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Table of Contents

Introduction: ................................ ................................ ................................ ......................... 3 History: ................................ ................................ ................................ ............................. 3 Strategic planning Environmental Factors: ................................ ................................ ......... 4 PEST Analysis: ................................ ................................ ................................ ................. 4 Political Factors: ................................ ................................ ................................ ........... 4 Economic Factors: ................................ ................................ ................................ ......... 4 Social and cultural Factors: ................................ ................................ ........................... 4 Technological Factors: ................................ ................................ ................................ .. 5 Porters Five Force Analysis: ................................ ................................ ............................ 5 Threat of Substitutes: ................................ ................................ ................................ .... 5 Threat of New Entrants: ................................ ................................ ................................ 5 Bargaining Power of Suppliers: ................................ ................................ ..................... 5 Bargaining Power of Customers: ................................ ................................ ................... 5 Industry Rivalry: ................................ ................................ ................................ ........... 6 Strategic Planning Models: ................................ ................................ ................................ ... 6 Basic Strategic Planning:................................ ................................ ................................ ... 6 Goal Based Planning Model: ................................ ................................ ............................. 6 Alignment Strategic Planning Model: ................................ ................................ ................ 7 Scenario Model: ................................ ................................ ................................ ................ 7 Self-Organising Planning Model: ................................ ................................ ...................... 7 Conclusions: ................................ ................................ ................................ ......................... 7 References: ................................ ................................ ................................ ........................... 8

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Introduction:
According to Kenneth Andrews (1971), strategy is defined as The pattern of major objectives, purposes or goals and essential policies or plans for achieving those goals, stated in such a way to define what business the company is in or is to be in and the kind of company it is or is it to be (Macmillan, H. Tampoe, M. P13). The scope of strategic planning studies is very wide and also it is used for achieving organisational performance and competitive advantages. Strategic planning management is one of the toughest challenges that are faced by the strategic managers. Strategic planning is the process where the organisation has definite set of process to explain the strategy or the resources available to an organisation are allocated for pursuing the strategy. The main principle behind strategic planning depends on one of the three questions which are 1. What do we do? 2. For whom we do it? 3. How do we excel?. In this report, the researcher have analysed various factors that affect the strategic planning of the organisation British Airways.

History:
In 1971, civil aviation act was passed and in the same year the BA Board was formed for controlling the activities of two government operated airlines, British Overseas Airways Corporation (BOAC) and British European Airways Corporation (BEA). Both the airways were merged into one and were controlled by BA Corporation and hence the brand name British Airways was formed in the year 1974. In January 1976, only two airways have expanded its operation to supersonic airliner flights and BA was one among them. Privatisation threats were in place in 1981, July 1987 marked the achievement of BA crossing its rivalry British Caledonian. One word airline alliance is formed by the year 1998 in collaboration with American Airlines, Cathay Pacific, and Qantas. The last Boeing 757 was announced in the year October 2010 by British Airways.

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Strategic planning Environmental Factors:


For understanding the factors which affect the strategic planning process, strategic analysis tool are used. In the given scenario the environmental factors are external in nature and hence analyses like PEST analysis and Porters five force analysis are used in general.

PEST Analysis:
PEST has it abbreviation as political, economical, social and technological factors that affect the business strategic planning of British Airways. This report is always useful for developing a strategic model for the organisation in the future.

Political Factors:
The duty for the air passengers were increased in the year 2010 which implies that an average family of 4 members would have to spend an additional 240 for their travel and hence the rise in duty has stopped many families from planning the holidays because of the expenditure. The total amount when calculated for the entire flight journey is really huge and even the researcher thought of dropping the plan if he had one. Nowadays we can see large number of union strikes in BA which is very effective because Unions has become the vital part of any organisation and as such for British Airways. The union strikes are influenced by political parties and leaders for their selfish reasons. The security measures is already very strict in airports, it became more tight after the incident occurred after 9/11, this in turn has small effects on the business sector of BA due to long queues in check in and security checks and also passenger are allowed to carry one hand luggage which was not the case previously.

Economic Factors:
Various economic conditions affect the business sector and strategic planning of British Airways. The globalisation of the business has helped BA up to a certain extent but the principle of the organisation remains unaltered. The economic budget and the economy of a nation are the other factors which affect the strategic plans of BA. In the latest economic budget, the price of petroleum is increased which affects the profits of BA, customers cannot be charge with very high price for the tickets as the economy changes, so BA have to maintain an average fluctuation between the pricings so that they will not lose their regular customers. The VAT in recent years has changed radically which forced the managers to change various factors which are already planned by strategic managers before execution.

Social and cultural Factors:


The social life of an individual working in BA is affected both in attitude wise and in mental strain by the neighbours, relatives, media , family, etc which form the components of a social environment. Due to globalisation, BA has many staffs that are culturally diversified. So in BA while doing strategic planning the culturally diverse employees are taken into consideration and will have a negative effect on the planning. The percentage of recession for the period of 2010 is noted which is 7.1% and this forced the organisation to reduce employee strength by a fair margin.

