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Strategic Analysis & Planning 2 - Coursework Example

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The company competes with Virgin Atlantic, Qantas, Air France-KLM and Cathay Pacific, whilst also facing stiff competition from budget and no-frills airlines such as…
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Strategic Analysis & Planning 2
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Download file to see previous pages This report analyses British Airways’ competitive position and, through audit of the firm’s resources and value systems, determines how the company might achieve growth effectively in what is a rather mature and low-growth market. The report primarily analyses the operations function of the business to best analyse its most potent competitive advantages and opportunities for strategic growth.
British Airways now pursues a cost leadership position against major competition. The airline industry in Europe is characterised by many price-sensitive consumers that select low-frills airlines as a means of satisfying their own budgetary needs. The ability of BA to control costs allows the airline to keep ticket prices lower for these price-sensitive buyers in an environment where price wars continue to improve market share for smaller competition (Payne, McDonald and Frow 2011). Predominantly, BA had maintained a reputation for being a high-priced airline company, however the firm better controls its operating costs in order to provide lower fares in an effort to compete with these growing and influential budget carriers (Smith 2013).
Where BA maintains its cost leadership advantages is in operation cost controls. This cost leadership strategy is maintaining a lower price to value ratio, or satisfying customers by offering prices that are satisfactory for the value they receive (Thompson, et al. 2010; Murray 1988). Primarily, cost leadership as a new competitive strategy is achieved through economies of scale, cost-related advantages that are realised through size, scope of the firm and through scale of service production (Truett and Truett 2007).
British Airways maintains the capacity and hub capabilities that allow the firm to turn around different European flights very quickly. BA maintains a total fleet size of 292 planes and maintains its own, self-owned and self-managed maintenance division that allows for ...Download file to see next pagesRead More
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