Analysis of British Airways - Essay Example

The Analysis of British Airways 1.0. Executive Summary With my motivation to excel in my career, I am hoping to gain a position in British Airways. The rationale of choosing this business organization is obvious. By joining a team which remains undisputed its industry, I will undoubtedly be able to efficiently utilize the knowledge and skills I've acquired from my various disciplines. This will also allow me to enhance my strengths and competencies and enable me to realize my full potential in the corporate world. British Airways can provide me with the venue that I need for growth as well as enough challenges to keep me motivated. 2.0. The Skills Which I Will Contribute to British Airways I will be able to help the company in its decision making processes specifically on the strategic path that it would take. This is because I have been able to acquire knowledge and skills in the fields of general management, strategic management, and corporate finance. I am particularly interested in joining the management and planning team which primairly determines the core competencies, strengths, weaknesses, and the needs of British Airways. I can surely be instrumental in shaping the strategic path of the organization with my hard-earned knowledge and skill in assessing the internal performance of the company as well as the external factors in its external environment, I believe that in landing a job, a potential employee must only be imbued with the technical skills needed for the position. One of the most important things to consider is the person's high level of motivation to excel in the field and his capacity to deal with diverse individual in the business organization. Joining British Airways has been one of my greatest dreams and I am highly passionate to aid in the company's success. I am highly motivated to excel in this career, wanting not just a mere position but with commitment and devotion, I would like to pursue growth and excellence. I believe that I will be able to stand the pressure of joining a diverse workforce because I am trained to be open-minded and respectful of individuals outside my color, culture, value, and opinion. 3.0. Application of My Skills In order to prove that I will be effective in my chose position, I will be giving a brief analysis of British Airway's current performance through the employment of strategic management tools. First, I will be focusing on the business organization's financial performance by a financial ratio analysis. Next, I will look at the company's internal and external environment by the identification of strengths, weaknesses, opportunities, and threats. Lastly, I will be offering a three-point plan on how British Airways can further improve its operations. 3.1. Financial Analysis In terms of financial performance, British Airways in can be assessed by looking at the firm’s profitability, leverage, efficiency, liquidity, and investor ratios. In terms of profitability, British Airways reports increasing profit margins yet still lags behind its competitors like Ryanair and Thomsonfly (British Airways 2007). British Airway’s resources are largely financed by riskier financing debt. The company enjoys higher liquidity enhancing the ability of the air carrier to pay off its immediate obligation by its current assets. The company also improves its efficiency by lessening the day its pays off its suppliers and collects from its customers. An investor is most likely be attracted by the escalating share price of British Airways but be put off by the zero dividend yield. 3.2. SWOT Analysis for British Airways I will now focus on the SWOT Analysis. In terms of strengths, British Airways has always been unmatched due to its mere size commanding strong brand equity, strong network presence, cost cutting efficiency, and customer loyalty (Datamonitor 2005).In terms of assets, the airline is regarded as the second largest in the world (British Airways 2006) and fifth in servicing customer demand. The size of the company commands a strong brand equity and being in a highly capital intensive industry, its size generates significant economies of scale. However, British Airways currently struggles with its various internal weaknesses like its high dependence on business and transatlantic passengers, high level of debt, and internal issues like labor unions (Datamonitor 2005). British Airways is challenged to revamp its market positioning as over dependence on these revenue streams can be unprofitable in the long run. British Airways is also exposed to higher risk due to its high leverage. There are four identified opportunities in the external environment that British Airways can take advantage of. First, the opening of the Terminal 5 at London Heathrow Airport posts more opportunities to boost the revenue of British Airways since it can now fly into more destinations (Datamonitor 2005). This, together with the expected increase in demand in air travel, can help the air carrier leverage its position in the industry (Datamonitor 2005). The proliferation of low cost airways in the global industry also posts opportunities for British Airways considering that its high-segment travelers are becoming more price-sensitive. On the threats portion, British Airways is exposed to higher levels of competition because of the aggressive strategies of its competitors and the proliferation of low-cost airlines, As an international player, it also faces the risk of currency fluctuations. 3.3. Recommendations My recommendations include three aspects. First, British Airways should battle head on with its competitors by improving its products and delivery of its services. Recognizing that the success of a business organization is largely dependent on its delivery of maximum satisfaction, British Airways can enhance its position in the market by closely evaluating its product and its delivery of services as a way to compete with its competitors. Second, British Airways should boost its efficiency by evaluating its value chain and eliminating those things or processes which are not value adding. Currently, British Airways is faced by threats of becoming unprofitable through higher costs of fuel, exchange rate instability, and environmental damages. The airline should boost its efficiency by looking ways on how to improve on what it can still enhance to absorb the costs which it cannot avoid. Lastly, British Airways should embark on a more socially responsible operation in order to improve its image in the market as well as ward off threats from the political sector. It is irrefutable that the global business arena is emphasizing on corporate social responsibility and sustainable development. British Airways should strive to create an image of a socially responsible business organization in order to ward off threats from the political sector. References British Airways 2007, Retrieved 15 February 2007, from http://www.britishairways.com/travel/home/public/en_gb Datamonitor 2007, British Airways SWOT Analysis, Retrieved 15 February 2007, from http://www.datamonitor.com. Keown, A.J., Martin, J.D., Petty, J.W., and Scott Jr., D.F, 2005, Financial Management principles and applications, Pearson/Prentice Hall International Edition, 10th Edition. Sorensen, C. 2006, Low cost airline flying high. Financial Post. Thompson, A. & Strickland , J 2002, Strategic Management. 3rd ed. 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