Analysis of British Airways Marketing Environment

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1.0Executive Summary

2.0Background and Introduction

3.0External Analysis
3.1Macro Environmental analysis
3.1.1Political and Legal Factors
3.1.2Economic Factors
3.1.3Social Factors
3.1.4Technological Factors
3.1.5Environmental Factors

3.2Micro Environmental Analysis
3.2.1Industry Analysis
3.2.2Market Analysis
3.2.3Competitor Analysis
3.2.4Customer Analysis
3.2.5Stakeholder Analysis

4.0Internal Analysis
4.1Resource Analysis
4.2Marketing Audit
4.2.1Marketing Strategies Audit
4.2.2Marketing Structure Audit
4.2.3Marketing Systems Audit
4.2.4Marketing Function Audit
4.2.5Marketing Productivity Audit
4.3Innovation Audit
4.4Other Auditing Tools
4.5SWOT Analysis




This report identifies through research, the impact that marketing environmental issues have on British Airways. It clearly outlines the macro and micro environmental factors and internal factors that the new Chief Executive, Willie Walsh, has to consider in order for him to successfully drive the company forward and receive a 10% operating margin.

British Airways (BA) is the UK’s largest international scheduled airline, operating international and domestic scheduled and charter air services for the carriage of passengers, freight and mail and the provision of ancillary services. The airline flies to over 550 destinations globally and is considered to be a leader in the industry. In order to profitably satisfy customer needs, an organisation must understand its external and internal situation including the customer, the market and its own capabilities. Furthermore, it needs to understand and adapt to the dynamic and uncontrollable factors of the environment in which it operates. A marketing audit is in a number of ways the true starting point for the strategic marketing planning process, and is therefore, as Kotler (1999)has suggested ‘a comprehensive systematic, independent and periodic examination of a company’s-or business unit’s-marketing environment objectives, strategies and activities with a view to determining problem areas and opportunities. An analysis of the three key perspectives of a marketing audit; the 'macro-environment,' the 'micro-environment' and the 'internal environment will be carried out for BA. 2005 saw a new Chief Executive being appointed in BA; Willie Walsh, former head of Aer Lingus. The man with an excellent reputation for driving down costs has stressed his determination to realise his predecessors, Sir Rod Eddington’s, goal of a 10% operating margin.

The marketing environment is ever changing and therefore it is essential that a structured, detailed and continuous analysis of the principal dimensions of the environment is made. 3.1.1 Political and Legal Factors

The start of the millennium is turning out to be some of the most difficult times that the airline industry has ever faced. The events of terrorism attacks in September 11, 2001 in New York and July 7, 2005 in London along with the wars in Iraq have no doubt caused an unprecedented crisis and political instability. The events have caused the introduction of new security regulations from the EU and US that come into effect in summer 2006 and a fall in customer travelling confidence.

Governments have controlled where airlines can fly, and aspects of their product planning and pricing policies. In recent years, substantial regulatory reform has taken place, giving carriers more opportunity and increasing the market competition. Deregulated companies like BA require systems that enable decisions to be made quickly Open skies is an agreement which changes the regulatory landscapes significantly (appendix 1).

A significant legal factor affecting BA is the power of trade Unions. BA has suffered many strike actions (August 2004 and August 2005) and is aware of the implications that the trade unions can cause. Legal...
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