Research Topics: British Airways Case Studies

Budget Airlines in Hong Kong: Oasis Hong Kong Airlines

Budget Airlines in Hong Kong: Oasis Hong Kong Airlines                 Rev. Raymond C. Lee and his loving wife, Priscilla, founded Oasis Hong Kong Airlines in October 2006. Their reason is to provide long-haul travel accessible and available to all passengers. Because their aim is to provide access and availability of long-hauled flights to all passengers, they provided low-cost fares and the opportunity for passengers to customize their flight experiences by offering either business or economy class trips. Through their vision and mission, which is based on biblical principles of having a deep respect for all races, creeds, religions, Oasis Hong Kong Airlines extends its dedication of providing affordable and accessible business and leisure trips to all passengers. This provides all passengers with low fares and high quality and standards of comfort, safety, and service, thus, contributing to the building of an aviation culture in Hong Kong that helps to strengthen Hong Kong’s position, being the leading aviation hub in the whole of Asia Pacific. At present, the airlines fly daily non-stop between Hong Kong, from Hong Kong International Airport, and London in Gatwick Airport, and six times weekly between Hong Kong and Vancouver, Canada. In the future, Oasis Hong Kong Airlines plans to add routes and services to Europe and North America, thus, changing the future of long-haul travel to and from Asia (2007).               From this brief history and information about Oasis Hong Kong Airlines, it can be understood that the positive intentions of the airlines transcends not only in providing services and convenience to customers, but also in offering and helping the city of Hong Kong with its advantage in terms of tourism, economy, and technology. With this, it would be helpful and essential to analyze the advantages, strategies, and the competitive advantages of Oasis Hong Kong Airlines in the market.   PEST Analysis             The PEST Analysis establishes a good analysis of the external effects on a company by breaking them into essential and obvious sorts. External factors or the macro-environment of a specific organization, such as the Oasis Hong Kong Airlines pertains to the outside factors that the organization has no control of. This analysis should be done in order to assess the different factors that may serve to the future problems of the organization in terms of its operations in the market.   <ul style="margin-top: 0in; margin-bottom: 0in" type="disc"> <li class="MsoNormal" style="text-align: justify; line-height: 150%"> Political – Political aspects include government policies and regulations, legal issues, and formal and informal rules, from which the organization must base its operations (2007). </li> </ul>   For the Oasis Hong Kong Airlines, the political factors that it must take note of include travel policies and restrictions of the British government, and other countries from which it wishes to operate. This is in line with the additional security imposed by the government of the United Kingdom in battling terrorism and threats in their country.               In addition, Oasis Hong Kong Airlines must also comply with other agreements, such as its Open Skies Agreements with the United States, which would serve to open the aviation industry of Hong Kong to other countries. However, many more barriers can be identified, such as the restrictions in air services agreements or ASAs, alliances, mergers between carriers, limited access to airport infrastructures and ground handling services, access to computer reservation systems, and code-sharing arrangements (2000).    <ul style="margin-top: 0in; margin-bottom: 0in" type="disc"> <li class="MsoNormal" style="text-align: justify; line-height: 150%"> Economic – Economic aspects of the business affect the purchasing power of customers or passengers, and the cost of capital of the organization (2007). </li> </ul>               Economic factors that must be taken note of by Oasis Hong Kong Airlines include additional taxes, increase in oil and commodity prices, increase in ticket prices, and global exchange rates.               It has been reported that Hong Kong’s aviation industry contributes largely to its economy, being an international trading center in the Asian region. Its air transport contributed 8.1% in Hong Kong’s GDP in 1998, along with the employment of 325,851 individuals in both the import/export and tourism industries (2000). In 2006, new records were set by the Hong Kong International Airport, with passenger estimates of 9.1% and cargo throughput of 5.2%, thus, producing a total of 44.45 million passengers and 3.58 million metric tons of cargo ( 2007). In this regard, it can be seen that tourism and the import/export industries in Hong Kong serve to be the primary contributory factors in its economic activity. However, because the Hong Kong dollar is still dependent on the US dollar, changes in the value of the US dollar can still affect the purchasing power of the Hong Kong dollar.   <ul style="margin-top: 0in; margin-bottom: 0in" type="disc"> <li class="MsoNormal" style="text-align: justify; line-height: 150%"> Sociological – This includes the demographic and cultural aspects of the macro-environment of the organization. Sociological factors affect the needs of the customers and size of its market (2007). </li> </ul>               For the Oasis Hong Kong Airlines, sociological factors include the conflict regarding the physical conditions of customers, their different shopping patterns, their business intentions or career patterns, and the safety of Hong Kong. It has been reported that Hong Kong boasts an impressive array of human resources that includes not only mainland Chinese who have been educated and trained in the West, but also a standing force of lawyers, accountants, and other professionals hailing from every corner of the world ( 2002). The role of the educational attainment, demographics, and occupation of the citizens of Hong Kong would suggest the increased rate of travel to other countries, along with their intention of availing of cheaper services.   <ul style="margin-top: 0in; margin-bottom: 0in" type="disc"> <li class="MsoNormal" style="text-align: justify; line-height: 150%"> Technological – Factors under technology include e-commerce, Research and Development initiatives, automation, and technological changes, which reduce entry barriers, lowers costs of production, and influence outsourcing decisions ( 2007). </li> </ul>   In this regard, Hong Kong uses both hard and soft technologies, where hard technology refers to specifications of goods and the mechanism of production, while soft technology refers to business process that includes organization, marketing, and managerial knowledge and skills (2003). As such, the use of advanced technology and information systems in Hong Kong, most especially through the World Wide Web and e-commerce would contribute significantly to the technological aspects of the business.   