The British Airways Plc. Business Strategy

EUROPEAN AIRLINES STAKEHOLDER MAPPING

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MBA - Strategic Analysis and Planning (ST4S15-V1)

University of SouthWales

Prepared by MBA Students in Group 5

Rahman Shittu

Muhammad Refaey

Micheal Otasanya

Course tutor:

Prof. Pedro Longart

August 20, 2017

1. Who are the stakeholders relevant to European Airlines Industry

“Stakeholders are those individuals or groups who depend on an organization to fulfil their own goals and on whom, in turn, the organization depends” Johnson, Scholes & Whittington (2008, p. 140). According to Bryson (2003) stakeholders refer to persons, groups, or organizations that are taken into account by leaders, managers, and frontline staff of organizations.

Stakeholders relevant to European Airlines Industry include:

1. Customers: Customers are the source of profit for airline companies, Customers want products and services of a reasonable quality and reasonable price for the goods and services  
2. Government/regulations:
3. Employees: Employees have the power of influencing the customers. Managers and employees have their individual interests and goals such as: security of income, job satisfaction, skills and career development, a safe and comfortable working environment.
4. Local communities

1. Suppliers: Suppliers have high interest and big impact on airlines. For instance British Airways has only one fuel supplier meaning it also has power over the decisions made by BA. Also, many airlines depends on online travel agents such as cheapflights.co.uk, expedia.co.uk, lastminute.co.uk, etc. People often buy from such websites since they are convenient and often provide cheaper deals.

2. Shareholders
3. Financial Institution: Financial institutions have both high impact and interest in BA. They can refuse or grant funding. The need of funding depends on BA’s gearing ratio and liquidity. 8
5. Media: The media has a great impact on the image of the airlines, airlines tries to keep a good relationship with the media in order to have good relations with the public.
7. Competitors

Using the basic analysis techniques according to Bryson, we have the following stakeholders

Customers of 55years of age and above

The age bracket usually travel for vacation and they are frequent flyer. This group of customers complains of high price but price will not affect their decision of going for a trip.

Customers of 54 years of age and below

For younger flyers, cost is a big issue for them and they will rather not travel than to spend so much on air ticket. This group also want to have everything such as full service on the plane, comfortable seats and any benefit they can get at a lower cost.

International Air Transport Association

IATA is an organization that is in charge of airline regulations, policies and standards. They also make sure that airline cost are within considerable margin.

European Airlines Companies

These are European airlines and are in the business of air transportation. Examples of such are:

Easyjet

British Airways

Thomson Airways

Flybe

Thomas cook Airlines

Monarch Airlines

Virgin Atlantic Airways

Other modes of transportation (Rails, Roads and Water ways)

Research published in April 2013 by ATOC shows that, on the ten busiest domestic air routes, the market share of rail travel increased from 29% to 46% between 2006 and 2012.

This other mode of transportation has crippled domestic market for airlines and there has been a drastic reduction of patronage within a typical country.

Planes Manufacturers

For expansion and the need to satisfy customers, airlines will need to get new planes and the two world manufacturers are Boeing and Airbus

International Oil Market

The price for airline fuel (kerosene) have been fluctuating and this affect the operation of the airline company

http://www.iata.org/about/Pages/priorities.aspx

This article outlines the stages of strategy in an organization using a UK's leading airways - British Airways as a case study. The three stages of strategies are: corporate strategy, business strategy and functional or operational strategy. A balance scorecard thinking approach of British Airways strategies and decision making during uncertainty and change are also highlighted.

According to British Airways Plc.Annual Report and accounts released in December 2016,” British Airways Plc in the year 2016 operated in a challenging external environment, this included: low fuel prices and interest rates promoting the growth in market capacity and competition; uncertainty following the UK vote to leave the European Union (EU); terrorist attacks in key destination markets; and operational disruption due to adverse weather and air traffic controller strikes.” During the year, the management of British Airways Plc carried out a lot of strategic management actions sought to mitigate where possible the impact of the various challenges in the business operation as well as achieve better performance and a competitive advantage for the organization.

“Strategy is defined as the direction and scope of an organization over the long term, which achieves advantage in a changing environment through its configuration of resources and competences with the aim of fulfilling stakeholder expectations” Johnson, Scholes & Whittington (2008, p. 3). According to Hamel and Prahalad, (1989) as cited in Segal-Horn (2004, p 140) “strategy is what gives drive and strategic intent to an organization. It defines a target for where the organization wants to be in the future”.

1. Corporate Strategy

“Corporate-level strategy is a top level strategy concerned with the overall scope of an organization and how value will be added to the different parts (business units) of the organization. This could include issues of geographical coverage, diversity of products/services or business units, and how resources are to be allocated between the different parts of the organization. Corporate-level strategy is also likely to be concerned with the expectations of owners – the shareholders and the stock market “Johnson, Scholes & Whittington (2008, p. 7)