British Airways Report

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Table of Contents

EXECUTIVE SUMMARY2
1. COMPANY OVERVIEW2
1.1 RECENT PROBLEMS FACED BY BA3
2. CURRENT STRATEGIC POSITION OF BRITSH AIRWAYS3
2.1 BRITISH MERGER AND ALLIANCES4
3. EXTERNAL ENVIRONMENTAL FACTORS5
3.1 PESTEL ANALYSIS5
3.2 FIVE FORCES ANALYSIS11
3.3 LAYERS OF THE BUSINESS ENVIRONMENT14
3.4 COMPETITORS ANALYSIS15
3.5 STAKEHOLDER ANALYSIS17
3.5.1 STAKEHOLDERS MAPPING: The Power/Interest Matrix18
4. INTERNAL ANALYSIS22
4.1 RESOURCES-BASED VIEW22
4.2 VALUE CHAIN ANALYSIS24
4.3 THE LIFE-CYCLE MODEL28
5. CONCLUSION30
6. RECOMMANDATION31
REFERENCES33
BIBLIOGRAPHY33
Websites33

EXECUTIVE SUMMARY
This report identifies through an analysis, the current strategic position of British Airways and identifies and evaluates strategic choices that the company could pursue. It outlines both internal and external factors that management need to consider in order to regain their competitive advantage and successfully drive the company forward in coming years, stay ahead of the completion and ensure a long-term survival. 1. COMPANY OVERVIEW

British Airways is a well known and establish business in the airline industry. British Airways is the UK’s largest international scheduled airline, flying to 148 destinations. It is a market leader and favourite company for the quality of its services. It is said to be the UK’s largest airline company and one of the biggest companies in the world. It place of business is London with significant presence at Heathrow, Gatwick and London City. BA Operates one of the most extensive international scheduled airline route networks, together with its codeshare (Indian’s Kingfisher airlines to share flight between the UK, Europe, India and Sri Lanka) and franchise partners, BA flies to more than 300 destinations worldwide. The company states that in 2008/09, BA carried more than 33 million passengers (www.britishairways.com).

Despite being the largest company with a good reputation, in recent years, British Airways has been making corporate loses, for example BA posted record losses of £401 m in 2008, and £148 m for the first quarter in 2009 (www.guardian.co.uk). 1.1 RECENT PROBLEMS FACED BY BA

British Airways has faced threats and long standing arguments with its unions as well as a possible strike still ahead as the company has cut thousands of jobs as a part of its restructuring programme. The strike has caused disruption to BA passengers and cost the airline more than £150 million. (www.guardian.co.uk) •British Airways has also significantly faced image damage it reputation and loss of customer confidence due to the strike. Willie Walsh said it was that “it was entirely the fault of the cabin crew’s union unite that the dispute has dragged on for 12 months. •Lack of real communication is also at the heart of BA problems. There is no real communication between management and employees. •BA has cut 1.700 full-time to recruit cabin crew on lower wages and 1.000 full-time made redundant at Heathrow. (www.guardian.co.uk). The problems outlined above have mainly been caused by internal influences. Nevertheless it is important to remember the different factors that also influence BA and its strategies, structures and means of operating and understand the key drivers of change. 2. CURRENT STRATEGIC POSITION OF BRITSH AIRWAYS

BA current strategies are: is to
Reduce costs to restore profitability. Cost-saving measures such as reducing cabin crew on aircraft which would help the company save pounds. BA CEO Willie Walsh said in a statement that “Revenues are down, so we must reduce costs to restore profitability and without changes, we will lose more money with every month that passes.”( www.guardian.co.uk) •Create alliances and merger to regain competitive advantage as competition will be higher for other airlines which may rush to follow suit in order to defend themselves against a larger competitor....
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