Aviation Market of Hong Kong             To be able to identify and understand the aviation market or aviation industry of Hong Kong, its different characteristics must first be determined. Hong Kong has only one airport, the Hong Kong International Airport, reaching half of the world’s population within a flying time of only five hours, 24 hours a day. It has two runways, handles more than 49 aircraft movements per hour, and reaches over 130 cities around the world (2003). The Hong Kong International Airport has a significant role in the economy of Hong Kong, as air transportation activities are being serviced, including network and product externality. The hub-and-spoke operations in the airport provides additional route to its existing network, the network externality, while freight and passenger transports are its product externality, being complementary products of air services ( 2000). In addition, market entry barriers do not exist in Hong Kong for most products, along with the lack of tariffs on aviation products ( 2003), a sound judicial system, and low business taxes (2000). As such, it has been the most important source of international capital for Mainland China, as it provides a unique platform for business environments that is already familiar and supportive for many years in doing business, making an unrivalled wealth of knowledge in the future. The market of Hong Kong is also a channel for foreign capital into the Mainland, being its information hub for exploring business opportunities in Asia ( 2002). In this regard, it can be perceived that the extent or range of activities in Hong Kong serves to fuel its aviation industry, as it serves to be an effective and efficient means of enhancing and improving the economic advantages of Hong Kong.               Certain advantages to the economy of Hong Kong can be identified, as the contributions of its aviation industry. Primarily, the aviation industry of Hong Kong has contributed a lot to its transportation activities, which accounts for the transport of passengers, cargo, and mail. In this regard, the transfer of cargo and passengers from Hong Kong to other parts of the world is being facilitated more effectively and in lesser extent of time, compared to sea travel. With Hong Kong’s aviation industry, more and more visitors and tourists are able to visit the city, thus, contributing to its tourism industry. According to the Hong Kong Tourism Board, on the 2004 Hong Kong Tourism Statistics, the total amount that visitors spent on entertainment was HK$ 1641 million ( 2005). With the development of its aviation industry, visitors and tourists have been visiting attractions known in Hong Kong, such as the new Hong Kong Disneyland, Ocean Park, Ngong Ping 360, and many others. Because Hong Kong’s tourism activities are enhanced by its aviation industry, its economy would also be developed, as tourism and economy goes hand-in-hand. The influx of tourists and visitors in Hong Kong can help gain huge revenues with the increase in tourist travel. This can prompt the government of Hong Kong to come up and create more tourists destinations and hotels, which can generate job opportunities. Along with this, the development and improvement of Hong Kong’s aviation industry and market provided the city to improve its export and import activities, which opened opportunities for increased foreign investments. As such, both local and international businesses are being enhanced in order to improve the economy of Hong Kong. In this regard, the aviation industry of Hong Kong has become a primary means for the city to participate in globalization. Globalization enables Hong Kong to exchange goods, services, financial capital, and knowledge with other countries ( 2006), thus, further enhancing the economic activities of the city. Last advantage brought about by Hong Kong’s aviation industry is the increase in competition. Increase in competition in the aviation industry offers improvement and variety in terms of services. Competition allows organizations to further develop and enhance their services, thus, making the aviation industry with growth and advancement.               In relation to competition in the aviation industry of Hong Kong, several airlines can be identified, serving to be the rivals or competitors of Oasis Hong Kong Airlines. Two airlines, namely, Dragonair and Cathay Pacific Airways, Hong Kong’s major home carriers, serve to be the tight competitors of Oasis Hong Kong Airlines. Cathay Pacific Airways is one of the leading companies in the world’s airline industry in terms of volume of sales and profitability. It has also one of the widest connections among other international airline companies made possible through global networking. At present, it operates scheduled passenger and cargo services to more than 104 destinations around the world, and ranks as the World’s Best Airline in 2003 and 2005 (2007). It currently operates a total of 106 aircrafts comprised by Boeings and Airbuses, with an average age of 7 years (2007). Dragonair is the second largest airline in Hong Kong, next to Cathay Pacific, and operates both cargo and passenger networks that reach a variety of destinations in the Asia-Pacific region, Europe, and the Middle East ( 2007). It currently operates 37 Boeings and Airbuses, with 400 flights a week to Mainland China ( 2007). Given the market of Hong Kong and the different airlines that can accommodate that market, it can be understood that the aviation or airline industry of Hong Kong can serve customers effectively and efficiently. This would not have been the evaluation in terms of Hong Kong’s aviation industry, if Hong Kong has not become China’s main entry port of business, foreign investments, tourism, and other economic activities. As such, it can be perceived that through the aviation industry of Hong Kong, the different economic, political, sociological, and technological aspects have been developed and improved.     Competitive Position of Oasis Hong Kong Airlines             In order to know and analyze the competitive position of Oasis Hong Kong Airlines, the theory of competitive advantage must first be taken note of. It has been mentioned that competition serves to be one of the means of the development of any industry, including the aviation industry. In this regard, competition serves to be the driving factor of improvement and development of the different airlines in Hong Kong. This emphasizes the concept of competitive advantage in the aviation industry, which refers to the edge of a particular organization over its competitors that is brought about its planned actions and strategies in terms of its market, operations, and management. This concept emphasizes all the important aspects in the operations and management of a certain organization, including suppliers, prices, resources, and capabilities. One of the theories of competitive advantage is the Resource-Based Theory of Competitive Advantage. This theory emphasizes the combination of the internal and external strategies, where internal perspectives refer to the organization’s core competence and the external perspectives refer to the structure of the industry (1985). In this theory, the resources of the organization are being assessed to determine its needed strategy for its perceived success in the market. In addition, Porter’s Competitive Rivalry can also be used in the analysis of Oasis competitive advantage. In this regard, it must be recognized that the company has many equally attractive competitors, making the airlines having little power in the situation (2007). In this sense, if the airlines can offer other services unlike the products and services of its competitors, then it can win its competitive advantage.                 