SWOT Analysis of British Airways

Table of Content

Executive Summary:

British Airways is one of the International Airlines that provides its flights to 570 finishs in 133 districts. It chiefly operates from the Heathrow and Gatwick. It faces many jobs like 531 million lbs loss in gross because of deficiency of international market survey, employee relationship ( work stoppage job ) and many more. Hence an effectual scheme is the lone opportunity to get the better of these jobs. The scheme of British Airways includes the invention in technological accoutrements, clients relationship, employee relationship, safety and security of interest holders and so on.


Any concern has challenges from different elements like globalization, information and engineering, socio and cultural factors, political factors and so on. To run into these challenges a clear scheme is really important for any organisation. A scheme is a clear vision of what the administration will be based on a sustainable competitory advantage. Actually, scheme is a route map for future waies and range. It is a long scope program for five old ages and more. It develops mission, nonsubjective and ends for an administration. To develop an effectual scheme any administration must put an history with different factors. Environmental analysis, present analysis, strength, failing, chances and so on are the factor through which a scheme can be developed.

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Part 1

1 ) Identify the mission, Values and cardinal aims of an administration within its environment.

The mission statement of British Airways is “To be the unchallenged leader in universe travel for the following millennium” .

The values of British Air passages:

  • Honest.
  • Reliable
  • On clip
  • Good service

Aims of British Air passages:

British Air passages based in London is the largest air hoses in the United Kingdom and provides day-to-day flights to more than 400 metropoliss world-wide. Like most big corporations the air hose must concentrate on a assortment of ends and aims both for short-run and long-run endurance in the competitory planetary market.

General aims of British Air passages:

With an aim of going the universe ‘s largest leader in planetary premium air hose, British Airways will go on to concentrate on client service at every degree of rider ‘s journey. The overall Aims are divided into three countries.

  • Global ( entreaty to all rider ‘s, whether for leisure or concern travel in order to make repetition client ‘s ) .
  • Premium ( guarantee that rider ‘s receive the highest quality of service where of all time they encounter the air hoses ) .
  • Airline ( maintain the focal point on air power with the largest equipment, merchandises and services ) .

Strategic aims of British Air passages:

British Airways provides four strategic aims:

  • Airline of pick ( remain the top pick for International flights for premium clients every bit good as lading, economic system and shorter flights ) .
  • Top-quality services ( provides the best client service for riders on all paths and categories of travel and better online service ) .
  • Global metropolis growing ( go on to spread out the list of top-tier states through air hose partnership ) .
  • Meet client ‘s demands ( researching the latest options and merchandises to heighten client trueness.

A stakeholder is a individual or administration that has an involvement in a concern, for illustration benefit from it.

As a client you are a stakeholder in British Airways. Even if person is working portion clip they are stakeholders in their employers concern. You can be a stakeholder as a client, in all stores you buy from and anyplace you spend leisure money, it could be traveling to the film or back uping your football match.A A A

Stakeholders of British Air passages are:

Groups Relationship with concern
Customer Buy merchandise or services
Suppliers Rely on concern for orders
Employees Rely on concern for employment
Owner ‘s Have invested money in the concern
Local and national communities Directly affected by the actions and operations of the concern.

Influences of stakeholders:

Groups The influences of stakeholders
Customers Are looking to purchase merchandises or services, they are looking for a broad scope of merchandises and services. They besides want easy handiness and hope to purchase good quality merchandises and services at a competitory monetary value. They are truly of import as they provide money for the concern in order to be successful.
Suppliers Suppliers stock the concern with the supplies the concern demands, if they are late so it will do a struggle between concern and providers. Therefor it is critical that all the concern providers are on clip. Suppliers are likely the 3rd of import portion in a concern, they provide the products/services and if they are non in clip it poses to be a menace to the fiscal province of the concern. On the other manus, providers are n’t that of import in determination devising because they are scared of losing their contract with British Air passages.
Employees May want an addition in wage rise. Staffs have a really large involvement in British Airways, they have an involvement in the concern in the signifier of rewards, fillips, price reductions, and vacation pension.A
Owner ‘s In contrast it may desire a lessening in wage rise for their employees you could state that the proprietors likely one of the most of import people in a concern.
Local and national communities Give planning permission depending on the concern a individual wants to make.

