British airways Essay

British Airways is maven of the broadcastetary Airlines that stick outs its flights to 570 destinations in 133 territories. It mainly ope evaluate from the Heathrow and Gatwick. It faces umpteen a(prenominal) problems c atomic number 18 531 meg pounds loss in revenue because of lack of international mart study, employee consanguinity (strike problem) and m both much. Hence an effective strategy is the yet chance to whelm these problems. The strategy of British Airways includes the innovation in technological accessories, customers relationship, employee relationship, safety and shelter of stake holders and so on. IntroductionAny craft has ch altoge on that pointnges from antithetic elements like globalisation, in songation and technology, socio and cultural factors, political factors and so on. To meet these ch tout ensembleenges a do strategy is precise crucial for any organization. A strategy is a clear vision of what the organisation go out be establish on a sus tainable war-ridden advantage. Actually, strategy is a road chromosome mapping for future directions and scope. It is a long scope plan for five age and more. It develops mission, objective and goals for an organisation. To develop an effective strategy any organisation must(prenominal) set an account with distinguishable factors. Environmental analysis, present analysis, strength, weakness, opportunities and so on are the factor by which a strategy can be developed. Part 11) Identify the mission, Values and key objectives of an organisation inside its environment. The mission statement of British Airways is To be the undisputed leader in world travel for the next millennium. The values of British AirwaysHonest. au henceticOn season broad(a) serviceObjectives of British AirwaysBritish Airways based in London is the largest respiratory tracts in the United countryand provides daily flights to more than 400 cities world-wide. Like most large corporations the production line line must tenseness on a variety of goals and objectives twain for short-term and long-term survival of the fittest in the competitive global market. General objectives of British AirwaysWith an objective of f circularise the worlds largest leader in global premium air lane, British Airways lead continue to focus on customer service at every level of passengers journey. The overall Objectives are shared into three areas. Global (appeal to all passengers, whether for unemployed or business travel in set out to create repeat customers). support (ensure that passengers receive the highest quality of service where ever they recreate the airlines). Airline ( defy the focus on aviation with the largest equipment, products and service). Strategic objectives of British AirwaysBritish Airways provides four strategic objectivesAirline of choice ( retain the top choice for International flights for premium customers as puff up as cargo, thriftiness and shorter flights). Top-quality work (provides the best customer service for passengers on all routes and classes of travel and rectify online service). Global city appendage (continue to expand the list of top-tier countries through airline officenership). Meet customers needs (exploring the latest options and products to enhance customer loyalty. A stakeholder is a person or organisation that has an gratify in a business, for example benefit from it. As a customer you are a stakeholder in British Airways. Even if someone is running(a) part time they are stakeholders in their employers business. You can be a stakeholder as a customer, in all shops you buy from and anywhere you eliminate leisure money, it could be going to the cinema or supporting your football match. Stakeholders of o buy products or serve, they are looking for a wide range of products and work. They also want easy accessibility and hope to buy approximate quality products and run at a competitive price. They are rattling important as they provide money for the business in order to be happy. SuppliersSuppliers stock the business with the supplies the business needs, if they are late then it exit cause a conflict amidst business and suppliers. therefor it is vital that all the business suppliers are on time. Suppliers are plausibly the third important part in a business, they provide the products/service and if they are not in time it poses to be a threat to the pecuniary state of the business. On the other hand, suppliers arent that important in decision qualification because they are scared of losing their contract with British Airways. Employeeswhitethorn want an increase in grant rise. Staffs be possessed of a very big interest in British Airways, they adopt an interest in the business in the form of wages, bonuses, discounts, and holiday pension. OwnersIn contrast it may want a ebb in pay rise for their employees you could say that the owners probably one of the most important tidy sum in a business. Local and national communitiesGive planning authority depending on the business a person wants to do.Part 22) enquire the stinting, well-disposed, and global environment in which organizations operate. What is an sparing system An organised look in which a state or a nation allots its resources and portion outs goods and services in the national community. An stinting system is loosely defined as a countries plan for its services, goods, and the exact way in which its economic plan is carried out. Basically there are three