Proposed Business Strategy for British Airways

Business Strategy Post-Module Assignment

NAME: LUKMON SUMOLA STUDENT NUMBER: D09118896

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Questions Answered

Section A: Analysis Complete a SPECCTRE analysis and 5-forces analysis of the international airline business. Evaluate the attractiveness of the segments of the business in which British Always operates

What are the main factors affecting the profit potential for British Airways? How and why do these factors affect competitors in ways that are different (Positive or negative) from British Airways?

Using the SWOT analysis, summarise the current competitive position and potential of British Airways.

Section B: Strategy Formulation Using the TOWS matrix, convert the SWOT analysis into a set of strategy options open to British

Airways for the 2010 to 2013. Which of the four alternatives do you consider the most appropriate for British Airways, and why have you selected this option?

State (a) What you believe ought to be the key objectives and performance measures for British Airways for this period and (b) the reasons why you have selected these objectives and measures.

List the programme headings that make a cohesive strategy for achieving these objectives, explain how you have derived these from preceding analyses.

Section C: Management of implementation Explain how you could communicate your selected strategy within the British Airways organisation, bearing in mind that it is a global airline with employees throughout the world.

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Introduction The airline industry was deeply affected by the recent global economic crisis which spurred many customers to seek for better value for money, and continuous growing of internet online shopping experience presented opportunistic choices than ever before. The war or insurgencies in oil producing countries accelerated the oil prices, coupled with government tax increment as caused much consolidation in airline industry.

These variables have caused collapse of many companies, some airline companies form merger while some are completely absorbed by another airline. Companies are forced to revisit their strategy, as customers are more discerning, can shop around for better prices, look for good quality services at low price, surf online relentless for superb bargains and offers. The company that have unique value innovation that could perform activities in a different way to competitors, that render premium service at low price will survive the game.

This reading are in threefold, Firstly, I intend to analyse the internal and external environmental forces affecting airline industry, how these factors affecting profit potential of British airways and competitors in a way different from British airways. Secondly, to analysis strategy options available for British airways for the period 2010 to 2013, the four set of strategy I considered most appropriate and reasons for selecting these strategies. To list the main objectives and performance measures for British airways and the reasons for selecting these, and to list programme headings that make cohesive strategy for achieving these objective and explain how I have derived these from the preceding analysis. Thirdly, to explain how to communicate these selected strategy to British airways employees all over the world.

British airways profile The British airway is the UKs largest premium airline, operated international and domestic scheduled air services for passengers, freight, mail and ancillary services. It ranks ninth in the world in total number of kilometers flown and the third in international kilometers flown.

It operates from London with greater presence at Heathrow, Gatwick, and London City airport. It flies about 32 million passengers in 2009/10 to more than 300 destinations worldwide, and carried 760,000 tonnes of cargo to various destinations all around the world, and had 238 aircrafts in service as at March 2010. In 2009/10 British airway group revenue was 7,994 million, group loss before

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tax was 531 million, and group operating loss was 231 million. Passenger traffic accounted for 86 per cent of this revenue, while 7 per cent came from cargo and 7 per cent from other activities.

Airline industry environmental analysis The environmental changes create opportunities and treats for an organisation. It is essential to constantly analysis how these factors are changing now and how they are likely to change in future and anticipate how to influence those changes. There are many concepts and techniques that can help organisations to mitigate external environmental factors, a generic framework such as SPECCTRE

analysis acronym for social, political, economical, competitors, customers, technology, regulatory,

and environmental combined with 5-forces analysis can provide useful starting point for strategic analysis.

Generic SPECCTRE framework Fig. 1 depicted the comprehensive list of external environmental forces affecting industries, these factors are changes driver that create threats and opportunities within the environment organisations operates. Understanding of these forces is essential to survival of any organisation, it helps to focus on what is important or not.

