Marketing and operations management integration

¶ … airlines operating in and out of the UK. It has 12 sources in Harvard Style.

Company Overview

British Airways (BA) has come a long way by expansion of their services and fleet. Currently the airline is operating from Harmondsworth in the United Kingdom. British Airways is the biggest airline providing airline facilities all over Europe. The airline has strength of more than 365 planes. British Airways offers its clients access to more than 270 destinations all over the globe. These destinations span in more than 97 countries. The major activity zone for the airline is London, more specifically the Heathrow and Gatwick airports [Hoover's, 2003].

Business Environment Evolution

The roots of British Airways can be traced back to around the time of the World War I. The formal introduction of the airline took place with the decision of the United Kingdom government to combine two British airlines operating at that time, named as British Overseas Airways Corporation (BOAC) and British European Airways (BEA) [Fedrick, 2002].

British Airways suffered a lack of reputation due to inconsistent quality in services during the late 70's till the early 80's. The company operated with an old fleet of planes that accounted for uncomfortable journeys and customer complaints. It was often that the flights would miss scheduled times. This lack of operational capability led British Airways into a realm of financial losses in 1981 which amounted up to £140 to £200 million for each minute [Fedrick, 2002]. The greater loss was found in customer discontentment. The intensity of the situation can be judged with the state that BA services were as downgraded for the customers to avoid it at all expense. Majority of the clientage resorted to competitor companies like Virgin Airlines.

The company was in the need for a new vision and management strategy, and in 1983 the new Chief Executive Officer of the company, Colin Marshall has the answer. Upon the suggestion of the CEO, the number of employees, and the routes being offered were cut down.

The company was privatized upon the decision of the government. Right after, BA bought a competitor airline called Caledonian in 1987, in the name of expansion. The airline had a great vision of getting greater hold of the market. In pursuit of the vision, British Airways attempted to grasp 25% of USAir and 25% of Qantas [Fedrick, 2002].

Due to the rapid increase in the popularity of the airline, the competitors, especially Virgin Airlines drafted lawsuits against BA that inflicted heavy settlement costs in the airline. This resulted in BA having to sell British Caledonian [Fedrick, 2002].

In 2000, British Airways bought 9% of the shares of Iberia. The same year, BA put up her shares to Air France seeking to attain global advantage and a fresh image. Though this turned out to be an unfortunate time for the share swap as shortly an Air France Concorde crashed, claiming the life of 113 passengers. This translated into British Airways ceasing the operations of her Concorde fleet [Author not available, 2000].

CEOs

After Colin Marshall stepped down from the seat, Bob Ayling took to lead British Airways in 1996. Ayling had been with British Airways since 1985. His resignation from the designation in 2000 was the basis of Rod Eddington taking oath as British Airway's new CEO. Eddington had been associated with the airline industry, specifically as a Managing Director at the Cathay Pacific Airline [Fedrick, 2002].

Alliances

The airline operates in collaboration with eight other airlines providing customers with valuable services being a part of the alliance. This alliance is called 'Oneworld', and some of the airlines in this alliance are American Airlines, Cathay Pacific, Emirates and Deutsche Ba. In pursuit of offering its customers with competitive packages, British Airways keeps on innovating new packages at diverse rates. This alliance has helped BA reach out to 570 locations in about 134 countries. Customers enjoy a variety of destinations and world-class services that cater a similar variety of customers ranging from explorers to executives.

SWOT Analysis

Strengths fleet with excellent aircrafts

Amazing magnitude of operations

Amazing diversity of routes

Packages that ensure the customer better mileage for every money

World-class quality service

Stability and support from the alliance 'Oneworld'.

Weaknesses

Lacking in marketing strategy to win customer loyalty.

Deprivation of strategic management for investment in the future

Weak repute for offering interesting packages to the customers due to mistakes committed in the past

Opportunities

The Airline depends upon the customers willing to travel by offering its impressive tariffs for travelers, hence can gain a considerable clientage.

Oneworld' groups British Airways amongst the elite of the industry offering the company with a flux of opportunity to serve.

Marketing airline services will help increase competition and the upon realization of quality service, customers are expected to resort to the company as their mode of travel

Threats

Competitors are expected to come up with management strategies to counter British Airways

Global recession

Seasonal changes in the traveling industry

Terrorist activities such as the September 11 incidents.

