British airways

British telephone circuitwaysExecutive Summary British Airways is sensation of the Inter tribeal Airlines that appends its flights to 570 destinations in 133 territories. It mainly operates from the Heathrow and Gatwick. It faces many problems handle 531 million pounds loss in revenue because of lack of world(prenominal) commercialize study, employee relationship (strike problem) and many more(prenominal). Hence an effective strategy is the only chance to whip these problems. The strategy of British Airways includes the innovation in technological accessories, customers relationship, employee relationship, safety and security of s obligate holders and so on. Introduction Any tune has ch eachenges from contrasting elements like globalisation, schooling and technology, socio and cultural factors, political factors and so on. To meet these ch eachenges a clear strategy is very crucial for any organization. A strategy is a clear ken of what the organisation will be based on a sustainable competitive advantage. Actually, strategy is a road map for future directions and scope. It is a enormous range forge for five years and more. It develops mission, objective and goals for an organisation. To develop an effective strategy any organisation must set an account with different factors. environmental analysis, present analysis, strength, weakness, opportunities and so on argon the factor through which a strategy eject be developed. bring out 1 1) Identify the mission, Values and profound objectives of an organisation within its environment. The mission statement of British Airways is To be the undisputed leader in world exit for the next millennium.The values of British Airways Honest. Reliable On time Good serviceObjectives of British Airways British Airways based in London is the spectacularst flight paths in the United body politic and provides daily flights to more than 400 cities world- abundant. Like about large corporations the pipelineline must focus on a variety of goals and objectives both for short-term and long-term survival in the competitive global grocery place.General objectives of British Airways With an objective of becoming the worlds largest leader in global premium flight path, British Airways will continue to focus on customer service at every level of passengers journey. The overall Objectives atomic number 18 divided into three aras. Global (appeal to all passengers, whether for leisure or business sector 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 service). strategical objectives of British Airways British Airways provides four strategic objectives Airline of choice ( go on the top choice for International flights for premium customers as well as cargo, preservation and shorter flights). best services (provides the best customer service for passengers on all routes and classes of travel and improve online service). Global city harvest-tide (continue to expand the list of top-tier countries through airline partnership). Meet customers needs (exploring the latest options and products to enhance customer loyalty.A stakeholder is a person or organisation that has an liaison in a business, for example make 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 batch be a stakeholder as a customer, in all shops you cloud from and anywhere you spend leisure specie, it could be going to the cinema or support your football match. Stakeholders of British Airways areGroupsRelationship with businessCustomerBuy product or servicesSuppliersRely on business for ordersEmployeesRely on business for employmentOwnersHave invested money in the businessLocal and national communitiesDirectly aff ected by the actions and trading operations of the business.Influences of stakeholders Groups The influences of stakeholdersCustomersAre looking to buy products or services, they are looking for a wide range of products and services. They also want easy accessibility and hope to buy good quality products and services at a competitive price. They are really important 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 late then it will cause a conflict between business and suppliers. in that locationfor 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 make because they are scared of losing their contract with British Airways.E mployeeswhitethorn want an increase in pay rise. Staffs be in possession of a very big interest in British Airways, they have an interest in the business in the form of wages, bonuses, discounts, and holiday pension. OwnersIn contrast 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 2 2) Investigate the economic, social, and global environment in which organizations operate. What is an economic system An organised manner in which a state or a nation allots its resources and allocates goods and services in the national community.An economic 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/different types of economic systems prevailing around the world and they are Market Eco nomy In a commercialise frugality, national and state regimes play a minor role. Instead consumers and their buying decisions drive the saving. In this type of economic system, the assumptions of the commercialise play a major role in deciding the right path for a countrys economic development.Market economies aim to reduce or eliminate entirely subsidies for a particular diligence, the pre-determination of prices for different commodities, and the amount of regulation controlling different industrial sectors.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 government in a market economy is to simply make sure that the market is constant enough to carry out its economic activities properly. Planned Economy A planned economy is also cognise as a command economy. The most important aspect of this type of economy is that all major decisions related to the production, distribution, commodity and service prices, are all made by the government.The planned economy is government directed, and market forces have very little say in such 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 s take down 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 allocating the resources either for advertising or marketing. Mixed Economy A mixed economy combines elements of both the planned and the market economies in one cohesive system. This fashion 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 the country. 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 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(prenominal) interjection as its a private company the only intervention that the government would have is only setting the prices of the air tickets.What is brotherly upbeat 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 helping people facing contingencies.Social welfare which British Airways does for its employees. Social Welfare Policy Is basically 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 used 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. in that respect are various social welfare policies that the United Kingdoms adopts and they areSocial welfare form _or_ system of government that British Airways has adopted/follows The impact that social welfare initiates on British Airways as well as the wider community 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 forefront aces as British Airways has provided all it employees with look ating in safety measures, plus rest time is given to the employees and to the mob members of British Airways accommodation is given because the crew is normally flying for endless hours/long journeys. The workers are a lso made alert about the basic terms and stipulates of the organisation which are basically ethics, decree 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 pension, 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 Employment Law in British Airways states and illustrates the normal working hours, conditions, and the acts of the organisation.What is Industrial Policy Industrial policy comprises all government interventions which consist of Directed towards the supply side of the economy that consists of enterprises, industries, sectors). Aims to influence the industrial structure of the economy and its industrial changes.Industrial policy purposefully affects incentives to pro duce special(prenominal) 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 Distort optimal allocation, Distort dynamic contestation and its benefits (innovation, flexibility, consumers sovereignty etc.). Privilege specific enterprises or industries or sectors at the expenses of others, 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 humankind and private sector coordinate their efforts to develop rising technologies