Essay Summary of British Airways

This is an airline industry, which started its operation in 1st September 1972 as two separate airlines i. e. British overseas Airways Corporation (BOAC) and British Europe Airways (BEA) which the two airlines merged in 1974 to form British Airways. Since then, British Airways (BA) was the sole entity in the airline industry in the United Kingdom and the large of Europe, till in the late 90s where virgin Atlantic entered the market, become its main rival in the airline industry in the United Kingdom.

The airline currently flies to over 550 worldwide destinations and each year its profit after tax has significantly increased together with the passengers list and cordial working environment with its competitors. The airline flies to all the five continents. Currently the airline is being managed by Willie Walch who’s the current Chief Executive Officer. British Airways: Globalization The introduction of globalization was and is to capture the international market. This has been a huge improvement expansion of the airline, where the airline gets to an international player in the airline industry.

Globalization has had its benefits and challenges to the airline. The benefits are:- • There has been an increase brand awareness i. e. British Airways internationally, hence improving its market. Penetration especially in new destination. This is because British Airways offers quality air flight services that are safe, secure, for both the passengers and the cargo. • There has been an increase in travel destination; the British Airways has been able to spread its tentacle internationally.
• The airline has increased the competitiveness in the airline market, whereby the British Airways for example is able to compete with Emirates in the Middle-East countries, hence the consumer are able to enjoy the competitive prices that British Airline offers. • Since the introduction of globalization to the airline, the airlines revenue has significantly increased, enabling the airline to purchase more and new airbus, introduction of terminal 5 at Heathrow Airport, training of its staff etc.
• The airline has been able to offer employment opportunities not only to UK’s citizens, but also from other countries, that ere in the travel destinations of British Airline, hence alleviating the problem of unemployment. Although, there have been benefits to the airline, it still had some challenges in the globalization which are; • Vulnerability to terrorist attacks. The increase of terrorist attacks especially in the Middle East has made the airline vulnerable especially after the 9/11 in the United States. • Language barriers • Increase in pollution i. e. air pollution
• Unregulated and ever-changing trade laws. • Increase in the crude oil prices. • Unpredictable environmental and weather patterns • Increase in exchange rates especially with the increase in oil prices. The airline for it to overcome some of the challenges has responded by changing the organization policies and the decision-making some of the areas the airline’s response is:- • Co-operation with the other international airlines. The airline has undertaken a strategic move to form partnership with other airlines so as to capture the growing market and also ease the entry into a foreign country.
For example the merger between British Airways and continental American Airlines (B. A-C. A. A). The co-operation with other airlines has proved to be beneficial to British Airline in improving its network globally of international destination and has increased the profit-margin. This together with, campaigning for the better international trade laws, in the airline industry. • Environmental factors The airline has taken measures to reduce pollution and reduce global warming.
This was especially demonstrated with the removal of concords of which many environmentalists complained about its huge impact in the environment. The airline has been able to reduce the aircraft weight and cargo weight to reduce pollution. The staff of British Airline and the consumers are been trained on how to reduce pollution and take care of the environment. • Social responsibility The airline has taken-up measures to participate in the improvement of the living condition of its consumers in the different travel destination. The airline hence has been able to share its resources i.
e. percentage of its annual profit with its consumers especially in developing countries in helping to alleviate poverty, improve health standards. Some of the areas the airline has directly been involved are:- • Ensuring of clean and safe water borehole e. g. in South Africa. • Building and construction of schools especially in the low housing projects. E. g. Slum, countries in post civil war situation e. g. Rwanda, Iraq. Etc. • Help in upgrading of slums, by building of low cost houses. • Empowering of women by funding women-base projects e. g. keeping of poultry, dairy farming etc.
