Case 1 (F) - Essay Example

BRITISH AIRLINES CASE ANALYSIS Air transportation as the major industry is aimed to provide an important contribution intoeconomic and social spheres. The demand for air transportation services comes from the needs and desires to obtain final objectives, such as getting from one place to another, delivering baggage and other cargo, etc. Today the air transport industry is large and is an essential for many other industries such as tourism, exotics, and hi-technology. In UK, airline industry is mostly concentrated in Heathrow airport, the largest international airport by passengers and is divided into scheduled and budget airlines.

It is considered that in in the world the second largest international airlines by scheduled passenger- kilometers is the British Airlines. The following paper will illustrate the macro environmental impacts on British Airlines as well as on the airline industry. Further, it will represent the competitive environment that British Airlines operates in and will analyze the strategy that this company establishes. Speaking about the macro environment that British Airlines operate in, it is necessary to mention that it consists of different external factors that directly or indirectly influence the business.

If such macro environmental factors are managed in the efficient way, they ensure a constant growth and a reliable future of the business. The airline industry of UK is also affected to many external factors. The largest factor is the global economic conditions. As UK airline companies are aimed to provide services the leisure and business consumers all around the world, global economic conditions badly inhibit the growth and profitability of airline companies as they reduce profit and cause the less number of customers.

Such factor as the unstable prices for fuel put its impact on everything that works with the help of fuel. When prices increase globally, the UK airline companies also suffer from the operational costs. Along with the world economics and prices for fuel, natural disasters and other unexpected events influence the operation of air transportation. Thus, the biggest example from the recent past is the 9/11 terrorists attack, the volcanic eruption in Finland and earth quake in Japan that badly affected the businesses of airline companies touching the whole world.

Global competition have also changed the look of air transportation, as modern customers are more knowledgeable about evaluation of prices and quality standards of different airline providers before actual choosing of one for traveling or using its services in carriage. In order to satisfy consumers’ preferences, changing needs and expectations, the UK airline companies should provide the highest standards of customer services with the affordable rates. In addition, while companies make strategic alliances and cooperate with other airline companies, it is harder for the individual airlines to survive at a profit.

While building their strategies, the UK airline companies should take into account at social and demographical factors, such as level of income of the consumers, their preferences and life styles, religious favors, cultural values, languages and brand perception and acceptability. Moreover, in the era of modern technologies, much attention should be paid to the scientific and technological advancements, it means that U.K. airline companies as well as air industry all over the world should make a significant part of their investments on the research and development in order to identify comfortable and efficient flying experiences for their customers and keep abreast of the innovations.

British Airlines offer its services to the customers across the globe operating individuals and business travelers in the way that they would want to fly with the company whenever they can. The company ensures all customers a unique premium service, which customers have already recognized. As a result of worsening of economic conditions, the airline industry is in the time when processes need significant changes in different areas. Along with the global economic and financial crisis and continued rise of prices for fuel, British Airlines has accelerated assertion in the airline industry.

While many passenger and cargo transportation companies have suffered and gone bust, the global air market is still weak. The markets in which British Airlines operate are greatly competitive and the levels of competition differ from route to route. However, there are few international routes where competition remains limited, because certain restrictions are placed on the number of flights. Along with these challenges, British Airlines feels competitors across Europe air transport companies.

There is a free market for flights in Europe that allow any airlines within Europe to perform their services at any route they chooses. For the British Airlines, they are essential competitors. Within the UK, another means of transport that is mostly used for short haul routes is a competitor for the air carrier. Thus, train operators take a larger share of the travel markets. It allows the consumers to cut times for their journey times when using the West Coast mainline, for example. Deregulation, however, has had an important impact on the British Airlines’ long haul business.

Thus, the first phase of the EU- US Open Skies agreement that started in summer 2008, has changed the competitive picture on transatlantic routes, specifically at Heathrow international airport. Moreover, a new generation of wide- body aerial vehicle has also changed the competitive landscape of the company. The Airbus A380 well- established at Heathrow has three airlines and offers a total of more than twenty departures a week. The British Airways vision is added by their key goals. The British Airlines tend to become the airline of choice for the long haul premium consumers.

It delivers the best service for customers, growing its presence in the main global cities and providing the best global connectivity for its customers. As the company considers London to be its home city, it focuses on providing its services at this emotional and financial heart of air business, finding it the world’s largest international air market. The company wants to meet its consumers’ needs and improve its activities through new profit streams. That is why, the company offers its customers great value of the brand.

Only consumers give the company availability to see how it should develop new products and services and how to meet the needs of its main customers. In addition to its vision, British Airways have launched a three- year change program “Compete 2012” that will put customers at the heart of British Airways and will enable the company to invest in new leadership training, implement clear communication program, re- enforce the new organization structure within the company. Such vision means that the company cares not only about its consumers, but also supports and develops its personnel in order to achieve common goals and objectives.

The company understand the recent trends and thus relies on a network of both airline and non- airline partnerships to be able to deliver a complete service to its customers. While it is unusual for a brand to out its whole marketing range into a single agency hands, the British Airlines management is confident that such commitment will do its best for the brand. With the collaboration of "KnowMe" program, British Airlines will engage its work in order to organize customer data to help create a constant cooperation for them all over the brand.

It means that the company will give the relevant message to its customers when they are searching for a holiday or engaging themselves with the British Airlines through the Executive Club. The new agency model means improvements, not changes in the company’s core marketing strategy. The motto “To fly. To serve” is still the heartbeat of the organization, which is well- known for customers as reliable and valuable brand. While British Airlines provide services of the scheduled flights, Ryanair, the budget airlines, have performed their activities comparably good during the downturn.

While Ryanair’s strategy is to deliver the best customer service performance in its peer group, it even suggested launching itself as a long haul carrier. With such features as punctuality, fewer lost bags and cancellations, Ryanair can build its name as the rest of its peer grouping companies in Europe. References Button, K., 2008. The Impacts of Globalization on International Air Transport Activity, Available from http://www.oecd.org/greengrowth/greening-transport/41373470.pdf Ryanair strategy, n.d. Available from https://www.ryanair.com/doc/investor/Strategy.

pdf  Smith, L., 2014. British Airways on why it is plotting a new joined up marketing approach, The Marketing Magazine, Available from http://www.marketingmagazine.co.uk/article/1286437/british-airways-why-plotting-new-joined-up-marketing-approach The markets we operate in, 2010. British Airways, Available from https://www.britishairways.com/cms/global/microsites/ba_reports0910/pdfs/Our_business.pdf