Table of Contents
2.0 External Environment – Opportunities and Threats.
2.1 PESTLE Analysis.
2.1 Deep list (Trends)
2.2 Scanstep (Drivers)
2.3 Porters 5 Forces.
2.4 Industry life cycle.
3.0 Internal Environment – Strengths and Weaknesses.
3.1 Resource-Based View of British Airways.
3.2 VRIO analysis for British Airways.
3.3 Porter’s Value Chain Analysis of British Airways.
3.5 Culture of British Airways.
- 4. 0 TOWS summary and strategic recommendations.
Appendix A: PESTLE Analysis of Airline Industry.
Appendix B: TWOS Analysis.
Appendix C: Porter’s Five Forces Model
Appendix D: Resource-Based View of British Airways.
Pahwa (2020) stated that Business strategy is a combined decision making and implementation for attaining the business goals. Business strategy is one of the vital parts of the business by which business firms can attain their vision, vision; increase their values and satisfy the stakeholders. This report develops the strategic management of British Airways. This airway is founded in 1974. The fleet size of this airway is 278 and it has 183 destinations all over the world (British Airways, 2020). The headquarters is located in London, England, the UK with great profit history. The amount of revenue of British airline is £13,020 million and net profit is £1,952 million in the year 2018 (British Airways Annual Report, 2018). Therefore, this paper describes the internal as well as external environmental issues for British Airlines. It also reflects the TOWS analysis for this airline with affordable recommendations.
2.0 External Environment – Opportunities and Threats
2.1 PESTLE Analysis
Kotler et al. (2016) mentioned that PESTLE indicates the factors of political, economic, social, technological, and legal and environmental factors. Appendix A contains the explanation of PESTLE. The finding of PESTLE analysis shows that the political issues including several laws, regulations and government fiscal policies affect Air industry. The tax rate of the UK is also high that affect the Air industry (Beard, 2019). In the last few years, the increase in fuel prices negatively impacts the air industry (TTS, 2020). Due to the Coronavirus, economical activities are falling into a lockdown that also brings impact on the Airline industry (Philip and Morales, 2020). The social circumstances, most importantly COVID-19, also have a significant impact on the business performance of the Air industry. The social beliefs, structure, and status of the people also generate the choice of traveling that ultimately affects the air industry business (Burridge, 2020). Technological development is rapidly happening in the air industry.
At present, most aircraft have greater speed and security. In addition, there are various types of services presented in the aircraft for the customers like Wifi facility and online ticket booking system (Beard, 2019). The legal issues are seriously connected with the air industry such as passenger legal rights and legal battles with union officials over plans (Dennys, 2020). The change in environmental factors, mainly Corona Virus and Global Warming, has a significant effect on the airline industry. For this reason, the Airline industry has to take a green flying policy to save the environment from pollution (CAPA, 2020).
2.1 Deep list (Trends)
Impact of Corona Virus: At present, the most alarming challenge for every country is covid-19 that created the disease from coronavirus. Mazareanu (2020) stated that due to this Corona Virus, the airline industry is highly affected because most of Airlines can’t run their flight for several months. British Airlines are also highly affected by this Corona Virus. All flights are postponed but they need to bear all expenses that hamper their high profitability trends.
Changeable global economy: The more volatility in the economic condition has a great influence on the airline industry (Pratap, 2016). The British Airline has covered the market of UK, USA, China and India. Some economical changes in these countries affect the financial performance of British Airlines (Beard, 2019).
Global passenger traffic: Since 2016, the international passenger traffic growth has raised in all markets including Africa, Europe, Latin America, Middle East and North America (Pratap, 2016). However, COVID-19 has drastically affected the global passenger traffic where passenger demand shrank 55.8% in March 2020 compared to March 2019 (IATA, 2020).
Impact of online marketing: Most business firms are using online marketing platforms like Facebook, YouTube, Instagram and email marketing to cover the customers’ attention and relationship (Pratap, 2016). In the case of British Airlines, 70% of total passengers are booking their seats through the online method. Therefore, this airline has taken into deep concentration on online marketing campaigns (British Airway Annual Report, 2019).
Social trends: The airline industry is also influenced by the social trends of the passengers. Social issues include the values, beliefs and social status of the people at which they can decide their traveling options (CAPA, 2020).
Technological changes: According to Beard (2020), technological advancement is seriously needed in the airline industry. The changes in technological issues have a significant impact on the functions of British Airlines. The passengers always choose to safe and comfortable journey that can be ensured through using modern technologies in the Airlines.
2.2 Scanstep (Drivers)
International market growth: At present, the international market growth is stopped due to Corona Virus. But, before this virus, there was a huge international growth in the Airline business. According to data of 2018, the international airline market growth was 9% more than the previous year (British Airway Annual Report, 2019).
Raising income level: At the ending point of 2019, the income level of people has increased that positively impacts the airline business. However, the present scenario is different due to Corona Virus spread around the World (Mazareanu, 2020). British Airlines have faced several decreasing trends due to a decrease in the income level of people…………………………..