BTEC Level 5 Business Strategy, Unit 7
BTEC Level 5 Business Strategy, Unit 7 Business Strategy
Strategies are formulated by the organizations so that they can attain their vision and mission in an efficient manner. Business strategies are related to the long term plan and practices that are used by the firm so that their overall growth can be improved. The executives have to focused on the resources when they are implementing any plan so that competitiveness can be achieved (Scholes, 2015). Through these strategies, company will be able to fulfil the demand of their stakeholders so that their financial growth can be enhanced. The present report is based on British Airways which perform their operations in aviation industry. They are formulating their plans so that they can increase the satisfaction level of their consumers. In this context, report explains the process of strategic plan and how some factors affect the performance of an enterprise. Along with this, it explains the approaches that are used to evaluate the strategies.
1.1 Evaluate how visions, missions, goals, objective, and set competencies inform strategical planning
Strategic planning is basically an activity of organisational administration which is used to set high status, resources and energy, to strength operations and to make sure that employess and shareholders are working to achieve common goals (Rothaermel, 2015). There are various types of visions, missions, goals, objective and set competencies are being used to achieve strategical planning. British Airways have five strategic goals to achieve like to be the first choice in airline for long wait premium customers, to deliver excellent services at every point, to grow presence in various cities, to stand on top in London, and to satisfy customers needs and maintain margines by new stream of revenue. To achieve such goals, they have certain missions, visions and objective:-
Missions: British Airways always make sure that their customer should fly confidently to any destination and they ensure that together they will behave responsibly to take care in the world they live in. This mission of them does not only represent that they are an airline organization but they are a dutiful corporate company (What Is Strategy and Why Is It Important?. 2017).
Visions: There vision is to be the dutiful airlines in the world, that is responsible for customer needs, they want to be the indisputable ruler in the world, and be the esteem airlines in famous cities.
Objectives: Main objective of British Airways is that they want their customers to choose them again and again, wants to give premium and good quality services to each customers and to be at the leading position in the airlines sector across the world (Higgins, Omer and Phillips, 2015).
1.2 The factors that have to be considered when formulating strategic plans
Success of any organization depends on the strategic plans that is made by the company because these plans take an organization towards a specific direction. Several factors that determine the strategic plans of British Airways are :-
- Internal Factors:- These factors are those which are inside the organisation, they may be culture of organisation, ethics, strategies and policies (Kourdi, 2015). These factors must be taken into consideration to form a successful strategic plan so as to achieve long and short term goals.
- Stakeholder:- The major stakeholders are managers, employees, customers, creditor, supplier, community and government. Each one of them have different expectation that that affect the business.
- External Factors:- These are those factors that are not controlled by organisation and they are outside of it. These factors are like political, social, cultural and technological.
- Political Factors:- These are like government policies, laws that affect the organisation in one or other way, it may include various TAX policies, VAT, that are affecting British Airways.
- Economic Factor:- Economic factors are related to the countries wealth and the ability of customer to buy products and services. This focuses on interest rate, consumer debt level, unemployment level that influence customers decision of spending (Carraher and Paridon, 2015).
- Social Factor:- These factors are related to choice, tastes, demands of customers that vary from one customer to another. British Airways PLC improve their quality of services, workforce to have positive impact on society and environment.
- Technological Factor:- These factors basically focus on discount and offer that is being given by British Airways to their customers to save their time and cost. It includes all the products and services that is being offered by company.
1.3 Evaluate the effectiveness of techniques used when developing strategic business plans
British Airways using many techniques and models in order to develop an effective strategic plan. Through these, manager will be able to expand their business in the market so their growth can be improved. There are some techniques such as:
Swot analysis: This tool is used by the manager of British Airways so they will be able to identify their internal strength, weaknesses and external opportunities, threats. When they expand their business in another country then they can use their strength and grab the opportunities in order to sustain their competitive advantage (Morris and et.al., 2015). Along with this, they can control over their weaknesses so that their performance can be improved. Advantage of this approach is that the airline industry can gain the competitive advantage in the market.
Pestle analysis: This is the another technique that is used by the organization as through this they can analyse the factors that externally affect their performance. Through this, airline industry will be able to identify the political, economical, social, legal, technological and environmental factors. On the basis of this, company can manage their operations so that their overall performance can be improved.
Porter five force: This is the tool that is used by British Airways so that they will be able to identify the factors which may influence their activities. This model is based on some factors such as bargaining power of seller, bargaining power of buyer, threat from new entrant, threat from substitute and inter firm rivalry (Pisano, 2015). Through this, they will be able to make the appropriate strategies that are helpful in improving their performance.
