The present assignment should formulate a proposal concerning a major strategy change of British Airways, which will be in our case the acquisition of the low-cost carrier Easy Jet. After the formulation of the major strategy change proposal, this work provides an implementation plan as well as a strategic management plan
Table of Contents
1. Introduction
2. Major Strategy Change Proposal
2.1.Nature and Content
2.1.1. Reaffirmation of practical nature of proposal
2.1.2. Generic Basis of Competition
2.1.3. Strategic Direction and Risk/Reward
2.1.4. Implementation Method
2.2.Justification
2.2.1. Suitability
2.2.2. Acceptability
2.2.3. Feasibility
3. Implementation Plan
4. Strategic Management Process
4.1.Current Strategy Process
4.2.Reasoned Proposals for Change in Process
Objectives and Core Themes
The primary objective of this assignment is to formulate a strategic proposal for British Airways, specifically focusing on the acquisition of the low-cost carrier EasyJet to strengthen its market position. The work evaluates the financial, operational, and strategic implications of this merger, exploring whether such a move is suitable, acceptable, and feasible within the current competitive airline landscape.
- Analysis of corporate strategy and the viability of acquiring a low-cost competitor.
- Application of strategic frameworks, including Porter’s Generic Strategies and Ansoff’s Product-Market Matrix.
- Evaluation of financial health and business risks through cash flow and break-even analysis.
- Comparison of prescriptive and emergent strategic management approaches in the context of the dynamic airline industry.
Excerpt from the Book
2.1.1. Reaffirmation of practical nature of proposal
In recent years, the number of low-cost carriers in Europe has increased noticeable. Especially the market for short haul flights within Europe has enlarged so that there are today approximately 57 providers competing for customers (www.discountairfares.com). Predictions of experts suggest that in the near future there will be a collapse in the low-cost airline business and only the biggest and strongest will be able to survive. The proposal of the author is that British Airways (BA) takes over the London based low-cost airline Easy Jet (EJ) in order to participate in this fast growing market. In this way, BA will be able to reparate its mistake from August 2002 as Go Air was sold to Easy Jet. Even after the collapse of the low-cost line of business, BA’s low-priced subsidiary will be capable to increase its market share and to remain competitive.
Chapter Summary
1. Introduction: This chapter defines the scope of the assignment, specifically proposing the acquisition of EasyJet by British Airways as a strategic response to market competition.
2. Major Strategy Change Proposal: This section details the nature of the acquisition, the competitive basis using Porter’s models, and the justification based on the suitability, acceptability, and feasibility of the investment.
3. Implementation Plan: This chapter provides a structural timeline and overview of the steps required to execute the proposed acquisition.
4. Strategic Management Process: This section evaluates the existing prescriptive approach used by British Airways and argues for the adoption of a more flexible, emergent strategy to navigate the dynamic environment of the airline industry.
Keywords
British Airways, EasyJet, Acquisition, Low-Cost Carrier, Corporate Strategy, Porter’s Generic Strategies, Ansoff Matrix, Strategic Management, Market Development, Merger and Acquisition, Business Risk, Competitive Positioning, Synergy, Airline Industry, Prescriptive Strategy.
Frequently Asked Questions
What is the core focus of this academic work?
The paper examines the strategic possibility and justification for British Airways to acquire the low-cost carrier EasyJet.
Which specific strategic frameworks are utilized?
The author employs Porter’s Generic Strategies, the Ansoff Product-Market Matrix, the BCG Business Matrix, and the Emery/Tryst environment model.
What is the primary objective of the proposed acquisition?
The goal is to allow British Airways to participate in the growing low-cost market and correct the previous divestment of their own subsidiary, Go Air.
Which scientific methodology supports this analysis?
The methodology includes a comparative analysis of prescriptive versus emergent strategy approaches, supported by financial data from annual reports and industry life cycle modeling.
What does the main body of the document cover?
It covers the nature of the strategic proposal, an in-depth justification based on business risk and feasibility, an implementation plan, and a critical look at the organization's strategic management process.
Which keywords define this document?
Key terms include Corporate Strategy, Acquisition, Low-Cost Carrier, Market Penetration, and Strategic Management.
Why does the author prefer an emergent strategy for British Airways?
The author argues that because the airline industry environment is complex and dynamic, a rigid prescriptive approach is less effective than a flexible, emergent process that adapts to real-time market changes.
What financial constraints are highlighted regarding the feasibility?
The feasibility analysis considers the capital required for the acquisition, the market capitalization of EasyJet, and the projected cumulative profits of both entities.
How is the risk of the proposed strategy categorized?
The risk of entering the low-cost segment through this acquisition is categorized as medium to high due to the competitive nature of the European airline market.
- Quote paper
- B.A. Sebastian Meyer (Author), 2004, Acquisition of EasyJet plc. by British Airways plc., Munich, GRIN Verlag, https://www.grin.com/document/75508
