Strategic Management - British Airways Holidays Organization - Case Study Example

Strategic Management Name: Course: Tutor: Institution: Date: Table of Contents Table of Contents 2 1.0 Organizational Analysis 3 1.1 Resources Analysis 3 1.2 Strength and Weaknesses 4 1.3 Value chain Analysis 5 1.4 Core Competencies 6 1.4.1 Human Resource Efficiency 6 1.4.2 Brand Reputation 7 2.0 Strategic Position SWOT Analysis 7 2.1 Strength Analysis 7 2.2 Weakness Analysis 8 2.3 Opportunities Analysis 8 2.4 Threats Analysis 9 3.0 Strategic Direction 9 4.0 Conclusion 10 References 11 Appendices 13 Appendix 1: Company Profile 13 1.0 Organizational Analysis 1.1 Resources Analysis In order to develop a complete analysis of the British Airways Holidays organization, resource analysis, this report adopts Siddiqi (2014) argued that an organization has three resource bases, namely the human resource, physical and financial resources, respectively. Therefore, this section evaluates each of the resource components in the venture. With respect to its human resources, the organization has established a wide pool of resources. Thus, the organization has developed an employee value proposition program to ensure an attraction and retention of the respective employees in the market. As such, one of the organizational employees’ value propositions is the internal corporate strategy where the employee and their families acquire social support services such as health insurance and holidays for performing employees. Moreover, additional human resource development is in its opportunities to advance and grow employee careers through training and development outsourcing services adopted by the British Airways management of the senior level employees as well as an internal employee mentoring system for lower level employees. As such, this offers the organization an increased qualified and experienced workforce to support its operations. On the other hand, with respect to its physical resources to serve and operate in the tourism industry, the organization has over the years acquired a wide pool of resources to support its resources in the market. For instance, the organization established forward industry alliances with the accommodation organisations to ensure that consumers visiting the industry acquire comfortable and convenient accommodation services as a form of promoting increased tourism industry, consumer satisfaction (“British Airways”, 2014, “Travel Guides”). Moreover, the organization has numerous aircrafts that allow for varied aviation budgets for the consumers as well as increasing overall transportation frequency for increased convenience. Finally, under the resources, a financial analysis on the British Airways holidays, a subsidiary of the British airways demonstrates a steadily growing financial base and profitability levels. In this regard, despite the profit margin fall due to the 2008 global financial crisis that affected the entire European tourism industry, the organization has registered increasing profit margins over the years. In this regard, Milmo (2009) stated that the organisation incuderd an all time loss of $401 million as compared to the 2013 porits of $433 million. As such, this demonstrates that an outlook into the future demonstrates a clear forecast on the venture's ability to develop and advance its profitability into the future making it a viable alternative. However, despite the listed rising profitability, the analysis as Crooks (2011) in an evaluation of the industry production costs in the financial times, demonstrated a rising cost of production with a high cost of resources and operational costs in the market, thus risking the ventures profitability margins rise into the future. 1.2 Strength and Weaknesses On one hand, a strength analysis of the organization establishes that it has a key strength in its expansive market base in the UK. In this regard, a strong internal organizational base illustrates that the venture has the operational efficiency allowing for reduced operational costs. Moreover, the venture strategy of focusing on inbound logistics to transport tourists to internal tourism attraction centers in the UK offers it’s an added market niche development and focus strength in the long run period. However, as Burnham (2013) noted, the venture operations indicates that the organization has its weakness in the lack of an elaborate marketing approach. As such, although its parent organization has a strong marketing platform on which the venture rides on, this denies it the opportunity to develop unique marketing systems that would increase its unique market reputation. Consequently, the organization relies on the reputation of its current company, a virtue likely to impact it negatively in the event that the parent company British Airways reputation and market brand image was damaged and negatively impacted on into the future. 1.3 Value chain Analysis Under a value chain analysis of the British Airways Holidays, this report establishes that under the inbound logistics aspect, the organization relies on the parent Company British Airways to facilitate movement of consumers and clients from across the globe to the UK market for tourism and adventure needs. Similarity, and the organizational operations, the value chain analysis establishes that the organization focuses on developing a strong UK tourism base. In this case, its main operations are in marketing and transporting its consumers to the respective desired UK based tourism destinations. On a similar note, Crain and Abraham (2008, p.32) argued that as a form of developing outbound logistics, the organization has established market alliances. For instance, the venture established an alliance with the Serena and Starbucks hotels for their clients. In this regard, the third party products and services are supplied and availed of their consumer at a relatively