British Airways Company Profile - Case Study Example

Sustainable Global Enterprise Abstract British Airways is the national airline for the United Kingdom. The company was established in 1971 to run four separate airline entities. In 1974, the four entities merged to form the British Airways we know of today. British Airways is the largest airline in the United Kingdom in terms of fleet size, international destinations and international flights. The company trades its shares in the London Stock Exchange and is also a member of the International airlines group. However, the company has had its fair share of challenges. This is because it operates in an industry that is rapidly evolving and is therefore highly competitive. In such a field, it is a difficult task to maintain a sustainable global enterprise. It has therefore been essential for the company to review policies so that it can be able to cope with the changes in the industry and at the same time maintain its position in the competitive environment (Britishairways.com). Sustainable Global Enterprise Introduction The last quarter of the 20th century has seen a whole lot of changes being experienced in the transport sector. These changes have contributed to a number of issues that are being experienced in the aviation transport industry today (Kamarth & Tornquist, 2004, p23). The industry is having challenges from different fields such social, environmental and technological technicalities. The social issues that are facing the industry are many. One of the social issues is the financial crisis which caught the industry by its neck. The financial crisis makes prices to keep fluctuating and therefore players in the industry can never be sure of the outcome of a financial year. In 1997, there was the Asian financial crisis which affected the industry considering that Asia was an emerging market for companies in the industry. 2009 was one of the least profitable years because the economic crisis in the world had hit very hard (Belobaba, Odoni, & Barnhart, 2009, p41). The financial crisis is a macro-economic instability that is facing the industry. Another macro-economic instability that is facing the aviation transport industry is terrorism. This issue was a result of the 9/11 bombing in 2001. Ever since then, the industry has been under immense pressure from the public to tighten security and ensure that their clients travel safe from any sort of terrorism attack (British Airways 2012; 8). The fact that terrorism is linked with Islam also brings up yet another societal issue. This is because the airline companies are more keen while frisking Muslims because they have been stereotyped as terrorists. This is viewed as a form of racism. The issue of global warming has been and still is a contentious issue in today’s society. Airlines are on the receiving end of this because planes are known to emit carbon which is a Harmful green-house gas. Airlines have the challenge of reducing the amount of green-house gas emissions as a way of conserving the environment. This is challenging because of the fuel requirements of airplanes (Ben-Yosef, 2005; 88). Technology is the back-bone of the industry. It is the main element that has brought major advancements in the industry. The challenge of technology in the aviation industry is keeping up with it. Industry players have to keep making technological changes on their airplanes and customer relation service to suit the needs of their clients. Technology is one of the main features which can give an individual airline company competitive advantage. The main challenge on the part of technology is price. The installation of certain technologies is an expensive venture and this poses a challenge to the industry players. Technology is also unequally distributed. It may be impossible to use some applications in various markets because of the low popularity rate and also the fact that the necessities for running the applications are at times unavailable (Belobaba, Odoni, & Barnhart, 2009; 67). British Airways’ relevance to this topic is based on the fact that this company is well established. It has been in the industry for 38 years and has been able to maintain a fair share of the market amidst all the challenges and the competition. The company serves a wide range of markets. The airline makes destinations in the major or central airports which is very convenient for its operations. More so, the company offers a favorable charging system which has helped it survive in the industry which is dominated by low-cost flights (Havenga, & Hobbs, 2004;51). British Airways has diversified its destinations and this has contributed to the sustainability of the company. This is because they price their flights in accordance to the demands and capabilities of the market segment. The central location of the headquarters is also a strategic factor that has helped them sustain their global enterprise (Hart, 2007;33). Analysis of the Company Profile British Airways is a well-established company having being in business for well over 38 years. This is because it first existed as four separate entities before they merged to form the company. Goodfellow (2006; 39) says that the company serves approximately 34 million passengers annually. The fact that it has the largest fleet and highest number of destinations in the UK shows that the company is well established in the industry. The vision of the company is to maintain its position as a full service global airline. The main purpose of the British Airways company is to offer year round low fares with an extensive global route flying to and from centrally located airports. According to the sustainable value portfolio, there are four dimensions in the sustainability strategy which form a framework model. Using this framework, the company’s profile can be evaluated as to how it prevents pollution, stewards its products, develops and deploys clean technology and co-creation of new businesses (Hart & Milstein, 2003). British Airways has invested in research for