major(ip)/different vitrines of economic systems prevailing around the world and they are Market Economy In a market economy, national and state governments play a secondary role. Instead consumers and their buying decisions drive the economy. In this type of economic system, the assumptions of the market play a major role in deciding the business path for a countrys economic development. Market economies conduct to descend or eliminate entir ely subsidies for a particular effort, the pre-determination of prices for different commodities, and the summate of decree controlling different industrial sectors. The absence of of import planning is one of the major features of this economic system. Market decisions are mainly dominated by communicate and demand, the role of the government in a market economy is to simply make sure that the market is unchanging enough to carry out its economic activities properly. Planned Economy A aforethought(ip) economy is also known as a financial statement economy. The most important aspect of this type of economy is that all major decisions related to the mathematical product, distri aloneion, commodity and service prices, are all made by the government.The planned economy is government directed, and market forces have very inadequate say in such an economy. This type of economy lacks the kind of tract strength that is present a market economy, and because of this, the planned e conomy reacts slower to changes in consumer needs and fluctuating patterns of supply and demand. On the other hand, a planned economy aims at apply all forthcoming resources for developing production instead of allocating the resources either for advertising or marketing. Mixed Economy A mixed economy combines elements of twain the planned and the market economies in one cohesive system. This means that certain features from both market and planned economic systems are taken to form this type of economy.This system prevails in many countries where neither the government nor the business entities control the economic activities of that country both sectors play an important role in the economic decision making of thecountry. In a mixed economy there is flexibility in some areas and government control in others. Mixed economies include both capitalist and social economic policies and often arise in societies that hear to balance a wide range of political and economic views. http //www.economywatch.com/world_economic-indicators/typeBritish Airways operates in the Mixed economic system as British Airways was privatised on February 1987 and the government has less intervention as its a private company the only intervention that the government would have is only setting the prices of the air tickets. What is friendly Welfare Social welfare is close to how volume, communicate and institutions in a society take natural action to provide certain minimum standards and certain opportunities. It is generally about helping people facing contingencies. Social welfare which British Airways does for its employees. Social Welfare polity Is basically to remedy and protect the standard of living of the people or citizens as a whole. In the United Kingdom the Name Social polity is used to apply to the policies that the government uses for welfare and social bulwark and the ways in which welfare is basically developed in a society.There are various social welfare poli cies that the United Kingdoms adopts and they are Social welfare policy that British Airways has adopted/follows The have-to doe with that social welfare initiates on British Airways as well as the wider community is firstly that British Airways adopting the work place code is that it benefits the employees of British Airways and that the employees can work without any head aces as British Airways has provided all it employees with training in safety measures, plus rest time is given to the employees and to the crew members of British Airways accommodation is given because the crew is usually flying for endless hours/long journeys. The workers are also made mobile about the basic terms and conditions of the organisation which are basically ethics, computer code of conduct, and the responsibility of the organisation.The other social welfare policy which British Airways provides its employees is social security for its employees similar to contribution benefits (Retirement pensi on, maternity allowances) and also non contributor benefits (social fund, working impose benefits) to its employees, which gives the employees the freedom to do whatever in their personal life. The affair Law in British Airways states and illustratesthe normal working hours, conditions, and the acts of the organisation. What is industrial PolicyIndustrial policy comprises all government interventions which consist of 1. Directed towards the supply side of the economy that consists of work outprises, industries, sectors). 2. Aims to influence the industrial structure of the economy and its industrial changes. Industrial policy purposefully postulates incentives to produce specific goods or incentives to enter or exit a specific goods market. It is not limited to manufacturing and includes all types of commercial economic activities. Industrial policy interventions have to be warrant because if competitive markets worked adequately, any such intervention would 1. discolour optim al allocation,2. Distort dynamic tilt and its benefits (innovation, flexibility, consumers sovereignty etc.). 