Part 2

2 ) Investigate the economic, societal, and planetary environment in which organisations operate.

What is an economic system: An organized mode in which a province or a state allots its resources and allocates goods and services in the national community.

An economic system is slackly defined as a states program for its services, goods, and the exact manner in which its economic program is carried out. Basically there are three major/different types of economic systems predominating around the universe and they are:

Market Economy: In a market economic system, national and province authoritiess play a minor function. Alternatively consumers and their purchasing determinations drive the economic system. In this type of economic system, the premises of the market play a major function in make up one’s minding the right way for a state ‘s economic development.

Market economic systems aim to cut down or extinguish entirely subsidies for a peculiar industry, the pre-determination of monetary values for different trade goods, and the sum of ordinance commanding different industrial sectors.

The absence of cardinal planning is one of the major characteristics of this economic system. Market determinations are chiefly dominated by supply and demand, the function of the authorities in a market economic system is to merely do certain that the market is stable plenty to transport out its economic activities decently.

Planned Economy: A planned economic system is besides known as a bid economic system. The most of import facet of this type of economic system is that all major determinations related to the production, distribution, trade good and service monetary values, are all made by the authorities.

The planned economic system is authorities directed, and market forces have really small say in such an economic system. This type of economic system lacks the sort of flexibleness that is present a market economic system, and because of this, the planned economic system reacts slower to alterations in consumer demands and fluctuating forms of supply and demand.

On the other manus, a planned economic system aims at utilizing all available resources for developing production alternatively of apportioning the resources either for advertisement or selling.

Assorted Economy: A assorted economic system combines elements of both the planned and the market economic systems in one cohesive system. This means that certain characteristics from both market and planned economic systems are taken to organize this type of economic system. This system prevails in many states where neither the authorities nor the concern entities control the economic activities of that state – both sectors play an of import function in the economic determination – devising of the state. In a assorted economic system there is flexibleness in some countries and authorities control in others. Assorted economic systems include both capitalist and societal economic policies and frequently originate in societies that seek to equilibrate a broad scope of political and economic positions.

hypertext transfer protocol: //www.economywatch.com/world_economic-indicators/type

British Airways operates in the Mixed economic system as British Airways was privatised on February 1987 and the authorities has less intercession as it ‘s a private company the lone intercession that the authorities would hold is merely puting the monetary values of the air tickets.

What is Social Welfare: Social public assistance is about how people, communicate and establishments in a society take action to supply certain minimal criterions and certain chances. It is by and large about assisting people confronting eventualities.

Social public assistance which British Airways does for its employees.

Social Welfare Policy: Is fundamentally to better and protect the criterion of life of the people or citizens as a whole.A In the United Kingdom the Name “Social Policy” is used to use to the policies that the authorities uses for public assistance and societal protection and the ways in which public assistance is fundamentally developed in a society. There are assorted societal public assistance policies that the United Kingdom ‘s adopts and they are:

Social public assistance policy that British Airways has adopted/follows:

The impact that societal public assistance novices on British Air passages every bit good as the wider community is foremost that British Airways following the work topographic point ordinance is that it benefits the employees of British Airways and that the employees can work without any caput ones as British Airways has provided all it employees with preparation in safety steps, plus rest clip is given to the employees and to the crew members of British Airways adjustment is given because the crew is usually winging for endless hours/long journeys. The workers are besides made qui vive about the basic footings and conditions of the administration which are fundamentally moralss, codification of behavior, and the duty of the administration.

The other societal public assistance policy which British Airways provides its employees is societal security for its employees similar to contribution benefits ( Retirement pension, pregnancy allowances ) and besides non subscriber benefits ( societal fund, working revenue enhancement benefits ) to its employees, which gives the employees the freedom to make whatever in their personal life. The Employment Law in British Airways provinces and illustrates the normal on the job hours, conditions, and the Acts of the Apostless of the administration.

