stratassignemnt-120810061718-phpapp01

7/25/2019 stratassignemnt-120810061718-phpapp01

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Question 1.1

Describe the PEST factors affecting BA between the years 1995 2!

Po"itica"

The #o"itica" en$iron%ent in which British Airways &BA' o#erates an( has a significant inf"uence

on how BA is regu"ate(.

)n 199* a +$irtua" %erger, between BA an( A%erican Air"ines &AA' was b"oc-e( by the

Euro#ean o%#etition o%%ission/ as it a(0u(ge( BA too #owerfu" an entity. The reasons gi$en

was that BA o#erate( #ri%ari"y out of the #o#u"ar on(on air#ort an( that the nite( 3ing(o%

ha( the secon( "argest air"ine %ar-et after the nite( States. This obstruction re(uce( BA4s

#otentia" co%#etiti$e #ower/ as en0oye( by the %e%bers of the ri$a" Star A""iance.

The Euro#ean o%#etition o%%ission/ un(er the Euro#ean nion/ of which the nite(

3ing(o% is a %e%ber state/ a((resses co%#etiti$e #ractices. A"though %ergers can e#an(

%ar-ets an( bring benefits to the econo%y so%e %ergers are (ee%e( to re(uce co%#etition an(

the %an(ate of the Euro#ean nion is to sti%u"ate growth an( raise the stan(ar(s of "i$ing

a%ongst the %e%ber states. As in the case of BA an( AA/ the %erger was (ee%e( to re(uce

co%#etition in the %ar-et whi"st creating an( strengthening BA as a (o%inant #"ayer.&htt#677ec.euro#a.eu7co%#etition7in(e8en.ht%"'

BA achie$e( its ob0ecti$e for growth with a""iances with a nu%ber of air"ines in 19. This was

(one without regu"atory c"earance an( by A#ri" 2/ the new E: E((ington "e$erage(

i%%unity fro% antitrust "egis"ation/ furthere( the affi"iation between BA an( AA.

Antitrust "egis"ation is a "aw inten(e( to #ro%ote free #o"itica" co%#etition by out"awing

%ono#o"ies. &htt#677ec.euro#a.eu7co%#etition7antitrust7o$er$iew8en.ht%"' )%%unity fro% this

"egis"ation enab"e( BA to for% the a""iance with AA.

Econo%ic

The state of the tra(ing econo%y (uring the #erio(s 1995 2 sha#e( how BA o#erate( as an

air"ine. )n the years #rior to 1995/ the econo%y was fraught by recession howe$er in this c"i%ate

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BA was the %ost #rofitab"e western air"ine in an in(ustry. E$en though the econo%y was

s"uggish a 2; fa"" in a$erage yie"( for the in(ustry by 1995/ BA4s yie"( re%aine( stab"e an(

traffic grew by


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+Bac- to British/, in 1999 was intro(uce( to offset Ay"ing4s (ecision an( the nion @ac- was

reintro(uce(. urther socia" inter$entions by BA/ by using the "i-es of 3 author P.@. :4 our-e

an( %usic/ +) $ow to Thee Cy ountry/, e"e$ate( BA to be %ore socia""y acce#tab"e as a

nationa" carrier.

)n 199* an( 199


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Question 1.2.

As a change consu"tant/ what change inter$entions wou"( you ha$e i%#"e%ente( to %itigate

against the effects of the econo%ic factors!

As a change consu"tant/ the change inter$entions ) wou"( ha$e i%#"e%ente( to %itigate against

the effects of the econo%ic factors wou"( be base( on the -now"e(ge that BA4s co%#etiti$e

success in a constant"y changing %ar-et #i$ots on BA4s abi"ity to e#eri%ent/ a(a#t/ rein$ent an(

regenerate as the %ar-et an( co%#etiti$e en$iron%ent shifts. &www.%e(ia.wi"ey.co%'

BA in the years #rior to 1995 was the %ost #rofitab"e western air"ine/ an( in 1995 BA4s yie"( was

stab"e an( traffic grew by ing buyer beha$ior buyer nee(s an(buyer e#ectations/ BA wou"( ha$e ha( insight into how the %ar-et wou"( change. This wou"(

ha$e gi$en BA insight that co%#etition fro% "ow cost o#erators wou"( increase base( on buyer

tren(s.