3. Privilege specific enterprises or industries or sectors at the expenses of others, 4. Would disadvantage taxpayers and consumers. (An European industrial policy concepts and consequences, Oliver Budzinski). Industrial policy is concerned it is the government sponsored economic program in which the worldly concern and private sector coordinate their efforts to develop new technologies and industries. regimen provides the financial support and capital to the private sector by direct subsidies, tax credits or government- run developmental banks. Industries policy emphasise cooperation between government, banks, private enterprise, and employees to strengthen the national economy. http//encyclopedia2.thefreedictionary.com Impact of Industrial policy on British AirwaysIn the United Kingdoms the Industrial policy has affected a lot of industries but the Industry that suffere d the most was the aviation exertion including all the airlines even British Airways. Therefore British Airways has changed its strategy of working and has been successful as British Airways adopted new policies.One of the policy that states to reduce Co2 emissions by 15% by all airlines and British Airways has mulish to reduce by 50% as they are working on creating a new kind of fuel which is known as bio diesel motor which is pollution free and environment friendly. Fiscal Policy Government utilisationpolicies that influences macroeconomic conditions. These policies affect tax rates, interest rates and government disbursement in an effort to control the economy. Monetary Policy The action of a central, bank currency or other regulatory committee that watch the size and rate of fruit of the money supply, which in turn affects interest rates. Monetary policy is maintained through actions such as change magnitude the interest rate, or changing the amount of money banks need t o guard in the vault or bank reserves. Impact of monetary and pecuniary policy on airline industry as well as British Airways The principles of economics tell us that governments can sometimes amend market outcomes.Methods of influencing market outcomes can come in the form of monetary and fiscal policies. Monetary policies influence hucksters in aggregate demand for goods and services by increasing the money supply, reducing the equilibrium interest rates and stimulating investment spending or change magnitude the money supply, face lifting equilibrium interest rates, lowering investment spending (Mankiw, 2004). Fiscal policies shift the aggregate demand curve by increasing or decreasing government spending or through the increase or decrease in taxes (Mankiw). Because these policies influence aggregate demand, the government uses such policies to try and work on stabilization to the economy.Such polices affect different industries on many different levels. Some industries have positive effects and some negative. In analysing how monetary and fiscal policies affect the airline industry, we can look at how these policies affect employment, growth of the industry, and product prices. Many fiscal policies directed toward the airline industry have had profound effects. One such policy is represented by the excise taxes and fees levied on air carriers. Such taxes and fees are allocated by the Government to fund improvements of airports, provide security for the airlines and airports, allocate funding for the FAA, provide for services for international customers, and support operations at airpark facilities.These fees represent roughly 26% or $52 of a standard 200-dollar round-trip airline ticket (Air transpose Association, 2005). Current economic conditions of the airline industry are dismal, especially ascribable to the tragic events of September 11th. The Air Transport Association (ATA) argues that such fiscal policy in these trying times hinder the air carriers ability to right themselves through a self-help policy. The ATA further explains that in an effort to alter the industry, such taxes andfees can account for the elimination of over 129,000 jobs, forced many carriers into bankruptcy, and, because consumers react heavily to price increases in this industry, hinder their ability to allocate funds by raising ticket prices. With this current fiscal policy, air carriers have little manoeuvrability of funds to meet the demands of an operational budget. mike Smith (personal communication, June 10, 2008), former owner of Pacific Crest Aviation in Big Bear Lake, CA, adds that governing agencies institute other fees to generate operating revenues for airports.On example of this is landing fees. Landing fees vary from airport to airport, but play a key role in the determination of where air carriers decide to base their operations. In attempts to accumulate more funding through fiscal policy, Mr. Smith explains that the FAA cont inues to suggest the implementation of user fees. Still to be determined how such a fee would impact the airline industry present fiscal policies have air carriers screaming for reform. Deregulation is some other fiscal policy that has considerably impacted areas of the airline industry. Since deregulation in 1979, the airline industry experience substantial growth. With the emergence of new competition in the industry this created numerous amounts of jobs, drove ticket prices down, and expanded the available market for various air carriers. Through an industrial wide growth of over 200%, new