Social

Economic

Competitors

CustomersRegulatory

Environmental

Demography, life

style and public

opinion

Change in

regulations

Change in global

economic, interest

rates, taxes

Changes in

customers

categories

Source: Adapted DIT MSC in supply chain management, course manual (2010/11)

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SPECCTRE Analysis of airline industry The following are the comprehensive lists of external environmental forces of SPECCTRE analysis

influencing airline industry:-

SPECCTRE List Major Forces

Implication on Airline Industry

Obese passengers The obese increase amount of fuel consumption especially in US where there are high numbers of overweight adult.

Perception of certain ethnicity due to Terrorism

Certain ethnicities are considered high travel risk due to 9/11, this impact on travelling.

Security issues due to terrorism

High security measure have to be in-place to ensure consumer confidence on travelling

Student holyday period There are high increases in family travel during student holiday period, putting attractive holiday package to boost revenue.

Social

Price sensitivity among wider demography

The unemployed adults are more price sensitive due low disposable income.

Change of government policies Any change in government policy might have positive or negative impact.

Government spending cut Consumer tight spending to strictly control household budget.

Government environmental taxes

The high increase in environmental tax implication on revenue

Passenger Duty charged The passenger duty changes add on the flight cost which has to be paid by passenger might discourage travelling.

Government support for national carriers.

Government support give the national flag carrier financial backing.

Political

War and insurgent in oil producing countries.

The implication of war and insurgent on oil price as in the case of gulf war and Egypt mass uproar which skyrocket oil price.

Variation in foreign exchange. Fluctuation in currency impact on profit.

Economic High interest rate The cost of borrowing higher or lower impact on revenue.

Global economic deterioration The effect of decrease in disposable income due to global economic downturn impact consumer spending, less business and leisure travel.

High government tax Various aviation tax charged effect on airline fare which might reduce numbers of airline passengers on short-haul.

Variation in oil price Continuous variation in oil price due to unexpected occurrence effect on profit.

Competitors High competitive market The high intensity of the rivalry driven the price down, making it difficult for some company to compete on price

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Continuous grow of no frill operators

The global recession intensify the market as price become order quantifier, increase number of no frill operators in respond to economic situation, threat market share of existing operators in this segment

High Speed train operators In short-haul fast speed trains operators are taken market shares, e.g. Eurostar

Euro-bus and ferry services operators.

The competition coming from euro bus and ferry operators and similar operators around the world.

Customer are more savvy and discerning

Customers are more price sensitive and judgemental, they constantly compare price for better bargain. The high bargaining power of consumer due to awareness. Customers

Spoil with choices Customers are spoiled with choices; there are many airlines to choice from.

On-line booking and checking-in

Cost reduction through do-it-yourself, and customer convenient, reduce airport congestion

Fuel-efficient technology High fuel-efficient technology potential to reduce cost effect on profitability.

Video conference and Voip communications

The emerging usage of video conference and VOIP application group video functionality impact on business travel.

Technologies

Airport check-in kiosk The administrative cost reduced by mounting airport check-in kiosk, and improved inflow of passengers less congestion.

Regulatory Various Regulations e.g. EU-US Open Skies agreement etc The impact of changes in regulations effect on airline industry favourable or unfavourable

Climate change, e.g Volcanic Ash; Severe Weather Condition e.g Snow Storm

Fight cancellation as a result of storming weather condition impact on airline revenue.

Environmental CO2 emissions and Aircrafts noise

The environmental pollution impact on community, government imposes variety of environmental regulation which might increase operation cost.

Source: Adapted from (2010/2011) DIT MSC Supply Chain management, Strategy module manual.

Porters 5-Forces analysis of airline industry The Porters 5-forces framework deal with external factors influencing the business environment in which organisation operates, it essentials to understand the dynamism of five interactive factors. Fig. 2 depicted Porters 5-Forces analysis of airline industry.

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Threat of new entrant

New entrants and existing carriers from the Middle East, Africa, and India pose possible threat. If these carriers could offer quality services at rock bottom price to attract larger customer base not targeted by the market leaders, such move could threat premium segment profitability. The airline industry is capital and labour intensive business, if the initial starting finance could be sourced with little interest rate, low cost of borrowing might encourage more entrants, at the same time airplane can be leased or rent.

