Innovation-based Capabilities For Improving Revenues And Profitability: A Case Study Of British Airways Essay.

The report is based on the analysis of the ways by which innovation based capabilities cam be used for the purpose of increasing the levels of revenues and profitability.

The organization which has been considered for analysis is British Airways which is the flag bearer company of the United Kingdom.

The innovative service which has been suggested for implementation in the organization is the use of Biometrics. The innovation based capability will be able to increase the operating speed.

The most important part of the innovation capability is based on the financial strength of the company in the airlines based industry.

Innovation in Organizations

Innovation is considered to be a complex process which overlaps with various other concepts including, creativity, technology and change. The research based on innovation is mainly related to different fields which include, engineering, public administration, economics and business. The innovation based study in organizations is thereby considered to be multilevel, multidimensional and dependent on the context as well. The internal and the external conditions of the organizations are thereby based on the innovation related capabilities. Innovation is able to play a major role in the ways by which organizations operate in the changing environment (Ali Taha, Sirkova and Ferencova 2016).

The report will be based on the innovation based plans which have been made by British Airways in order to increase its innovation based capabilities. The ways by which the company will be able to develop the innovative techniques will be analysed in the report. The structure of the report is based on the future of the airlines industry after the year 2020. The requirements related to innovation of the industry and the organization will also be examined in the report. British Airways has acquired the position of flag bearer and the biggest airlines based organization in the United Kingdom with respect to fleet size (Amabile and Pratt 2016). The organization has also gained the second biggest position after the company named EasyJet based on the number of passengers.

The future operations of airlines industry have been analysed with the help of the study which has been commissioned by the Industry Affairs Committee. The institution is able to help the management of airlines organizations so that they are able to anticipate the opportunities and risks which the business can face between the current year and the year 2035. The external forces in the environment can affect the organizational operations mainly include the technological innovations and different environmental concerns as well. The study is important for the purpose of shaping the future operations of the organizations which are a part of the airlines industry (Airlines.iata.org 2018).

According to Anderson, Poto?nik and Zhou (2014), the study based on the airlines industry is able to prove that the operations of different organizations will be affected by different factors which include, data, geopolitics, Asia-Pacific and Africa, government, borders, security, trust and privacy based factors. The different factors that affect the industry are thereby explored with the help of four scenarios including, sustainable future, new frontiers, platforms and resource wars. The factors are thereby examined based on different perspectives which include, the shift of power, the prosperity of the world based on the sustainability, war based on resources and the domination on the world based on different agendas.

As discussed by Baporikar (2015), all different situations are able to provide effective levels of challenges to the airlines based industry. The airlines industry is thereby influenced by the different changes which take place in the geopolitical situation of the country. The study which has been made by the institution is able to depict that different operations in the airlines industry will face huge number of changes in the next few years, especially after 2020. The operations in airports are expected to be automated in the future with the aim to increase the levels of efficiency. The cost related to human resources in the organizations will be reduced due to decrease of employees in different areas.

The Future of the Airline Industry

As argued by Boukis (2016), the levels of privacy of customer data needs to be maintained by the organizations so that they are able to gain more number of consumers. The mismanagement of data can thereby cause huge issues for the proper operations of different airlines organizations. The companies need to adhere to different policies and management related practices in order to ensure that the trust of customers is maintained effectively. The value which is provided to customers and their retention is an important factor which will be able to affect the future of operations of airlines organizations.

The companies thereby need to follow the customer first based policy in order to maintain their position in the industry as compared to the others. The personalized and value driven offers which are provided to the customers are also able to play a key role in the future of airlines based organizations. The different technologies are expected to affect the operations of airlines based organizations in the future and the after the year 2020. The different modern technologies which are able to affect the companies in airlines industry include, drones, robotics and artificial intelligence, cyber security, big data (Cano-Kollmann, Hannigan and Mudambi 2018).

