Lessons that British Airways might have taken away from the inability of Silverjet
This essay will probably discuss the several inconsistencies that bring about the inability of Silverjet, and the lessons British Airways might have taken away. For instance, Ritson (2008, p25) states, that "while solo positioning to one target is of interest" to improve the chances of making more revenue "is to focus on multiple segments", which is among the reasons why Silverjet has got ceased its operations. Likewise, Capell (2007) explains that despite the fact that competitors such as British Airways, Virgin Atlantic and American Airlines were providing their services at an increased price than Silverjet discover how to write a personal narrative essay, "many of them had funds to last them through a downturn". I believe these are two issues, that are of a greater significance out from the whole history of Silverjet, which is comprehensively discuss in this article.
One lesson to be learned by Uk Airways is segmentation strategy. For instance, Dudovskiy (2016), an international business researcher, analysed Uk Airways, and discovered that the company’s key marketplace, are business class specific and high grade travellers, thus focusing less on low income population. This opens a chance for Uk Airways, and study from Silverjet’s failing, to adapt and charm to several segment (Ritson, 2008, p25). A way of taking advantage of the multiple segments, can be by firmly taking into consideration a study by Solomon et al. (1994) that presents that, so that you can understand consumer decision making "marketing managers "should properly study "how buyers obtain information, . what conditions consumers use to create service or product choices.". By researching consumer behaviour, it gives British Airways the opportunity to enter a new target market, and increase the chances of increasing capital to survive through economic downturns. For example, Ritson (2008) pointed that, low cost airlines such as EasyJet and Australia’s Virgin Blue, "started with a focus on economy segment", however have now started concentrating on "business-class seats and targeting premium travellers.".
Another lesson, pursuing on from the preceding paragraph, is one which precisely targets raising enough capital to make it through uncertain and challenging occasions. According to Lowe (2007), because of the rise in fuel prices, Silverjet run out of funds, and therefore acquired to suspend its shares and functions in 2008, due to not being financially flexible. British Airways as well suffered, from certainly not being financially flexible, where in 2009 2009, dropped £148m in earnings BBC (2009). As British Airways is normally a UK based firm, recent events such as Brexit, will heavily impact the airline market. Ambrose (2016) says that airlines can transport passengers anywhere in the EU for free, if the united states that the business operates in, can be a EU member. However, if UK will leave the EU, Uk Airways will eventually lose that right, leading to a dip in its funds. To cover the new expenses, the company must increase its prices, that may impact consumer assurance, making customers to look for cheaper services, thus influencing British Airways gravely (Kotler et al., 2012). Thus, to avoid this matter, British Airways, should look to raise cash, and ensure financial flexibility, which will later be used for unexpected expenditures that may arise because of this of economic downturns (Boddy, 2014). Hence, I believe the best option for the airliner is certainly to please its shareholders and assure satisfaction amongst their stakeholders.
Examining the two lessons that Uk Airways might have taken away from the failing of Silverjet, it all boils down to the economic condition a firm operates in. A report by Sloman and Jones (2014) implies that, supply and demand is affected by the economical conditions present at the time. Supply means what volume is being produced, whereas demand includes the quantity consumers need it (Econlib.org, 2012). So, supply and demand have been greatly affected by the Great Recession, which were only available in July 2007. Regarding to Lowe (2008), Silverjet started making a profit only 6 months prior to the Great Recession settled, this creating various issues for the Airliner. Subsequently, within 10 weeks, Silverjet were only able to complete 24% of their obtainable seats, which resulted from the inability of securing an expenditure to support the company in continuing its functions, and then go into administration a month later on (Lowe, 2008). As briefly explained, what stopped Silverjet, was that demand decreased due to the lower consumer money, which resulted from the financial uncertainty settled at that time. Thus, British Airways will also ideas on how to write an informative essay be affected by this uncertainty, resulted from the current global events, including the election of the brand new American President and Brexit (BBC.co.uk, 2016). The airline market can again, be shaken, by buyers being discouraged to travel, as a result of restrictions that might come in place due to UK exiting the EU. Also, the brand new US President, might impose higher immigration control, which might require more paperwork, impacting on ease of travel (BBC.co.uk, 2016).
Unlike Silverjet, Uk Airways could, in fact, soften the impression these events could have on its procedures, by by using a specific group of tools and tactics, to forecast demand and efficiently adapt to the changes to come. Among the tools is SWOT analysis, and a report by Boddy (2014), pointed that, it is "a means of summarising the organisation’s strengths and weaknesses in accordance with external prospects and threats.". This, will aid Uk Airways in comparing itself to the competition and what could be improved to get ready itself for the changes to come. Likewise in the study, another important software is to evaluate the Macro Environment, applying PESTLE. Moreover, according to Sloman and Jones (2014) the most effective method in forecasting is certainly "barometric forecasting that involves the use of leading indicators". For instance, specific to British Airways, forecasting demand can be achieved by analysing the fluctuations in STOCK MARKET prices, changes in buyer confidence, adjustments in the GDP, changes in interest rates and alterations in the charge of exchange, each one of these being successful indicators of how secure or unstable economic conditions will be (Sloman and Jones, 2014). Thus, enabling British Airways to predict in advance, approximate demand curves in the airlines sector. Areas of demand can be influenced through legislations and fluctuations in gasoline rise.
It can also be discussed, that the reason why British Airways has not failed yet, is due to their dedication of providing value to their customers. Even though, their clients had to pay substantial prices for British Airways services, consumers would still count on the airliner’s services, as they provided satisfaction and high quality (Kotler et al, 2012 p.100). Also, Uk Airways, already had large fleets and currently invested funds in increasing the quality of the business enterprise class services, thus helping them to make it through through the financial downturn. Whereas Silverjet, typically focused on quantity rather than top quality. This impaired by the fact that their budget was limited. It can be seen in Hunt’s interview kept by Lowe (2007), "There can be an overreaction. We have a 76pc load factor which we’ve achieved in five a few months and we do not think any airline has done that.". For me, this denotes the owner’s frustration that the key reason why their shares worth nosedived is basically because, shareholders did not understand the fact the company had achieved its aim of having lots factor of 76laptop or computer.
In summary, the three crucial lessons that would lead British Airways to being among the leading corporations in the airline industry are switch in the segmentation technique, raise enough capital, and use tools and ways of forecasting demand. By simply expanding their services to target economy passengers, the company can "make serious cash" (Ritson 2008). Also, regarding raising enough capitals, it could simply be achieved through satisfying shareholders and stakeholders as well, by being genuine, transparent, all inclusive, hearing feedback and ultimately continually adapt to the current economic changes, through making certain the Macro and Micro Conditions are regularly being analysed. The previous aspect but not minimal, is taking benefit of the "barometric forecasting" device, which simply searches for patterns in the financial environment, which involves aspects such as for example fluctuations in exchange rates, interest levels, political events, GDP figures and fluctuations in client spending (Sloman and Jones, 2014).
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