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这是一份关于行为企业管理的报告，研究了影响英国航空公司的全球企业战略的外部和内部因素。进一步的分析得出，作为全球化的公司，关于他们的目标如何实现，他们所面对的约束是对公司进行评估。英国航空公司是一家全球性的航空公司，它的起源是开拓性的第一次世界大战中的民用航空。它是世界上最成功的航空公司之一，2006年在销售方面排名第十位。与世界上许多航空公司一样，私人投资者拥有英国航空公司。多年来，英国航空公司把自己描述为世界上最受欢迎的航空公司，因为它比其他任何一个航空公司拥有更多国际化的旅客，他们飞往更多不同的目的地。英国航空公司与美国航空公司的1999联盟成就了全球八家航空公司的“一个世界”联盟。
1919年的8月25日，英国航空公司在伦敦和巴黎之间推出了世界上第一个国际航空服务。英国航空是英国最大的定期航班，主要的营业地点是伦敦的希思罗机场，是世界上首屈一指的机场，位置相对高，有着高比例的点对点的业务服务的地理区域，它可以飞往不止148个目的地。 This is a report on corporate management in action studying how external and internal factors affect the global corporate strategy of British airways. A further analysis on how their goals are achieved giving the constraints they face as a global company is evaluated. British airways is a global airline company that originated from the birth of the civil aviation following the pioneering days of World War 1. It is one of the world's most successful airlines in the world and was top ten in terms of sales as at 2006. Unlike many of the world's airline, private investors own British airways. For many years, British Airways described itself as the world's favorite airline because it flew passengers that are more international to more destinations than any other carrier. The 1999 alliance between British airways and American airlines became the "one world" alliance of eight airlines across the world. On 25 august 1919, British airways fore runner company AT&T launched the world's first daily international scheduled air service between London and Paris. British airways is the UK's largest scheduled airline which principal's place of business is Heathrow airport, one of the world premier airport locations serving a large geographical area with a comparatively high proportion of point-to-point business, flying to 148 destinations and over ----------. They also operate a worldwide air cargo business in conjunction with their scheduled passenger services. The main activities of the British airways and its subsidiary undertakings are the operation of the international and domestic air services for the carriage of passengers, freight, mail and the provision of ancillary services. GOALS AND OBJECTIVES British airways mapped a long-term vision, which is to become the worlds leading global premium airline, and they have five key goals to help achieve this vision. Be the airline of choice for long haul customers. Deliver an outstanding service for customers at every touch point. Grow their presence in key global cities. Build on their leading position in London Meet our customers' needs and improve margins through new revenue streams. One of the most recent set out agenda of British Airways was to build on terminal five's strength, to upgrade customer experience, make business more cost effective, grow operations and make corporate responsibility a prominent part of its business. In a bid to become the leading global premium airline, along with their five key goals , British Airways launched a three year change program called compete 2012 linked to the London 2012 Olympics. The Compete 2012 aims to instill the drive and competition of the Olympic spirit unto the way they work as a team. This program will progressively and successfully roll out across their business to refresh its culture and revolutionize the way they work. MARKET AUDIT In every organization or business, especially those operating on a global scale, internal and external factors always pose a challenge to operations and performance. However, this largely depends on the structure, size and the industry in which they operate. British airways as an airline company have both internal and external factors because of the scope of their business. EXTERNAL ANALYSIS Diagram below shows an illustration of an organization's industry structure. Macro environment; Political Economical Social/cultural Technological Legal Environmental Nature of competition; How concentrated? How fierce? How global? The six forces in an industry; Competitive rivalry Power of complementors Power of suppliers Power of customers Threat of new entrants Threat from substitutes Stage in industry life cycle Globalization
(Adrian haberberg and Allison Rieple)
In a macro-environmental analysis, the wider environments have the power to alter; demand for the products offered by firms in an industry; the way in which products and services are distributed; the prices charged for them and the ways in which organizations compete in the industry. Political factors Industries are often affected by political events specific to their line of business especially on a global scale. The airline industry is one of the most regulated industries with international regulations covering areas such as aircraft safety, the instrument and flight manuals on board, the provision of lockable flight decks, pilot training, landing slots at airports, allocation of routes, and the airlines permission to enter a country's airspace. This industry is subject to rules from the national and supra-national government such as the EU, civil aviation authority in the UK and the federal aviation authority in the USA. Both regulations and legislation control what airlines can and cannot do, as most airlines are still state owned and legally prevented from being sold to private investors, a legacy from the days when almost