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Introduction
Transportation has become a significant part of business today which has a great influence over other economic and business practices. Any change in price, demand, and technology influence businesses significantly in relating environments. Low-cost carriers are becoming dominant in the market. Therefore, the provision of low airfares becomes an interesting topic of discussion in addition to the technological advancements that contribute to the cost of transportation as well as to the enhancement of the customer experience.
Information technology and computer-based information systems have become a competitive necessity, essential to the survival of almost every business. Over the years, IT has shifted from a primarily internal orientation to strategic orientation. IT has the potential to change how a business works internally and to identify new ways of competing; several authors (Allan 1998), (David 2004) suggest therefore that IT should become equal to or a driver of business strategies. IT has also become an important factor concerning “innovations”. Joe, et al (2005) suggests that “innovation is essential in order to generate long-term stability, growth, shareholder return, and sustainable performance and to remain at the leading edge of the organization”.
Background information
Most of the problems faced by BA were rooted in such factors as frequent air attacks, competitors’ entry into the market as well as the high rises in the prices of oil (to more than double the original price. The government further imposed taxes to safeguard the environment. After 10 years of losses, British airways needed to rethink its strategies and invest in new ways. Paul Coby, becoming CIO of BA in 2001 saw technology as an opportunity in order to cut costs, increase customer satisfaction and generate growth. Since 2001 BA airways have used technology in order to innovate and stay at the leading edge of their organization.
Aims and objectives
Aims
To analyze technological innovation used by British Airways and how it is related to the improvement of their corporate brand strategy.
Objectives
- To demonstrate BA’s current alignment between strategic vision, organizational culture, and corporate image.
- To explain the use and purpose of the computer-based information systems used by British airways.
- To identify the positive impacts of the computer-based information systems in relation to British Airways corporate brand strategy.
Research methods
The research for this topic will be collected by gathering only secondary data; the researcher will collect this data is based upon three main characteristics. The data will be collected systematically, interpreted systematically and there will be a clear purpose for finding the right data. “We can define research as something that people undertake in order to find out things in a systematic way.” (Allan 1998) Therefore the researcher will carry out this research by following different steps in a chronological way. First, the researcher will clarify his topic, review literature in order to understand and have a better focus to collect the right data, analyze the data and as the last stage write everything down. “Formulating and clarifying the research topic is the starting point of your research project.” (James & Jack 1999). For this research, it was agreed to only use secondary data, which is data coming from a study that already has been conducted.
Literature review
Technological innovation
In the near past, drastic changes in the structure of the airline industry have been evident. The airlines were formally known to be competitors as well as rival groups, a situation that is currently changing into one of cooperation. Currently, both big well as small airlines opts for cooperation rather than competition amongst themselves (Dennis 1976 ). Such alliances allow firms to focus on their respective core competencies while drawing the benefits of scale economies. The following chart illustrates different views of the concept of technological innovation.
The term of innovation used in this study will mainly focus on the development of new computer-based information systems, which are not only used to improve the efficiency of BA’s operations, but also to provide new strategic possibilities for organizational innovation and development. The BA cabin crew has the advantage of acquiring online internships which will significantly enhance their performance. The computer-based information systems discussed will be as follows:
- The “self-service check-in Kiosk
- The Catering online extranet, which provides BA with low-cost access to their supply chain applications.
- The efforts of BA to enhance its allied Google Earth facilitating the visitors to access accommodation in the nearest hotels as well as the most convenient transport by the use of 3D map.
- The alliance between BA, Cisco, and Prime establishing the Airlines Industry’s largest IP telephone network.
- The deployment of Wily Technology in order to manage software applications on the BA.com website.
Strategic vision
The model of James and Jack (1999) shown in appendix 1, identifies three main variables: Vision, culture, and image. This model helps managers analyze context concerned with the alignment of strategic vision, organizational culture, and corporate image, so they can evaluate their strengths and weaknesses.