and industries. Government provides the financial support and capital to the private sector by direct subsidies, tax assign or government- run developmental banks. Industri es policy emphasise cooperation between government, banks, private enterprise, and employees to strengthen the national economy. http//encyclopedia2.thefreedictionary.comImpact of Industrial policy on British Airways In 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. and then 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 decided to reduce by 50% as they are working on creating a new kind of fuel which is known as bio diesel which is pollution free and environment friendly. Fiscal Policy Government using up policies that influences macroeconomic conditions. These policies affect tax rates, interest rates and government pass in an effort to control the economy.Monetary Poli cy The action of a central, bank currency or other regulatory committee that check off the size and rate of growth of the money supply, which in turn affects interest rates. Monetary policy is maintained through actions such as increasing the interest rate, or changing the amount of money banks need to slip away 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 sometimes improve market 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, reduce the equilibrium interest rates and stimulating investment 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 govern ment 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 effectuate 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 roun d-trip airline ticket (Air Transport Association, 2005). Current economic conditions of the airline industry are dismal, especially due to the tragic events of September 11th. The Air Transport Association (ATA) argues that such fiscal policy in these trying times kibosh 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 and fees can account for the elimination of over 129,000 jobs, force many carriers into bankruptcy, and, because consumers react heavily to price increases in this industry, foil 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 plumping Bear Lake, CA, adds that governing agencies institute other fees to generate operating revenues for a irports. 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 nominate 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 considerably impacted areas of the airline industry. Since deregulation in 1979, the airline industry experienced substantial growth. With the issue 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 price s 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, 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. young 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 ar e still 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. footling 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 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 hypothesise economic condition in the nations marketplace.By successfully managing opportunity cost, and adapting to an ever changing economic environment, airline indust ries 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.govMakiw, N.G. (2004) Principles of economics (3rd edition). Chicago, 2 Thomson South-Western.PESTLE Analyses on British Airways PESTLE FactorsKey PointsImplications for British AirwaysPolitical to a great extent regulation (AEA, 2009).Increased 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 office and competitive adva ntage in maintenance.EconomicGlobal economic crisis world growth is projected to just over 2 per cent in 2009 (IMF, 2008). vex 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 cost and using alternative means of communication such as telecom fencing. British Airways is vulnerable as a United Kingdom operating airline to a poor modify 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.Increasing UnemploymentPotential opportunities for growth as older generations have more time to spend on leisure activities such as international travel.Increased bargaining power as a n employee.TechnologicalA recent survey revealed that 34% of online consumers plan to use price- comparison sites more in 2009 (NMA, 2009)Online reserve 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 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 ethical issues could have a detrimental effect on reputation if left unresolved. LegalCollusion and price fixing.Recognition of handicraft union and industrial action e.g. cabin crew strikes.Open skies agree ment.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. Part 33) Investigate the behaviour of organizations and the market environment. What is Oligopoly Oligopoly is a market which is normally dominated by a few verse of large suppliers. The degree of market concentration is very high. Firms within an oligopoly produce branded products and also sometimes there is a breastwork to new entries.Advantages as general Firms or companies are able to reap economies of scale, due to large scale competition. Products cannot produce by individual firms on a small scale. There is an incentive to engage in research and development. They have the ability to earn super normal profits and capture l arge market share. Firms enjoy lower costs due to technological improvement. This results in higher profits which will improve the firms or companies capacity to withstand price war.http//www.blurtit.com/q2774865.htmlDisadvantages as general Firms and companies are concerned with the activities of their competitors. If one firm or company reduces its prices the other companies would have to.How oligopoly has impacted the airline market and British Airways In the late 1990s the European airline market was liberalised, lowering the barriers to entry. Traditional firms then faced competition as firms could enter the market more easily. New entrants used leased aircrafts to keep costs low. Firms have merged (such as Liberia Airways and British Airways did in 2000) to improve the firms horizontal integration. What is monopoly A situation in which a single company owns all or nearly all of the market for a given type of product or service. This would happen in the case that there is a b arrier to entry into the industry that allows the single company to operate without competition. In such an industry structure, the producer will often produce a volume that is less than the amount which would maximize social welfare. www.investwords.com/3112/monopoly.html Advantages of monopoly as general There is no risk of excess production. There is sufficient capital for research. Price of goods are reduced. The market can be controlled.Disadvantages of monopoly as general The consumers are exploited. There is hardly and consumer choice. The price is high on products. As there is no competition it leads to inefficiency. The tug is exploited as the price charged is higher than the marginal cost.How monopoly has impacted the airline market and British Airways There is no competition which would make the airlines inefficient. As there is no choice the consumer would have to take that one airline only. As the ticket prices could be high the consumers would prefer to take a trai n to their destination if the consumers destination is in Europe and this would cause a loss for the company.What is perfect competition An ideal market structure characterized by a large number of small firms, identical products sold by all firms, freedom of entry into and exit out of the industry, and perfect knowledge of prices and technology. This is one of four basic, market structures. The other three are monopoly, oligopoly, and monopolistic competition. Perfect competition is an idealized market structure that is not observed in the real world. While unrealistic, it does provide an excellent benchmark that can be used to analyse real world market structure. In particular, perfect competition efficiently allocates resources. http//www.amosweb.com.Advantages of perfect competition as general Optimal allocation of resources. Competition encourages efficiency. Consumers charged a lower price. Responsive to consumer wishes, change in demand, leads extra supply.Disadvantages of p erfect competition as general Insufficient profits for investment. Lack of product variety. Lack of competition over product design and specification. Unequal distribution of goods and income. Externalities .e.g. pollution.How perfect competition impacts airlines market and British AirwaysAs in the Airlines Industry there are many airlines and there is competition there can be either positive effects as well as negatives effects the positive effects of perfect competition is that the resources of the airlines is allocated to the point as t