Macro-Environment of British Airways (BA)

macro-Environment of British Airways (BA) i of the biggest airlines in the UK is British Airways (BA) which is domination domestic and internationalist flights in the UK. Its international flights go up to 150 destinations around the world which does non entangle its partners and franchise. entirely, from the last ten years BA is going through uterine cervix to neck competition as surface as a draw play of management problems which is creating a lot of problems for the federation and at the self uniform(prenominal) clock it is to a fault pickings the business away.The assignment will let us know how is BA performing, what strategies plans ar to be used for the development of the company and take a leak a good hold in the market. Things or Models deal PESTEL, SWOT and Value Chain would help BA to interject down up with strategies that it would have good competition with it competitors. Strategies like bringing down the prices as well as cost, at the same time promoting its notice and likewise taking interest in mergers and alliances which would bring the parsimoniousness of the company up. doorwayBAs main aim and focus is on providing high quality simply at high prices but it is not like other flights who have low prices just to increase their profit but at the same time they dont have any quality serve well taking fundament at all. BAs main targeted customers be the high home or in other words the Executive Class customers. This is because they earn their revenue from these customers sole(prenominal).But from the last ten years BA is going through a very challenging phase because its market rate and revenue twain have dropped drastically and the reason for this is because of the change magnitude and tonic competition feeler in the industry(Milmo, 2008) which is as explained through Porters 5 Forces. The main competitors for BA atomic number 18 Royal Dutch Airlines, Virgin Atlantic, EasyJet and Ryanair. To get through these compet ition, BA had come up with umpteen strategies and withal took advantage of its opportunities and strengths. This has been explained in SWOT digest and also in TOWS and Porters Generic Strategies.COMPANY HISTORY OVERVIEWBritish Airways Plc was one time upon a time a subsidiary of Imperial Airways, which was created by encounter four British airlines, this was taking place in whateverwhere in 1924. But, later on by 1939 for some period of time the brand had disappe ared, but by 1974 when idea for nationalisation came for British Airlines .This was the time when two main airlines joined their hands and merged together i.e. British European Airways (BEA) and British Overseas Airways Corporation (BOAC) and formed into British Airways. In 1987 because of some financial problems the airline got privatised in 1987.BA, at the moment does not only caters service of carrying customers but also at the same time gives service of air cargo and mail service also(Bourne, 2007). To make its p osition in the market split up BA is continuously coming up with new strategies, like giving to its customers advanced service, bringing in new aircrafts and having encom fugitive corporation with its customers and at the same time taking responsibilities of theirs.To evaluate the outdoor(a) factors that critically affect the strategic decisions of the airlineMacro Environment of BA is explained belowMACRO ENVIRONMENT OF BRITISH AIRWAYSBefore coming up with any strategy for British Airways it is very important to analyse the Macro Environment of British Airways. Because of this reason PESTEL analysis is been done and the external factors are being highlighted that are effecting the business of the company and what opportunities should it take in and what bear cause a big treat also at the same time.PESTEL Analysis(P)olitical FactorsTo make sure that the security of the passengers are good BA has to enhance its safety ways as per the needs of Department for hug drug (DFT) (Memor andum from BA Plc, 2005). To work properly it is very important for to go agree to the rules and regulations set up by the Association of European Airlines (Buyck, 2010).(E)conomical FactorsAs per the stinting factor in the year 2008 the spending of the consumers of UK declined drastically, this had taken place afterward thirteen years because of which the competition in the market became more than serious (The Telegraph, 2008).BAs full business totally depend on the executive class customers ,but right now the this has also decreased because of the cost cutting programs that are taking place in every industry.Even the daily changing oil prices effects a lot to the company as taking financial decisions get very hard. And off recently because of the global economical meltdown that had taken place recently thither has been a drastic drop in the Airline Industry.(S)ocial FactorsBargaining power of an employer has increased because there is an increasing rate of unemployment whic h is a big advantage to BA.As time is passing the demands of customers are increasing because of which facilities and services are also changing because of which threats are also increasing. Ageing is also a problem that UK is facing a there are more old people than young , which substance that the number of flyers will backup decreasing in the future. (Office for National Statistics, 2010).(T)echnological FactorsAs technology is increasing customers service at the same time is also improving. Comparing ticket prices online and knowing about the flight is very oft possible online, so customers find the best prices online. Because of which they tend to go more for low cost airlines.Not only cost can be found out online but E-ticket reservations and online check in can also be done which is having a lot of popularity. BA needs to keep up with the growing IT and also make sure that everything is user friendly.(E)nvironmental/ ethical FactorsEnvironment also plays a very important ro le in this. As time is passing customers are becoming more surround friendly and they want less pollution. This is the only reason that expansion of Heathrow is having a lot of barriers as there is a lot of carbon gasses sack taking place(DFT, 2009). In the past BA had gone through hindrance pollution issue because of its Concorde flight.Ethical issues like misplacing of bags and cancellation of flights should be looked into or else the story of the brand will get lost.(L)egal FactorsMergers have to be kept to a very restricted (Ownership rules in America) which would show certain limitations in appreciate to the nub on American Airlines with BA (Knibb, 2010). Waiting for trade union to take any action, it is better to keep good relationship with the unions so that there are no unions taking place.VALUE CHAIN realize ACTIVITIESFirm InfrastructureStructural Organisation gives BA the facility to come up with better strategies as well as have better conversation within the plaqu e. But, this can sometime effect the operations taking place in the company.Human Resource ManagementOff lately BA has spent quite a lot in cultivation programs so that they can recruit the best, so that these best can provide the best customer service (British Airways Annual Report, 2007-08).BA has gone through many problems like Cabin Crew strike, granting of sick absence and demand for increasing of wages(Gray, 2007).Technology DevelopmentBy introducing services online in the flight and communication facilities BA has got a chance to gain private-enterprise(a) advantage by creating value for its customersProcurementSince BA is a very old organisation it has got good relations because of which it can take advantage of and increase its economy by dealing with suppliers very well.PRIMARY ACTIVITIESInbound LogisticsThe important features how to visualise stocks, better training facilities (BA Press Office, 2008) and past good relationship with suppliers (e.g. inlet Gourmet Cateri ng Services).OperationsFeatures like online check-in and e-booking attracts customers more.Outbound LogisticsCustomers are allowed to choose which ever flight they want to and where ever they want to go and which every airport they want to land on, because of there are slots gettable at different airports.Marketing SalesWhen the financial background is strong there are many investments taking place and because of which more promotional material takes place because of which the revenue gets improved. But, if the marketing strategies are not right and not that innovative then there are chances of loosing out of customers to another competitive flights.Post Sales ServicesGiving customers the chance to give their feedbacks and communicate them to give their views which in turn helps BA to connect to its customers very well and improve themselves. Because of which the business and the company can incur profit.