What is Industrial Policy:

Industrial policy comprises all authorities intercessions which consist of:

  1. Directed towards the supply side of the economic system that consists of endeavors, industries, sectors ) .
  2. Purposes to act upon the industrial construction of the economic system and its industrial alterations.

Industrial policy purposefully affects inducements to bring forth specific goods or inducements to come in or go out a specific goods market.

It is non limited to fabrication and includes all types of commercial economic activities.

Industrial policy intercessions have to be justified because if competitory markets worked adequately, any such intercession would: A A

  1. Distort optimum allotment,
  2. Distort dynamic competition and its benefits ( invention, flexibleness, consumer ‘s sovereignty etc. ) .
  3. Privilege specific endeavors or industries or sectors at the disbursals of others,
  4. Would disfavor taxpayers and consumers. ( An European industrial policy: constructs and effects, Oliver Budzinski ) .

Industrial policy is concerned ; it is the authorities sponsored economic plan in which the populace and private sector coordinate their attempts to develop new engineerings and industries. Government provides the fiscal support and capital to the private sector by direct subsidies, revenue enhancement credits or government- tally developmental Bankss. Industries policy emphasise cooperation between authorities, Bankss, private endeavor, and employees to beef up the national economic system. hypertext transfer protocol: //encyclopedia2.thefreedictionary.com

Impact of Industrial policy on British Air passages:

In the United Kingdoms the Industrial policy has affected a batch of industries but the Industry that suffered the most was the air power industry including all the air hoses even British Airways. Therefore British Airways has changed its scheme of working and has been successful as British Airways adopted new policies. One of the policy that states to cut down Co2 emanations by 15 % by all air hoses and British Airways has decided to cut down by 50 % as they are working on making a new sort of fuel which is known as bio Diesel which is pollution free and environment friendly.

Fiscal Policy: Government disbursement policies that influences macroeconomic conditions. These policies affect revenue enhancement rates, involvement rates and authorities disbursement in an attempt to command the economic system.

Monetary Policy: The action of a cardinal, bank currency or other regulative commission that determine the size and rate of growing of the money supply, which in bend affects involvement rates. Monetary policy is maintained through actions such as increasing the involvement rate, or altering the sum of money Bankss need to maintain in the vault or bank militias.

Impact of financial and pecuniary policy on air hose industry every bit good as British Air passages: A

The rules of economic sciences tell us that authoritiess can sometimes better market outcomes. Methods of act uponing market results can come in the signifier of pecuniary and financial policies. Monetary policies influence displacements

in aggregative demand for goods and services by increasing the money supply, cut downing the equilibrium involvement rates and stimulating investing disbursement or diminishing the money supply, raising equilibrium involvement rates, take downing investing disbursement ( Mankiw, 2004 ) . Fiscal policies shift the aggregative demand curve by increasing or diminishing authorities disbursement or through the addition or lessening in revenue enhancements ( Mankiw ) . Because these policies influence aggregative demand, the authorities uses such policies to seek and convey stabilisation to the economic system.

Such constabularies affect different industries on many different degrees. Some industries have positive effects and some negative. In analyzing how pecuniary and financial policies affect the air hose industry, we can look at how these policies affect employment, growing of the industry, and merchandise monetary values.

Many financial policies directed toward the air hose industry have had profound effects. One such policy is represented by the excise revenue enhancements and fees levied on air bearers. Such revenue enhancements and fees are allocated by the

Government to fund betterments of airdromes, provide security for the air hoses and airdromes, allocate support for the FAA, provide for services for international clients, and back up operations at airpark installations. These fees represent approximately 26 % or $ 52 of a standard 200-dollar round-trip air hose ticket ( Air Transport Association, 2005 ) . Current economic conditions of the air hose industry are blue, particularly due to the tragic events of September 11th. The Air Transport Association ( ATA ) argues that such financial policy in these seeking times hinder the air bearers ‘ ability to right themselves through a self-help policy. The ATA further explains that in an attempt to stabilise the industry, such revenue enhancements and fees can account for the riddance of over 129,000 occupations, forced many bearers into bankruptcy, and, because consumers react to a great extent to monetary value additions in this industry, hinder their ability to apportion financess by raising ticket monetary values. With this current financial policy, air bearers have small maneuverability of financess to run into the demands of an operating budget.

