British airways Essay

British Airways is one of the International Airlines that posts its flights to 570 destinations in 133 territories. It mainly ope rank from the Heathrow and Gatwick. It faces numerous problems like 531 million pounds loss in revenue because of lack of planetary grocery study, employee relationship (strike problem) and many more. Hence an effective strategy is the only chance to everywherecome these problems. The strategy of British Airways includes the innovation in technological accessories, customers relationship, employee relationship, arctic and security of stake holders and so on. IntroductionAny business has challenges from different elements like globalisation, information and technology, socio and cultural factors, political factors and so on. To meet these challenges a puzzle bulge strategy is rattling crucial for any organization. A strategy is a clear vision of what the organisation will be based on a sustainable competitive usefulness. Actually, strategy is a ro ad map for future directions and scope. It is a long range plan for five years and more. It poses mission, objective and goals for an organisation. To develop an effective strategy any organisation must(prenominal) set an account with different 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 within 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.ReliableOn timeGood serviceObjectives of British AirwaysBritish Airways based in London is the largest respiratory tracts in the United Kingdomand leave alones daily flights to more than 400 cities world-wide. Like most large corporations the air passage must focus on a variety of goals and objectives both for short-term and long-term survival in the competitive global market. General objectives of British AirwaysWith an objective of comely the worlds largest leader in global premium airline, British Airways will continue to focus on customer service at any level of passengers journey. The general Objectives are divided into three areas. Global (appeal to all passengers, whether for leisure or business travel in order to create repeat customers). Premium (ensure that passengers receive the highest quality of service where ever they encounter the airlines). Airline (maintain the focus on aviation with the largest equipment, products and services). Strategic objectives of British AirwaysBritish Airways provides four strategic objectivesAirline of choice ( abide the top choice for International flights for premium customers as well as cargo, economy and shorter flights). Top-quality services (provides the best customer service for passengers on all routes and classes of travel and improve online service). Global city growth (continue to expand the rock of top-tier countries by dint of airline vocalismnership). Meet customers needs (exploring the latest options and products to enhance customer loyalty. A stakeholder is a person or organisation that has an affaire in a business, for example benefit from it. As a customer you are a stakeholder in British Airways. Even if someone is working 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 spend leisure cash, it could be going to the cinema or aiding your football match. Stakeholders of o buy products or services, they are looking for a wide range of products and services. They also expect easy accessibility and hope to buy good quality products and services at a competitive price. They are really great as they provide money for the business in order to be successful. SuppliersSuppliers stock the business with the supplies the business needs, if they are l ate then it will cause a competitiveness between business and suppliers. Therefor it is vital that all the business suppliers are on time. Suppliers are probably the third important part in a business, they provide the products/services and if they are not in time it poses to be a threat to the financial state of the business. On the other hand, suppliers arent that important in decision making because they are scared of losing their contract with British Airways. EmployeesMay want an increase in pay rise. Staffs spend a penny a very big interest in British Airways, they pitch an interest in the business in the form of wages, bonuses, discounts, and holiday pension. OwnersIn argument it may want a decrease in pay rise for their employees you could say that the owners probably one of the most important people in a business. Local and national communitiesGive planning permission depending on the business a person wants to do.Part 22) Investigate the economic, social, and global e nvironment in which organizations operate. What is an economic schema An organised manner in which a state or a nation allots its resources and allocates goods and services in the national community. An economic establishment is loosely defined as a countries plan for its services, goods, and the exact way in which its economic plan is carried out. Basically in that respect are three major(ip)/different fibres of economic systems prevailing around the world and they are Market Economy In a market economy, national and state governances be realize a minor 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 pay path for a countrys economic development. Market economies aim to reduce or eliminate entirely subsidies for a particular industry, the pre-determination of prices for different commodities, and the follow of regulation controlling different industrial sect ors. The absence of central planning is one of the major features of this economic system. Market decisions are mainly dominated by supply and demand, the role of the governing in a market economy is to simply make sure that the market is lasting enough to carry out its economic activities properly. Planned Economy A planned economy is also known as a command economy. The most important aspect of this type of economy is that all major decisions related to the toil, distribution, commodity and service prices, are all made by the government.The planned economy is government directed, and market forces halt very little say in such(prenominal) an economy. This type of economy lacks the kind of flexibility that is present a market economy, and because of this, the planned economy reacts poky to changes in consumer needs and fluctuating patterns of supply and demand. On the other hand, a planned economy aims at using all available resources for developing production instead of alloca ting the resources either for advertising or marketing. Mixed Economy A heterogeneous economy combines elements of both the planned and the market economies in one viscous 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 a good deal arise in societies that seek 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 Social Welfare Social welfare is about how people, communicate and institutions in a society take action to provide certain minimum standards and certain opportunities. It is generally about encourageing people facing contingencies. Social welfare which British Airways does for its employees. Social Welfare Policy Is fundamentally to improve and protect the standard of living of the people or citizens as a