This approach increases awareness of British Airline in the different destinations hence increasing its passengers lists compared to its competitors. • Negotiation of trade agreement and tariffs The airline has undertaken to re-negotiate the trade laws in other travel destinations especially in the United Kingdom and USA which the airline has been operating over 10years. This re-negotiation will endeavor to reduce the operating costs of the airline. • Increase airline destinations. The airlines have increased its tentacles especially in developing countries in Asia e.
g. India and Africa. As more developing countries are improving the airport structure, the airline is watching this keenly, especially in countries that are known to be tourist destinations e. g. Tanzania, Zambia etc. • Power of negotiating better deals with the airbus manufactures The globalization has resulted the company to purchase more airbus, hence the airline is able to enjoy better discount deals with reasonable after sale services, hence reducing the operating costs. • Invest in the latest technology and information technology
This will enable better and faster delivery of services and also ensure efficient communication with the consumer e. g. booking and reserving airline cost online. • Offer better working condition for the employees To avoid unnecessary strike by the employees, the airline has come up with channels of communication which the British Airline staff can say and discuss their grievances. The increase of insecurity due to terrorism, unpredictable weather patterns the airline has insured its cabin crew staff with excellent compensation scheme. • Reduction of the interest rates.
Though with the increase in inflation worldwide, the airline is still able to negotiate for lower interest rates, enabling a win-win situation for both the banks and the airline. • Introduction of business suites in the airbus The introduction of world travelers and world travelers plus suites which was to cater for the business class. The airlines has observed that 30% of the consumers are business people, who spend a lot of their time travelling from destination A to B, hence the introduction of these two suites in the economy class, will enable the business people to still go on working while travelling.
The suites are fitted and equipped with laptops, facsimile machines, phones etc. • Integration of the different cultures into the airlines The airline has trained its staff in the main international languages i. e. English, German, French, Spanish, Italian Japanese etc. This enables the cabin crew to communicate effectively with the consumer. The airline staff has also been trained on how to integrate with different culture e. g. how to behave in Muslim countries, Jewish countries etc. REFERENCES: Takeoff, R. L. (1979). A Concept of Corporate Planning. New York: John Wiley.
Ansoff, H. I. (1965). Corporate Strategy: An Analytical Approach to Business Policy for Growth and Expansion New York: McGraw-Hill. Armstrong G. & Kotler P. (2007). Consumer Markets: Influences on consumer behavior, Principles of Marketing. Burgelman, R. A. (1983). corporate Entrepreneurship and strategic management: insights from a Process study. Management Science, 29, 1349-1364 Burnet John J, (1984) Promotion management, A strategic Approach, West Publishing Company. Caples, (1977); tested Advertising Methods, 4th Edition, Prentice hall inc. Englewooe – cliffs.
Drucker P. F (1973); Management, tasks, responsibilities, practices; Harper & Row. Greer T. V. ,(1973); Marketing in the Sovient union ; holt, Rinehart & Winston. Hornby W. H, (1976); “Beware the Market’ Thinkers , ‘Quill . ICMR Case Studies and Management Resources. (2007). Consumer Behavior. Retrieved January 20, 2008 from http://www. icmrindia. org/courseware/Consumer%20Behavior/CBC03. htlm Kotler, P. (2005) Principles of Marketing. New York. Melbourne Press Lnick F. John and WillinLee Ziegler, sales promotion and modern Merchandising, McGraw Hill. Lehmann D. R.
(1985); Market Research and Analysis, home – wood, III. :Richard D. Irwin Schaik J. L. , (2002); The Task of Marketing Management; J. L. van Schaik (Pity) ltd Weitzel, W. & Johnson, E. (1989). Decline in organizations: A literature integration and extension. Administrative Science Quarterly, 34, 91-109. Wernerfelt, B. (1984). A resource-based view of the firm. Strategic Management Journal. www. dur. ac. uk/p. j. allen/masses6. doc , Methods and Direction of Corporate strategy Development Winer, R. S. (2007). Marketing Management, Prentice Hall, Upper Saddle River, NJ

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