British Airways was found in 1974 after the merger of four airlines in the United Kingdom and was owned by the British government until 1987 when it was privatized. The airline continued to grow and acquire various smaller airlines in the United Kingdom and various other nations in Europe. Currently, it is the second-largest airline in the country, after easy Jet, based on passengers carried and fleet size. The headquarters of the company are at Waterside, Harmondsworth and its main hub is at London Heathrow Airport (Dron, 2017). British Airways flies to 184 destinations with the help of a fleet of 281 aircraft of different capacities. It is in alliance with various other international airlines. In 2018, the company generated revenue of 13.02 billion Pounds (IAG, 2019).
Following are the four dimensions of the Ansoff Matrix for British Airways:
Market Penetration
Market penetration refers to increasing sales through existing products in existing markets. The first strategy that the company makes use of is aggressively marketing its products in the United Kingdom and various other nations it operates in. This helps promote the products and also secure their dominance in various growing markets. It develops attractiveness by promoting its products and offering tickets at attractive prices. Competitive pricing plays an important role in the airline industry. British Airways also promotes current users to increase their use by offering loyalty schemes that allow them to purchase tickets at lower prices, earn air miles, and various other benefits. The company also regularly revises its on-board serving menus and ensures they match the needs of the passengers of the market. The company has strategic alliances with various other airways to develop linked routes to facilitate existing markets. During holidays and other special events, British Airways offers tickets at lower prices to boost sales and increase revenues.
Market Development
British Airways develops its market by creating routes to a new destination and offering services on those new routes. These new routes are geographical locations the company expands into. Another strategy the company makes use of is targeting new segments in its existing markets by offering slightly different products. An example of this is budget flights between routes or premium flights with premium facilities between specific routes. The pricing changes allow the company to expand into new market segments that are new. As a result, the company is able to fly between new routes, offer new facilities on existing routes, and so on. British Airways can increase sales and generate greater revenue through this market development strategy.
Product Development
Product development is the strategy to launch new products in existing markets. British Airways does this in numerous ways. The first strategy is to procure new aircraft and operate them on different routes to offer passengers with greater comfort, shorter duration, and better services. The company has also developed in-flight Wi-Fi on certain routes to facilitate customers during their flight by providing them with internet access at all times. The existing aircraft are also renovated from time to time to ensure comfort is maintained and technology is upgraded. The improved passenger flight experience allows the company to provide the customers with greater comfort and ensure they are satisfied with the experience. The product development division of British Airways works to ensure improvement is continuous and products are developed on a routine basis.
Diversification
Diversification, selling new products in new markets, can be a risky strategy for British Airways. British Airways does this by procuring new aircraft and flying them on new routes. This can cost the company in various ways such as a reduced number of passengers, marketing costs, aircraft maintenance costs, and so on. The company can also vertically diversify by building its airports at various locations to overcome the airport fees the company has to pay. It can diversify into various hospitality businesses such as hotels, resorts, rentals, and so on. These are often the facilities airline passengers desire once they embark on a flight. British Airways can take advantage of this. It can work on conglomerate diversification by stepping into various unrelated industries such as the banking sector, hospitals, apparel, shoes, sports, and so on (Bui, 2017). It can take advantage of the successful brand name.
References
Bui, T., 2017. British Airways – Brand strategy. [Online] Available at: https://www.slideshare.net/tubui92/british-airways-brand-strategy [Accessed 02 Jan. 2020].
Dron, A., 2017. British Airways aims to mitigate strike effect. [Online] Available at: https://web.archive.org/web/20170112132630/http://atwonline.com/labor/british-airways-aims-mitigate-strike-effect [Accessed 02 Jan. 2020].
IAG, 2019. Welcome to the IAG Annual Report 2018. [Online] Available at: https://www.iairgroup.com/~/media/Files/I/IAG/documents/annual-report-and-accounts-2018-interactive.pdf [Accessed 02 Jan. 2020].