First step that one would recommend for British Airways (BA) would be to invest in market investigation. Introducing Human Resource policy and adapting internal market culture is crucial for the

Recommendations.

First step that one would recommend for British Airways (BA) would be to invest in market investigation. Introducing Human Resource policy and adapting internal market culture is crucial for the company’s development. By doing surveys, asking current and potential clients about their desires will allow BA to adjust their marketing strategies in order to achieve higher demand and hence profits.

By improving both external and internal communications BA will be able to focus on the target market (i.e. prospective travellers) and therefore will become more competitive against Virgin and EasyJet, which are currently gaining market value when BA is loosing it. Managers should convince shareholders to invest in future which is the core of any airline development.

As BA is loosing market share because of several competitors its reputation suffers: shareholders are not happy and demand for shares has a potential of going down. Therefore, BA can increase dividend payments in order improve the financial image of the company.

Another way to increase company’s revenue is to increase credit sales, which may improve the receivables turnover ratio (An accounting measure used to quantify a firm's effectiveness in extending credit as well as collecting debts. The receivables turnover ratio is an activity ratio, measuring how efficiently a firm uses its assets). Hence, high ratio represents an efficient collection of accounts receivables.

Also, one can recommend BA to operate at a lower inventory levels. The company has a surplus of inventory; therefore this surplus represents a bad investment with a very low or even zero rate of return. Hence, by choosing inventory’s both quality and quantity carefully BA can lower their cost and attract more customers competing with small companies with small prices.

Therefore, recommendations can change financial and people (staff) situation of the company. With better liquidity in finance BA can get some funding from several financial institutions and as a result and get the rest of money from retained profits. Also, BA has to develop carefully on the market adjusting their strategies during the process, as their current situation is unstable.

Organization of the company has to be improved: as British Airways is a big company they may have some managerial diseconomies of scale. This may result in some time and hence money losses. Therefore, there should be constant training and support of all company’s workers.

Investopedia. 2012. Receivables Turnover Ratio. [ONLINE] Available at: http://www.investopedia.com/terms/r/receivableturnoverratio.asp#axzz2CJShAgjQ. [Accessed 14 November 12]

Дата добавления: 2015-11-04