Bargaining power of suppliers

The industry is dominated by two major airplane manufacturers, the Boeing and Airbus and the airline industry is highly fragmented at present. The market is duopoly in nature which gives more power to the two airplane manufacturers. There is hyper-competition between both companies but the airline carriers would want both companies to remain in business because the livelihood of airline business depends on manufacturer to deliver fleets to carry passenger from point A to B fuel efficiently and safely.

If there is no law or regulation to prevent acquisition or merger of Boeing and Airbus, combined synergy from such acquisition or merger might impact profit margin in the industry. Any increase in

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flight maintenance parts supplied by Rolls-Royce etc, the extra cost will be past to airline carriers which in essence will threat profit margin.

Bargaining power of buyers

The economic downturn, increase in tax rate, and government cutting on spending spurred many customers to become price sensitive. They constantly look for premium service at low price, rigorously compared flight fare of one carrier to another before purchase flight tickets. The customers are savvier and discerning than ever before they can search for better bargain at reasonable price, the bargaining power of buyer is high, no switch cost and customer are not loyal to particular brand in this industry.

Threat of substitutes

The impact of threat pose by substitute is low in airline industry, the main substitutes to airplane are high speed trains specially suitable for short-haul within region. The shipping liners will threat profitability in long-haul transportation of goods. The usage of video conference, and VOIP software among business executives reduced number of business travellers

Competitive rivalry

The airline industry have low profit margin which further intensify hyper-competition among carriers, every carrier fight toothlessly to retain their part of the pie. The legacy airliners like BA,

Lufthansa etc find it difficult to compete on price with no-frill airliners like Ryanair etc. The companies that remain profitable in the airline industry are those carriers that could create value innovation, render reasonable service at lower price, and play the game slightly different than the competitors.

Market attractiveness analytical tools There are few tools used to determine market attractiveness such as the Boston matrix, Ansoff's matrix, GE matrix etc basically determined industry market attractiveness on factors such as Market Size, Market Growth Rate, Industry Profitability, Competitive Rivalry etc. Fig. 3 depict simply analytical tool of Boston matrix which classified market into four categories, Stars, Cash cows, Dogs, and Question marks, based on market share and market growth relative to competitors. The higher market share a product has or the increase in product market growth the better for the company, the rates of market share and growth is of interest to many players in the industry as it represents the level of attractiveness of the market.

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Fig. 3 BCG Matrix

High

Question ? Stars Ma

rket

Gro

wth

Low

Dogs Cash Cows

Low Market Share High


The attractiveness of market segment British Airways operate The airline industry market growth is low, and British airways increasingly faced fierce competition result in market share erosion. There is decline in market demand for premium segment which is the most profitable in British airways business portfolio, due to external environmental forces impacting business, exacerbates market growth. The British airways is operating at loss, although earn high revenue, the passenger flight business unit is a CASH COW in a weak position, migrating gradually to DOG as a result of loss market share.

The financial outlook of the airline industry is gradually changing because economy is returning to normal, but the no-frill segment of the business remain more profitable especially on short-haul. Fig. 4 illustrate British airways premium segment life cycle as it decline as the result of low demand, although the outlook of global economic is improving. The economic upturn will improve growth, and a deployment of strategy extension to counter decline will return British airways to profitable growth.

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Time

Fig. 4 British airways premium segment life cycle

Premium life cycle Effect of strategy extension to

counter decline


The main factors affecting the profit potential for British Airways The airline industry is exposed to external environmental factors that inhibit profitable growth, those forces affecting profit potential of British airways are:-

Competitors Factors.

Economic Factors.

Bargaining power of buyers

Cabin crew strike

Regulations

The effect of external environmental forces on competitors The Positive or negative effect of external factors on competitors in comparison to British airways

can be summarised as follows:-

Competitor factors Expansions of no frill carriers globally threaten profitable growth of premium airline such as British airways, although competition from high speed trains operators, Euro-bus and ferry services operators have little impact on British airways as it operated mainly long-haul but this could significantly impact profit margin of no-frill airline. Some competitors have cost structure that lower

than British airways or supported by their government.