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Technological Factors:
The modern world is transforming into a place of technological advancements and for gaining competitive advantage it should be able to install the latest technological systems and machines which make the process more quickly and in a much efficient way. BA has showed 20% increase in the profit in recent years which is due to the efficient and fast services it was able to provide to customer by installing latest technologies. While doing strategic planning the strategic managers should take into consideration the latest technology available and introduced in the future and the plannings done accordingly. By implementing new advanced technologies, it creates uniqueness among the huge list of competitors and thus BA gains competitive advantage.

Porters Five Force Analysis:


An article was published in the year 1980 by Michael Porter for the analysis of various external environmental factors and it was later named in his name as Porters five force analysis. This type of analysis is supposed to be the most powerful tool for strategic planning. Five factors that affect the business and strategic planning of BA are discussed through this analysis and the factors are threat of substitutes, threat from new entrants, bargaining power of the suppliers, bargaining power of the customers and industry rivalry.

Threat of Substitutes:
There are no substitutes for BA travelling to world destinations other than competitive airlines, but the threat is slightly more when comparing the flights to Europe where train service is a substitute than flight services, in addition to the train services there are also ferry services to many ports of Europe. Other than from train service international flight threats is nearly 0.

Threat of New Entrants:


New entrant is also low, because the airline industry is a huge industry and it is tough for an organisation to start from scratch and develop through rigorous competition availing in the market of airline industry. Even the rules and regulation, and health and safety laws are very much complicated which prevents someone to start business in airline industry. Fear factor is also the other concern. As BA holds a firm brand name and it has a strong customer value, no new organisation can overcome in the airline industry.

Bargaining Power of Suppliers:


The supplier of Boeing and other flights to BA posses a huge threat because when these suppliers stop supplying for any reason or increase the price, BA have to pay it otherwise the business will get collapsed and also it is affected by the air traffic regulations.

Bargaining Power of Customers:


Customers are possible for getting highest bargaining power and the recession has a bad effect on the business of BA. Due to recession customer have more voice for bargaining because the pricing is less due to recession. The threat possessed by customer is by argument which they compare with other airline services.

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Industry Rivalry:
This threat is also high in the scale because airline industry is filled with very close competitors who price differ with very low margin. The ticket prices are other factor which is very competitive with one another and it adds to the level of threat to BA.

Figure 1: Porters Fiver Force Analysis.

Strategic Planning Models:


It is not possible for identify a specific model for the organization, but also provides some information about how different types of model would help organizations to develop their own planning models. Thus, organizations can choose any of the basic models and modifications can be made in the form of business progress, respectively. Here are the different models that are the foundations, so that organizations can begin the process of strategic planning, it is also possible to combine these models, only the end result of the strategic planning process should be a plan for achieving the goal. Five different models described below,

Basic Strategic Planning:


Small scale organisation gets more advantage by this kind of model where they never get involve into the strategic planning process or analysis. Management people from the top level hold a huge responsibility in management of these strategic plans. This process is inclusive of mission and vision statement, the choosing of the main objective or goal of the organisation, for achieving these goals and objectives various strategic plans are executed, various strategic approaches are implemented, and the updating the strategies depending on the change management is necessary.

Goal Based Planning Model:


In British Airways the working principle or process is first a goal or objective is designed and the employees will do hard work for achieving the goals and objectives. In this
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model strategic plans are designed where the end result is achievement of the goals and objectives. Factors which influences this model is SWOT analysis, issues are prioritised using strategic analysis tools, before execution strategic programs are designed, action plans are well established, for a year the operation are planned for the organisation, the capital investment for the period of 1 year is maintained, strategic plans which are currently ineffective are kept updated for very good results.

Alignment Strategic Planning Model:


For gaining very good business performance results, many operational factor should be aligned before they start processing and execution and also these factor are tuned to very fie margin so that they can be brought into alignment. Business is a combination of working factors and for the effective business operations these interrelated factors needs to be aligned properly. A group of employee right from the top to the bottom level of employment and management will decide the mission of the organisation, strategic plans are identified well in advance for the good working, tuning required are also identified before the execution of the process and these are tunings which is included in the strategic plannings.

Scenario Model:
Among the other model this one is unique where it can be used in conjunction with any other models and this make this model a special one for identifying the issues related to the strategic planning and also the design of the model which is used to overcome this issues are also discussed and developed in this model. For this purpose the macro environment forces which have a direct impact on business are determined and evaluated. Scenario planning and strategic planning are conducted for the purpose overcoming the forces of the environment. Detailed tasks are provided under each scenario and among those scenarios the best is chosen and executed.

Self-Organising Planning Model:


This planning is noted to be used in almost every organisation because of its self evolving structure as the business grows. For the clarification of cultural values of an organisation two methods are used, one is dialogue and the second one is story board techniques. Evaluation at every stage is necessary because of the naturalistic planning process and the process is updated regularly. There are also plans for portraying stake holders with the strategic plans.

Conclusions:
In the future running an airline business is very competitive and challenging, but airlines like British Airways are well established organisation and hence it should be a difficult task for them to run the business which can be proved by their statistics and history. By developing the strategic planning for the future business growth in BA process how efficient the business are operating and also the management responsible for such operation is very effective management, such type of management remains a role model for other business organisation. The external environment factors which influences the business are studied and analysed, then plans are developed and it can be executed in the coming future
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for a progress in the development of business for BA. There are also various strategic tools available which can be used for developing a good strategic plan when executed results in effective business operations.

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