Using this theory on competitive advantage and Porter’s Competitive Rivalry, the competitive position of Oasis Hong Kong Airlines can be determined. Because resource-based competitive advantage emphasizes on the resources of the organization in focus, it can be perceived that the success of Oasis over its competitors can be brought about by its use of available sources. Primarily, the competitive advantage of Oasis Airlines lies on the fact that it was able to meet the needs of its customers. Meeting the needs of customers emphasizes the notion that customers at this time are more knowledgeable, more analytical, more demanding, and provide more strategic information (2000). This also emphasizes the fact that customers nowadays are not satisfied only with few products, and thus need a variety of products to satisfy their demands and needs. With the increase in the development and improvement in terms of the economy and tourism of Hong Kong, the organization saw the opportunity of providing new alternatives for passengers and cargo that may compete with the existing airlines in the city. In addition, because the airline is relatively new to the market, the analytical and more demanding characteristics of consumers would enable them to try the service being offered by Oasis Airlines. In this regard, the airline has taken advantage of the curiosity of its market.               Another competitive advantage of Oasis Airlines over its competitors is its flexibility, by custom designing solutions for the airlines’ customers, in anticipating their needs (2007). Customizing the needs of its passengers led the airlines to offer two hot meals and soft drinks for free on both classes, free service of snacks and alcoholic drinks for the business class, free headphones, blankets and pillows in both classes, purchase of noise-canceling headphones and amenity kits, and having a seat-back TV with at least 16 channels, along with 12 channels of audio (2007). In addition to such services is the emphasis of Oasis Airlines of the significant role Information Technology play in its performance. Michael Wirth, the airlines’ head of Information Technology pointed out that the organization’s IT plays an intrinsic part in their corporate development, as it supports the airlines’ new generation business distribution model. Through the Information Technology of Oasis Airlines, the airline is able to implement its direct distribution model, which enables passengers to directly buy tickets from the company through its web site. In this regard, the challenging part of implementing this model is to make the system secured, convenient and safe ( 2007). In relation to this is the adopted IT system of Oasis Airlines is its distribution system, which has three major channels, namely, consumer-direct, direct through-trade, and indirect through-trade. Through the indirect through-trade system, tickets are sold over the Global Distribution System, where travel agencies are connected and bring the airlines with wider reach and extent. Through the direct through-trade and consumer-direct channels, tickets are directly sold to consumers through the World Wide Web, and through their application of the Oasis Smart.Net service ( 2007). These distribution channels indeed increase the competitive advantage of the airlines, as they target the direct distribution of their tickets to further reduce the costs and spending of their consumers. In this regard, it can be perceived that in this competitive advantage, Porter’s Supplier Power and Buyer Power can be recognized. Through the distinctive and unique features of the airlines, it can be observed that the uniqueness of service of the airlines is attributed to its suppliers, which have the ability to substitute and make the features of the airlines cost-effective while meeting the demands of the passengers. On the other hand, the buyer power of the customers is also observed, as related to this particular competitive advantage, as being cost-effective, the passengers would be able to purchase services from the company to avail of its services. Because the features of the airlines are more user-friendly, and its price more affordable than its competitors, targeting low-spending customers would be easy to do.               One of the most important aspects of an organization’s competitive advantage is its team or employees. In this regard, teamwork and team leadership is being emphasized and becomes the source of the strength and cooperation of the whole organization. With regards to team leadership, both the roles and responsibilities of the team leader and his or her members interact with one another in order to fulfill their goals and objectives. Likewise, Oasis Airlines believes so. It has been reported that the airline is comprised only of a small team, having only a handful of employees that serve cross-departmental functions (2007). In this regard, the few employees comprising the organization have become one of the competitive advantages of the airlines. This is because it can be perceived that because the organization has lesser employees, dissipating information and knowledge is easier for them to control and manage, compared to larger organizations. Most employees comprising Oasis Airlines perform a number of functions and tasks, thus, making it easier for the organization to facilitate communication and responsibilities.               Last and most important competitive advantage of Oasis Airlines is their cheap ticket prices compared with their competitors. It has been reported that the price of a business class ticket offered by Oasis Airlines can be comparable to the price of an economy class ticket in other airlines ( 2007). This is line with the goal or objective of the airlines to provide its customers with affordable and available services that would suit their budget. In this regard, this strategy of the airlines is to raise the competition in the aviation industry of Hong Kong and to provide potential customers with convenience and quality at a lower cost. However, basing on Porter’s Threat of Substitution, it can be perceived that some airlines would be offering cheap prices similar to the strategy of Oasis Airlines. This is because, they deem that cheaper tickets would be more attractive to consumers, than higher ones, if and if the quality of service meets their expectations. In this sense, due to the threat of substitution, the power and the advantage of the airlines in the market may be weakened (2007). In addition, such advantage of Oasis Airlines in the market of Hong Kong and other countries can be analyzed using Porter’s Threat of New Entry. It has been reported that if the company has little protection for its key technologies, then new competitors can quickly enter its market and weaken its competitive position (2007). In this regard, to be able to preserve the competitive advantage of Oasis Hong Kong Airlines, it must be able to strengthen its barriers to entry and preserve its position in the market.                   Credit:ivythesis.typepad.com