all airlines were part of the strategic defense infrastructure of their countries. Government create policies on privatization and nationalization and have a strong influence on what the tax regime is, and if it is heavily regulated and centrally controlled. Political decisions determine the interest rates, which influence exchange rates, inflation, and in turn economic stability and wealth. Legal systems are varied and are based on their common law, civil or theocratic law. Government in the UK has been looking at the aviation for additional tax revenue to make airlines pay for environmental cost. It has been learnt that come 2011, there will be a 210% increase by the APD in the UK and the EU will introduce a payment system for carbon emissions. Currently, British airways applied for anti-trust immunity to operate a joint business across the Atlantic with fellow one world alliance but this is left for the EU and US authorities to decide if they are to enjoy the equal rights on these routes as their competitors. They only hope that the government will make the approval of a third runway at Heathrow airport, as this is vital to the airport development and the wider UK economy. Economical and environmental factors A number of factors that affect economic activity derive from the physical environment like global warming believed by most to be due to carbon dioxide and other greenhouse gases produced by industrial activities. Worldwide and local economic development affect the purchasing power of customers and end users, the availability of raw materials and human resources examples of which include global and national macro-economic booms, recessions and inflation. Products and services are purchased by consumers and government departments that are funded by tax and duties paid by consumers. Economic boom increases growth of many industries especially in cases of differentiated goods. Therefore, when there is an economic downturn, it causes difficulties and hinders growth for industries and their businesses. These factors relate to demand and supply of key inputs such as oil, metals, and minerals and shortage of these inputs result in increased prices, which in turn affects the profitability of industries that need to purchase them. Climate change, waste, noise, and air quality that could be hazardous to human beings are issues that British airways have to reduce by a considerable amount in the coming year because of the people who live close to Heathrow airport. The rate of economic slowdown made oil and fuel hit a record high of $146 a barrel and for a airline company like British airways that uses six million tones of fuel in a year, it increased fuel cost forcing many airlines including British Airways into financial loss. The recession caused redundancy in the economy and has made premium fliers, families and individuals travel less for holidays, and when they do; they want the best services and value for money. Most of the airline customers now use price comparison website to get the best fares available. The act of terrorism like 9/11 attack on the world trade center also contributed to poor ticket sales for British Airways and other airline companies as customers were not assured their safety was guaranteed. A good example of environmental factor is the volcanic ash cloud that disrupted flights and travelers around the world causing British airways almost 50 million pounds in a day. Some of the customers and tourist were forced to spend nights at the airport. British airways will have to focus on their integrated environmental strategy and increased focus on corporate responsibility as failure to adopt this will lead to a potential loss of revenue. Social/cultural factors Social issues affecting British airways and its scope of business include societal values, trends, and culture. Some of these are Growing consumer assertiveness and intolerance of poor quality Growing acceptance of computers and tools or the education, leisure, information gathering and the purchasing of good and services Increase in average household income, and the corresponding reduction in the time available to spend it. British airways' business means they have to work and fly to different environments across the globe where people have different approaches to values, beliefs, culture and divergent approaches to business. As suggested by-----------national cultures take different dimensions and a number of elements, which are Power distance
Uncertainty avoidance
Individualism versus collectivism
Masculinity versus femininity
Long term orientation versus short term orientation
Universalism versus particularism
Specific versus diffuse measure
Achievement versus ascription measure
Human orientation
Performance orientation