Antici#ating change o#ens new o##ortunities an( thus is a Fua"ity way to %anage change rather

than 0ust reacting to change. By antici#ating the reaction of its co%#etitors to the econo%ic crisis

in Asia in 1999/ BA wou"( ha$e been better #re#are( for it4s co%#etitors focus on BA4s

#rofitab"e transat"antic route.

The increase in fue" #rices is so%ewhat out of the contro" of BA. ue" #ricing has a (irect i%#act

on BA4s o#erating costs. Better un(erstan(ing the oi" in(ustry wou"( ha$e gi$en BA $a"uab"e

infor%ation as to the tren(s in the oi" in(ustry/ an( rather than intro(ucing the s%a""er an( %ore

G


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fue" efficient Boeing


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Question 2.1.

The $ision of obert Ay"ing is an ea%#"e of a $ision gone wrong. Drawing fro% the theory on

characteristics of a $ision/ #ro$i(e #ossib"e reasons why this $ision was not successfu"!

The reason why Ay"ing4s $ision was a $ision that went wrong is that his $ision fai"e( in

estab"ishing ob0ecti$es which were nee(e( to answer BA4s un%et nee(s whi"st ta-ing into

account the "ong an( short ter% $iew of BA. The characteristics of Ay"ing4s $ision was that it

was unc"ear an( his arrogant %anage%ent of staff %a(e hi% unins#iring.

n(er obert Ay"ing BA4s %ission was to beco%e +the wor"(4s "ea(ing air"ine., This was to be

achie$e( by focusing an( i%#ro$ing on custo%er ser$ice/ inno$ation/ business an( first c"ass

tra$e" an( financia" #erfor%ance. A noteworthy =*B was set asi(e to i%#ro$e an( enhance BA4s

cor#orate i%age/ new ser$ices/ routes/ aircraft/ faci"ities an( training.

owe$er the "ac- of co%%unication of Ay"ing4s $ision to %e%bers of staff "e( to staff

(isi""usion%ent. The (e$e"o#%ent an( i%#"e%entation of a co%#any4s $ision is achie$e( with

the in$o"$e%ent of staff. To an etent there was not %uch wrong with Ay"ing4s $ision/ as this was

su##orte( by hair%an Carsha""/ who announce( on Ay"ing4s resignation that the co%#any4s

strategy wou"( re%ain the sa%e/ on"y with the right %an to eecute it.

Tho%#son/ Stric-"an( an( Ha%b"e &25/ #2' state that the characteristics of an effecti$e $ision

shou"( beI

J Graphic:a #ainte( #icture of the -in( a co%#any that %anage%ent is trying to create an(

the %ar-et #osition the co%#any is stri$ing to sta-e out.

J Directional:the $ision shou"( say so%ething about the co%#any4s 0ourney or (estination

an( signa"s the -in(s of business an( strategic changes that wi"" be forthco%ing.

J Focused:Kision shou"( be s#ecific enough to #ro$i(e %anagers with gui(ance in %a-ing

(ecisions an( a""ocating resources.

J Flexible:Kision %ay nee( to change as e$ents unfo"( an( circu%stances change

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J Feasible:the $ision is in the rea"% of what the co%#any can reasonab"y e#ect to achie$e

in (ue ti%e.

J Desirable:the $ision nee(s to a##ea" to the "ong ter% interests of sta-eho"(ers.

J Easy to communicate:a $ision %ust be easy to e#"ain an( be %e%orab"e.