Mike Smith ( personal communicating, June 10, 2008 ) , former proprietor of Pacific Crest Aviation in Big Bear Lake, CA, adds that regulating bureaus institute other fees to bring forth operating grosss for airdromes. On illustration of this is set downing fees. Landing fees vary from airdrome to airport, but play a cardinal function in the finding of where air bearers decide to establish their operations. In efforts to roll up more support through financial policy, Mr. Smith explains that the FAA continues to propose the execution of user fees. Still to be determined how such a fee would impact the air hose industry ; present financial policies have air bearers shouting for reform.

Deregulation is another financial policy that has well impacted countries of the air hose industry. Since deregulating in 1979, the air hose industry experienced significant growing. With the outgrowth of new competition in the industry this created legion sums of occupations, drove ticket monetary values down, and expanded the available market for assorted air bearers. Through an industrial broad growing of over 200 % , new bearers were able to open places to 1000s of new employees in assorted parts of the state. Average ticket monetary values in 1979 remain comparatively unchanged today. As an highly competitory market emerged, the mass meeting for riders on each bearers flights kept ticket monetary values down every bit bearer created linking flights through this new unfastened sky policy ; making more consumers, minimising chance cost, and offering competitory pricing.

The Airline industry continues to be affected by the overall status of the state ‘s economic system. When healthy disbursement exists and pleasance travel is frequent, air bearers are able to make full flights, rise monetary values, and keep a stable economic environment. However, when status of the state ‘s economic system falls, so make the purchasing wonts of the consumer. This is where the air hose industry finds itself today. Fighting to make full flights in a slow economic system and contending heavy financial policy.

Recent pecuniary policies made by the federal authorities to better market conditions are certain to hold an consequence, but how it will impact employment, growing, and monetary values in the air hose industry are still unknown. The most

Recent pecuniary policy made by the authorities came in the signifier of economic stimulation cheques. This in-flow of money into the economic system in an effort to excite the purchase of goods and services throughout the United States may assist decrease the effects of our current sulky economic system. Small to no information exists to demo how this has impacted any growing in the air hose industry. So far, there seems to be small alteration in the disbursement wonts of the consumer to go via air. Because the economic place of the air hose industry has been fighting for so long, betterments due to any individual event may be impossible to track. Whether alterations in financial policies, pecuniary policies, or internal bearer construction aid to better conditions in the air hose industry, alterations will go on slow and will reflect economic status in the state ‘s market place.

By successfully pull offing chance cost, and accommodating to an of all time altering economic environment, air hose industries can hold economic success. However, the wellbeing of the state ‘s economic system will hold a direct impact on the degree of success experienced in the air hose industry. During economic deficits in the state ‘s economic system, travelers will hold fewer resources available to go for pleasance. Lending to the negative economic influences in the air hose industry, hereafter and bing policies aiming the air hose industry will go on to impede the industry ‘s ability to retrieve losingss in periods of economic adversities. hypertext transfer protocol: //www.taxreformpanel.gov

Makiw, N.G. ( 2004 ) Principles of economic sciences ( 3rd edition ) . Chicago, 2: Thomson South-Western.

PESTLE Analyses on British Air passages:

PESTLE Factors Key Points Deductions for British Air passages
Political Heavy ordinance ( AEA, 2009 ) .

Increased security due to past terrorist menaces ( DFT, 2008 )

Conformity is indispensable if British Airways wants to go on.

Sufficient security steps should be in topographic point to guarantee consumer assurance and competitory advantage in care.

Economic Global economic crisis: universe growing is projected to merely over 2 per cent in 2009 ( IMF, 2008 ) . Pound failing particularly against the Euro.

Oil monetary values declined by 50 % since their extremum withdrawing to 2007 degrees. Decline in fuel prises the dollar strengthens ( IMF, 2008 ) .

