Strategic Issues Faced By British Airways – Marketing Mix, Internal Analysis, And Marketing Metric

Issues faced by British Airways

British Airways is one of the largest airline in UK that is based on fleet size. The airline was established in 1974 by British government to control and manage two nationalized airline companies named British European Airways and British overseas Airways Corporation. In addition to scheduled services provided by British Airways, it is engaged in the operations of international carriage of mail, freight and more ancillary services. British fly over more than 30 destinations and carry more than 33 million passengers (Airways, 2017). The report discusses the strategic issues faced, marketing-mix, internal analysis, Marketing Metric in order to analyze the current situation of British airways. The report also has used the tool “BCG matrix” to analyze the marketing strategies. At last, the report has given a recommendation to the issues that will be found through tools.      

British Airways has to face a filed suit from Branson Airways that had led to loss of brand image and reputation. With difficulties faced by British Airways, overseas partners faced huge losses such as Qantas, US Air, and TAT suffered a huge loss (Lange et al., 2015).

Global recession- Due to increasing recession at the global level, tourists are no more interested to go for holiday. In the attempt to increase its customer base, it strived to provide good customer experience to attain a same level of profit. British Airways focused on the groups of passengers such as business people and holiday makers. Moreover, it has affected the fare of flights due to competent market price and less fare decided by competitors with same facilities (Charter, 2017).

Fuel Price- Oil price has been increasing due to high demand. International civil aviation try to cut down flight to reduce the use of fuel. Nevertheless, it is an environmental issue too. If price touches at extreme high level, British Flight expects the fuel bill for the current year jumped by 1 billion that represents overall 35 percent of annual costs.  

British Airways is facing a daunting challenge such as raising finance at the time of economic crisis in debt market. Choosing right of workers is difficult to measure because the staff costs for British Airways is high. Moreover, as compared to other companies, the quality of British Airways do not match with the customers paying. This creates customer dissatisfaction that can be improved by proper human capital management (Coller, Mills, and Mills, 2016).  

Marketing strategies

To overcome the strategic issues, British Airways had taken a strategic initiative in 2012 that intends to achieve the vision of becoming one of the leading global airline. The plan involves an overall approach or 360 degree to overcome several issues such as issues related to environment, British tradition that supports consumer friendly initiatives, and relationships with suppliers (Airways, 2017).

With an aim to maintain position it always remained a leading Airways, it has been able to maintain the high standards in relation to its services. Airline provides a 24*7 security services to the customers and handle the situations when things become uncontrollable (Shanbhag, Dutt, and Bagwe, 2016).

Product- The products and services offered by these airlines satisfies the needs and wants of the customers. It has a fleet sized of 295 that provides a first-rate service to all the patrons. At first, the flight ticket are offered at a very reasonable prices just to satisfy the wants of customers. The Airways is connected to different busiest airports and provides an excellent scheduled fight to all the destinations. It has also chosen other form of entertainment such as movie collection, access to radio channels and various television programs. With an aim to cater the needs of section and segmentation of customers, it is important to divide the services in mainly three diverse executive classes (Mbaskool, 2018).  

Price- British Airways have smartly managed its pricing policy in such a way that every person or every class can avail them with services. It tried to maintain a pricing policy that is equal to the value provided to the customers. The strategy is to decide how total amount spending can influence the customers and decision makers. Customer buy a ticket at a very base price without any surplus value addition and other benefits and even choose various services that he requires.  The economy class pricing strategy for the customers who want to access the tickets at low price. A medium- value pricing strategy is for such customers that require and demand fringe benefits. The Premium pricing strategy is preferred by those customers who travel to get high-class benefits availed by the airlines (Dudovskiy, 2016).

Place- Place plays a distinctive part in market strategies. British Airways recognizes the truth and always shown their dedication towards liaisons, partnering and mergers with most of essential destinations in the world. As originated and establishment of UK, it carries its most regular activities around the operational base. British Airways developed such infrastructure to conduct a very safe and proper activities (Mbaskool, 2018). BA has collaborated with other airports authorities to carry out the same business activities. They own their self warehouses and even share warehouses in alliance with other companies (Williams, and Rhoades, 2017). The channel of distribution is through call centers, travel agents, and online websites. This airways is most popular airline to fly through other six continents of the globe nearly serving 160 destinations (Shaw, 2016).       

SWOT analysis of British Airways

Promotion-Considerable creative and innovative actions has to be put to maintain promotional strategies. In order to maintain and keep the communication lines open with customers, different strategies have to be followed. The company has created a mobile application for special customers to allow them to access reservations and get fringe benefits. British Airways provides special flight tickets at a very reasonable prices for special occasions. Tickets in the name of “Christmas gift vouchers” is one of the scheme where the customers can travel to various places at a discounted prices (Moore, and Taylor, 2016).   

It is very necessary that strategic development is a reflection of British Airways strengths and weaknesses that are related to competitors. Whereas, opportunities and threats are presented by external environment.   

Strengths Alliances and collaborating Brand Image Financial stability	Weaknesses Relation among the employees is worst in history. Poor financial position
Opportunities SkyTrax quality system Competitors have forced company to exit	Threats Skies agreements Global economic crisis Low cost competition

Strengths- British airways is among the top airlines of the world. Moreover, it is largest airline in UK in relates to fleet size. It is second largest airline in UK when as compared to passenger carrying. British Airways have a strong brand image as one of the leading global premium airline. Moreover, It was also voted as customer`s no.1 preferred brand in UK in 2014, 2015 and 2016 (Rahman, 2018).  

