Undoubtedly, business strategies have an impact on the successful penetration of companies into airlines` markets. They affect the amount of market share owned by a company and the airlines` marketplace is their bread and butter. With the market place being the core focus of the airlines` companies, they formulate business strategies that would give them a competitive advantage to the rest and these strategies have various implications towards them. The implications, whether long-term or short-term, have a direct impact to the growth and profitability of a company. This paper will focus on explaining the different business strategies employed by two airline companies, the British Airways and Air Canada and the effects expected to result from this strategies.
Air Canada`s Business Strategies
Air Canada is well known for employing more than one business strategy to improve its competitiveness in the market. The first business strategy enforced by Air Canada is leveraging international network while maintaining disciplined approach to growth. By anticipating a growing demand for the international passenger travel, Air Canada focuses on progressive expanding its services in selected international markets while moderating growth in the domestic market. Air Canada is well positioned in increasing its share in the international market by leveraging its competitive advantages, which include the following: Air Canada is a widely recognized brand with a strong position in the market; it has an extensive global network enhanced by its membership in star alliance and participation in a transatlantic revenue sharing joint venture; and it also has an average age of wide body aircraft of 12.3 years (Air Canada, 2012).
Secondly, Air Canada focuses on improving cost structure and increasing revenue generation as a strategy. This becomes a key element for long-term profitability and sustainability. The company pursues sustainable reduction in its cost structure and ensuring customer experience is not compromised, and to leverage opportunities for growth in revenue. The airline seeks cost reduction and revenue generating initiatives that include use of technology and streamlining of processes to reduce their costs, and increase customer satisfaction and finding new revenue sources and eliminating wastes by leveraging of cross branch synergies (Air Canada, 2012).
Another cornerstone of Air Canada`s business strategy is focusing on premium passengers and products. The airline meets this by continuously meeting and exceeding customer expectations. This is achieved by delivering consistent friendly, professional and best in class services. Air Canada has been recognized in various awards, which include best in-flight services in North America, best airline in North America, and best North American Airline for International Travel. This reflects both the professionalism of its employees, and the skills employed in offering quality products. Increasing satisfaction levels in customers and growing the airline`s premium customer base is a key element in Air Canada’s business strategy (Air Canada, 2012).
Air Canada also focuses on fostering positive culture change. This is achieved by enhancing the corporate culture and developing a strong employee brand and transforming the corporate culture to that that involves entrepreneurships, leadership and accountability. This enables Air Canada to have a competitive edge through customer service and innovation, team spirit and cohesiveness, high employee morale, embracing the core function of the airline and increased employee performance. All these factors contribute to the ongoing growth of the Airline and have a direct impact to the airline`s long-term performance. The entrepreneurial culture emphasized by the cost containment approach encourages all employees to act as ambassadors and owners of the company (Air Canada, 2012).
British Airways` Business Strategies
British Airways focuses on being the airline of choice for long haul premium customer as one of its business strategies.. This is the major factor to its profitability. The key to this is by understanding the requirements for the airline to be one`s choice thus driving the design choices on products, service and network. The airline focuses in maintaining a strong presence in cargo economy and short haul segments. All these play a key role in supporting the role (Farmer, 2009).
The company focuses on the delivery of an outstanding service for customers at every touch point. This is emphasized by the passion expressed by the customer facing staff to deliver outstanding customer service. This is done by building on it by a revolutionary way of leading, training and rewarding thus customers in all routes and classes enjoy premium experiences. The company aims at investing on improvements targeted at the premium customers such as service style training and those that benefit all customers. An example is by improving the Terminal 5`s facilities and lounges in various airports (British Airways, 2012).
The airline makes growth and presence in key global cities in the world a priority. The aim of this is to provide the best global connectivity for all kinds of passengers. British Airways builds its presence in top tier cities globally. This is done directly or through the expansion of airline partnership networks. The company emphasizes on development in global cities for future purposes though established global cities remain critical. British Airways introduces products such as upgrading long haul`s flight business class seats, doing new designs for first class cabin and introducing new flights.
British airways consider London as its financial and emotional heart of their business being its home city. Due to this fact, it enhances on building a leading position in the city. London is the world`s biggest international market and thus the most competitive. British Airways ensures that Heathrow remains a world-class hub. This becomes vital since it gives the airline a strong market base in London thus serving the largest international long haul market. The airline achieves this by participating in indoctrination of government policy decisions and working hand in hand with airports to continually develop the infrastructure. This helps to improve baggage punctuality thus maintaining their good reputation among customers (British Airways, 2012).
Finally, British Airways enforces meeting customers` needs and improve margins though new streams. Revenue streams are core to the business. The airline explores on methods of developing new products and services that will exploit its capabilities and assets while in the same time meet the needs of the core customers and also enhance loyalty. British Airways builds profitable ancillary services that offer customers value and at the same time re-enforcing the brand, British Airways (British Airways, 2012).
References
Air Canada. (2012) 2011 Annual Information Form. Retrieved from
http://www.aircanada.com/en/about/investor/documents/2012_AIF.pdf
Farmer, T. (2009) British Airways’ Business Strategy. Retrieved from
http://fridayaviationblog.blogspot.com/2009/02/ba-business-strategy.html
British Airways. (2012) 2009/10 Annual Report and Accounts. Retrieved from
http://www.britishairways.com/cms/global/microsites/ba_reports0910/pdfs/Strategy.pdf