Budget Airlines in Hong Kong: Oasis Hong Kong Airlines

Budget Airlines in Hong Kong: Oasis Hong Kong Airlines Rev. Raymond C. Lee and his loving wife, Priscilla, founded Oas...

Strategic Management of British Airways Company

Strategic Management of British Airways Company   Introduction             Transportation plays an essential role to the success of many businesses and organizations. Without efficient transportation, many supplies and raw materials will not be brought from one place to another. It has been reported that humans have always needed to get around from place to place, making the act of walking a limitation on the distance traveled and the things they could carry. Consider the innovations that help humans travel around and transport cargo, including automobiles, ships, and airplanes (2006). Through these innovations, humans were able to effectively and efficiently move from one place to the next with the convenience of bringing luggage and cargo. Today, through transportation, humans were able to make trade relations with one another. Many business organizations make it a point to travel to different cities and countries to promote their products and services. Traveling and promotion are now part of an organization’s strategic management. From this, airlines play a major importance in the success of business organizations around the world. Business organizations are able to widen their market by traveling to different places via the airlines. Their importance leads us to evaluate their strategies in dealing with their business. This paper aims to discuss the strategic management of a specific airline company and assess its effectiveness in the business.   British Airways Airline Company             It has been reported that the British Airways is the largest airline of the United Kingdom and one of the largest in the world, with more flights from Europe across the Atlantic than any other operator ( 2006). British Airways flies to over 550 destinations and to more than 130 countries worldwide, including London, major European centers such as Paris and Frankfurt, and Asian hubs like Hong Kong, Singapore and Bangkok (2005). This airline is synonymous with excellent service and quality and has always been regarded as a leader in the airline industry, and serves more than 35 million passengers annually. Its history traces back to 1924 when the five small British independent airlines merged under state guidance to form Imperial Airways. At present, British Airways operates out of London’s two main ports, namely Heathrow, which is the world’s largest international airport, and Gatwick (2005).             For its travel classes, the British Airways offers four cabins. The first cabin is complete with fully flat seats, each in its own cocoon-style area with a seat for a companion to join the passenger for meals or for a chat. The second cabin is called the Club World, having flat bed sleeper seats. The third cabin is the World Traveller Plus, a premium economy services, offering more room in-flight and dedicated check-in desks, and the last cabin is the World Traveller, which is the airline’s economy, or coach class ( 2006).      Strategy Review of the British Airways             Strategic management is that set of managerial decisions and actions that determines the long-run performance of a corporation, and includes aspects such as environmental scanning, strategy formulation, strategy implementation, and evaluation and control ( 2006). Strategic management is important for every business, as it determines its success in the market, in its formulation and implementation of projects. One of the strategies of airlines is alliances or merges. Alliancing in airline industry seems persistent, as every international airline is forging alliances of some form, which can be traced as far back as the 1940s (2004). From a strategic perspective, airline alliances have become an inherent part of the task environment of airlines (2004). Alliances are beneficial for airlines in its control and maintenance on the business. Similarly, this strategy was adopted by the British Airways for better service. On March 31, 1924, Britain’s four airlines, namely, Instone, Handley Page, Daimler Airways, and British Air Marine Navigation merged to form Imperial Airways (2006b). However, during this time a number of smaller UK airline companies had started their operations, so in 1935, these airlines merged to form the original privately owned British Airways Ltd. The British Government in 1939 nationalized the airlines and after the Second World War, the airlines were combined to form the British Airways in 1974 (2006b). The driving factor behind alliances is long-term profitability, and their formation tends to be for strategic reasons, such as accessing larger markets, establishing global brand loyalty and building hub-to-hub traffic (1998). This move is advantageous for the airline to service more passengers and establish market reputation. Alliances or merges are part their strategic management plan, as being part of the strategy formulation and implementation. Strategy formulation and implementation is an on-going, never-ending, integrated process requiring continuous reassessment and reformation, is dynamic, and involves a complex pattern of actions and reactions ( 2006). Being dynamic, airlines tend to always innovate and improve their actions to further enhance the quality of their service.             In addition, another way for the British Airways to cope with serious competition from other airlines, it continuously provides itself changes and innovation for better services. Strategic management, having its characteristic of being dynamic and complex, enables the British Airways to accommodate change. This change is done by improving the amenities of the airlines and developing new information systems as added services. It remains to be the world’s international airline and the first airline to offer jet passenger services, the first to operate weather-beating auto landings, the first to offer supersonic passenger services, and the first in the modern era to offer fully-flat beds (2006c). Due to the mentioned services, the British Airways were able to build a good reputation in the market and gain the trust of many customers. These has widened their industry and made the airlines to be “the world’s most favorite airline”.   