PESTLE and SWOT analysis of British Airways 2016-2017

By: Jonathan Kush

On the 24th May 2017, British Airways experienced a massive IT failure when the airlines servers at its data centres were physically damaged supposedly following a power outage (The Guardian 2017). The IT glitch affected more than 1000 flights carrying close to 75,000 passengers meaning BA faced compensation costs over £100million (Butler 2017). This is an example of the importance of investing in the latest technological developments within an industry which can help to eliminate technological weaknesses that can leave a firm vulnerable, just like BA’s case. Using PESTLE, Swot, BCG Matrix and Porters Five Forces analysis, this report looks at the current macro environment in the UK airlines industry, identifying trends in the political, economic, social, technological, environmental and legal landcape that impact individual airlines such as BA. Pestel reveals the key drivers of change which constitute opportunities and threats in a firm’s external environment and industry which can be overcome by focussing on strengths and eliminating weaknesses. This is why Pestel is only a starting point since other frameworks such as Porters Five Forces and BCG are also used in conjunction to assess how BA can utilise core resouces and competencies so as to take advantage of opportunities while neutralising competition and rising threats.

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