The recent uprising in Arab countries has resulted in oil prices going up; this impacts negatively on not only this airline but other companies in general. Due to the fluctuating global economy it is important that British Airways therefore conducts a SWOT and PEST analysis of itself so that it knows its standing. This way, it can capitalize on maximizing profits, through identification of strengths and opportunities that it can build on and weaknesses and threats for it to be wary off.
SWOT analysis of British Airways
One of the strengths of British Airways in the aviation industry is the growing income levels. The growth in individual incomes increases the amount of disposable income and hence many people are able to utilize the carriers to fly to their destinations
Growth in tourism is also a major strength as it has led to a significant increase in the number of domestic and international passengers with statistics indicating a 50% growth in the number of domestic flyers and a 25% increase in the number of international flyers (Pickering 67).
One of the major weaknesses of British Airways is infrastructural development. The development of infrastructure has been very slow; thus unable to keep up the pace of growth of the aviation sector.
There are several opportunities in the global market that British Airways can capitalize on to get maximum profits. One of these is expected investment where the airline can increase its capital.
The airline should do so due to the increasing number of stakeholders interested in the aviation industry. If the company increases its capital base then it can be able to enjoy large economies of scale.
Despite the downturns, air travel has continued to grow over time and is one of those industries that are far away from reaching their peak. This can be partly attributed to the ever growing population and the increase in the propensity of people to fly.
With efficient management, an organization like British Airways has the opportunity to grow into a big and profitable enterprise.
There are many threats facing organizations in the aviation industry such as British Airways. Travelling for leisure and business is greatly impacted by the global economy. A downturn in the global economy means that less people are likely to travel for pleasure and to do business. This leads to low income to the airline during this period.
Pest analysis of British Airways
In the political environment of British Airways is stability in the countries it flies and also in the world at large. This is because volume of travel to politically unstable countries always reduces than during peaceful times.
Also some government legislation such as increase of taxes by blocs such as the European Union also affects the company.
Economically, British Airways is affected by inflation rates, recessions, and levels of unemployment. For example, the credit crisis in 2009 reduced the volume of travel and also increased operational costs for the company.
Socially, the company has been affected by the changing demographics of the world’s population. This is because regions that are densely populated with old people receive few numbers of travelers; this is because most of this people cannot fly that often due to their age and even illnesses related with age.
Technologically, the company is subject to rapid technological advancements made. For example, the invention of a new plane model such as the Boeing 797 which may lead to loss of investments made in other older models.
Difference between Marketing to Consumers and Organizations
Marketing to consumers is known as B2C marketing whereas marketing to organizations is referred to as B2B. These two levels of marketing are similar and still different in many aspects of their operations. One of the differences is that the information requirement for organizations and that for consumers is different when it comes to the actual purchase decision (Eiglier 245).
Another difference is that the B2B level of marketing is based on logic and reason, while the B2C level is mostly reliant on emotions of the consumers. This is because organizations are mainly keen on reducing time and costs associated with the purchase process. Organizations are also more focused on the effectiveness on the product than on its beauty and other attributes that consumers look at (Reid & Richard 89).
Differences in International and Domestic Marketing
International marketing involves marketing to consumers and organizations outside one’s country. The difference of this marketing to that domestic marketing is mainly based on the physical difference and also the size of the market; international marketing has a larger market than the domestic market (Aaker 127). Also, the costs involved in international market are higher since it involves advertising in more locations than domestic marketing.
In international marketing, a company may choose to have one strategy in all markets through the process of standardization. This process involves having a single strategy in all other countries which is similar to the one the company uses in the domestic country (Aaker 204). Another way of going about international marketing is through adaptation which is a process where the company chooses a marketing strategy based on the situation in a country.
International marketers also have more competitors than domestic marketers. For example in the EU, the marketers have to be aware of the risks and benefits of the market they are entering into. This is because a company may expose itself to predators and imitators who may steal its marketing strategies to gain advantage over it.
Marketing attractiveness in each different type of marketing is dependent upon a couple of things; one of these is the industry the company is in. For example, opening a bank in the EU bloc would be attractive due to the increasing globalization.
International marketing mix strategies are either standardized or adoptive; the difference is whether the strategy is based on the consumer country, standardized, or on the host country, adoptive. However the adoptive marketing strategy is the best since it takes into consideration the needs, cultures and other attributes of the target market (Aaker 206).
Eiglier, P. Marketing Consumer Services: New Insights. London: Marketing Science
institute, 2007. Print.
Reid, David A. and Richard Plank. Fundamentals of Business Marketing Research.
New Jersey: Best Business Books, 2004. Print.
Aaker, D.A. Strategic Market Management. New York: Wiley, 2005. Print.
Pickering, John. Industrial Structure and Marketing Conduct. London: Martin Robertson,