2.1 Select an appropriate future strategy for British Airways PLC and evaluate the effectiveness
The main goals of British Airways are to create a strong base customers, to provide high quality services to their service users, to improve growth in the market and so on. There are some other strategic objectives of the airline industry that to expand the business and offer the quality services to the passenger as per their requirements. In order to expand the business in other competitive market, manager of the organization has to focus on their workforce because these are an important asset of the company.
It is the responsibility of manager to provide training and development to their staff members so that they will be able to enhance their skills and knowledge (Torrent-Sellens, 2015). If their core competencies get improved then they can provide quality services to their customers. Through this, British Airways can increase the satisfaction level of their passengers. Along with this, the airline industry can use competitive strategies in order to perform better than their rival firm. By identifying the competitors strategies, an enterprise will be able to attract more customers towards their services. Apart from this, they can use interactive strategy as their future strategy. On the basis of competitive strategy and skilled workforce, the organization will be able to increase their market share in London. Further, they can build their relations with other organizations and their customer by implementing the interactive approach (Elements of a Business Plan.2017).
2.2 Analyze the appropriateness of alternative strategies
The airline industry can use other alternative strategies in order to improve their performance in the market. These strategies are:
- Market entry: This is an appropriate strategy that is used by the organization in order to expand their business in other market (Lussier and Corman, 2015). There are some strategies that are used for entry such as joint venture, merger, acquisition, franchising, licensing and strategic alliances. Through this, an enterprise can establish their business in another market so their brand image can be improved.
- Substantive growth: This kind of strategy can be used by British Airways in order to improve their growth. For this, the airline industry can use horizontal and vertical integration. Along with this, they can also use diversification strategy in order offer new services into the new market. The advantage of this theory is that they can increase their growth in future and through this they can achieve success so their overall performance can be improved.
- Limited growth: This type of alternative approach can be used by British Airways so they their problems that they are facing in the market (Ibrahim, Dumas and McGuire, 2015). Some of the issues are related to the financial loss, low growth. So through this approach, the manager will be able to improve their performance and overall goals can be accomplished. For this, they can use market penetration and product development.
- Retrenchment: This strategy is used by the airline industry when they will not be able to increase their market share due to high competition in the market. At this time, they can asset reduction strategy, cost minimization strategy and revenue generation approach.
3.1 The roles and responsibilities of personnel (HR) for implementing a specific strategy
When British Airways implement any strategy than it is the responsibility of HR manager to effectively manage the work of all staff members. They are one who deal with all employees so their overall performance can be improved and they will be able to achieve their goals (Rosemann and vom Brocke, 2015). Some of the roles and responsibilities of the personnel are:
- It is the role of personnel to communicate with all the employees so they will be able to know that what they have to do in order to achieve the goals.
- HR manager has to motivate their workers towards the strategy that is implemented by the organization so that they can perform well.
- The personnel has to focus on the relationship among all the employees so trust can be build and through this their performance will get enhanced.
- All the resources should be allocated and distributed in an efficient manner so they will be able to gain high revenues.
- The Manager has to evaluate the performance on continuous basis so they will be able to know that how goals can be achieved and what next is to be done by the company so that they can improve their future growth.
- It is the responsibility of personnel to identify the changes that occur after implementation of the strategy (Tarhini, Al-Dmour and Obeidat, 2015). After identifying the changes, strategy can be implemented in an efficient manner so that overall goals can be achieved.
3.2 The estimated resource requirements for implementing a new strategy
When British Airways implement a strategy then they need some resources such as human, financial, raw material so that their overall performance can be improved. By using these, company can expand their business in the market. These resources are:
Human resources: These are an important asset of the organization who help them in attaining the goals. Manager has to retain their workers in the organization so that their overall performance can be improved and they will be able to gain more benefits (Young and et.al., 2015). For this, manager of British Airways has to trained their employees so that they can perform well.
Financial resources: These resources are related to the capital, cost and investment of the organization. Through these, British Airways will be able to purchase the material and pay the salary to their employees on time. Along with this, manager can increase the satisfaction among the workers.
Raw material: These are material that are required to order to provide the quality services to the customers. The manager can offer the quality and luxuries services to their passengers (Lai, Melloni and Stacchezzini, 2016). If company will purchase raw material in bulk than they can minimize their cost and through this profits will be maximized.
Technological resources: These resources are related to machine, tool, energy and so on. Through the technological advancements, firm will be able to offer more innovative and quality services to their customer. All staff members should be trained so that they can handle all the equipment in an efficient manner.