Core Business              British Airways is based at London Heathrow Airport in London, England, and has a commanding presence at Gatwick and Manchester International Airport. It has succeeded in dominating Heathrow to the point that the airport is commonly referred to as Fortress Heathrow within both the airline and its competitors (2006a). It serves flights to destinations in the United States of America, Canada, Australia, New Zealand, South Africa, Singapore, Hong Kong, Thailand, Malaysia, India, France, Germany and other major countries around the world.             Currently, British Airways has a modern fleet with an average age of 9.7 years, and consists of Airbus A319-100, A320-100, A320-200, Boeing 737-300, 737-400, 737-500, 747-400, 757-200, 767-300ER, 777-200, and 777-200ER (2006b). The type of aircraft, aircraft number, capacity and destinations are shown in the table.   Type Number Seats Notes Airbus A319-100 33 126 Short haul European and UK domestic routes Airbus A320-100 5 149 Being replaced by Boeing 737-500 Airbus A320-200 21 (7 on order) 149-150 Short haul European and UK domestic routes Airbus A321-200 7 (3 on order) 194 Short haul European and UK domestic routes Boeing 737-300 5 126 Short haul European and UK domestic routes Boeing 737-400 18 147 Short haul European and UK domestic routes Boeing 737-500 9 110 Short haul European and UK domestic routes Boeing 747-400 57 351/291 Long haul international routes Boeing 757-200 13 180 Short haul European and UK domestic routes Boeing 767-300ER 21 181-252 Long haul and short haul routes to the Caribbean, the USA and Europe Boeing 777-200 27 219-224 Long haul routes Boeing 777-200ER 16 274 Long haul routes From ( 2006a)               Moreover, the British Airways have franchises from other airlines including the British Mediterranean Airways since 1997, the COM air in South Africa since 1996, the GB Airways of UK since 1995, the Loganair in UK since 1994, and the Sun Air in Denmark since 1996 (2006a). Due to these alliances, the British Airways were able to produce large sum of profits, shown in the table below.   Year ended Passengers flown [4] Turnover (£m) Profit/loss before tax (£m) Net profit/loss (£m) Basic eps (p) 31 March 2006 35,634,000 8,515 620 467 40.4 31 March 2005 35,717,000 7,772 513 392 35.2 31 March 2004 36,103,000 7,560 230 130 12.1 31 March 2003 38,019,000 7,688 135 72 6.7 31 March 2002 40,004,000 8,340 (200) (142) (13.2) 31 March 2001 36,221,000 9,278 150 114 10.5 31 March 2000 36,346,000 8,940 5 (21) (2.0) 31 March 1999 37,090,000 8,915 225 206 19.5 31 March 1998 34,377,000 8,642 580 460 44.7 31 March 1997 33,440,000 8,359 640 553 55.7 31 March 1996 32,272,000 7,760 585 473 49.4 From (‘British Airways’ 2006a)   Strategic Changes             Demand for air travel has declined since four planes were hijacked and used to attack the World Trade Center and the Pentagon. The world’s favorite airline, the British Airways, is one of the airlines that have been forced to cut jobs and routes ( 2001). Due to the incident, more problems bombard the company, such as the global slowdown in the travel industry, the lower demand for bookings, fuel costs rise sharply, insurance costs going up, and higher airport taxes ( 2001). From these obstacles, the company saw the need for strategic changes in attracting the market.             As a solution to this decline, the airline offered improved amenities, including sleeper seats, in an attempt to lure business travelers at the expense of economy class customers ( 2001). It has unveiled £600 million worth of new customer services and products, which is the biggest investment of its kind in airline history, including flat beds in its ‘Club World’ long haul business cabin. Furthermore, the airline has added legroom in its ‘World Traveller Plus’ section. With this sections, British Airways passengers can now upgrade from traditional economy on extended flights without paying for a Club ticket (  2005).             In addition, due to the arising problems in the company, the president, Bob Ayling attempted to have a merger with American Airlines, but failed due to regulatory problems ( 2001). With this, different presidents of the company did many more attempts to revive its reputation and decreasing performance.             Moreover, in 2005, Cisco Systems and Prime Business Solutions announced a major network convergence project for British Airways to improve its communications for 14,000 offices and airport staffs. This project marks the sale of Cisco’s five millionth Internet Protocol (IP) telephone system, which is being developed and implemented by Cisco Gold Certified Partner, Prime, and will be the largest of its kind in the airline industry worldwide ( 2005). This improvement in the system of British Airways reduces costs and improves productivity through the integration of all voice and data communications onto a single network. It allows British Airways to remove the cost of inter-office telephone calls and will streamline the management and provisioning of telephony services throughout the company ( 2005). Furthermore, the networked capabilities of Cisco’s IP phone system will make the relocation of communications services quicker and easier (  2005). With this advantage, British Airways deployed 8,500 Cisco IP phone system to the company, and the project was completed in March 2006 ( 2005).   Conclusion             The role of British Airways in the transportation industry is an important factor for many business organizations. With this, it is necessary to conclude that the British Airways continue to improve their innovations and systems as their strategies of developing their company. These are in accordance to their aim of increasing their profit and for rendering better services to their customers. With better services, the company can persist on maintaining their established reputation and image to their market. With their strategies, such as the mergers, and improvement of amenities and services, the company can attract more customers and can guarantee more improved service to many passengers and airline staff. These would not only generate more profit and prestige for the airline company, but would also foster harmony and good working environment for each employee. Continuous innovation and improvement in British Airways can sometimes produce problems, but with good leadership and company maintenance, development can be achieved properly and efficiently.   Credit:ivythesis.typepad.com