Operations

The management did not lose hope in the operational capabilities of the company. Soon, measures will be taken to counter the operational difficulties faced by BA. The situation demanded that restructuring be carried out within the company. Measures to restructure included job cuts and investment into assets to indulge the company into achieving better standards than those offered by the competition. British Airways actively invested in a new fleet of aircrafts with more comfort. To compliment the fresh transformation, a technologically advanced image was aimed for with installation of new control systems and terminal facilities at the outlets of the company. The customers welcomed the image of British Airways. [Grugulis and Wilkinson 2001]

The transformation from trodden to aristocracy was not yet complete. The operations of the company would undergo a complete metamorphosis to live up the fresh image. A cultural transformation within the organization was called for. The employees underwent a thorough training program that emphasized positive attitude towards customer orientation. British Airways focused on commitment to its objectives. The operations of the airline were completely rekindled to adopt the new culture. Emphasis was made on feedback from the employees to maximize output. The staff was encouraged with clever incentives that even involved a 'family' of staff working in the same daily shifts. Such operational culture transformation promoted an incontrovertible image of British Airways, and the company has since projected a consistent image to the customers. [Grugulis and Wilkinson 2001]

Apart from the operational culture transformation, British Airways pursued mergers, franchises and alliances. This made convenient to cover the operational overhead incurred by the company by sharing financial, manufacturing and strategic functions. The maintenance operations of the airline were sold to GEC and the data processing operations were outsourced to Bombay [Warhurst, 1995, Blyton and Turnbull 1996, Colling 1995]. Such expeditions were critical in exhibiting a fresh new outlook that represented a makeover in the operations and services of the airline. Since the renaissance of the airline, the portrayal of the newly arisen appearance and operations of the airline has been made consistent without failure.

The exquisite operational capability of BA can be compared to any world-class airline around the globe. BA was ranked as the second esteemed company in the United Kingdom in the year 2000 (Financial Times, 18th March 2000). Other airlines, like American Airways, have started offering online ticketing capabilities to compete with BA, while other no-frill airlines such as British Midland have not. BA was one of the pioneering airlines to offer such services to the customers, another step ahead in providing cutting edge services in their favor.

Marketing Strategies simple glimpse of the British Airways Official Website would reveal the effort the company has put in to bring the services to her customers. The marketing strategy BA is complete customer orientation. The company seeks to cater each of the varied type of customers. The airline has initiated routes to a wide range of destinations all around the globe with main focus on flights from the United Kingdom to the United States [British Airways Official Website 2003]. Backing a network of destinations are the competitive tariffs hosted by British Airways. Competitors like Virgin Atlantic Airways do not offer the customers as good a variety of destinations [Fink and Harrich 2000] as the size of BA is 15 time greater than Virgin [Fedrick, 2002].

The company upholds the excellent standard followed by BA, with frequent customer feedback. The website for the airline lists the addresses, telephone numbers and email addresses for attaining regular feedbacks from the customers. Any query or complaints are noted and responded to by online customer support executives. [British Airways Official Website 2003]

The Marketing team of BA drafts the latest customer requirements by continual appraisal of its services according to customer trends. One of the moves cut out to favor the young unassisted travelers was to prohibit these travelers from sitting next to adult male traveler. This move was actualized to counter sexual or physical abuse inflicted on the young by the adults ['British Airways announces changes, 2002]. Such moves improve the outlook of the airline in aligned to its objectives, attributed to the marketing team at British Airways.

Another competitive advantage requires from British Airways to setup a global electronic network to bring the services closer to the target customers of the airline. A 24-hour customer support group corresponds to customer queries. Online ticket reservation and flight schedules open up a great domain of options available to the prospective travelers. [British Airways Official Website 2003]

Incentives to regular executive customers of British Airways have been responsible for earning the airline customer loyalty. BA gives away holiday packages, travel discounts, and unmatchable indulgence by providing the executive class with Chauffeur drivers, Express rail tickets during international travel and hotel vouchers and what not. Besides the executive class, regular customers too are catered with an exceptional level of care. [British Airways Official Website 2003]

By offering extra preventive measures in the interest of safety of the travelers, and their health, British Airways confirm a devotion and loyalty to the clientage. A recent example of such activity is observed in the management and scheduling of flights due to or through Hong Kong and Beijing in the scare of the SARS virus ['British Airways announces changes, 2002].

Marketing Mix

With the examination of the internal and the external environments of British Airways through the SWOT Analysis (outlined earlier) the company has a focus on its marketing mix strategy.

Product

BA exploits its strengths to identify the product in the market. The huge fleet of BA and the quality care with comfort provided to the customers upon their choice of traveling with the airline are identified. Customers are informed of the various travel destinations packages and incentives they can expend upon traveling with BA.

Competitors of BA, such a Virgin has mostly well-defined product descriptions insisting on their grand quality of services [Fink and Harrich 2000].

Price

The cost that the customers pay for traveling with BA is minimized relative to the level of satisfaction the product offers. The cost each tariff bears is standardized and affordable. But alternately, British Midland airline has been seen to have a better competition as it offers cheap flights equally diversified frequency of flights and ease of the availability of the seats. Being a part of the Star Alliances brings it at par with BA [British Midland Official Website 2003].

Place

BA has distinguished her services from the rest of the airlines by offering features and benefits to the loyal customers and wide range of incentives to the new consumers inside and outside the United Kingdom. BA has made place in the domestic and International market by identifying patent offers, the target of appeal being the customers that either frequently travel for businesses expeditions, or those who travel for exploration. Flight routes are scarcely distributed among less frequent destinations, for example Pakistan or Africa, and more business resources are made available for destinations in the United States.