Strategic vision and organizational culture
The vision of a company is defined by its core values. These are a set of guiding principles that have a profound impact on how everybody in an organization thinks and acts. Research done by James and Jack (1999) showed that successful companies build their visions true redefinitions and reinventions of their core values instead of completely changing from one value to another (James & Jack 1999)
The organizational culture of a company is the collection of values and norms shared by people or groups within the company and that control the way they interact with external stakeholders. Mark, et, al ( 2008) find that the concept of organizational culture held by most corporate branding practitioners is naive. They claim that practitioners fail to distinguish the difference between desired values; which are mostly stated in the vision statement, and the practiced values at work which is the organizational culture of a company. So in order to create a perfect harmony between these two elements, it is imperative that there is an interconnection between the promise a brand makes and the performance the corporation delivers (David 2004).
Strategic vision and corporate images
A challenge in corporate branding is to align strategic visions with corporate image. Corporate branding puts a stronger emphasis on the role of strategic visions due to the fact that it requires top management reflection on who the company is and what it wants to become. James and Jack (1999) say that corporate images feed into strategic visions serving as a mirror in which top managers can reflect on who they are. This means that instead of using stakeholder images as exact assessments of brand performance, compare them with strategic vision, images held by stakeholders, on who the company is and what it stands for (David 2004).
Before privatization in 1987, people in Britain said that BA stood for “bloody awful”. The overall image perceived was that BA was operationally incompetent and indifferent to customers. However, in the early 1990s BA succeeded in privatizing and true severe downsizing and corporate-wide customer service training they turned to a respectful and highly competitive corporation. In the mid-1990s BA faced additional pressure for change; market research showed that the customer base was shifting and that only 40% of its passengers were British (Joe, et al 2005 ).
One of the main problems was that BA was based on British traditions which did not cohere with the global image they were striving for. Another problem was that BA culture did not support its vision. The employees were subjected to another round of cost-cutting while at the same time they saw the expenditure of £60 million on tail fin painting. Struggling for globalization, BA radically needed to change its strategies so that a strong corporate brand could be obtained. The employees conducted a strike which was disruptive to a campaign for global vision (Dennis 1976 ).
Data Analysis
This research has several objectives and questions to be achieved to get to the main aim. Having collected documentary secondary data, there are different ways of analyzing them. In this case study, the data that is collected will be analyzed “qualitatively” and to do so, like Joe, et al (2005) method, categorizing data will be the closest process to examine the data according to the topic.
The data needed for this research is divided over a timeline; the researcher has to collect data starting from 2001 directly after the study made by Mark, et, al ( 2008). It is important to have the relevant data to see if there has been an evolution since the study has been made.
Data analysis of technological changes in British Airways is designed to define the improvements they brought to the overall corporate strategy of the company and especially brand strategy, which is one of the most important managerial aspects in modern conditions.
The analysis of improvement will be based on Hatch and Shultz model. Their concept may be described as a gap model providing basic parameters of branding strategy including three basic elements: image, vision, and culture. We shall analyze how technological challenges in British Airways affected these three elements.
Basic technological innovations developed by British Airways management mainly refer to informational technologies which are the primary driving force of modern branding.
First, let us analyze positive changes in branding strategy due to the alliance between BA Website and Google Earth.
To adequately formulate the positive implications of this innovation for the corporate policies of British Airways Company, one should pay special attention to Hatch and Schultz’s helpful differentiation between corporate and product branding. As Hatch and Schultz note, “Corporate branding differs from product branding in several respects(…).
First, and most obviously, the focus of the branding efforts shifts from the product to the corporation. Of course, product and corporation are related in that corporate brands add economic value to the variety of products and services offered by the company(…). But the broader scope of the corporate brand pushes brand thinking considerably beyond the product and its relationship to the consumer or customer” (Schultz and Hatch, 1044). These considerations are extremely important in terms of analyzed innovation. It is evident that the alliance between the British Airways website and Google Earth, which allowed visitors not only to book their flights but find nearby hotels and car rentals on a 3D map, is closely tied with corporate branding strategies rather than product branding.
Giving additional conveniences to customers and allowing them to use new technologies to accommodate their needs and guarantee satisfaction, helps form positive attitudes to the company in general, rather than particular goods and services. Customers of British Airways, using helpful software had the possibility to compare it with other companies’ offers and make a conclusion concerning quality, accessibility, and utility of these tools.
The deployment of wily technology in order to manage software applications on the BA.com website.