UK Consumer disbursement saw its sharpest diminution for 13 old ages between July and September 2008 ( Channel 4, 2008 )

Possible decrease in the sum of concern travel as companies are cutting costs and utilizing alternate agencies of communicating such as telecom fence. British Airways is vulnerable as a United Kingdom runing air hose to a hapless exchange rate.

Fluctuation in oil monetary values and exchange rates will straight impact British Airways cost base.

More intense competition.A

Social The United Kingdom has an aging population.

Increasing Unemployment

Potential chances for growing as older coevalss have more clip to pass on leisure activities such as international travel.

Increased dickering power as an employee.

Technological A recent study revealed that 34 % of on-line consumers plan to utilize price- comparing sites more in 2009 ( NMA, 2009 )

Online engagement services and check-in is going progressively used by the air hose industry.

Increased consumer consciousness and hence bargaining power.

British Airways must guarantee that they remain up to day of the month with these technological progresss whilst avoiding going excessively reliant, as this may insulate certain consumer markets ( i.e. the aged ) who do n’t experience comfy utilizing such engineering.

Environmental/Ethical Noise pollution controls and energy ingestion controls.

Cancellations of flights and loss of luggage.

New statute law ( e.g. clime alteration measure ) implementing tighter environmental ordinance may increase operational costs each twelvemonth.

Such ethical issues could hold a damaging consequence on repute if left unsolved.

Legal Collusion and monetary value repair.

Recognition of trade brotherhood and industrial action e.g. cabin crew work stoppages.

Open skies understanding.

Restriction on amalgamations will hold an impact on British Airways proposed confederation with American Airlines.

Good employee dealingss are indispensable if British Airways wants to avoid industrial action and interrupted operations.

Opportunity for British Airways and its rivals to freely transport aircrafts between the European Union and the United States.

Part 3

3 ) Investigate the behavior of organisations and the market environment.

What is Oligopoly:

Oligopoly is a market which is usually dominated by a few Numberss of big providers. The grade of market concentration is really high. Firms within an oligopoly green goods branded merchandises and besides sometimes there is a barrier to new entries.

Advantages as general:

    • Firms or companies are able to harvest economic systems of graduated table, due to big scale competition.

– Merchandises can non bring forth by single houses on a little graduated table.

  • There is an inducement to prosecute in research and development. They have the ability to gain super normal net incomes and gaining control big market portion.
  • Firms enjoy lower costs due to technological betterment. This consequences in higher net incomes which will better the houses or companies capacity to defy monetary value war.

hypertext transfer protocol: //www.blurtit.com/q2774865.html

Disadvantages as general:

  • Firms and companies are concerned with the activities of their rivals.
  • If one house or company reduces its monetary values the other companies would hold to.

How oligopoly has impacted the air hose market and British Air passages:

  • In the late 1990s the European air hose market was liberalised, take downing the barriers to entry.
  • Traditional houses so faced competition as houses could come in the market more easy.
  • New entrants used leased aircrafts to maintain costs low.
  • Firms have merged ( such as Liberia Airways and British Airways did in 2000 ) to better the houses horizontal integrating.

What is monopoly:

A state of affairs in which a individual company owns all or about all of the market for a given type of merchandise or service. This would go on in the instance that there is a barrier to entry into the industry that allows the individual company to run without competition. In such an industry construction, the manufacturer will frequently bring forth a volume that is less than the sum which would maximise societal public assistance. www.investwords.com/3112/monopoly.html

Advantages of monopoly as general:

  • There is no hazard of extra production.
  • There is sufficient capital for research.
  • Monetary value of goods are reduced.
  • The market can be controlled.

Disadvantages of monopoly as general:

  • The consumers are exploited.
  • There is barely and consumer pick.
  • The monetary value is high on merchandises.
  • As there is no competition it leads to inefficiency.
  • The labor is exploited as the monetary value charged is higher than the fringy cost.

How monopoly has impacted the air hose market and British Air passages:

  • There is no competition which would do the air hoses inefficient.
  • As there is no pick the consumer would hold to take that one air hose merely.
  • As the ticket monetary values could be high the consumers would prefer to take a train to their finish if the consumer ‘s finish is in Europe and this would do a loss for the company.

