1.0 Introduction
The organization chosen for this analysis is British Airways. Based at Heathrow Airport in London, British Airways is the biggest international airline in the UK. It deals in domestic and international carriage of freight and mail as well as ancillary services. Privatized in 1987, it has continued to increase in growth in spite of stiff competition (Connell, Williamson 2011, 115). This paper analyses the industry and external environment alongside an evaluation of the strategic options of the organization and the change process within the organization as related to the findings of the analysis already carried out.
A model of Corporate Strategy
[Source: Johnson, G., Scholes, K., & Whittington, R. (2008). Exploring corporate strategy]
2.0 Analysis of the external and industry environment of British Airways
2.1 PESTEL analysis
2.1.1 Political
From the political aspect, government and political instability affect the routes operated by many airline companies. For example, the Arab spring that affected a number of countries in North Africa and the Middle East such as Libya, Syria, Egypt and Tunisia affected British Airways through flight cancellations (Connell, Williamson 2011, 115).
2.1.2 Economic
Due to global economy recession, the share price of British Airways has fluctuated while insurance costs of British Airways rose because of the fear of terrorism and tighter security checks at the airport (Barrows, Neely 2011, 67). Due to Fuel price fluctuations, companies are cutting down on travel costs by using alternative communication systems such as Teleconferencing (Shaw 2011, 83).
2.1.3 Socio-cultural
As evidenced in the figure below new Asia Pacific and Australasia, markets offer good potential. Revenues currently stands at a paltry 721 £m [British Airways 2010, 6]. The aging populations in Europe are likely to spend more in leisure and offers good business potential. In addition, increased unemployment increases the...