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Economic Factors Currency variation significantly affect British airways operation due it global present, but currency variations have little impact on profitability of budget airlines operating within euro zone. The British airways saved 2.7 billion between 2004 and 2009 from fuel hedging; some of their competitors might not benefit such huge money at this period. The economic recession present significant opportunity for no-frill airlines, while cost decline in numbers of business travel. British airways carried substantial dept that need refinance, of which their competitor might carry less or negotiate better interest repayment.

Bargaining power of buyers Customers are more discerning and price sensitive due to global economic meltdown, they are caution of spending and are more attractive to low fare airlines which cause erosion in profit margin of premium airlines like British airways.

Labour Union The constant strike action by labour union significantly impact British airways profit due to the legal cost accrued on court cases filed by cabin crew trade union and dissatisfied customers. This affects competitors slightly different to British airways.

Regulations Open-skies agreement between countries present opportunity to expand but competition remain limited for British airways in certain international routes due to restriction on numbers of flights that can operate, and regulation countries tend to favour the country flag carrier to other airline. The ambition to expand routes to such country is limited.

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The British Airways SWOT analysis The SWOT analysis enables British airways to make strategic decisions by combined evaluation of internal factors of strengths and weaknesses with the external factors of threats and opportunity.


Summary of current competitive position and potential of British airways The List of SWOT analyses carry different weights. The most influential factors impacting British airways business among the SWOT analysis are ranked highest to lowest, and prioritised the highest on the rank. The following summarised competitive position and potential of British airway in form of weighted SWOT.

Strengths Opportunities Strong brand name Excellent customer service strong global market positioning network and alliances diverse customer base Innovative. Learning culture. Sufficient liquidity. Well trained and knowledgeable staffs. Fuel-efficient aircrafts.

Increase demand for flight within China. Expansion of civil aviation in India. Airline industry generates USD 408

billion in global GDP. Merger, alliances, and joint venture. Open Skies agreement. Global economic recovery. Acquire no-frill

Weaknesses Threats Heathrow has no spare runway. Disconnected with employees. Management team lost focus. Order and obey culture. Poor decision making. Annual loss 2009/10, 231m. Employees adamant to change. High % of lost baggage. Flight cancellation to small size.

High Regulations. Cabin crew strikes. Competitors. Terrible weather conditions. Oil dependency and fuel price. Currency fluctuation. Act of terrorism. Economic recession. Customers bargaining power. Interest rates variations.

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British airways-weighted SWOT


The British airways is a strong brand, although the company report annual loss of 231m in 2009/10, but enter the recession financially strong. To maintain British airways strong market position which was under threat due to economic downturn, low demand in premium flight, and customer bargaining power, strengths in fuel-efficient aircraft and superior customer services will improve competitive position.

The company liquidity strengths could exploit possible opportunity in acquire low cost no-frill airline to counter competitors route by route in the European market. Although the company high oil dependency and variation in oil price create major threat but the continuous oil and currency hedging minimise exposure to these risks. British airways potential strong financially, if the cabin crew union constant threat resolved, and the management team refocus on key objectives and reinforce those objectives, the company will return to profitable growth.

Strengths Opportunities Strong brand name Excellent customer service strong global market positioning network and alliances diverse customer base Innovative. Learning culture. Sufficient liquidity. Well trained and knowledgeable

staffs. Fuel-efficient aircrafts.

4 3 1 2 3 4 4 5 3

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Increase demand for flight within China.

Expansion of civil aviation in India. Airline industry generates USD 408

billion in global GDP. Merger, alliances, and joint venture. Open Skies agreement. Global economic recovery. Acquisition of no-frill carriers

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4 3

5 4 3 3

Weaknesses Threats Heathrow has no spare runway. Disconnected with employees. Management team lost focus. Order and obey culture. Poor decision making. Annual loss 2009/10, 231m. Employees adamant to change. High % of lost baggage. Flight cancellation to small size.