Adapted from Thompson, Stickland and Gamble (!!", p!#

Ay"ing4s arrogance an( "ac- of un(erstan(ing of the in(ustry was further shown an( another

reason why his $ision was unsuccessfu" when Ay"ing/ re#"ace( the tra(itiona" nion @ac-/ a

sy%bo" of the 3. Being a nationa" carrier/ Ay"ing shou"( ha$e un(erstoo( the i%#ortance of

nationa" #ri(e. Ay"ing fa$ore( wor"( i%ages as #art of his $ision an( %o$e to %a-e BA a %ore

recogni>ab"e organisation. The =*% eercise was not on"y cost"y but was un#o#u"ar. Ay"ing

shou"( ha$e teste( his i(ea first before reJbran(ing BA. Ay"ing b"ant"y fai"e( in un(erstan(ing

the senti%ents an( #ri(e of the British #eo#"e an( shareho"(ers. Lot ha$ing the su##ort of the

British #eo#"e an( shareho"(ers was another reason for Ay"ing4s $ision being unsuccessfu".

Another reason why Ay"ing4s $ision fai"e( was that Ay"ing (i( not ha$e a through un(erstan(ing

of the en$iron%ent in which BA o#erate( an( the hu%an resource as#ects of the business. Ay"ing

sacrifice( BA4s %ar-et an( staff %ora" in fa$or of cost cutting.

Ay"ing4s $ision is an ea%#"e of a $ision gone wrong. The $ision itse"f was not #oor"y concei$e(/

it was #oor"y eecute( as reasons "iste( abo$e. Ay"ing was not the right %an to eecute the

strategy of BA an( this was confir%e( by BA4s hair%an.


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Question 2.2

an you (esign your own $ision for BA for the #erio( in Fuestion/ which is (ifferent fro%

obert Ay"ing! @ustify your answer.

Ay"ing4s $ision is an ea%#"e of a $ision gone wrong. The $ision itse"f was not entire"y #oor"y

concei$e(/ it was #oor"y eecute(. Ay"ing was not the right %an to eecute the strategy of BA

an( this was confir%e( by BA4s hair%an. ence in (esigning a $ision/ it wou"( be (ifficu"t to

(esign a $ision for BA which was that %uch (ifferent to that of Ay"ing. owe$er in trying to

(esign a $ision which i%#ro$es that of Ay"ing the $ision shou"( be/ co%#"ete/ c"ear/ sti%u"ating/

(istincti$e an( s#ecific.

Adapted from South African Air$ays ($$$%flysaa%com#

:ur Kision

British Airways Vision Information

British Airways Mission

To deliver continued profits and develop our market share through world-class service toour customers both international and domestic.

British Airways Vision

A uropean airline with global reach

British Airways !ore Business

The air transport of people and goods.

British Airways !orporate Values

!ustomer "ocused

Be prepared and endeavor to acknowledge the individual needs of our customers#international and domestic$ by adapting our interactions to their specific needs

Accountability

%houlder responsibility for individual and team actions& decisions and results by institutingclear plans and goals and measuring our progress against them& while discerning a deeper

purpose in one's everyday (ob.

Integrity

Implement the highest standards of ethical behavior in all our lines of work and maintainingcredibility by making certain that our actions always match our words consistently.


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%afety

Adopting a )ero defect mentality and striving for )ero accidents through proper training&work practices& risk management and adherence to safety regulations at all times

*cellence in +erformance%etting goals beyond the best and reinforcing high ,uality performance standards and

achieving e*cellence through implementing best practices

Valuing our +eople

!ommitting to satisfaction& development and well-being through treating them withrespect& dignity and fairness

eference6 $$$%flysaa%com

The abo$e a(a#tation fro% South African Airways is a $ision/ which is co%#"ete/ c"ear/

sti%u"ating/ (istincti$e an( s#ecific. The $ision abo$e is a roa( %a# showing the route BA

inten(s to ta-e in (e$e"o#ing an( strengthening its business. )t #aints a #icture of BA4s

(estination an( #ro$i(es a rationa"e for going there. BA4s $a"ues are the be"iefs/ business

#rinci#"es an( #ractices that gui(e the con(uct of it4s business/ the #ursuit of its strategic $ision

an( the beha$ior of it4s e%#"oyees.

