Final Presentation

Shashank Yadvendra(19035322)MBA

Sheffield Hallam University

AGENDAAGENDA

■ 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

■ References

Discussions: Long Haul Market

Overview of BAOverview 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 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 forcesFive 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

● Additional on-board services

● Safety controls, punctuality and reliability

● Additional baggage allowance

● Promotions and offers

CRITICAL SUCCESS FACTORS

BA strategic position

Regional

National

International BALufthansa

VirginAir France-KLM

American Airlines

Air France-KLMBMILufthansa

No Frills Full Service

Geo

gra

ph

ic S

cop

e

Service rendered

Ryan AirBMI BabyEasy JetFly BeJet 2MonarchThomson fly

Aer Lingus

COMPETENCE AND RESOURCESCOMPETENCE AND RESOURCESThreshold 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 mappingStakeholder's mapping

● Community ● Small scale Suppliers such as stationery and toiletries suppliers

● Competitor

● Travel agents and marketing intermediaries

● Board of Directors

● Employees representative such as trade unions and associations

● Investors and shareholders

● CreditorsPo

wer

Level of interest

Low High

Lo

wH

igh

SWOT Analysis SWOT Analysis Strengths

• Brand name, consistency, reliability, customer service, size and scale• Responsive to market trends • Strong sectoral presence in the long haul market • Environmental performance• Customer loyalty• Advanced technology like A318 for steep landing

Weaknesses • Management-employee relationship•Too narrow product line•Job losses and pension issues

Opportunities• Heathrow –Terminal 5, anti-trust immunity and One-world alliance• Official carrier for 2012 Olympics games

Threats •Rising fuel costs and future tax on aviation fuel •Changes in buyers taste and preference•Adverse Government policies e.g. planned increase in air passenger duty by 2011

Hybrid

Differentiation Focuseddifferentiation

Low price/low added value

Lowprice

Strategiesdestined for

ultimate failureLow

Perceived added value

High

Low Price High

Strategic clock of BA

Protect / build

● Reasonable pricing

● Advertisement

● Corporate social responsibility to gain customers support

Market Development

● Use Avionic Engineers to provide consulting services to other airlines

Product Development

● Additional services such as in-flight internet and telephony services

● dedicated travel class to certain regions

● In- flight advertisements for various companies e.g. HSBC, Gucci e.t.c.

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

Diversification

● Establishing training academy for pilots and stewards

● Investing in the hotel industry to cater for customers and travelers

ANSOFF MATRIXexisting new

exis

tin

gn

ewm

arke

t

product

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….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

REFERENCESREFERENCESJohnson, 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