Strategic Management of British Airways Company

Strategic Management of British Airways Company Introduction Transportation plays an essential role to the success of ma...

“Advertising involves the systematic distortion of the truth in order to sell more products and services”. Critically evaluate this statement and identify whether you agree or disagree.

Advertising: The Truth and the Lies In a highly competitive marketplace that delivers products and services, the advertising plays along within and beyond the competition. Advertising will color the competition by interpreting the consumer’s needs and wants and bringing out the message through out the other parts of the country and then, leave an influence. Advertising and promotion is a market strategy that is available for all, in whatever type of industry or product they belong. The basic promotional message of an advertisement is composed of one, sometimes two, or all of the factors of informing, entertaining, educating, persuading, and reminding. Meanwhile, the promotional objectives will dictate the nature and form of the promotional message’s type of appeal.  The promotional objectives can be determined by variety of factors such as the competitive situation, the position of the brand or service, life cycle stage of the service offered, and the organizational and marketing objectives. An advertisement completed its ingredients by creating an appeal to the public eye that is essential in presenting the promotional message. And a mixture of or more appeal is not restricted. Rational Appeal – This kind of appeal presents information and facts about the certain products they endorsed. The message is sometimes logically that explains and compares against the competing brand, so that the decision of the buyer will rely upon the detailed information. Emotional Appeal – Advertisers based their advertisement through the emotions or feelings of the audience. It is said that this kind of appeal enhances the message. One example is the British Airways’ efforts to differentiate itself on service and friendliness and a promotional campaign bringing the British Airways as “the world’s favorites’ airline”. Fear Appeal – This is not entirely about threatening but yet tends to work best when the presentation is based on the current issue. An example is about an automobile that ensures the safety of every driver, because of their advanced technology that can save their lives when they are in great peril. Humor Appeal – We always love to laugh and humorous messages are used successfully in many advertising campaigns. This kind of appeal attracts the audience’s interest, attention, and even imagination. This mood-enhancing tactic effectively convinces the consumers to buy their product in many various ways as possible and sometimes casting the fear of the potential consumers. Advertising Advertising as a basic definition is a paid publicity that was transmitted in different kind of media such as television, radio, internet, magazines, newspaper, or posters and billboards. It is expensive but promises additional profit because of its effective control over the audience. Although advertising is a non-personal communication, it can still reach the different parts of the world through the use of the technology. That is why, advertising also plays in between the wars of the giant businesses or industries, and they can promote all the good about the product or services the business can offer.    The Persuasion Knowledge Model and Consumer Behavior Model Persuasion knowledge model (PKM) in advertising is the structure within the individual’s personal experience and gained information throughout his life span. This is the target of the advertising to be fulfilled. The PKM processes the factors that can affect the formulation of the presentation which are based through the consumer behavior and social influences.  Meanwhile, the consumer behavior is one of the popular method in determining the tastes and preferences of the consumers that can be projected to the presentation. As an advertisement based on the consumer’s behavior, the tendency to attract the customers is strong. Which is in the other way of distorting the facts about the product, like introducing a soft drink that is now sugar but in truth, a little sugar is added because of the gross taste. Assessing the Advertising Advertisements are very powerful that sometimes controls the decisions of the audience about their buying preferences. Through advertisements, the firms can gain additional income and the consumers can realize the fulfillment of one of their agenda. That is the power of advertising, they creates stories or short skit about the things that an individual needs although he can live without it. Here are some interesting answers of the consumers about their idea about advertising Consumer 1: My complexion is not this dull when I was young. It only happened because I joined the swimmer’s club and when I watched the commercial about the whitening products, I was inspired that there’s still hope in my skin. And so I tried it. But then I realized that I am an active swimmer and so this won’t work for me no matter how many boxes I buy. Consumer 2: I just spotted this memory enhancer while I’m heading back to my dorm. I thought that this will help me improve my studies. After I took one capsule, I felt something different. I can’t sleep at night and many headaches disturbed me. That is why I trashed it out. Consumer 3: As a busy working mom, I always want the best for my family. And when my officemate told me about this dishwasher, I was suddenly dazed because it will cut the time washing the dishes. I was just like hypnotized with their stories, and so me and my husband decided to buy it. It’s great because now, I can focus on my children and on other things. But no matter how powerful they are, advertising has limitations and one of these is that they can’t extend the campaign overseas. It is because of the cultural differences that limit the recognition of the brand and its values that they deliver. And in contrast, when there is too much competition the businesses applies all their marketing strategies in its standard and advertising capability to increase efficiency (2003). Conclusion In advertising, the distortion of truths is not new to the public but it still effective in terms of selling the products. Distortion of the truth is a strategy for the companies to develop better effectiveness or les costly products. And if the short run gain from a distortion of the truth were large, then the temptation to lie would be strong that can result into danger for the consumers ( 1978). But there is a legal action imposed by the government to avoid the fabricated truth behind every product promotions and advertisements. All of the ideas about the products are mixed with the different appeals to persuade or convince the audience that the product is important or part of the basic needs even though it is truly not. An added factor of this is the use of influential people like celebrities that leaving promises to the consumers.  Credit:ivythesis.typepad.com