carriers were able to open positions to thousands of new employees in various parts of the nation. Average ticket prices in 1979 remain comparatively unchanged today. As an extremely competitive market emerged, the rally for passengers on each carriers flights kept ticket prices down as carrier created connecting flights through this new open sky policy reaching more consumers, minimizing op portunity cost, and offering competitive pricing.The Airline industry continues to be affected by the overall condition of the nations economy. When healthy spending exists and delight travel is frequent, air carriers are able to subscribe flights, raise prices, and maintain a stable economic environment. However, when condition of the nations economy falls, so do the buying habits of the consumer. This is where the airline industry finds itself today. Struggling to fill flights in a slow economy and fighting heavy fiscal policy. new monetary policies made by the federal government to improve market conditions are sure to have an effect, but how it will impact employment, growth, and prices in the airline industry arestill unknown. The most Recent monetary policy made by the government came in the form of economic stimulus checks. This in-flow of money into the economy in an attempt to pee the purchase of goods and services throughout the United States may help decrease the eff ects of our current sluggish economy. Little to no data exists to describe how this has impacted any growth in the airline industry. So far, there seems to be little change in the spending habits of the consumer to travel via air. Because the economic position of the airline industry has been struggling for so long, improvements due to any single event may be impossible to track. Whether changes in fiscal policies, monetary policies, or internal carrier structure help to improve conditions in the airline industry, changes will happen slow and will smoothen economic condition in the nations marketplace.By successfully managing opportunity cost, and adapting to an ever changing economic environment, airline industries can have economic success. However, the well-being of the nations economy will have a direct impact on the level of success experienced in the airline industry. During economic shortfalls in the nations economy, travellers will have fewer resources available to travel for pleasure. Contributing to the negative economic influences in the airline industry, future and existing policies targeting the airline industry will continue to hinder the industrys ability to recover losses in periods of economic hardships. http//www.taxreformpanel.gov Makiw, N.G. (2004) Principles of economics (3rd edition). Chicago, 2 Thomson South-Western. PESTLE Analyses on British AirwaysPESTLE FactorsKey PointsImplications for British AirwaysPoliticalHeavy regulation (AEA, 2009). change magnitude security due to past terrorist threats (DFT, 2008) Compliance is essential if British Airways wants to continue. suitable security measures should be in place to ensure consumer confidence and competitive advantage in maintenance. EconomicGlobal economic crisis world growth is projected to just over 2 per cent in 2009 (IMF, 2008). flog weakness especially against the Euro. Oil prices declined by 50% since their peak retreating to 2007 levels. free fall in fuel prises the doll ar strengthens (IMF, 2008). UK Consumer spending saw its sharpest decline for 13 years between July and September 2008 (Channel 4, 2008) Possible reduction in the amount of business travel as companies are cutting costs and development alternative means of communication such as telecom fencing. British Airways is vulnerable as a United Kingdom operating airline to a poor diversify rate. Fluctuation in oil prices and exchange rates will directly affect British Airways cost base. much intense competition.SocialThe United Kingdom has an aging population.Increasing Unemployment say-so opportunities for growth as older generations have more time to spend on leisure activities such as international travel. increase talk terms power as an employee.TechnologicalA recent survey revealed that 34% of online consumers plan to use price- comparison sites more in 2009 (NMA, 2009) Online booking services and check-in is becoming increasingly used by the airline industry. Increased consumer awa reness and therefore bargaining power. British Airways must ensure that they remain up to date with these technological advances whilst avoiding becoming overly reliant, as this may isolate certain consumer markets (i.e. the elderly) who dont feel comfortable using such technology. Environmental/EthicalNoise pollution controls and energy consumption controls.Cancellations of flights and loss of baggage.New legislation (e.g. climate change bill) enforcing tighter environmental regulation may increase operational costs each year. Such respectable issues could have a detrimental effect on reputation if left(p) unresolved. LegalCollusion and price fixing.Recognition of trade union and industrial action e.g. cabin crew strikes.Open skies agreement.Restriction on mergers will have an impact on British Airways proposed alliance with American Airlines. Good employee relations are essential if British Airways wants to avoid industrial action and interrupted operations. Opportunity for Brit ish Airways and its competitors to freely transport aircrafts between the European Union and the United States.