This technological innovation may be understood in terms of further improvement of British Airways’ popularity due to the enhanced flexibility and utility of its software. Before these changes took place, the customer often complained about a low number of functions and possibilities provided by the British Airways site, however, the introduction of new software technologies and new methods of control helped increase the number of visitors, scope of online transactions, and contacts with customers and counterparts.
Hence, British Airways managed to overcome its conservative mood which was often mentioned by analysis as the primary source of the negative performance of the company during the 90-s.
Hatch and Schultz’s model helps also understand positive changes to British Airways’ branding strategy brought by an alliance between BA, Cisco, and Prime which established the largest IP telephone network in the industry. From the first sight, this innovation has nothing to do with the branding strategy. However, as Schultz and Hatch claim, that generalization is adequate only from the outdated vision of corporate branding. As these authors claim, “The corporate brand contributes not only to customer-based images of the organization, but to the images formed and held by all its stakeholders, including: employees, customers, investors, suppliers, partners, regulators, special interest and local communities’ (Shultz and Hatch, 1042).
In this light, it should be noted that the introduction of the new IP telephone line in cooperation with other major company’s helped improve British Airways reputation among other businesses, their customers (which resulted in widening the scope of positive customers), widen the network of existing and possible counterparts. These improvements refer mainly to Shultz and Hatch’s concept of corporate vision, which is deeply entrenched in organizational culture.
There is no denying the importance of the fact, that deep cooperation in the technological sphere between British Airways, Cisco, and Prime was positive in terms of enhancing British Airways’ corporate vision and recognitions, which in its turn stimulated the brand’s popularity among customers and counterparts. In this view, one of the most important preconditions for successful branding strategy, that is the interconnection between the performance of the company and the promise of the brand, was maintained.
The cohesion between corporate vision and corporate culture, which are so important for Hatch and Schultz, is also maintained by innovations designed in British Airways for the training of crew members (Little, 2006) This new equipment ‘teaches cabin crew how to use a new in-flight sales system’. This innovative technology won Brandon Hall Research annual awards and managed to gain high popularity among other companies and counterparts, which stimulated the development of the same process. There is no denying the importance of the fact, that introduction of this learning technology allowed significant improvement of employees’ vision of the company and their position in the company. (Wilkinson and Grugulis, 2001).
According to Schultz and Hatch schema, this in its turn is likely to results in stimulating corporate culture and vision development, which is the primary prerequisite for developing effective corporate branding. Besides this, it was important to enhance relations with employees in view of the human resource crisis which menaced British Airways due to massive layoffs following the economic downturn (Pitcher, 2007).
Recommendations
The strategic vision is interpreted in relation to images held by external stakeholders who will use the information on the company that goes beyond what the corporation provides. Due to this external influence, the branding process involves elements that lie outside the direct influence of the management.
In order for organizations to succeed in establishing a strong corporate brand, the integration of visual image and culture are essential in order to compete in conditions of unsustainable product differentiation created by globalization.
Conclusions
The conservativeness of the British brought resistance to the global vision of the airline considering it to be their icon, not to be shared worldwide. The culture of BA contradicted its image leading to a wrong path to corporate branding. The handling of the corporation’s culture, vision as well as the intended image could not be managed at the same time.
References
Allan, A, 1998 Innovation Management. Oxford University Press Inc. the USA.
David, A, A, 2004, Brand Portfolio Strategy. Free Press.
Dennis, G., 1976 Innovations Oxford University Press Inc. USA.
James, R., G., Jack, W., 1999 Marketing Corporate Image New York, McGraw-Hill.
Joe, T, John, B, Keith, P, 2005 Managing Innovation John Wiley & Sons.
Little, B. British Airways flies high with online learning system. Human Resource Management International Digest. Vol. 14. No 4, 2006.
Mark, D, David, G Ammon, S, 2008 Management of Technological Innovation Oxford University Press.
Pitcher, G. Who can pilot BA’s HR into clear skies? Personnel Today, 2007; ABI/INFORM Global, pg. 9
Schultz, M. Hatch, M. J. Bringing the corporation into corporate branding. European Journal of Marketing, Vol.37No.7/8,2003.
Wilkinson, A., Grugulis, I., 2001, British Airways: Culture and Structure, Business School, Research Series Paper, 4 , REAM Paper No. 10.
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