Weaknesses- the weaknesses are related to reliability, trust aspect, laggards because of innovation and change in employee management. Some analysts and researchers hold a preview that British Airways that is over reliant on UK market. Almost, half of airline revenues are derived from UK so somewhere it becomes dependent on UK. The staff of British Airways started a fortnight strikes in July 2017 in UK. This is a result of ongoing and increasing bitter dispute among the airlines and the mixed fleet crew (Rahman, 2018).  

Opportunities- Emerging economies with improved infrastructure that demand offer airlines a opportunity for expanding infrastructure. In 2017, British Airways launched new summer holiday line routes such as Ibiza, Palma, Malaga, and Florence from Birmingham airports in UK. Whereas, the airways are exploring more holiday routes (Ustaömer, Durmaz, and Lei, 2015).   

Threats- competitors are mostly considered as a major threat. British Airways usually faces powerful rivalry and competition in many routes. For example- Air India, Etihad Airways, Qantas Airways, Singapore Airways and Qatar Airways were competitors of British Airways. Rising costs of fuel and labor in UK are facing issues.     

While preparing for the future strategies of British Airways, BCG matrix can be a viable to analyze the business strength and attractiveness of market. The key findings from BCG matrix is that company grow high in Asia pacific and Eastern Europe. A strategic implementation states that service quality needs to be enhanced to get a competitive advantage. A share matrix known as BCG matrix is an strategic tool that helps in recognizing and sharing resources in the portfolio of brands as the airways need to determine that which segment is profitable. Moreover, it has high potential to grow because it has low market share (Suksantilap, Leelasantitham, and Glesner, 2017).

Stars

British Airways can be considered as stars because of European routes. The company has a commanding 21.35% market share with a volume capacity of 11,427,425 and also among the top five rated in Europe.   

Cash cows

Ireland and UK routes are cash cow routes for British Airways. These routes are the most successful routes in mature market and generate more profits when as compared to other routes. The intercontinental routes to Canada and North America boost some more lucrative routes to include most gainful route from London health row  to New York where British airways commands 38 % market share. Moreover, it is all ahead of British competitor “Virgin Atlantic” with 24 %. In addition to this, when looking for an opportunity to add British Airways share with the American Airlines and the combined share of two airlines of New York route that rises even 50 %.

Question mark

China route is positioned as question mark when its current growth rate is concerned. In the developing market, the route has the potential to grow in the market as a star. British Airways can invest more in the route as a solution to grow market shares (Thakur, and Workman, 2016).

Dogs

Boutique airline concept “open skies” is considered as British Airways dog since many years. Its operations continue between Paris and Washington, Amsterdam and New York remained a failure that lead to losses for British Airways. British Airways route of Africa can be marked as dog due to its poor performance. British Airways had to close many flights, when it closed in 2015 due to country`s unprofitability and poor economy.         

BCG matrix

By analyzing the external environmental issues and factors, it should focus on enhancing technological, competition, and environmental issues. It is necessary to build defensive strategies that can help to protect its market share. Other low cost airlines are biggest threat to British airways that enables to move in low cost market that cannot be deemed as appropriate actions on the basis of previous failed attempts. The quality of service need to be improved to attain a competitive advantage. It is important to address the area for British Airways where the value is being lost due to avoidance of continuous attacking competitor strategies. It is recommended that decreasing the salaries of the staff can be a key factor to British`s durability. As per (CAA) civil Aviation Authority cabin crew of the airways that is paid almost double as its competitors pay. A standard salary for British Airways cabin crew includes allowances and bonuses for huge sum. The equipment, physical facilities and appearances o person is associated with the services that should be promoted (Lukovac et al., 2017). Rather paying unnecessary to its staff, company should be more willing to help the customers to provide them with prompt services and establish profit distributing. The personal have the knowledge and skillset that need to convey loyalty, trust and confidence. As per the vision, British Airways should make sure that their customers should fly environmental friendly and smoothly (Harrison, 2018). It is important to consider that British Airways is charging high price as compared to other big airline company. British Airways should be aware about various international politics such as fuel price fluctuation and terrorist attack for Middle East risk politics.  

Conclusion 

British Airways should be very careful while preparing a global business strategy. Moreover, if they consider the problems and decides to. The above report brings out the situational analysis of the British Airways. As it remained as one of the leading aircraft in UK. The report has an in-depth analysis of all the elements of marketing-mix. As a promotional strategies, it opt to introduce discounted pricing on flight tickets in the occasional season. As a tool to analyses the current position of British Airways, it has a brief discussion of BCG metrics.

References 

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Coller, K.E., Mills, H. J. and Mills, A. J., (2016) The British Airways Heritage Collection: an ethnographic ‘history’. Business History, 58(4), pp.547-570.

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Moore, S. and Taylor, P., (2016) ‘We planned a dispute by Blackberry’: the impact of restrictions on the use of social media in industrial action in the light of the British Airways dispute-2009-11. Industrial Law Journal, 45(2), pp.251-257.

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Shanbhag, M., Dutt, M.L. and Bagwe, S., (2016) Strategic Talent Management: A Conceptual Analysis of BCG Model. Imperial Journal of Interdisciplinary Research, 2(7).

Shaw, S., (2016) Airline marketing and management. US: Routledge.

Suksantilap, P., Leelasantitham, A. and Glesner, M., (2017) A Survey of Demand Factors Utilized in the Facial Surgery Service Business Using BCG Matrix. INTERNATIONAL JOURNAL OF APPLIED, 10(2).

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