What is perfect competition:

An ideal market construction characterized by a big figure of little houses, indistinguishable merchandises sold by all houses, freedom of entry into and go out out of the industry, and perfect cognition of monetary values and engineering. This is one of four basic, market constructions. The other three are monopoly, oligopoly, and monopolistic competition. Perfect competition is an idealised market construction that is non observed in the existent universe. While unrealistic, it does supply an first-class benchmark that can be used to analyze existent universe market construction. In peculiar, perfect competition expeditiously allocates resources. hypertext transfer protocol: //www.amosweb.com.

Advantages of perfect competition as general:

  • Optimum allotment of resources.
  • Competition encourages efficiency.
  • Consumers charged a lower monetary value.
  • Responsive to consumer wants, alteration in demand, leads excess supply.

Disadvantages of perfect competition as general:

  • Insufficient net incomes for investing.
  • Lack of merchandise assortment.
  • Lack of competition over merchandise design and specification.
  • Unequal distribution of goods and income.
  • Outwardnesss.e.g. pollution.

How perfect competition impacts air hoses market and British Air passages:

As in the Airlines Industry there are many air hoses and there is competition there can be either positive effects every bit good as negatives effects the positive effects of perfect competition is that the resources of the air hoses is allocated to the point as there is competition the other air hoses every bit good as British Airways is encouraged to work harder to crush the competition and there for the air hoses charge its clients with a lower cost to garner more of the clients. The negative effects of perfect competition is that sometimes the return on the investing can be hapless there is noise pollution being created by the noise of the plane engines and can impact the society with air pollution as it can harm the society.A A A

Part 4

4 ) Explain the significance of international trade and the European dimension for UK concerns.

What is trade:

Trade is the transportation of ownership of goods or services from one individual to another individual. Trade is besides known as commercialism or fiscal dealing or swap like in the old yearss. Trade can merely take topographic point in a market. A market is a topographic point where purchasing and merchandising takes topographic point it could be either in a store, house or even the cyberspace.

Advantages of trade:

  • Can increase international ties.
  • Leads to specialization and therefore additions efficiency.
  • Additions criterions of life.

Disadvantages of trade:

  • As there is extra production it leads to pollution.
  • Can take to a possible economical imperialism.
  • Can do a balance of payment job which can take to international debt.

Why is trade of import:

To merchandise is of import for a state because through trade a state gets its resources which it ca n’t supply for itself, or its cheaper for a state to import than to bring forth locally. A state trades its resources to other states that can non bring forth them this means that it ‘s a large rhythm where everyone trades until all the states have what they precisely need while doing some money by selling what they do n’t necessitate. The state fundamentally does it for the development of the state so that its people can acquire their day-to-day staff of life and butter, apparels and necessities which they need that their state does non hold entree to, and to even make concern with other states through trade.

What is international trade:

International trade is exchange of capital, goods, and services across abroad lodgers or districts. It fundamentally refers to exports of goods and services by houses to a abroad purchaser besides known as a importer. In most states it represents a important portion of gross domestic merchandise besides known a ( GDP ) .

Advantages of international trade:

  • Improve domestic fight.
  • Helps to derive planetary market portion.
  • Reduces the dependence on bing market.
  • Additions opportunities to spread out.

Disadvantages of international trade:

  • Can take a really long clip to derive.
  • Extra cost can be incurred.
  • Payments come after long.
  • Licenses are need and cover has to be done in ordinances.

Why is international trade of import:

International trade is of import because it allows other states to take advantage of something known as comparative advantage. Comparative advantage means that a state is able to bring forth something by giving less for something else they want. Therefore even if a state in non able to bring forth the best quality merchandise of anything, relatively the states can bring forth without giving up something. When states take advantage of comparative advantage, the entire end product in the universe additions and hence everyone benefits from excess end product and hence international trade helps set up a higher criterion of life.

What is economic integrating:

Economic integrating is the riddance of duty and nontariff barriers to the flow of goods and services and the factors of production between a group of states or assorted different parts of the same state.

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SWOT Analysis of British Airways. (2016, Dec 05). Retrieved from


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