A Critical Discussion about British Airways and Its Entry into Central Essay - 1

A Critical Discussion about British Airways and Its Entry into Central and Eastern European markets proposal - Essay Example In aviation industry however entering new markets is not easy as airlines need a lot of permissions to fly to their preferred destinations. For domestic routes, an airline gets a national license by the regulatory authority. For international flights, the regulatory authorities of all involved countries have to permit the course and destination. For expansion purpose if an airline to operate from out of a host country, like a multinational it also has to decide a suitable entry mode. Majority of the airlines prefer equity participation in existing airlines, or through mergers and acquisitions. In this paper, the opportunities for British Airways (BA) will be studied for entering the East European Market. Earlier this market was closed but now the airlines like British airways have the option to join this market. Aims & Objectives Eastern Europe has gone through an economic policy change. It is now a free economy and thus now it is possible for the West European and other airlines to enter this market for profitable business ventures. This paper aims to research and find for British Airways a suitable market entry mode. The scope of this research will be to find the best options and to figure out the best one. Here are the aims and objectives of this research: 1. To understand Mergers and Acquisitions: Although East Europe is now a free market, however, every country has its own set of compulsions which any new entrant in the market has to face and which might act as a hurdle in establishing business in such a region. Mergers and Acquisitions can only work for the benefit of trade if both parties joining hands have common synergies. This brings us to the point where understanding Mergers and acquisition becomes very important. This is to be done especially in the light of existing political and economic conditions of the market we plan to enter. 2. To discover the cultural and knowledge base of the region to be explored to see if British airways can tackle them successfully or not. In the long run, investment in any country is not only a financial investment. The culture and environment also play their own very significant role in business success. 3. To evaluate competencies and internal strength of British Airways. This will help show if Mergers and Acquisitions or Joint ventures can be the best solution to entry in east Europe for British Airways. 4. To discover the capability of new venture to be able to merge seamlessly with the global operations of British Airways. This is to be done with special focus on technology. 5. To study customer requirements and needs in Eastern Europe where cost will act as a deciding factor. Literature Review: British Airways is targeting new markets and to enter a new market as an airline, a lot of factors are to be considered. As per (Hill et al, 1990) the four motivation factors include market seeking, resource seeking, efficiency seeking and strategic resource seeking. When the opportunities in home ma rket appear to be limited, the companies in any of the markets and industries have to look for newer options in the markets outside the home zone. On 25 August 2009 the British Airways celebrated its 90th anniversary. The origins of one of the most profitable airlines can be traced back to the birth of civil aviation, the days after the World War 1. Air travel has changed beyond one’s imagination since the first scheduled air service on 25 August 1919. The day the world’s first commercial passenger air service from Hounslow Heath, Middlesex to Paris in August 1919 by British Airways’ forerunner company Air Transport & Travel was no ordinary day. It was a historic