Perceiving culture in the wrong way could lead to conflicts and disrespect for multinational managers, staff as well as the people of that community. British airways diversity initiatives are all about dignity and respect and are designed to promote good relationships between colleagues irrespective of their background, religion, and culture. To summarize all factors mentioned and discussed above, the table below shows cost of operations between 2007/ 2009 and how British airways lost bulk of their finances on fuel and oil cost. Operation cost of British airways between 2007 and 2009 2008/09 2007/08* Better / (worse) Employee costs (excluding restructuring) 2,193 2,165 (1.3)% Restructuring 78 1 nm Depreciation, amortization and impairment 694 692 (0.3)% Aircraft operating lease costs 73 68 (7.4)% Fuel and oil costs 2,969 2,055 (44.5)% Engineering and other aircraft costs 510 451 (13.1)% Landing fees and en route charges 603 528 (14.2)% Handling charges, catering and other operating costs 1,021 977 (4.5)% Selling costs 369 361 (2.2)% Currency differences 117 6 nm Accommodation, ground equipment and IT costs 585 576 (1.6)% Total Group expenditure on operations 9,212 7,880 (16.9)% Total Group expenditure excluding exchange 8,471 7,880 (7.5)% Total Group expenditure excluding fuel and exchange 5,843 5,825 (0.3)% FORCES IN THE INDUSTRY As the forces listed in the figure 1 above, the competition in the airline industry is fierce because of threat of new entrants, bargaining power of suppliers and buyers, threat of substitute products and services, and competition among incumbent firms. The intensity of competition evolves over time and is even more when a firm identifies an opportunity to expand or improve its position. Competitive rivalry Competition involves concentration and diversity of competitors, high fixed or storage costs, slow industry growth, lack of differentiation and low switching cost, capacity augmented in large increments, and high exit barriers and strategic stakes. The other forces in the industry affects the competition and increase intensity because the stronger the buyers, suppliers and complementors, the stronger the threat of entry and substitution. When rivalry is high, firms compete in a number of interacting factors such as price wars, advertising battles, new product introduction and modifications, increased customer services and warranties. Litigation has also become a factor as some companies might also turn to the courts to delay a competitor from launching of a new product. With the fuel increase and reduced customer demand, consolidation process sped up in the airline industry causing nearly 35 passenger and cargo carriers out of business or acquired by their competitors. Power of complementors and substitutes Complementors pose a threat to the profitability of an industry where there are no effective substitutes for their products. Low cost airlines such as Ryanair or Southwest offer extremely cheap fares from one airport to another. Buses and taxis can substitute for train services to airports just like trains are used for substitutes for short haul air and rail routes within Europe and these limits the fares they are likely to charge, since consumers switching cost from one mode of transport to another are low. This limits the power that complementors such as Ryanair have on British airways. Power of suppliers In most industries, firms rely on their suppliers to ensure that their goods and services are of good quality and delivered on time. If the firms have a wide variety of suppliers to choose from, then the suppliers have little power, but when the number of suppliers are relatively few in number and their inputs are vital to the quality of the finished product, .they are very important to the industry. Suppliers are becoming powerful because makers of automobiles and aircrafts use technology that is increasingly too complex for a non-specialist to master. British airways need supplies of aeroplanes, fuel, airport facilities and landing slots for take off and landing. The two main suppliers of large airliners are Boeing and Airbus. British airways might not want to integrate backwards into aircraft manufacturing and secondly the switching cost is high. Power of customers Buyer power is the extent to which an industry's customers have the power to dictate prices, quality standards and other terms and conditions to the firms that are supplying them. If customers have a wide variety of companies to choose from and the industry's product is largely undifferentiated, then the buyers/customers will have considerable power in that industry. Power of customers may be low if a product accounts for a small proportion of their cost, so do not notice much if prices rise. The recent strike action of the cabin crew of British airways affected operations and performance like cancelled and delayed flights of the airline and as a result of this customers were forced to fly with other airlines and this resulted in loss of ticket sales which means loss of revenue. Threat of new entrants An industry's productive capacity expands when new competitors enter the industry. When a market is growing rapidly, new entrants intensify the fight for market share, lowering prices and ultimately profitability. The likelihood that new entrants will enter the industry is contingent on the extent to which barriers to entry have been erected by existing firms to keep prospective new comers out. Some of these barriers to entry are Economies of scale
Brand identity and product differentiation
Capital requirements
Switching cost
Access to distribution channels
Cost disadvantages independent of size
Government policy
Pressure from substitute products
Such factors like capital requirements and economies of scale might not quite pose a barrier to entry if potential entrants have sufficient financial backing, confidence and motivation.