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Question .1.

obert Ay"ing intro(uce( a raft of changes that were etre%e"y un#o#u"ar with staff. Ana"y>e the

causes of staff resistance to his initiati$es!

There are se$era" factors which cause staff resistance. BA4s staff resistance to obert Ay"ing4s

initiati$es "ies in Ay"ing4s4 abrasi$e a##roach to %anage%ent co%#oun(e( by his "ac- of staff

consi(erations an( his in(ifference to custo%er care. is in(ifferent a##roach to custo%er care

sent the wrong signa"s to staff/ causing further staff resistance.

Being unc"ear"y an( unab"e to con$incing"y (etai" the outco%e of change e#ecte( create( a

sense of fear a%ongst BA4s staff. ear of change is contagious. ?hen #eo#"e are afrai( of

change/ the fear is transferre( an( contagious"y affecting other %e%bers of staff. This is e$i(ent

in the #i"ots so"i(arity when they threatene( stri-e action in 199*.

&www.search(ata%anage%ent.techtarget.co%'

E%#hasis on cost cutting rather than #ro(ucti$ity an( staff satisfaction at BA was another cause

of staff resistance. Soon after his a##oint%ent as E:/ Ay"ing atte%#te( to cut o#erating costs

by =1bi""ion by the year 2/ by she((ing o$erhea( an( "oss %a-ing business. Ay"ing4s ai% was

to s"i% BA into a +$irtua" air"ine, (ea"ing with tic-et sa"es an( f"ight han("ing on"y. An( as BA4s

5 e%#"oyees accounte( for ; of the co%#any4s costs/ it was e$i(ent to staff that Ay"ing

was going to tri% staff to achie$e his goa".

Ay"ing4s (ecision to outsource catering i.e. a change in ser$ice was (ee%e( by staff to resu"t in

0ob "osses. This was another cause of staff resistance as staff regar(e( this a##roach as being a

reason to cut bac- staff rather than $iewing it as strea%"ining of BA4s business #rocess an(

concentrating on it core business of #ro$i(ing f"ights rather than %ea"s on f"ights.

)n A#ri" 1999 the e%#"oyee o#inion sur$ey foun( that on"y G; of BA4s staff be"ie$e( that BA

wou"( ta-e a##ro#riate action to a((ress the #rob"e%s i(entifie( by e%#"oyees. BA staff (i( not

fee" $a"ue( in the "ate 1994s an( e$en fe"t re"uctant to (e"i$er the best custo%er ser$ice as

e#ecte( fro% BA4s +Putting Peo#"e irst Again, ca%#aign/ which was run in 1999. The cause of

resistance here/ is that the staff cou"( ha$e fe"t that a"though the initiati$e was goo( there was no

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rea" effort by Ay"ing to a((ress the %a0or #rob"e% which beset BA. Ay"ing #ersiste( with his

$ision without %uch regar( for the o#inion of BA staff. urther ce%enting an o#inion that Ay"ing

(i( not care about the staff4s o#inion another source of resistance to change.

Ay"ing (i( not %a-e it c"ear an( (etai" how he inten(e( to i%#"e%ent his $ision an( how that

$ision was going to wor- for BA. This +ga#, in the i%#"e%entation was another cause of staff

resistance as staff (i( not -now eact"y how they were going to rea"i>e Ay"ing4s $ision.

Cost e%#"oyees wi"" be resistant to change an( wi"" resist change either conscious"y or

subconscious"y. E$en though the fear of change is unfoun(e(. The #ace of change is e$er

increasing/ es#ecia""y in "ight of the internet/ new (e$e"o#%ent in techno"ogies an( socia"

networ-ing as in how e%#"oyees react to change. Ay"ing %ay ha$e been unfortunate in that his

a##oint%ent as E: was (one un(er harsh econo%ic con(itions/ but as E: an( the hea( of BA

it was his (uty to get his staff be"ie$ing in hi% an( his $ision to %a-e resistance to change "east

resistant as #ossib"e.