developing engines which are low on carbon emissions and fuel consumption. The main reason for their investment is to help reduce the concentration of greenhouse gases in the atmosphere by reducing the carbon emission levels of their aircrafts. The company stewards its products by engaging its stakeholders in the company activities. The company has also invested in the unveiling of the next-generation technology. In their new airplane models, the company has divided the cabins in to classes. This classification is determined by the nature of flight; that is, short, average, or long haul. The classes existent in the airline are first class, business class, and economy class. An example of a next generation invention is the first class seat in the long haul flight. The seat has in-seat power, a 15-inch entertainment screen and a spacious bed which measures 6 Ft by 6 In. This is an invention which offers both comfort and reliability.The company also has a subsidiary based in London known as the BA City Flyer. This subsidiary has been strategically put in London to cater for the unmet needs of the London market and this shows that they have achieved the base of the pyramid. British Airways has not fully incorporated the strategy of disruptive innovation. In this strategy, a new innovation is aimed at creating a new market and the eventuality of this is either a disruption of the existing market or a complete displacement of the previously used technology (Christensen &Raynor, 2003). In essence, British Airways has opted for a sustaining innovation strategy. This is because their innovations are aimed at evolving the existing markets. The cabin classification is one such example of a sustaining innovation. The company introduced the cabin classes so that they could diversify the service offers to their existent clients. Though this innovation may have to some extent been a disruptive innovation, it is mostly a sustaining innovation. The strategy that the company used initially to maintain a strategic global enterprise was creative destruction (Foster & Kaplan, 2001;94). This is because of the offers that they had brought forward and are still in place. The courier service of the company is one such example. The courier service was introduced to replace the railroad ferrying of goods and ship transport. This way, the company was able to sustain its position because people preferred to carry goods that were highly perishable or urgently needed using airplanes. Over the years, the company has switched its strategy to that of continuous improvement (Hutchins, 2008;67). The company resorted to continuous improvement because this was the only way that it could have managed to survive in the industry. Continuous improvement on their aircrafts and services helped them to have a competitive advantage over their competitors up until 2008. They have slowly improved the flight booking service, the customer service on board flights and the courier services over time (Schumpeter, 1950). British Airways, just like any other business, aims at making a profit at the very end of the day. However, the perception of it being a social enterprise cannot be dismissed. The adjustments that the company has made to its flights and services is both an avenue for them to accomplish their social responsibility and also a strategy of increasing profits for their shareholders. The fact that the company has lowered its prices and invested in production of environment friendly engines, shows that they are applying commercial strategies to fulfill their social responsibility. On the other hand, this is also a strategy of reducing costs and maximizing on their profits. In the airline industry, cultural sensitivity is a necessity because the market that a company serves is extremely diverse in terms of culture. BA has a cultural sensitivity that is reflected by the markets that they operate in, the partnerships that they have formed and the staff that they have employed. Their cultural sensitivity has helped them to be a sustainable global enterprise. Conclusion From the above analysis, one can derive that the most important element for a company to be a sustainable enterprise is innovation. The innovations that are implemented and developed should be two way; that is, beneficial to the company and to the market of the company. The strategies which are put in place to oversee the implementation of these innovations is what determines whether a company will be a sustainable global enterprise or not. These strategies can be put in place so that new innovations can replace the existent technologies or can complement the existent technologies through enhancements. Managing sustainability is not an easy task from the case study above. It has its challenges and the main challenge is ensuring that there are fresh and new innovations which can help a company to be sustainable. Another challenge in the management of sustainability is balancing off consumer satisfaction and environmental conservation. The best case of sustainability management can be achieved if the task force is well motivated. A well-motivated task force will use all resources at their disposal to satisfy the wants of consumers who if adequately satisfied, will contribute to the sustainability of an enterprise. Bibliography Belobaba, P., Odoni, A., & Barnhart, C. (2009).The Global Airline Industry.Chichester, John Wiley & Sons. Ben-Yosef, E. (2005). The evolution of the US airline industry theory, strategy and policy. Dordrecht, Springer. British Airways (2012). About British Airways. Available at: [Accessed November 19, 2012]. Christensen, C. M., &Raynor, M. E. (2003). The innovator's solution: creating and sustaining successful growth. Boston, Mass, Harvard Business School Press. Goodfellow, J. (2006). A Pilgrim's Guide to Chaos in the Heartland. [S.l.], Concrete Wolf Havenga, J., & Hobbs, I. (2004). A practical guide to strategy: making strategic thinking, development and implementation accessible. 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