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British Airways Strategic Plan

British Airways Strategic Plan

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Published by Vu Ngoc Quy
Strategic Management assignment of Aston University,
Strategic Management assignment of Aston University,

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Published by: Vu Ngoc Quy on Nov 29, 2009
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Strategic Report 2009

Group 10A

Candidates: 706523, 412805, 802050, 464929

Executive Summary

This report was produced for the purpose of providing British Airways Plc (British Airways) with a
strategic plan to implement over the next three years. British Airways is the UK market leader in
airline operations, however has faced increasing competition over the last decade resulting in erosion
in their market share.

The report begins by analysing the current internal and external environment of BA. Through strategic
evaluation we have recommended that BA focus on their fundamental service delivery to restore their
competitive advantage within the industry. This will require implementing a combination of two
strategies; a people processes strategy and a strategy focused on technological advancement.

The people processes strategy was derived from a number of industry sources outlining BA’s decline
in customer satisfaction. The technological advancement strategy coincides with the renewal of BA’s
aircraft fleet and will further improve the overall customer experience.

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Table of Contents

Table of Contents

........................................................................................................................................... 3

1.1 Report Objectives

..................................................................................................................................... 4

1.2 Company Overview

.................................................................................................................................. 4

1.3 Current Strategies

..................................................................................................................................... 4

Figure 1 - Business Map (T-O £8.32bn)

........................................................................................................ 5
........................................................................................................................................................................ 6
2.0 External Analysis

..................................................................................................................................... 7

2.1 PESTEL Analysis

................................................................................................................................ 7

2.2 Porter’s Five Forces

............................................................................................................................ 9

2.3 GE Matrix

.......................................................................................................................................... 10

3.0 Customer Analysis

................................................................................................................................. 11

4.0 Competitor Analysis

.............................................................................................................................. 12

4.1 Strategic Groups

................................................................................................................................. 12

4.2 Airline Quality Review (AQR)

.......................................................................................................... 13

5.0 Internal Analysis

.................................................................................................................................... 14

5.1 Value Chain Analysis (VCA)

............................................................................................................. 14

5.2 Resource Based View (RBV)

............................................................................................................. 16

5.3 Financial Analysis (Source: British Airways, 2008).

......................................................................... 17

6.0 Summary

............................................................................................................................................... 18

6.1 SWOT Analysis

................................................................................................................................. 19

6.2 Key Strategic Issues

.......................................................................................................................... 19
...................................................................................................................................................................... 21
7.0 Strategy Formulation

............................................................................................................................. 22

7.1 TOWs Matrix

.................................................................................................................................... 22

Figure 11 - Preliminary Comparison of Strategies

................................................................................... 23

8.0 Analysis of Strategic Options

................................................................................................................. 24

8.1 Strategic Option 1 - Improvement to People Processes

..................................................................... 24

8.2 Strategic Option 2 - Improved Environmental Stance.

..................................................................... 25

8.3 Strategic Option 3 - Improved Technological Stance.

...................................................................... 26

8.4 Strategic Option 4 - Segment Focus

................................................................................................... 27

8.5 Strategic Option 5 - Broader Service Offering

................................................................................... 28
...................................................................................................................................................................... 30
9.0 Implementation

....................................................................................................................................... 31

9.1 Company Structure

............................................................................................................................. 32

9.2 Service Quality Gaps Model

.............................................................................................................. 34

9.3 Managing the Change

......................................................................................................................... 35

9.4 Gantt Chart

......................................................................................................................................... 37

9.5 Stakeholder Map

................................................................................................................................ 38

9.6 Control Systems

................................................................................................................................. 39

9.7 Balance Scorecard

.............................................................................................................................. 40

10.0 Critique

................................................................................................................................................. 41

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