2 3 3 2 4 4 3 2 1

High Regulations. Cabin crew strikes. Competitors. Terrible weather conditions. Oil dependency and fuel price. Currency fluctuation. Act of terrorism. Economic recession. Customers bargaining power. Interest rates variations.

3 4 4 2 4 4 1 4 3 2

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The British airways TOWS matrix framework The TOWS matrix systematically matches the external environmental forces of threats and opportunities impacting British airways profitability with the internal factors of strengths and weaknesses, and base strategic options for 2010/13 on the relationships identified. The following table summarised conversion of SWOT analysis to TOWS matrix.

British Airways TOWS Strategic Options

Strengths (S) Weaknesses (W)

Strong brand name. Excellent customer service. Strong global market positioning. Network and alliances. Diverse customer base. Innovative. Learning culture. Sufficient liquidity. Well trained and knowledgeable

staffs. Fuel-efficient aircrafts.

Heathrow has no spare runway.

Disconnected with employees. Management team lost focus. Order and obey culture. Poor decision making. Annual loss 2009/10, 231m. Employees adamant to change. High % of lost baggage. Flight cancellation. Business segment.

Opportunities (O) SO Strategies WO Strategies Increase demand for flight

within China. Expansion of civil aviation in

India. Increment of $609.3 billion

2013 in airline industry global GDP.

Merger, alliances, and joint venture.

EU-US Open Skies agreement.

Global economic recovery. Acquisition of no-frill carriers

Selective investments move for Asia, and middle-east market.

Focus on excellent service delivery.

Capitalise on EU-US Open Skies agreement.

Optimised aircraft and route Strategic acquisition of low cost

no-frill carriers for European market.

Expand through partnership, merger, and alliances.

Join star alliance for strategic benefits.

Innovation to capture market share.

Return to profitable growth as global economy fully recovered.

Resolve issues with union. Improve flight cancellations,

and baggage delivery service. Improve relationship with

staffs. Selective move to china, India,

middle-east, and US market. Enhance customer service at all

level. Refocus on companys

objectives. Cut cost to minimise financial

loss. Threats (T) ST Strategies WT Strategies High Regulations. Cabin crew strikes. Competitors. Terrible weather conditions. Oil dependency and fuel

price. Currency fluctuation. Act of terrorism. Economic recession. Customers bargaining power. Interest rates variations.

Invest in fuel efficient fleet. Reinvest shareholders dividend

back to business Enhance security Customer value Innovation Retrenchment Hedge foreign currency and fuel

price. Contingent capital security.

Effective risk management Expand runway to create

more capacity. Use contract staffs for back-

up in-case of strike. Lease flights instead of buy. Sell less fuel efficient

flights. Launch massive promotion

in target markets.

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Strategic Options It is essential to evaluate the varieties of alternative strategic choices available taken external environmental implications and internal capabilities to considerations. The business environment is uncertainty and astatic, it constantly changes. The environmental dynamism means we have to constantly revisit our strategy to stay ahead of the game.

Strengths Opportunities (SO) The strategic options considered most appropriate for British airways for 2010/13 within the TOWS matrix is the Strengths opportunities (SO). It enables British Airways to use the internal strengths to exploit the opportunities in light of the risks. The opportunities and the associated risks have to be thoroughly evaluated, the threats cannot be ignored, but need to build defence mechanisms to keep threats at bay and overcome weaknesses.

Selective investments move for Asia, and middle-east market

The Asia aviation market is growing at high rate especially in China and India, China expects to grow at average rate of 17.2% annually while India domestic market is growing at about 20% and double-digit rates internationally. If regulations permit, British airways should target Kingfisher airline in India and Spring Airlines the best low cost carrier in china for equity stake or possible acquisitions to enter these markets. The middle-East is another emerging market. The investments in these markets have to be approached with caution, but the risk worth taken by British airways to return to profitable growth.