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Question .2.

Describe the ste#s you wou"( ha$e ta-en in intro(ucing the sa%e changes in or(er to obtain

%ini%a" resistance fro% staff!

British Airways is a "arge organisation. )n 1999 it ran a custo%er care training (ay for a"" *G

e%#"oyees. Being such a "arge organisation BA faces interna" an( eterna" #ressures hence BA

nee(s to a(a#t to i%#ro$e it4s #erfor%ance an( is (one by continua""y a(a#ting it4s cor#orate

cu"ture/ it4s $a"ues/ be"iefs/ %ission an( $ision. This change i%#acts on the organisation. An( to

in or(er offset an( faci"itate any resistance to change organi>ationa" #o"icy is $ita". The

gui(e"ines set out by the organisationa" #o"icy wi"" be the ste#s that wou"( be fo""owe( to obtain

%ini%a" resistance fro% staff.

(Adapted from &ohn 'otter: Step )rocess for *eadin+ han+e:

$$$%kotterinternational%com-kotterprinciples-chan+esteps#

Ste# 1

reate a sense of urgency an( connect with staff. rgency is necessary to get the coo#eration

reFuire( to (ri$e the change. reating urgency wou"( "ea( staff out of their co%fort >one.

onnecting with staff in a way that connects to their $a"ues hence ins#iring the% rather than(iscourage the% which wou"( resu"t in resistance. onnecting with staff wi"" %a-e the change

+co%e a"i$e, with hu%an e#erience/ engage the senses an( create the %essage that the change

is essentia".

Ste# 2

or% a tea%/ an( e%#ower the% to "ea( the change. Lo %atter how co%#etent/ it is i%#ossib"e

for one #erson to sing"e han(e("y (e$e"o# the right $ision/ co%%unicate the $ision to *G

e%#"oyees/ whi"st being face( with obstac"es of change. or%ing the right tea% of #eo#"e to "ea(

the change initiati$e is $ita" to its success. The change tea% wi"" ha$e the right co%#osition/ a

significant "e$e" of trust as we"" as a share( ob0ecti$e. The change tea% wi"" inc"u(e/ in(i$i(ua"s

of #ower/ e#erts/ "ea(ers to (ri$e the change an( %anagers who wi"" contro" the change #rocess.

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Ste#

De$e"o# a change $ision/ this wi"" c"arify how the future wi"" be (ifferent fro% the #ast. A c"ear

$ision si%#"ifies e"aborate (ecisions. )t wi"" a"so %oti$ate staff to ta-e action e$en if they (o not

agree with the change initia""y. A c"ear change $ision wi"" he"# coor(inate the actions of (ifferent

%e%bers of staff in a fast an( efficient way. The $ision wi"" be strategica""y feasib"e. To be

effecti$e the $ision wi"" ta-e into account the %acro an( %icro en$iron%ent. The $ision wi"" be a

gui(e/ it wi"" be focuse(/ f"eib"e an( easy to co%%unicate.

Ste# G

o%%unicate the change for buyJin/ ensuring that as %any #eo#"e as #ossib"e un(erstan( an(

acce#t the change. BA is a co%#"e organisation/ hence getting an un(erstan(ing an(

co%%it%ent to change is (aunting tas-. n(er co%%unicating is a source of resistance. urther

co%%unication by consistent beha$ior by senior %anage%ent sen(s a #owerfu" %essage to the

organisation which increases %oti$ation/ ins#ires confi(ence an( wi"" (ecrease cynicis% to

change.