British Airways has been able to become first airline based organization in the world which had introduced different high technology based remote controlled devices. These devices were mainly used in order to implement the short haul based operations. The organization had started modernising the operations in order to maintain and also to improve the punctuality for the customers. The organization had implemented the technologies by partnering with Heathrow. The eco-friendly Mototuk tugs have allowed the staff of British Airways so that they are able to prepare an aircraft for the departure in an efficient manner (Mediacentre.britishairways.com 2018).

As discussed by Edmondson and Harvey (2018), the airline had become the first operator to use these high technology devices in different aircraft stands. The equipment is thereby used for the purpose of moving an Airbus short-haul based aircraft which is able to replace the different traditional diesel based tugs. The new technology which has been implemented by the organization has proved to be emission-free and the plane is moved in a precise manner. The technology implementation based steps which have been taken by the organization is based on modernising the operations. The organization had also launched different other technologies including self-serve bag drop based points and self-boarding gates on the domestic flights. British Airways has also decided to use iPad in its air travel based activities. The implementation of iPad has been able to reduce the time based on different types of operations in the organization.

The future operations of British Airways will also be based on the effective implementation of innovation. The expectations of the consumers based on short-haul flights will be able to affect the operations and future plans of British Airways. The organization can plan to ignore the passengers who are budget-conscious in nature and focus on providing the best quality services to the existing consumers. British Airways gains most parts of its revenues from the corporate customers (Funk 2014). The organization needs to concentrate on the ways by which it is able to provide effective services to the customers. British Airways is also planning to add seats to the aircrafts. The main aim behind adding seats to the aircraft is to lower the costs related to the seats offered to customers. The airlines organization has been criticised for lowering the costs based on services offered to the customers (Glor 2014).

Innovative Techniques for British Airways

According to Hameed and Counsell (2014), the addition of seat recliners is also a plan which has been developed by the organization. The changes are planned to be implemented in the airports of the United Kingdom. The future airports will also not require parking based facilities. The private messaging based activities are also planned in order to avoid the blow-ups in social media. The organization thereby plans to invest around 5.9 Billion Dollars on the proper improvement of passenger based experience. The main aim of the organization in this case is to improve its operations and increase the revenue levels. The installation of power points is an important part of the services offered to be passengers. The major aim behind technology implementation by British Airways is to provide premium services to the passengers (Hervás-Oliver and Peris-Ortiz 2014).

According to Jarle Gressgård et al. (2014), innovation based models can be implemented in an effective manner in order to increase the levels of revenue. The different trends which are able to contribute to the evolution of different innovation based models include, research, development and technology. The activities related to innovation are based on different models. The models have many advantages and disadvantages as well. Disruptive innovation is considered to be an important part of the development of a new service or product. An effective value based network is developed for the purpose of disrupting the existing market.

As discussed by Kuratko (2015), on the other hand, sustaining innovation is considered to be a major capability which already exists in the market. The organizations in this case does not create a new value network. Another major innovation process is based on the new technology which disrupts the market and existing business operations as well. The economy in which the business operates is also disrupted by the process of radical innovation. Incremental innovation on the other hand refers to the series of improvements which are made in the existing processes and products. This is helpful for the company to develop a competitive position in the industry. The innovation matrix is based on the ways by which different types of innovation processes are implemented by different organizations (Refer to Appendix 1).

British Airways can thereby implement many different innovative capabilities in order to increase the revenues levels and profitability. A major innovation which can be implemented in British Airways is based on the reduction of the effects of its operations on the environment. The organization can implement “Going totally green” based capabilities which is related to the usage of solar power in order to operate the flights. Another innovation based capability which can be used by British Airways is termed as “convertible seating” (Mendes et al. 2016). British Airways can also implement a major innovation capability which is based on “taking the first class facilities to a new level”. “iPads on board” is also considered to be a major innovation based facility which is able to affect the levels of operations and revenues of British Airways (Oly Ndubisi 2014).