Focus on excellent service delivery

British airways have strong brand equity of which excellent customer service is associated with. Superior customer services go beyond high decorum and courteous it includes all package in delighting customers. The company have to improve service offering to regain customers confidence, improve customers experience, minimise lateness, and improve luggage delivery services etc. There are still customers out there willing to pay premium fare for superior services,

British airways have to reach-out to these targeted group to sustain market position.

Capitalise on EU-US Open Skies agreement.

EU-US Open Skies agreement presents opportunity to operate in US airline market. It allows any EU carriers to fly from any point to any destination of their choice in USA without any restrictions on pricing or capacity, it allow US carriers to enjoy the same. The agreement altered competitive landscape on transatlantic routes. It is an opportunity for British airways

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to make transatlantic investment in the USA airline industry and could use the opportunity to operate transatlantic flights from outside London base.

Optimisation of aircraft and route The investment in fuel-efficient aircraft will reduce aircraft fuel consumption and offer environmental benefits in form of reduction in CO2 emissions to the air, and minimisation of aircrafts noise. British airways need to optimise their routing system to capitalise on ongoing liberation in global airline industry, as the bar on regulations continually lower. The enhancement of the routing system will enables British airways to further spread their tentacles to exploit those routes they have not been operating, which might bring financial benefit in the long run.

Expansion through acquisition, merger, alliances, and joint venture

Investment in no-frill airline will improve market share and profit margin in the long run. Evidence in investment in BA CityFlyer a new entrant to no-frill carriers and acquisition of OpenSkies a low cost long haul carrier operating from Paris to America. The merger with Iberia airline and joint venture with American Airlines benefit British airline through economic of scale, cost reduction, capacity and load factor enhancement, and improve service offering.

British airways key objectives The British airways series of key objectives to be completed by 2013 are as follows:-

To return to profitable growth

The company needs to urgently return to profitable growth to sustain the business. In doing so, British airways need to attract more passengers and make unpopular cost reduction and restructure decisions. The company have to slash operational costs, sell trouble business within business portfolio, and reduce unnecessary expenses to survive, as the survival of British airways is at stake. The company have to carry staffs along by reiterate it objectives and reinforcing them.

To expand global present

The global airline industry is growing especially in Asia and middle-east, due to deregulation and open Skies agreement. Selective investments move in these markets region will create another profit stream for British airways. The airline industry is in transition, consolidation is growing, British airways needs to build new global partnerships and alliances to expand and return to growth.

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To continue meeting customers needs.

British airways have to create customers value innovation to please the targeted customers, in the market segment it operates. There is need to improve internal customer relationship between workers union and management. The focus should be to continually provide outstanding customer service because there are few customers globally willing to pay extra money for superior services, even among those passengers travel on economy. The excellent services culture associated with the British airways is a difficult to copy competitive advantage, should exploit this competitive edge.

Remain market leader and invest in fuel-efficient aircrafts.

To remain market leader, British airways needs to constantly create attractive business propositions and service offering that customers will value. The market leader set the bar that others follow, a new investment in fuel-efficient aircrafts will improve operation efficiency, and present opportunity to optimise the current route by increase frequency of service and diverse to other route.

British airways key performance measures The key performance measures recommend for British airways at this time are combinations of financial and non-financial performance measures.

Liquidity Ratio

Before embark on implementation of strategic options suggested, the financial health of British airways needs to be considered. The current ratio evaluates financial performance of British airways, how the company convert current assets to cash in order to fulfil financial obligations. The quick ratio, evaluate how British airways are meeting short-term obligation with the company most liquid asset. The inventory to net working capital, the amount of British airways cash tied on inventory. These ratios are interested for the investors, shareholders, potential lenders because these ratios have impact on amount of working capital and ability of British airways to meet current dept payment.

Gross profit margin

The gross profit margin will illustrate British airways financial health by reveal the amount of cash left for investment and still yield profit. British airways need to return to profitable growth, there is urgent need to control the company overhead and convert sales to immediate cash to facilitate the company strategy options.

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Return on total asset

The return on capital employed will measure the earning power of various investment made. The investment in new fuel-efficient aircrafts returns over the course of years, and investment in other elements such as, gate and ticket counter at the new airport destinations as a result of expansion.