Ste# 5

E%#ower staff an( re%o$e barriers so that staff can wor- to their #otentia". By e%#owering staff

a""ows to #artici#ate in the change. Staff are then co%%itte( to i%#"e%enting the change (ue to

their contribution.

Ste# *

reate short ter% wins to -ee# staff %oti$ate(/ the wins wi"" be c"ear"y re"ate( to the change.

Short ter% wins are e$i(ence that efforts %a(e for the change has $a"ue. urther this wi""

increase the sense of urgency creates a #ositi$eness for the change/ bui"( %o%entu%/ turns

neutra"s in su##orters an( re"uctant su##orters into acti$e %e%bers in the change #rocess.

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Ste# ation towar(s it4s ob0ecti$es. The en$iron%ent inwhich the organisation o#erates (irect"y affects the organisation. The en$iron%ent enco%#asses

interna" an( eterna" factors that i%#act on the organisation both (irect an( in(irect"y. The

en$iron%ent inc"u(es the econo%ic syste%/ current econo%ic con(itions/ #o"itica" syste%/

natura" resources an( the (e%ogra#hics of the #o#u"ation in which the organisation o#erate.

urther/ cu"tura" forces an( $a"ue syste%s which sha#e the #oints of $iew an( the (ecisions %a(e

by %anagers.

Porter4s 5 forces %o(e" is a fra%ewor- for in(ustry ana"ysis an( business strategy which assists a

%anager in steering his7her organisation towar(s its ob0ecti$es. n(erstan(ing these forces

which inf"uence the organisations %icroJen$iron%ent he"# the %anager %aintain the

organisations #otentia" for #rofit.

J Supplier )o$er: is the #ower of su##"iers to increase the #rice of in#uts. n(erstan(ing

this force enab"es the %anager to (eci(e whether to source a (ifferent in#ut or "oo- at

another su##"ier.

J .uyer )o$er: is the #ower of custo%ers to (ri$e (own #rices. n(erstan(ing this force

enab"es the %anager to (eci(e whether the current %ar-et for his7her #ro(uct wi""

#ro(uce the #rofit (esire(. ?ith this infor%ation the %anager can choose to target a

"esser inf"uentia" %ar-et.

J ompetiti/e 0i/alry: is the strength of co%#etition in the in(ustry. n(erstan(ing this

force enab"es the %anager to un(erstan( his7her co%#etitors an( the co%#etiti$e

a($antages he7she nee(s to e%#"oy to %a-e co%#etitors irre"e$ant.

J The Threat of Substitutes: is the etent to which (ifferent #ro(ucts an( ser$ices can be

use( to re#"ace that of the organisations. n(erstan(ing this force enab"es the %anager to

better a(a#t an( continua""y research an( re(esign his7her #ro(uct to %eet the nee(s of

buyers.

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J The Threat of 1e$ Entrants: is the ease at which new co%#etitors can enter the %ar-et if

they see an organisation %a-ing a #rofit. This is an i%#ortant force because a %anager

(oes not want his7her organisation to o#erate in a #erfect co%#etition en$iron%ent. eJ

in$enting his7her organisation wi"" offset the threat of new entrants.

eference6 $$$%businessballs%com

The %acro or genera" en$iron%ent is the eterna" en$iron%ent which affect the organisation.

Canagers cannot contro" factors in the %acroJen$iron%ent. ence a greater un(erstan(ing of

theses factors which affect the organisation ai(es the %anager in achie$ing his7her goa"s for the

organisation. ofste(es4 5 cu"tura" (i%ensions show the $a"ue for the %anager to un(erstan(

his7her %acroJen$iron%ent/ as the $a"ues of #eo#"e of (ifferent cu"tures ha$e conseFuences for

how #eo#"e in (ifferent cu"tures beha$e an( how they react in the wor- en$iron%ent. urther the

strategic fra%ewor- for an organisation is base( on the $a"ues of the organisation an( #eo#"e wi""

re%ain a $ita" #art of e$ery organisation.