whole. In the United Kingdom the Name Social Policy is utilise to apply to the policies that the government uses for welfare and social protection and the ways in which welfare is basically developed in a society.There are versatile social welfare policies that the United Kingdoms adopts and they are Social welfare constitution that British Airways has adopted/follows The impact that social welfare initiates on British Airways as well as the wider commu nity is firstly that British Airways adopting the work place regulation is that it benefits the employees of British Airways and that the employees can work without any heading 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 clustering members of British Airways accommodation is given because the crew is normally flying for endless hours/long journeys. The workers are also made alert about the basic terms and conditions of the organisation which are basically ethics, regulation of conduct, and the responsibility of the organisation.The other social welfare insurance which British Airways provides its employees is social security for its employees similar to contribution benefits (Retirement pension, maternity allowances) and also non contributor benefits (social fund, working revenue benefits) to its employees, which gives the employees the freedom to do whatever in their personal life. T he Employment Law in British Airways states and illustratesthe normal working hours, conditions, and the acts of the organisation. What is Industrial PolicyIndustrial indemnity comprises all government interventions which consist of 1. Directed towards the supply side of the economy that consists of enterprises, industries, sectors). 2. Aims to influence the industrial structure of the economy and its industrial changes. Industrial policy purposefully actuates 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 justified because if competitive markets worked adequately, any such intervention would 1. Distort optimal allocation,2. Distort dynamic competition and its benefits (innovation, flexibility, consumers sovereignty etc.). 3. perquisite specific enterprises or industries or sectors at the expenses of o thers, 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 public and private sector coordinate their efforts to develop new technologies and industries. Government 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 suffered the most was the aviation industry including all the airlines even British Airways. Therefore British Airways has changed its strategy of working and has been successful as British Airways adopte d new policies.One of the policy that states to reduce Co2 emissions by 15% by all airlines and British Airways has decided to reduce by 50% as they are working on creating a new kind of burn which is known as bio diesel which is pollution free and environment friendly. Fiscal Policy Government spendingpolicies that influences macroeconomic conditions. These policies affect tax rates, interest rates and government spending in an effort to control the economy. Monetary Policy The action of a central, bank currency or other regulatory military commission that determine the size and rate of growth of the money supply, which in turn affects interest rates. Monetary policy is maintained through actions such as increase the interest rate, or ever-changing the amount of money banks need to keep in the vault or bank reserves. Impact of fiscal and monetary policy on airline industry as well as British Airways The principles of economics tell us that governments can some quantify improve ma rket outcomes.Methods of influencing market outcomes can come in the form of monetary and fiscal policies. Monetary policies influence shifts in aggregate demand for goods and services by increasing the money supply, reducing the equilibrium interest rates and stimulating investiture spending or decreasing the money supply, raising 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 bring 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 fisca l policies directed toward the airline industry have had profound effects. One such policy is represented by the fray 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 Transport Association, 2005). Current economic conditions of the airline industry are dismal, especially due to the tragic events of folk 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 stabilize the industry, such taxes andfees can account for the elimination of over 129,000 jobs, forced many carriers into b ankruptcy, 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 operating 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 continues 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 another fiscal policy that has consid erably impacted areas of the airline industry. Since deregulation in 1979, the airline industry experienced inviolable 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 relatively 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 opportunity 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 pleasure travel is frequent, air carriers are able to fill flights, ra ise 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 late economy and fighting heavy fiscal policy. Recent 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 stimulate the purchase of goods and services throughout the United States may help diminish the effects of our current sluggish economy. Little to no data exists to show 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 economi c position of the airline industry has been struggling for so long, improvements due to any iodine 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 reflect 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. contribute 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 fitting back 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. Sufficient 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). Pound weakness especially against the Euro. Oil prices declined by 50% since their peak retreating to 2007 levels. Decline in fuel prises the dollar 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 be and using alternative means of communication such as telecom fencing. British Airways is vulnerable as a United Kingdom operating airline to a poor exchange rate. Fluctuation in oil prices and exchange rates will directly affect British Airways cost base. More intense competition.SocialThe United Kingdom has an aging population.increase UnemploymentPotential opportunities for growth as older generations have more time to spend on leisure activities such as international travel. Increased negociate 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 awareness 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 u sing such technology. Environmental/honorableNoise 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 ethical issues could have a detrimental effect on reputation if left unresolved. LegalCollusion and price fixing.Recognition of flip-flop 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 British Airways and its competitors to freely transport aircrafts between the European Union and the United States.