Customer satisfaction

The customer satisfaction performance measures will highlight area to improve in the company

service quality, such as response time for queries, onboard catering, low flights cancellations, baggage rates, and missed connection.

Passengers Load factors

The passenger load factors enable British airway to measure capacity utilisation, and operation efficiency in comparison to competitors because high capacity factor have positive impact on profitability.

The programme headings Return to profitable growth Reduce waste within British airways through cutting cost of activities that create no value to

customers.

Reinvest shareholders dividend to reduce bank interest rate

Financial improvement

Expand global present

Route by route expansion

Acquisition, merger, joint venture and consolidation No-frill airline investment

Enter China and India market

Capitalised on OpenSkies agreement

To continue meeting customers needs.

Improve cancellations

Optimise baggage delivery rate

Create value innovation

Enhance lateness

Improve seat load

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Continuous providing quality customer service

Remain market leader and invest in fuel-efficient aircrafts.

Operation efficiency

Less noise and reduction on CO2 emissions

First to market in innovation

Experience curve acceleration

Strategy communication

The company like British airways that spread in nook and corner of the world are presented with mammoth logistic challenge when it comes to communicating organisation strategic intents, deciding strategic decisions is one thing, communicating it is another thing. The advent of information and communication technology make communication easy for most organisations CEO, the like of

video conference, VOIP, etc served the purpose of communication and visual mechanism instead of travelling long distance.

The first step in communicating the British airways strategy is to consider which stakeholders to inform and how the messages should be composed, different message goes to British airways shareholders, key customers, suppliers, and employees. The employee communication is vital and most challenging since the employees are the one to carry out the strategy, they need to embrace the strategy as the bases for new growth initiative for the future of British airways. To Cascade the new strategy top down need superb strategic communication mechanism.

The strategy team need to invite the regional representatives to British airways headquarter, they are to be briefed of the new direction British airways intent to pursuit, and participate in new strategy workshop to gain valuable insight and clarification of objectives. Upon completion of the workshop, the company have to unveil the new British airways strategy in a worldwide conference to be visited by many British airways most senior personals. The regional representatives have to report directly to British Airways CEO as the leader of the strategic team for progression of the strategy within their various regions.

The next step is for the regional representatives to cascade the strategy down the organisation regional structure. Each regional representative has to organise conference to introduce the new organisation strategy to various country managers, in the conference, the video of the British airways

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CEO with the member of the strategy team have to be showed talking to the conference participants in detail of the new strategy and reiterate the important of the strategy to the organisation profitable growth.

The last step is for the country managers to inform their workers of the new direction the British airways will be taken, they need to engage the employees directly for them to know what the new strategy mean to them and to know possible operational change it will bring. The country manager has to invite all staffs to meeting. In the meeting, the video of the CEO played asking the entire staffs to promise their support for the new strategy. In essence, strategy communication is not the end-point of strategy making process, it needs constant feedback to stakeholders.

Conclusions The global economic meltdown significantly affected many businesses, weakening the financial sectors in facilitate loan. The airline industry was significantly hit by loss of passengers which spurred many airlines to consolidate, divest, or be acquired.

Reference DIT MSC supply chain management course manual, 2010/11 British Airways (LON:BAY), viewed 10 Feb, 2011,

Airline and Aviation Industry News, viewed 15 Feb, 2011

Airline Leader, ISSUE 3 | DEC 10 JAN 11 Viewed 5th Feb, 2010 by

Brancatelli, J 2010, Willie Walsh and the Airline Factory viewed 12 Feb, 2011

Airline Industry Overview. Viewed 4th Feb, 2011

Is Bigger Better for Consumers, viewed 12th Feb, 2011 Glenn, C 2010, Is That Airline Ready For Lift-Off? Viewed 14th Feb, 2011

Michael, M 2010 Global Economic Prospects for 2010 and 2011 viewed 13th Feb, 2011

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British Airways, viewed 14th Feb, 2011

Documents

Proposed Business Strategy for British Airways