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Shashank Yadvendra(19035322)

MBA
Sheffield Hallam University
■ Overview of British Airways
■ Environmental analysis: pestle & five forces
■ Critical success factors
■ BA strategic position
■ Competencies and resources
■ Stakeholder 's mapping
■ SWOT analysis
■ Strategic clock of BA
■ ANSOFF matrix
■ Conclusion & Recommendations
AGENDA
■ References

Discussions: Long Haul


Market
Overview of BA
► Since its inception, over 90 years ago, BA has
grown to a full service global airline operating to
and from centrally located airports across the
globe

► Covering 600 destinations with allied members -


one world alliance

Discussions: Long Haul market


Environmental Analysis: PESTEL

POLITICAL
● Employments laws

● Political stability

● Government regulations such as aviation permits,


environmental regulations, safety, security
regulations and taxation policies
ECONOMIC

● Fuel availability and cost

● Business cycle (economic growth and


Recession)

● macroeconomic variables such as taxations,


inflation, exchange and interest rate

● Competition from other airlines


SOCIAL - CULTURAL

● Lifestyle changes e.g. attitude towards leisure ,


changes in tastes and preferences

● overall cost of living

● Societal work ethics


TECHNOLOGICAL

● Rate of obsolescence

● Innovation and technological development

● Other means of communication such as


teleconferencing, email, telecommunication and
video - conferencing
ENVIRONMENTAL

● Environmental legislation

● Energy consumption

● Waste Handling

● Corporate social responsibility (CSR) such as


BA's support for charities and community
development
LEGAL
● Employment Laws

● Health, safety and security laws

● Preferential legislations for certain carriers e.g.


terminal five that was allotted for British Airways'
exclusive use

● Monopoly legislation
Five forces
● Competitive rivalry: High because the industry is characterised by
large players such as Virgin Atlantic, Air France-KLM and
Lufthansa

● Power of Buyers: Low power of buyers because of the wide range


of options available options

● Power of Suppliers: Although there are over 250 suppliers,


however fuel and hardware suppliers posses relatively high power

● Threat of substitutes: There is low threat of substitute in the long


haul market because of limited or no substitute. However, tele
(video)conferencing and telecommunication present low threats

● Threat of entrants: Low


Cost Implications
Deregulation, which constrains favourable competition
CRITICAL SUCCESS FACTORS

● Additional on-board services


● Safety controls, punctuality and reliability

● Additional baggage allowance

● Promotions and offers


BA strategic position
International BA
Lufthansa
Geographic Scope

Virgin
Air France-KLM
American Airlines

Regional Air France-KLM


Ryan Air BMI
BMI Baby Lufthansa
Easy Jet
Fly Be
Jet 2
Monarch
Thomson fly
Aer Lingus

National

No Frills Full Service


Service rendered
COMPETENCE AND RESOURCES
Threshold resources

● Brand Reputation
● Internet facilities such as online booking and check-
in services
● Lounge availability for different travel class
● Strategic Alliance and open sky agreement e.g.
one world alliance
● Infrastructure and technology such as fuel efficient
aircraft, terminal hubs, hangers and landing slots
Threshold Competences

● Safety and Security measures: BA spends over


£100 million annually on security measures such as
CCTV system , background and criminal checks of all
flyers and ground staff, a team of trained security
auditors who carry out security checks globally
● Good management
● Effective brand management
● Baggage handling
● Online booking and check-in facility
Unique Resources

● Dominance of take off and landing slot at Heathrow


terminal five and other central global hubs

● Dedicated business class flight from London to New York

● Airbus recently delivered the first of two A318 aircraft


equipped with ‘steep approach’ capability to British
Airways
Core Competences

● BA provides the most direct non-stop flights to London


worldwide

● Product innovation

● Punctuality: In September, BA announced that over 87%


of its flight departed early
Stakeholder's mapping
Level of interest

Low High

● Community ● Small scale Suppliers such as


stationery and toiletries suppliers
Low

● Competitor ● Board of Directors


● Travel agents and marketing ● Employees representative such as
Power

intermediaries trade unions and associations


● Investors and shareholders
● Creditors
High
SWOT Analysis
Strengths Weaknesses
• Brand name, consistency, reliability, customer • Management-employee relationship
service, size and scale •Too narrow product line
• Responsive to market trends •Job losses and pension issues
• Strong sectoral presence in the long haul
market
• Environmental performance
• Customer loyalty
• Advanced technology like A318 for steep
landing

Opportunities Threats
• Heathrow –Terminal 5, anti-trust immunity and •Rising fuel costs and future tax on aviation fuel
One-world alliance •Changes in buyers taste and preference
• Official carrier for 2012 Olympics games •Adverse Government policies e.g. planned
increase in air passenger duty by 2011
Strategic clock of BA

High
Differentiation Focused
differentiation
Hybrid

Perceived
added Low
value price

Low price/
Strategies
low added value destined for
ultimate failure
Low
Low Price High
ANSOFF MATRIX
existing product new
Protect / build Market Development
● Reasonable pricing ● Use Avionic Engineers to provide
existing

● Advertisement consulting services to other airlines


● Corporate social responsibility to
gain customers support
market

Product Development Diversification


● Additional services such as in- ● Establishing training academy for
flight internet and telephony services pilots and stewards
● dedicated travel class to certain ● Investing in the hotel industry to cater
regions for customers and travelers
● In- flight advertisements for various
new

companies e.g. HSBC, Gucci e.t.c.


● Providing financial services such
as travelers cheques and bureau de
change
CONCLUSION AND RECOMMENDATION

● Take advantage of its strength in order to increase market


share

● Transform its weakness to attract competitors customers

● maximize opportunities such as the forthcoming Olympic


games, Anti trust immunity, and proposed merger with Iberia

● Advertisement, offers and promotions


Contd….
▪ Improve on area where competition is relatively
weak

▪ Take advantage of existing capabilities, unique


resources and competences

▪ Effective utilisation of existing facilities such as


T5 and lobbying for approval of anti-trust immunity
REFERENCES
Johnson, G., Scholes, K. and Whittington, R. (2008) Exploring
corporate strategy: text and cases, Pearson Education Limited,
8th Edition

Wheelen, L. and Hunger, D. (1998) Strategic management and


business policy, Addison Wesley Longman, 6th Edition

http://www.guardian.co.uk

http://www.ba.com