In this section, all factors considered in the pestle analysis are linked to each other thereby affecting the industry. The shortage of oil is an economic problem and most times, produced in most of the unstable regions, which is political factor. Awareness of the effects of global warming led to development of technological solutions to the problem some of which goes through legislation. On the other hand, although the forces acting on the industry serves as a useful analytical tool, it has some limitations like accounting for the role of partnership. British airways have many factors to consider as all elements have a significant role to play in their industry and most possibly result in bad operations and performance, which definitely is not good for their brand and reputation.
COPORATE STRATEGY Corporate strategy is the pattern of major objectives, purposes or goals and essential policies or plans for achieving those goals, stated in such a way as to define what business the company is in or is to be in and the kind of company it is or is to be in.
(Richard Lynch).
British airways global strategy is to become the world's global premium airline and they have incorporated ways of making sure that these objectives are met.
The diagram above illustrates how British airways have mapped out the plan in becoming the global premium airline, which will make them financially fit. They have focused more on the long haul journeys for their premium customers, as they believe they make more profit from the longer routes they fly. Their main and principal interests are
Partners: they believe that by collaborating with other airlines as well as businesses maintains good working relationship and strengthens their long-term goal. Customers: by keeping their customers satisfied, keeping their promises, doing things appropriately, finding solutions and showing respect to every individual. Colleagues: they strive to provide good working environments for their colleagues Performance: they can achieve a high level of this by improving operations and investing properly. Excellence: they want to set standards that others aspire to and improve performance. A key example is the move to new terminal five in Heathrow airport To accomplish these goals, British airways adapted some key performance indicators to monitor their progress and improve services. Recently they failed to reach their financial targets but the move to terminal five contributed the better operational performance and excellent services for customers. key targets Measuring tool Description Financial Operating margin Measuring financial performance for future investments and adequate shareholder return Customers Customer recommendation A customer recommendation used on board for their global premium monitor survey Operations Punctuality "ready to go" "ready to go" measures the punctuality of the flights and their departure time colleagues Colleague involvement This is to measure to improve customer services and their involvement towards the goals and values in the company These key performance indicators help British airways monitor progress towards achieving their goal as the world's global premium airline. However, while their key strategies in achieving these remains top priority for them as a company, they have remained market focused concentrating solely on the carrier of passengers and cargo. GLOBALIZATION Most of the professions today like the managers, bankers, engineers and others have now adapted to the concept of globalization. Globalization is the phenomenon of the transition of industries whose competitive structure changes progressively from multinational to global. Various known factors like technological, social, political factors push for competitive advantage in globalization. However, localization remains a barrier to globalization this because of cultural, commercial, technical and legal factors. Countries vary in standards, attitudes, distributive networks, regulation and security issues. British airways strategy is a global airline company with a strategy of becoming the world's global premium airline so their products and services are standardized, and not hugely affected by localization factors. Figure below shows different industries global integration/local responsiveness grid. Microchips Military automobile aircraft Pharmaceuticals High Bulk chemicals Telecommunication equipment Civil aircraft Telecommunication services Globalization Forces Packed food Retail banking Food retailing Low Low localization forces high Source: Prahad and Doz (1987). |
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