reduced cost. Thus, this serves as a critical value addition, through which the organization ensures that the operational and expenditure costs for their respective consumers. Additionally, with respect to its marketing operations, the organization has over the decades has relied on riding on its parent company marketing strategies. However, in the recent past, the organization has developed its own online marketing platform. As such, the venture markets its operations and services through its established global online platform. Finally, under the primary value chain activities, the organization offers additional after sales services through the provision of services such as consumer reviews and discount offers for repeat and regular organizational consumers to the venture. Further, with respect to its secondary value chain activities such as procurement, the organization has a cross functional team that develops a procurement budget based on a complete organizational strategic goals and departmental needs for increased operational efficiency (Dudoviskiy, 2012). Similarly, under the information technology management system the organization has developed an internal management system to ensure technology efficiency for increased organizational industry performance efficiency. 1.4 Core Competencies Mascarenhas, Baveja and Jamil (1998, p.19) stated that the current global market is highly competitive. In particular, the European tourism industry is increasingly competitive as the industry reached its maturity stage, thus minimal growth and expansion opportunities. As such, in order for any stakeholder organization to succeed in the industry, such organisations should develop unique competitive edges to oust market competition. This report section offers a strategic analysis of the British Airways holidays competitive edges. 1.4.1 Human Resource Efficiency As already discussed, the industry is facing increased marketing and operational strategies. As such, in order for organisations to establish market competitiveness organisations adopt intangible assets approach in the market. The British Airways Holidays has over the years developed a strong human resource base. Consequently, with the strong, experienced and qualified human resources, the organization managed to develop lasting consumer relationships. Thus, this approach allows for increased consumer loyalty to the venture offering it an added operational advantage over competitors in the market. This is a critical milestone in an industry where analysis illustrates that a majority of the stakeholders have invested in the IT sector ignoring the role of a strong expansive and qualified human resources force in the industry. 1.4.2 Brand Reputation One of the critical aspects in the market is the concept of brand reputation in the market. In this case, a brand reputation is described as the perception the consumer have on an organization. As such, Yeoman, Durie, McMahon-Beattie and Palmer (2005, p.137) stated that a reputation influences an organizational position in the market as well as a venture's ability to acquire and retain consumers. On its part, the British Airways holidays have developed a wide product reputation in the society. As such, the venture relies on the developed reputation by the parent company the British Airways that is a reputable aviation industry company. Therefore, this strong market base has offered the venture an increased competency and operational advantage over peer in the inbound tourism sector in the European tourism industry. 2.0 Strategic Position SWOT Analysis 2.1 Strength Analysis A strength analysis on the organization has established that the venture has the benefit of a growing market base. As indicated under the EU tourism industry analysis, it is apparent that besides promoting domestic tourism, regional tourism was a vital growth approach. In this case, the British Airways holidays offer a series of flight services across Europe. As such, this offers the venture the opportunity to acquire an increased regional consumer base, a virtual offering the organization an added market consumer base control through reduced transportation services. This is in contrast with other domestic tourism industry organizations that rely on third party organisations to provide transportation services into the market 2.2 Weakness Analysis A weakness evaluation of organizational operations is its focus on the UK market. In this regard, the venture focuses on the development and expansion of the UK market as a tourist destination in Europe. As Marciszewska (2006, p.107) argued, this Weakness is based on the changing European tourism industry, social and economic conditions. In this case, the region is evolving to embrace alternative and new tourist destinations untraditionally recognized. Therefore, with its failure to expand and venture into the regional markets, the venture operational model denies it’s the opportunity and chance to increase its consumer base as well as revenues streams to its shareholders. In this regard, this reduces the organizational, regional competitiveness against others already operating across the region. 2.3 Opportunities Analysis A PESTEL analysis on the European tourism industry illustrates that the regional integration has increased the tourism industry future prospects. In this regard, a review of the regional political administrations illustrates that an existing political goodwill and rising economic and social status since the 2008 global financial crisis present a market growth into the future. Therefore, this will present the existing tourism industry stakeholders with a regional growth and expansion opportunity in the future. As such, this means that the British Airways Holidays Organization will acquire an increased regional expansion and influence in the future, promoting profitability margins in the long run. 2.4 Threats Analysis Despite the expected social and economic opportunities in the market, the regional integration aspect is likely to increase competition levels in the society. In this regard, although the venture will acquire an increased regional market base, a domestic market base is always and remains paramount for any organizational stability (Baxter and Bowen, 2004, p.263). Therefore, the likelihood of increased competition onto the UK domestic tourism industry will challenge the organizational domestic market base, risking its eventual failure in the future. 