3.3 The contribution of S.M.A.R.T targets to the achievement of strategy implementation
British Airways can use SMART objectives in order to set their targets. Through these goals, organization will be able to set a direction for their employees. Along with this, a business organization can achieve success in the market. These SMART objectives are stands for specific, measurable, achievable, realistic, time. These are:
Specific: All objectives should be clear and specific so employees will be able to understand the goals (DeMartino and Barbato, 2015). Through this, they will be able to know that how operations needs to be done and in what manner. For example, company can set a objective like to increase the market by 1% at the end of the month.
Measurable: Objectives should be set by the top executives so that they can be measured in an efficient manner. Along with this, it is related to the quality, quantity and the cost of the services. For example, British Airways can measure their performance in every week so that future profits can be forecast.
Achievable: The manager has to assess their employees that they are able to perform the task in the business environment or not. Along with this, they have to examine that at the end of year then can accomplish their task.
Realistic: When an employee set their goals then those targets should be realistic in every manner. If an organization doesn’t have sufficient resources, time then they will not be able to improve their performance (Trevisan, 2016).
Time bound: Every objective should be set as per the time line or deadline so that their overall performance can be improved. For example, British Airways can increase their market share by the 10%. Here, 12 months is a time line
The strategic positioning of British Airways by carrying out an organizational audit
The manager of British Airways can conduct an organizational audit so they will be able to identify their position in the market (Arena, Azzone and Bengo, 2015). For this, they can use SWOT model in order to identify the strength, weaknesses, opportunities and threats. The organizational audit is:
Strength: These are the characteristics of an enterprise which can lead them towards the success. Through theses, they will be able to perform better than their competitors. These characteristics are:
- The brand image of British Airways is strong in the market so they have a strong base of loyal customers.
- The airline industry operate their business in many countries and along with this they have approx 150 destination through the world.
- They provide quality services to their customers in the flight.
Weaknesses: These are the characteristics through which British Airways will not be able to improve their services in the market (Levenburg, Schwarz and Motwani, 2015). Some of these are:
- When fuel prices are get increased then due to this the ticket of flight is also get enhanced.
- British Airways will not be able to provide training to their staff members so due to this they will not be able to deal with their passengers in an efficient manner.
- Competition is there is market so due to this they will not be able to achieve the competitiveness.
Opportunities: These are the characteristics through which an organization can sustain their competitive advantage in the market. These opportunities are:
- British Airways can perform their operations in many other international destinations.
- The airline can provide services to the customer at low cost so that their demands can be fulfilled.
Threats: There are some factors which can influence the performance of British Airways and through this they will not be able to fulfill their goals. These are:
- When the rate of fuel is get increased then it also affect the prices of the ticket this is a biggest threat of company.
- When global recession arise then it will affect the air transportation of the organization.
Environmental audit for British Airways
Environmental audit is a tool that is used by the organization so that they can identify their position in the market. Through this, British Airways will be able to identify the factors which may influence their performance. For this, manager can use PESTLE analysis. These elements are:
Political and legal: These factors are related to the foreign exchange, trade activities and so on. If political stability is their in country then British Airways will be able to improve their growth in other country. Along with this, they have to follow some of the legal laws so that they can improve their performance.
Economical: These factors are related to the economic condition of the country as these can also affect the growth of the airline industry (Ghezzi, Cortimiglia and Frank, 2015). For example, when oil prices get increased then the price of ticket is also get increased.
Social: These factors are related to the needs, lifestyle, preferences and demand of their customers. So, the manager of British Airways has to identify the requirements of their service users so their overall performance can be improved.
Technological: By using the technological advancements an organization will be able to attract their customers towards their services. For example, the airline industry can use arrival management and departure management system.
Environmental: These factors are related to the environmental safety and the organizations have to follow the rules that are made by the government. Now, government limit the radiations and their growth.
The significance of stakeholder analysis when formulating new strategy
British Airways can use stakeholder analysis in order to identify their roles in the decision making process. For this, manager can follow a systematic process. In the first step, manager identify the people who are associated with their operations and their demands. People who have high power and high interest they are closely associated with British Airways. On the other hand, if people have low interest and low power then they are highly associated with the enterprise (Young and et.al., 2015). Through this analysis, an enterprise will be able to role of stakeholders in the decision making process.
From the above carried out analysis it has been concluded that business strategy is an important factor of the organization as through this they can fulfill their goals. There are many factors which may affect these strategies such as leadership, employees and so on. British Airways can use SWOT and pestle model in order to identify their position in the market.
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