J )o$er Distance: is the (egree to which "ess #owerfu" %e%bers are inf"uence(.

n(erstan(ing this factor is $ita" for a %anager as he7she wi"" -now to what etent he7she

wi"" be ab"e to inf"uence his7her staff an( if %anage%ent sty"e shou"( be (e%ocratic or

autocratic.

J 2ncertainty A/oidance: is the etent to which %e%bers of a cu"ture fee" threatene( by

ris-y or un-nown situations. n(erstan(ing this factor ai(es %anagers un(erstan(

re"iance on e#ert o#inion/ into"erant an( (e$iant beha$ior which is cost"y. urther

%anagers wi"" be ab"e to %ou"( freethin-ing an( inno$ation in a "ow uncertainty

en$iron%ent. This gi$es the organisation a co%#etiti$e a($antage if %anage( correct"y.

J 3ndi/idualism: is the (egree to which society e#ects #eo#"e to ta-e care of the%se"$es

an( their i%%e(iate fa%i"y an( the (egree to which in(i$i(ua"s be"ie$e they contro" their

(estiny. or the %anager this is i%#ortant as e%#"oyees in high in(i$i(ua"is% cu"ture are

"ess "i-e"y to re%ain with an organisation so %anagers create a cu"ture where e%#"oyee

re%ain as re#"acing an( training new e%#"oyees is cost"y.

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J Gender 4rientation: etent to which society reinforces tra(itiona" nor%s of %ascu"inity

$ersus fe%ininity/ The ro"e of %anagers here to un(erstan( this factor is i%#ortant as a

fe%a"e %anager in a high gen(er orientation society %ight not be we"" acce#te(/ both

fe%a"e an( %a"e subor(inates %ight wor- counter #ro(ucti$e"y to a fe%a"e %anager.

J *on+5Term 4rientation: is the etent to which a cu"ture stresses that its %e%bers acce#t

(e"aye( gratification of %ateria"/ socia" an( e%otiona" nee(s. The i%#ortance for the

%anager to un(erstan( this factor is how the %anager trans"ates wor- into rewar(. Shou"(

the %anager rewar( wor-/ either goo( or ba( wor- i%%e(iate"y or (e"ay rewar(. This is

i%#ortant as organisations in$est resources into #ro0ects which ten( to ha$e "ong ter%

rewar(s/ an( a %angers abi"ity to con$ey this to staff is i%#ortant.

So"cu%/ @ac-son/ e""riege"/ 2.

As "iste( abo$e it is i%#ortant for a %anager to un(erstan( his7her en$iron%ent as the

en$iron%ent inf"uences what the organisation (oes. ence the %anager nee(s to be aware of

the re"e$ance of the organisation in the en$iron%ent.

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Question G.2.

efer to the subJhea(ing +Strategy, in the case stu(y an( ana"y>e BA4s strategy un(er the

(i%ensions6 (o%ain sought/ strategic thrusts/ (ifferentia" a($antages an( the resu"ts e#ecte(.

BA4s %ission to beco%e a g"oba" force was not an unsubstantiate( one. The %ission was base(

on historica" infor%ation of the "ate 194s. BA4s strategy consiste( of the co%#etiti$e ste#s an(

business strategy/ that Ay"ing #ut into #ractice to grow the business/ woo an( #"ease custo%ers/

co%#ete successfu""y/ con(uct o#erations a"" whi"st trying to achie$e targete( "e$e"s of

organi>ationa" #erfor%ance.

Do%ain Sought

BA4s %ission was to be the wor"(4s "ea(ing air"ine by focusing a%ongst others on business an(

first c"ass #assengers. Ma$it> an( Lew%an &192' state that the starting #oint in c"arifying one4s

strategy is to (efine the %ar-et sco#e or (o%ain for one4s #ro(uct or ser$ices. This is #recise"y

what Ay"ing (i(. Ay"ing fa$ore( (e$e"o#ing an( focusing on the high #rofit %ar-et seg%ents of

the %ar-et. ather than co%#eting against the "ow cost an( no fri""s bu(get air"ines which were

co%#eting for the Euro#ean %ar-et/ Ay"ing sought the high en( %ar-et an( intercontinenta"

routes as a niche %ar-et for BA. As Ma$it> et a" state/ the -ey issue is to i(entify a niche %ar-et

in the in(ustry.

