Change In British Airways Due To External Factors Commerce Essay

The topic of this assignment to analyze the impact of external factors on to the company strategic planning and its effect on companies future strategies. To understand and familiar with the same situation of company I have selected an organization that have been undergone under the same process which is British Airways. It is the best service provider since the 1st world War and until now they become the largest airscraft service of UK by merging their rights with other successful businesses time by time.

Position in current market of UK

As they have stated their name British Airways on the name of Britain nation it is easy to identify that they are providing more social services to the British families and providing extra services to business class with premium prices. Below we will discuss its origin and background of work then we will see the external factors which insist BA to change their strategies.

British Airways nature of work and Background:

British Airways are providing air travel services and holiday packages to their customers. At start in past they were only offered the ticket services for travel but now with the growing number of competition with Virgin Airline they market their Brand with competitive prices of holidays to their customers across the European countries.

That was the biggest change in their process and strategies due to the external factor which was competitor policies and business strategy. Now before discussing further we will first discuss their main objective mission statements.

Objective of British Airways:

BA main objective and mission is to become the familiar and favorite and first choice service of UK’s customers

Change in Management Strategy:

Recently many of organization and their production unit closed and shifted their production unit because they were doing business with unhealthier environmental factors. Govt. of UK launched the scheme for the organization ‘go for green’ that means think green and produce with non carbon environment and with zero land filling material.

Soon every organization took the step and changes their strategic planning to attract the customers with green ideas one of company named Marks and Spencer played a vital role to attract more people to think about healthier environment.

As British Airways have a large setup and lots of material that goes to land fill needs to be stopped this sudden change in strategic planning applies in BA and they took the following steps to ensure the need of the time:

By understanding the need of change and the effect from external factors they took the following change I their organization:

They realize the need of change with the use of strong leader who advised them to produce green ideas from their own working process and with the same working level

They include the effort of every single employee from operational department and from financial department to produce green ideas and implementation process

They identify the changes and the impact on environment and the change in behavior of there customers

With the help of their management team they identified the ways to overcome the unhealthy environment:

Protect the environment by reducing the noise and emission from their plane

Use of green Ideas in their strategies and marketing of business activites

Use of material and resources that are environment friendly

Further progress towards green environment:

Use of online and media tools to aware the general public about the benefit of green environment.

Providing the platform to employees and general public to discuss the new ideas about green environment

Change due to external Factor:

They applied the change due to external factors which is the govt. policies that insist every organization to reduce the land filling process and produce goods and services with green environment.

Change in British Airways Operation System:

According to the annual report of British Airways that they have practices change process in their management strategies nearly every year to prove them reliable for their customers. Recently they got a great loss in financial terms because of unsupervised planning process at atrt they didn’t do SWOT analysis and competitors analysis properly and failed to implement the right benefit strategies for their employees resulted they had a lot of increase in their annual costs. Their competitors took the benefit from this action and cut down their costs from different means to lead the market with cheaper rate after some times when they measure the prices they offered and their competitors process they found a big amount of spent on their own staff benefits and high wages turnover.

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They took an urgency step and bring the change in shape of cut down the benefits and cost of the labor. This action were not again properly analyzed and they again loose the worth of their market share in stock exchange when staff of aircraft goes on strike on continuous basis. After these continuous losses in stock exchange they did a proper SWOT analysis and cut down the cost by reducing the benefit to the customers and by competing process with their competitors and took following steps for their management:

Whole Schedule process controlled by operation control

Aircraft flights timing and date controlled by operation control

Crew timing costing and their all other issues controlled by Operations control

Operation control provides information to Station Control

Operation Control inform the Engineering staff for any kind of Maintenance

Operation Control dealing with Customer Services

(Pearson Education, 2010)

These process of cutting the cost through handling lot of data by single Operation Control department allowed they to start providing services on normal basis and on competitive prices. These all process and difficulties were faced by the BA due to external environmental factor. Now we will discuss that how SWOT analysis help to predict the need of change in their strategies before time.

SWOT Analysis:

It is a type of analysis that provide the clearer picture of strength of business in current climate and also shows the competitiveness of their decisions and policies in the market against there customers. It also warns the organization from the upcoming threats and help to reduce them by showing them upcoming opportunities. The main four components of SWOT analysis are as follows:

Strength

Weaknesses

Opportunities

Threat

Now I will do the same analysis in BA and will find out the strength and weaknesses in current market.

Strength:

Below are the resulted strength values of BA in current climate:

Trusted Brand of United kingdom

Cheapest prices with high quality service

High quality food in the jet

Working with environment protection companies

Buying of new Boeing 767 jet

Weaknesses:

Below are the weaknesses of BA according to SWOT analysis:

High process on some routes

Lack of market knowledge

High noise from their old plane that is not good for environment

Opportunities:

Following are the opportunities of BA Company according to SWOT analysis:

Increase in shares value by competing the competitive policies

Opportunity to become the best service provider until march 2012 by consistent on time service provider

Increase in number of customers by introducing care for customers through using green resources to protect the environment

Threat:

Following are the threats to BA according to the SWOT analysis:

Uncontrollable cost in the time of strike

Change in Govt. polices could made a big loss and big expenses on irrelative subject matter

Increasing number of competitors

Easy entry in market for new competitors

By doing the SWOT analysis BA would be able to control the cost that would help the organization to meet the expectations of their customers and be ready to act on changes before that time.