3.0 Strategic Direction One of the strategic directions applicable for the organization into the future is the development and establishment of an internationalization strategy. In this regard, the strategic approach recommendation is based on an analysis of the industry development trends on rising social and economic trends. One of the strategic examples of a growing and developing regional economic trend is the adoption of the Euro as a standard currency in the region (“Economic logic”, 2012). Therefore, this is likely to standardize the monetary system across the region. However, although the industry is developing, competition in the domestic market is bound to arise. For instance, regional organisations will venture onto the UK tourism industry. Therefore, the alternative approach recommended for the venture is to venture onto the regional markets as well. In particular, this review advocates for venturing into the Canadian market. Jayawardena (2003, p.411) Stated that Canada has over the years registered a growing economic base, thus allowing for increased tourism activities. Moreover, the related nature of the UK and Canadian cultures will promote the likelihood for interchanged tourism where the UK population would be encouraged to tour Canada as well as the Canadian society is encouraged to tour the UK. Through The adoption of this regional expansion approach, the venture will not only ensure an increased revenue market base, but also promote and facilitate the development of mutual relationships between the society, a practice and approach that would enhance long term consumer loyalty where such mutual understanding would facilitate consequential tourism increase in the future. 4.0 Conclusion In summary, this evaluation report develops a strategic review and evaluation of the British Airways Holidays organization. In this regard, the report establishes that despite the organization’s strong resource base and key competency in its reputation, the venture has a weakness in its strict focus on the UK market, failing to venture onto the regional growing tourism industry market. Thus a SWOT analysis identifies a key opportunity as expanding to the regional industrial base, while citing the risk of rising domestic market competition as a vital market future threat. Consequently, the report argues that the best strategic method for the organization to adopt in the future is expanding. In particular, the analysis cites the Canadian market as a priority expansion base due to its growing economic levels, culture synergy with the UK, as well as its existing political goodwill. References Siddiqi, M.A. 2014, "Job Resources as Organisational Support, Organisational Citizenship Behaviour and Customer Satisfaction: Some Evidences Of Linkage", Journal of Services Research, vol. 13, no. 2, pp. 95-115. British Airways, 2014, Travel Guide, [Online] Available at < http://www.britishairways.com/en-gb/destinations> [Accessed January 3, 2014]. Crook, E. D., February 25, 2011, Companies concerned about rising fuel costs, [Online] Available at [Accessed January 3, 2015]. Burnham, K., September 11, 2013, 3 Lessons from British Airways Twitter Flap, Information Week. [Online] Available at [Accessed January 3, 2015]. Milmo, D., May 22, 2009, British Airways makes worst ever loss, The Guardian. [Online] Available at [Accessed January 3, 2015]. Crain, D.W. & Abraham, S. 2008, "Using value-chain analysis to discover customers' strategic needs", Strategy & Leadership, vol. 36, no. 4, pp. 29-39. Dudoviskiy J., June 16, 2012, British Airways Value-Chain Analysis, Research Methodology. [Online] Available at [Accessed January 3, 2015]. Mascarenhas, B., Baveja, A. & Jamil, M. 1998, "Dynamics of core competencies in leading multinational companies", California management review, vol. 40, no. 4, pp. 117-132 Yeoman, I., Durie, A., McMahon-Beattie, U. & Palmer, A. 2005, "Capturing the essence of a brand from its history: The case of Scottish tourism marketing", Journal of Brand Management, vol. 13, no. 2, pp. 134-147. Hall, D. R., Smith, M. K., & Marciszewska, B., 2006, Tourism in the new Europe: The challenges and opportunities of EU enlargement, CABI Publishers, Wallingford, UK. Economic Logic, December 27, 2012, European Tourism and the Euro, [Online] Available at < http://economiclogic.blogspot.com/2012/12/european-tourism-and-euro.html> [Accessed January 15, 2015]. Jayawardena, C. 2003, "Sustainable tourism development in Canada: practical challenges", International Journal of Contemporary Hospitality Management, vol. 15, no. 7, pp. 408-412. Baxter, E. & Bowen, D. 2004, "Anatomy of tourism crisis: explaining the effects on tourism of the UK foot and mouth disease epidemics of 1967-68 and 2001 with special reference to media portrayal", The International Journal of Tourism Research, vol. 6, no. 4, pp. 263. Appendices Appendix 1: Company Profile The British Airways Holidays is a subsidiary of the British Airways Company. In this regard, the venture has over the decades focused on developing inbound logistical services to tourists in the UK market. As such, it ensures an increased synergy between tourism, transportation, accommodation and attraction cite respectively for its clients. In this case, the venture offers both aviation and road transport services in the market. Read More