“Advertising involves the systematic distortion of the truth in order to sell more products and services”. Critically evaluate this statement and identify whether you agree or disagree.

Advertising: The Truth and the Lies In a highly competitive marketplace that delivers products and services, the advertising plays along...

International Merger Strategy between British Airways and Iberia: is it a positive strategic move for British Airways shareholders? Research Proposal

International Merger Strategy between British Airways and Iberia: is it a positive strategic move for British Airways shareholders? Research Proposal

International Merger Strategy between British Airways and Iberia: is it a positive strategic move for British Airways shareholders? Research...

International Merger Strategy between British Airways and Iberia: is it a positive strategic move for British Airways shareholders? Research Proposal

International Merger Strategy between British Airways and Iberia: is it a positive strategic move for British Airways shareholders? Research Proposal

International Merger Strategy between British Airways and Iberia: is it a positive strategic move for British Airways shareholders? Research...

british airways problems Essay

british airways problems Essay

british airways problems Essay 1. Introduction: The history, development, and growth of the company over time (before and after the case) ...

Quality and System Management of British Airways

Contents Page Strategic objectives of operations management    Operations management    British Airways and operations management   Appropriate systems of quality    Total Quality management    ISO 9000   Quality Culture   Organizational performance improvement program   Proposed changes   Program of work for Project   Time needed   Project control and validation   Project evaluation   Probable problems for the project   References       Strategic objectives of operations management Operations management   Systems theory seeks to treat human organizations as systems of interrelated components, similar in many ways to more physical systems such as the solar system or the human body. The idea is to take a broad view of the system and its relationships with other systems in the environment. That is, a system is considered open when there are interactions between the system and its environment. A system is studied, then, by observing the flows into, out of, and within the system. The operations system can be seen as a system which converts inputs from outside the system, such as raw materials, money, people, and information, into outputs, such as goods and services (Summers 1998). The operations system, though, is but a subsystem of the overall organization, along with other subsystems such as marketing, finance, personnel, and accounting. The area of operations management is receiving more attention as a way to compete in the world arena, where recently such areas as marketing and finance were considered more important. Similarly, the types of managers who rise to the top positions of a company seem to run in cycles. When those managers from the ranks of marketing, for example, reach the top, they naturally give that area a greater weight in decision-making (Summers 1998).   The current trend is toward the awareness that operations management is increasingly where the action is. While only a few of the traditional strategic weapons mentioned above fell under the area of operations management, recent developments in the field have provided several more competitive options for a company in the general area of operations management. Some writers have called these strategies collectively the new operations management, or world-class manufacturing or service. In reality these strategic tools represent not revolutionary new ideas, but rather new emphases. Taken as a whole, they can radically change a company’s strategic approach (Lowson 2002). The strategic weapons of operations management represent natural evolutionary changes in the theory and practice of operations management. Taken together, though, they also represent a change in philosophy that is rather significant. Further, a combination of several of these tools can have a synergistic effect on a company’s operations. That is, they share several philosophical threads, such as doing things correctly and efficiently in the first place, goal-directedness, and unleashing human resources; thus, one of these strategic tools can build upon and support another for even greater benefit. The assurance of quality, while mainly the responsibility of operations management, transcends departmental boundaries in an organization. Especially in recent years, quality has come to be seen as a powerful marketing tool (Lowson 2002). Operations management focuses on making sure that a company produces the best kind of products and services in the most efficient and effective way. Operations management takes care of the company’s capital and material resources as well as its personnel resource. Operations management ensures that there would be a smooth change from the raw materials into finished products and services. To achieve the best performance in a competitive market, operations management is usually aligned with a market opportunity.   British Airways and operations management In previous eras where commercial and technical efficiency was a function of engineering prowess and efficient operation of the latest generation of aircraft, British institutional patterns were arguably not particularly advantageous for competing in the airline industry.  British Airways (BA) was far quicker than either Air France or Lufthansa in handing over control of the airline’s technical functions to managers with marketing expertise, although all three airlines were ultimately compelled by their competitive environment to do so (Hall & Soskice 2001). British Airways was able to build up a five- to ten-year lead over its rivals in adopting critical technological and organizational innovations. Unilateral CEO control was a major asset in allowing BA to decree orchestrated, synchronized changes across a number of departments in order to implement the network-based strategy rapidly. BA’s record on total factor productivity (TFP) shows particularly strong growth during the run-up to privatization and more especially after privatization and during the 90’s period of recession (Martin & Parker 1997). British Airways strategic objectives focused on engaging in mergers with other airlines, hiring and training a good crew and maintaining its financial and social status. The strategic objectives of British Airways are in line with the operations management system of the company. The operations objectives make sure that British Airways would continuously provide the best service to clients. The operations objectives make sure that the organizational objectives are met. The operations objectives guide the firm so that the organizational objectives will be met by British Airways.   Appropriate systems of quality Total Quality management TQM is a philosophy applied throughout the world in all kinds of organizations, for example, hotels, stores, car manufacturers and telecoms. Since the philosophy of TQM is so fundamental to business, it is applicable to all organizations. Every organization is a complex network of processes. A process is a combination of inputs and steps to follow to produce outputs. All processes contain inherent variability. One of the main ideas of Quality Management is to progressively reduce variation. In general, the quality culture that exists in an organization would have been built upon over the years that the organization has been in existence. The many failures and successes that the workforce had endured, the attitudes of the founder, and possible subsequent Managing Directors, all go together to produce a given culture (Antony & Preece 2002). For TQM, it is necessary to have a culture that is ready and open to change. Therefore, one of the prime aims of TQM is that the processes and products will be continually improved. Continuous improvement can also mean, especially at an early stage, a continuous change. Therefore, if employees are not open to change, then the chances for success with TQM become less and less (Antony & Preece 2002).    For many organizations, creating a quality culture strategy is a daunting task. It would seem at first glance that the larger company has the most difficult task to spread the quality culture throughout the organization. Nevertheless, some of the major companies have made that possible. The reason for this is that these companies may have practiced good quality principles for a number of years. Quality Management researchers have found that quality initiatives are generally too introspective and internally focused. TQM is viewed variously as a philosophy, which emphasizes that quality is the responsibility of everyone in an organization; as a process for managing change; as a strategy to improve organizational competitiveness and effectiveness; a value system that emphasizes striving for quality in product or services; and an approach to doing business that covers the whole organization. TQM is customer-driven and it is a strategy based on the desire to satisfy the customer’s expectation (Beckford, 2002). It is accepted that Deming has probably made the most substantial contribution to quality management. The concept of Total Quality Management (TQM) as the way of managing for the future does, on the other hand, have considerable value. If TQM is thought of as a way of managing rather than an added extra, then other management philosophies, methods and tools must be subsumed within it (Beckford 2002). Quality management and total quality management makes use of various strategies to achieve its purpose. TQM and QM use systems so that it can adapt to the changing need of businesses and industries. Such systems help TQM answer the needs of the environment. TQM makes use of systems to make sure that the best services can be given and the best products are made.  Through a TQM system firms such as British Airways can observe their level of quality. Once the level of quality fails to meet the firms’ standard, the TQM system is used to improve the quality levels. ISO 9000 An effective QMS is a vital part of any quality program; without it there is no basis for properly measuring and monitoring quality performance. It must not, though, be allowed to become an end in itself. The QMS will inform the organization how well or badly it is doing against the standards which it has set itself, nothing more. Unless action is continually taken to improve standards and performance, the measurement activity is sterile. Continued certification to the ISO 9001:2000 standard now requires that the organization demonstrate improvement over time (Stankard 2002).  Excellent business performance accumulates from sustained, long term improvements. The kind of continual improvement capability needed to start toward high performance is actually a requirement of the current revision of the ISO9000 quality system standard. By embodying systematic and ongoing improvement in a worldwide management standard, the International Organization for Standardization (ISO) has opened the door for firms all over the world to begin their journeys to excellent performance. While the ISO9000 standard makes a start, it alone is insufficient to achieve durable competitive advantage and high performance; its scope is too narrow (Stankard 2002).   