Airline Industry Case Study Analysis Assignment Help British Airways (BA)
BA is UK based Airline Company that is engaged to operate cargo business at global level including scheduled
passenger services. It is a flag carrier airline that schedules flights for more than 170 destinations within 80 countries of the world approximately. As per British airways case study assignment help experts within a year, it carries more than 33 million passengers worldwide (British Airways, 2013). This company has global route flying network to and from the best located airport at each country. Airline Industry The nature of UK airline industry is quite competitive and innovating in the comparison of other parts of the world. Virgin Atlantic, easyJet, Delta Airlines, Ryanair and American Airlines are some of the major competitors of BA (Gervat & Gavin, 2006). This industry’s performance is majorly influenced due to significant improvement in fuel prices.
Porter’s Five Forces Model Below five major and important forces of an industry are analyzed to determine the performance and competitive nature of BA in the given industry: Rivalry nature: This force is referred to such competitive struggle that firms of a given industry face for obtaining market share. It helps to determine the value of competition. There is high level of rivalry among competitors in UK airline industry that creates significant threat for BA. Absence of switching cost, lack of exit barriers, high fixed cost, global consumer presence, high industry growth rate are some reasons that exist in the airline industry and create high competition among airline firms in terms of passengers and financial performance accordingly (Wickramasinghe & Lubitz, 2007).
Entry Barriers: This aspect explains the entrance possibilities of new competitors in a given industry. New entry is responsible to increase industry capacity and competition for market share. Several entry barriers exist within the UK airline industry. BA brand loyalty, economies of scale, excess government regulations, high capital requirement, cost advantage etc. are some aspects that create entry barriers and less competitive environment for the given firm in airline industry of UK (Henry, 2008). Substitutes Threats: It defines the existence of substitute products that enable to satisfy consumer needs in the same manner. An existence of substitutes is responsible to decrease the opportunity of a firm to increase prices and to earn greater profit. There several and fewer substitutes are available for BA nationally and internationally respectively. Rail, Ships, buses and cars etc. are substitutes for BA nationally (Schmidt, 2008). Internationally, there are few airline firms existed for BA with such sound policies and strategies. Suppliers’ Bargaining Power: Bargaining power of supplier’s depicts ability to influence profitability of an industry by such companies those provides input. High bargaining power of suppliers enables to extract profit from an industry as buyer has no choice to change them. Bargaining power is high for airline industry as there are less number of manufactures and suppliers of aircraft parts and fuel respectively. Due to this, suppliers are enabled to influence operational cost of this industry in effective manner (Wickramasinghe & Lubitz, 2007).
Thus, high competition exists for BA to obtain input at reasonable prices. Buyers’ Bargaining Power: It defines such bargaining ability that is possessed by the end users of a specific industry. There moderate level of bargaining power exists for the customers of BA. In long haul destinations, customers have less choice to switch from BA. Less availability of flights and seats are responsible to decrease customers’ bargaining ability (Wilmshurs & Adrian, 2002). In addition, BA is tended to change prices at the time of festival seasons by adding value for customers. References British Airways. (2013). About British Airways. Retrieved from: http://www.britishairways.com/travel/about-british-airways/public/en_in Gervat, C. & Gavin, F. (2006). Night Plus Day London. ASDavis Media Group. Henry, A. (2008). Understanding strategic management. UK: Oxford University Press. Schmidt, S.K (2008). Strategic group model of the European airline industry: A critical evaluation of an external analysis model. Germany: GRIN Verlag. Wickramasinghe, N. & Lubitz, D.V. (2007). Knowledge-based Enterprise: Theories and Fundamentals. UK: Idea Group Inc (IGI). Wilmshurst, J. & Adrian, M. (2002). Fundamentals and Practice of Marketing (4th ed.). UK: Routledge. We ensure you that your business analysis assignment help content would be authentic, original and according the assignment guidelines. So, hurry up and please e-mail us your any assignment help at info@www.assignmenthelpexperts.com