Strategic Thrust

Ma$it> et a"/ ta-e the #osition that a strategic thrust is a %o$e of where a business is now to

where it wants to be. This is where Ay"ing fai"e(. As Ma$it> et a"/ reason that a strategic thrust

%ust be %a(e c"ear an( what sort of actions %ust be un(erta-en by the organisation to achie$e

the thrust. BA was (eter%ine( to be a g"oba" force in air #assenger tra$e" this was base( on

#re(ictions that the a$iation in(ustry wou"( ha$e been (o%inate( by a few "arge air"ines.

Ay"ing4s action to %ai%i>e #rofit by increasing #assenger yie"( an( cutting costs. Passenger

yie"(s/ is the %easure of the a$erage fare #ai( #er %i"e/ #er #assenger/ Ay"ing4s thrust here was

an atte%#t to offset the i%#act of "oss in #rofitabi"ity of econo%y seats which were threatene( by

the bu(get air"ine co%#etitors.

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Differentia" A($antage

Arguab"y this is where BA fai"e(. e#"acing the Euro#ean econo%y c"ass an( intro(ucing an

i%#ro$e( ?or"( Tra$e"er #rogra% was an atte%#t to (ifferentiate BA fro% its co%#etitors. )n

concentrating the business an( first c"ass an( intercontinenta" routes BA fai"e( to see- an

a($antage o$er it4s co%#etitors who were a"rea(y co%#eting in this s#ace. There was nothing

(ifferent fro% BA4s offering to that of the other air"ines a"rea(y f"ying these routes. urther in an

effort to %ai%i>e #rofits Ay"ing o#te( to increase #assenger yie"(s/ i.e. BA was unab"e to re(uce

#rices to f"yers but rather o#te( to %ai%i>e #rofits fro% f"yers. This wou"( ha$e not gi$en BA

any (ifferentia" a($antage o$er its co%#etitors but wou"( ha$e rather ha$e %a(e BA "ess

co%#etiti$e.

Target esu"ts E#ecte(

Ma$it> et a"/ state that an organisations strategy %ust inc"u(e a state%ent of antici#ate( resu"ts

an( what financia" or other criteria wi"" the organisation use to %easure it4s success an( what

"e$e"s of achie$e%ents are e#ecte(. BA4s strategy was co%#"iant here. BA wante( to %ai%i>e

#rofits by increasing #assenger yie"(s/ cut costs an( (e$e"o# an( focus on the high #rofit

seg%ents of the intercontinenta" routes an( #re%iu% #assengers. owe$er using #assenger yie"(

as a financia" %easure is not usefu" for co%#arisons across %ar-ets an( air"ines as yie"(s can

$ary by stage "ength an( (oes not consi(er aircraft "oa( factor. &www.a$iationg"ossary.co%'

The four #arts of the business strategy "iste( abo$e are inter(e#en(ent. Each are instru%enta" in

(eter%ining a c"ear strategy for the organisation. An ana"ysis of BA4s strategy shows that BA4s

%ission to beco%e a g"oba" force was not unwarrante(. BA4s un(er Ay"ing ha( a c"ear (efine(

strategy as to were BA was #ositione(/ what it %a(e BA (ifferent fro% its co%#etitors an( where

BA wante( to be. nfortunate"y %issing was the touch #oints of the #erson who was "ea(ing the

organisation/ as un(er Ay"ing the strategy was not eecute( an( this was reiterate( by BA4s

hair%an Carsha"" who announce( BA4s strategy wou"( re%ain unchange(/ with on"y +the right

%an to eecute it.,

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