The current ISO standard does require firms to build a continuous improvement capability; however its improvement focus is narrowed to customer satisfaction and process performance without regard to overall competitive strategy and the need for profitability. This narrow scope of the ISO standard leads to the second requirement for excellence which is to balance improvements across four main areas that includes economic opportunity and wealth creation; strategies and motivation to realize the opportunities; capabilities to execute the strategies and use of information and analysis to balance risk of loss with financial return. The ISO 9000 series is well accepted as the standard for quality management systems around the globe. It is comprehensive and has enjoyed substantial development over many years. However, as has been recognized in the inception of the ISO 14000 series, the scope of ISO 9000 is restricted to quality standards which are essential but not sufficient for contemporary organizations (Benveniste, et al., 2000).  The current revision of ISO9000 now requires that firms institute ongoing improvement of the quality management system and product and service delivery processes. However, any firm able to meet this narrow requirement for improvement need not stop with processes, customer satisfaction and management responsibility. It can use the high performance business model to guide improvement in planning, technology, workforce development, supply chain and any other area of the management system that bottlenecks growth in revenue and profits (Benveniste, et al., 2000). ISO 9000 helps a company monitor and map out all the processes in the company. It is a certification of how well the company is managed and how well the company performs. ISO 9000 sets a standard that tells if the firm’s quality of service and products is acceptable. ISO 9000 provides factors that monitor the quality of products or services. The factors of ISO 9000 serve as a guide for a firm to maintain a satisfactory level of quality.    Quality Culture For many organizations, creating a quality culture strategy is a daunting task. It would seem at first glance that the larger company has the most difficult task to spread the quality culture throughout the organization. Nevertheless, some of the major companies have made that possible. The reason for this is that these companies may have practiced good quality principles for a number of years (Kanji 2002). Like countries, business organizations also have their own cultures. It is the totality of the norms, beliefs and values that control the behavior of individuals and groups within any given organization that can be described as organizational quality culture. However, many organizations are not even aware of their own culture or its distinct characteristics. A quality culture which is lively and progressive can be found to be constantly evolving and helping to change the business. A progressive quality culture within a business readily evaluates and responds to stimuli (Kanji 2002). A quality culture for a firm or a country means that every processes of the firm are based on the goal to make sure that the best products are sold and the best service is given. Quality is more important in the UK than in China. Both countries make sure that their services and products pass quality standards but the UK doesn’t only focus on quality standards. The UK makes use of various systems and technologies to check if their products or services have high standards of quality. China only makes the quality standards as its basis; it does not focus much on ensuring the quality of the products. As evidenced by some products from China that were recalled, the country wants to focus more on sales rather than maintaining quality.   Organizational performance improvement program Proposed changes The proposed change for British Airways is to introduce the use of environmentally friendly fuel to their aircrafts. This proposed change aims to make use of environment friendly fuels that would attract environment conscious clients. There are some clients who would prefer to ride airplanes that are using environment friendly fuels. Engaging in such change would help in increase clients and it would help the company recover from its status in the UK Airline industry.  This proposed change would help in reducing pollution in the Air.  This proposed change will lessen the pollution brought by the combination of private cars, public cars and aircrafts. It will lessen the degradation of the environment in the different countries they operate in. This change will give the company lesser expenses in purchasing fuels that costs much.    Program of work for Project A. Initial stages of the project -       Find out the issues of the project -       Gather needed resources B. Project implementation -       Research about how durable the project will be -       Know the boundaries of the project -       Research about other similar projects and its weakness. C. Final stage of the project -       Determine whether the project is feasible or not -       Know the problems that might be encountered   Time needed The first stage of the project will take around 1 to 2 weeks. The first stage focuses on the initiation on the project. This part focuses on the initial part of the project.  The resources for this activity includes different notes and information  that will provide the different changes that needs to be done with the planned use of environment friendly fuel. In this stage the project manager will gather the needed resources and will hire the personnel that will manage the use of environment friendly fuel. The second stage of the project includes the planning stage. The second stage of the project will take one week so that proper planning, testing and analysis of the new project can be made. In this stage the budget, human resource, and job responsibilities have been known. The human resource would be trained in their use of green fuels. In this stage the advantage and disadvantage of the use of green fuels would be known. The third stage of the project will take two to three months for proper adjustments. In this stage the project is on the full implementation stage wherein the goal is to slowly introduce environment friendly fuels to some of the aircrafts. This would involve conversion of some of the aircrafts to make it compatible to environment friendly fuels. The fourth stage of the project will involve the control, validation and evaluation of the project. The evaluation materials will be used to understand the changes the project has done to the company and what are the current problems of the initiated project. The fourth stage will check how the project succeeded in its goal and what could still be added to the project. The last stage of the project will take around one to two weeks.   Project control and validation The project will be constantly monitored to check its effect on British Airways and the changes it has done on the company’s aircrafts. The initial problems on the project will be known and fixed to reduce the emergence of other problems. To control the project communication systems will be used between the members of British Airways and the members of the project team. The communication systems such as email and letters will assist in monitoring the project. The project will be validated via its effect on the company British Airways and the airline industry of UK.   Project evaluation Projects are not perfect it will contain certain flaws. If these flaws merge with forces within the environment the result would be the failure of the project. Project failure can be due to the lack of preparation or planning wherein the manager became too concentrated on the end result rather than the specifics of the project. Project failure can also be due to lack of cooperation between the manager and his subordinates. When there is no teamwork between the manager and the subordinates’ aspects of the project will not be completed. Another cause of project failure is when the manager does not take risks. The risk may have given the project a better chance for success. Moreover a cause of project failure is the lack of alternative strategies that should be used whenever there are small problems or irregularities seen when the project is being undertaken.  Lastly a cause of project failure is the inability to use the approved strategies. There are certain times that project managers fail to make use of strategies set by the organization, this results to an altered direction for the project and in the end failure of the project.  To avoid project failure, the project should be constantly checked and evaluated to see if it still performs according to standards. Evaluation will focus on checking how British Airways and its aircrafts has adjusted to the use of Environment friendly fuels and what changes have happened to the industry after the use of green fuels. Evaluation will be used to determine the things or issues that should be changed within the project and determine the next options that should be taken.   Probable problems for the project One constraint for the project is the barriers to the scope or reach of the project. The scope determines the boundaries of the project. Once the barriers prevent the company from reaching the scope the project would be a total waste. The barriers would be the cost for the conversion of some of the aircraft and the time that will be used in converting some of the aircraft for it to accept environmental friendly fuels. Another constraint for the project is the lack of time that will be used to finish the project. Time is important because it will determine which aspect of the project needs more focus. This constraint needs to be balanced thoroughly so that the project can achieve all of its purpose.  Lastly a constraint for the project is the lack of budget. The budget is the one used to finance all that will be needed to finish the project.  The budget is important because without it the project cannot move on to its other aspects.   References Antony, J & Preece, D (eds.) 2002, Understanding, managing and implementing quality: Frameworks, techniques and cases. Routledge, London.   Beckford, J 2002, Quality, Routledge, London.   Benveniste, J, Dunphy, D, Griffiths, A & Sutton, P (eds.) 2000, The corporate challenge of the 21st century, Allen & Unwin, Crows Nest, N.S.W.   Hall, PA & Soskice, D (eds.) 2001, Varieties of capitalism: The institutional foundations of comparative advantage, Oxford University Press, England.   Kanji, GK 2002, Measuring business excellence, Routledge, London.   Lowson, RH 2002, Strategic operations management: The new competitive advantage, Routledge, New York.   Martin, S & Parker, D 1997, The Impact of privatization: Ownership and corporate performance in the UK, Routledge, London.   Stankard, MF 2002, Management systems and organizational performance: The quest for excellence beyond ISO9000, Quorum Books, Westport, CT.   Summers, MR 1998, Analyzing operations in business: Issues, tools, and techniques, Quorum Books, Westport, CT.     Credit:ivythesis.typepad.com

Quality and System Management of British Airways

Contents Page Strategic objectives of operations management Operations management British Airways and operations management Ap...