Stakeholders:

In any business change strategies or producing report on change strategies it is crucial to take the interest of stake holders in it other vise the whole process would have no meaning. Stake holders are the group of person who has direct or indirect relation with company’s profit and loss.

Stake holders of British Airways:

Board of Directors

It is meaning less to implement any new changes without the consent of Board of directors of that organization. To protect the interest of BOD it is very important to include the benefit of BOD in the shape of high turn over and high brand image with high level of profit.

Suppliers

In different companies supplier have different level of importance but in British Airway they have crucial importance and there are different number of supplier such as food supplier, Oil or diesel supplier, etc. these are the different types of suppliers at BA and they have their key importance so while doing strategy planning change it is important to add the interest of this group of people.

Customers and Employees:

Customer and employees both are the need and asst of the business so company must include their interest to become successful after change in strategic planning.

Now we will discuss the importance of stake holder’s according to Mendlow’s matrix.

Structure with Importance of Stake holders in Marks & Spencer

Customers

Small

Shareholders Low

Suppliers

Commentators

Eemployees

Board of Directors

New trained Management

Power

CEO

&

Old Management

Team

High

Low High

Interest

(Dur, Cultural Web for British Airways in 1998)

Comments:

Again it is crucial to involve the interest of all stake holders while doing SWOT analysis and changing process in the company’s strategies. That impacts according to the business sales according to their above division of power and level of interest.

Objective of British Airways

Now I will discuss the new and old objective statement of British Airways which is as follows:

Old Objective Statement:

“BA main objective and mission is to become the familiar and favorite and first choice service of UK’s customers”

New Objective/Mission Statement:

“BA main objective and mission is to become the familiar and favorite and first choice service of UK’s customers with competitive prices”

There is only few words difference in new strategy which is that they would be focused as well on the cheap price to attract and retain more customers.

Suitable Strategy for British Airways:

Now I will evaluate the new process of implementation for new objective of organization and will also discuss the interest of key stake holders in it to have proper plan I need to take support from our above internal and external factors analysis, known as SWOT analysis.

Areas of controlled

Outcomes

Strategic Objectives

Financial

Image of Brand of BA

Financially sound in stock exchange market

Measure need on environmental project

Some times fiancé is only used to bring the image of brand in trend to the market to let know the customer about the products initially

Doing the analysis and using competitive price techniques would help to increase share values in stock exchange

BA needs to control their cost by analyzing the exact need of advertising about the green environment

Customers

Customer as a key stake holder

Marketing to attract more customers

Buying power and their capacity

BA should mind the importance of customers as key stake holder of the company and should include their high level of interest to attract them

Doing marketing and selling tickets online would minimize the expense of BA and would help them to get the maximum profit

Selling online tickets would also ease the customers and attract them with more facilities towards BA

By doing SWOT analysis company must do analysis of customers’ demand according to their buying powers.

Internal Process Level

Completing internal process on time

Reputation of perfect practice

New offers

Regular Internal Audit

Short term Wins

Track record of each employee with their progress

Carrere progression with new target points

Practice to increase the productivity level

Learning & Growth

Innovation and Maturity Level

At the end when they repeat their practice again and again they would lead to the following points:

Perfect inner process model

Highly trained employees

Innovative ideas

Strong team work at low budgeting

Above all process level includes the interest of key stake holders and the process is budgeted on the desired level of BA pricing strategy to control the cost and lead the market by offering best cheap price services. In final the process includes the internal audit process that will review the all activities and will discuss their results with their staff on different occasions.

Importance of Time Scale:

Time scale help organization to measure their need according to the time and use of the resources and they plan it accordingly and for future they used their time plan as successful example. If we take the same example of above NA Company their whole process rely on correct timing for example departure timing and landing timing of BA’s plane. If they change or distract from their plan they loose lot of money and resources on that time so by understanding the importance company must follow the time scale in their whole training process.

Time Scale

E

N

ACTIVITES

m

l

k

j

i

H

g

f

1 4 6 8 10 12

WEEKS

F

Finding the current market and competitors position

G

Analyzing the costing and ways to reduce it

H

Increase the market tools use

I

Joint hands with govt. environmental program

J

Reviewing programs

K

Change the things on quick basis

L

Increase the BA brand value among customers

M

Check point wins

N

Internal and External Audit

Internal and external audit both have different importance internal audit only shows the things which is going around in ide the organization while external audit compare it with other company’s progress and make recommendations.

Analyzing the current position:

In the time scale company analyze their market position in first week and will do SWOT analysis and other competitive analysis to find out their strength in market and after that they will implement the changes with the process of monitoring and reviewing that will show in upcoming barriers and consistent progress towards completion of goals

Conclusion:

In current climate every company especially BA needs to do analysis for external environment to check the external factors that might create disturbance in their operation and should be ready before they act against BA’s policies and regulations or company’s strategies.

Yours Truly,

Babar Ali