Strategic Management Essay Example | Topics and Well Written Essays - 3000 words

Strategic Management - Essay Example Till now, the organisation has more than 240 aircrafts serving over 33 million passengers (British Airways-a, 2009). In the 2009, the company has earned a revenue amount of ?8,992 million (British Airways-b, 2009). As in the year 2009, the company has employed more than 40000 people. Since its privatisation back in the year 1987, the company has experience a continual growth with intensified competition across the globe. The Airways Company has marked its significant presence through being the first airline to contribute to reduce the greenhouse emissions. The company has also been the first to allow its passengers to get the online boarding passes. In the recent downturn British Airways has experienced enough slowdown in the passenger traffic. Despite of the fact, it can be anticipated that British Airways would be able to grow with appropriate framing of strategies and required guidelines to move towards successful strategic direction. This report discusses both the macro and micro environments of British Airways. The internal analysis of the company includes an analysis of the company’s strengths, weaknesses, threats and opportunities with an insight into the financial analysis of the company. At the end, recommendations have been provided with a discussion of the present strategies. A conclusion has been inferred from the analysis with an effort to have a better idea of the strategic management of British Airways. Macro-Environment Analysis Porter’s Five Force Analysis â€Å"The economic structure of an industry is not an accident. Its complexities are the result of long-term social trends and economic forces† (Ehmke, Fulton & Akridge, n.d., p.1). â€Å"Porter’s Five Forces provides a convenient framework for exploring the economic factors that affect the pro?ts and prices of an industry† (Australian School of Business, n.d., p.1). Threat of New Entrants The Airline industry demands a considerable amount of capital as in s et up and large investment. Till sometime back, the probability of new entrants used to be quite low. However, with the increased easiness in the loan and credit accessibility, it can be expected that an increasing number of companies may enter into the business. If the borrowing is cheap, this can pose as a major challenge for the existing airlines with intensified competition to make the market saturated (Investopedia, n.d.). However, that does not imply that the entry is going to be easy in this industry. As the industry demands huge investment in the fixed assets, there exists a considerable amount of exit barriers. Factors like competitive environment, high regulation requirements and high capital requirements are significant barriers to entry. The services in this industry considerably differentiated with increasing degrees of quality, customer service and convenience. The company is a famous airlines company which also operates in alliance in the international routes, which w ould be tough for the new entrants to be into international alliance. So, the entry barrier is high in this industry. Bargaining Power of the Suppliers The airline companies do not have enough choices in case of their