“Entertainment and connectivity” is also considered to be a major capability which can help British Airways to improve its services and provide premium facilities to the consumers as well. “Biometrics can also play a key role in the ways by which the organization is able to develop its position in the industry in an effective manner. Biometrics will be helpful for the organization in order to provide the passengers with self-service checkout related facilities. The app-based QR codes will be able to play a key role in the ways by which organizations are able to reduce the amount of time which is required for checkout. Biofuels can also be used by British Airways in order to reduce the fuel based costs which are incurred by the organization (Palacios-Marqués, Merigó and Soto-Acosta 2015).

The technologies which are being proposed to British Airways are based on the innovation process related to disruptive and sustaining innovation as well. The process of disrupting innovation is applicable as some of the innovation based activities are based on the ways by which the organization needs to develop new facilities and value network in order to implement them. On the other hand, some of the innovation activities already exist in the industry and the organization just needs to implement them. The development of a new value network is thereby not necessary in order to implement the innovation based activities in an effective manner (Salomo and Gemünden 2015).

 As discussed by Schippers, West and Dawson (2015), the proper implementation of innovation in different operations plays a major role in the ways by which the organization is able to maintain the profitable operations in future as well. The implementation of innovation will thereby play a key role in the ways by which the organization is able to improve the competitive advantage in the airlines based industry. British Airways has been able to create its position in the industry as the flag bearer and the biggest airlines organization in the industry. The effective implementation of technologies will further provide effective opportunities to the organization in order to improve the customer base in the industry. The organization has been able to create its position as a premium service provider. This position can be maintained effectively with the help of proper innovation based levels.

British Airways needs to develop many activities in order to implement the innovation based capabilities in a successful manner. The most important part of implementation of innovation is related to the development of the human resources of the company. The human resources or the employees are thereby able to play the most significant role in the ways by which innovation capabilities can be improved effectively. The development of a new product or service thereby requires the proper engagement and collaboration of the employees (Sharmelly 2017). The recommendations which have been made earlier in the report based on innovation will be applicable for improving the revenues of the company in an effective manner. However, the development of a new product or service will be based on the implementation of any one of the above mentioned innovation capabilities.

The plan which has been made by the CEO of British Airways Alex Cruz based on implementation of disruptive technologies in the operations of the company is related to the digitization of the various organizational operations (Refer to Appendix 2). The development of a fleet is thereby considered to be an important factor which has been able to influence the operations of the company in a huge manner. The implementation of proper innovation facilities can play a major role in the development of revenues of the company in an effective manner. Innovation based implementation is thereby considered to be an important factor which will be helpful in increasing the speed of operations of the company. The reduction of operating costs is also considered to be a reason behind the implementation of innovation capabilities (Sung and Choi 2014).

Automation of activities is thereby considered to be the most effective way of reducing the costs based on production. The reduction of human resources in different organizational operations is also considered to be important for the proper reduction of costs related to production. The implementation of Biometrics in the operations of British Airways will be able to play a key role in reducing the time required for operations. The self-checkout facilities can be implemented easily with the help of biometrics (Tomi?, Strugar and Boljevi? 2016).

The organization has already planned for the implementation of the “iPads on board” based innovation facility which has been suggested in the report earlier. The next innovation facility which can be implemented by the organization is Biometrics for smooth checkout. The time which is required for checkout is also reduced effectively with the help of biometrics based facility. The process of fingerprint recognition is considered to be a major process with the help of which the requirement of human resources and employees can be reduced in the operations of British Airways (Sung and Choi 2014).

The financial capability of the organization is considered to be an essential factor which is considered to be helpful for the ways by which innovation capabilities can be implemented. The financial strength of the organization is thereby considered to be highly important for enabling automation based activities within the organizational processes and further reducing the levels of requirement of human resources. The organization can implement the effective innovation based capabilities with the help of proper financial capabilities and strengths. British Airways will be able to increase its revenues and growth with the help of implementation of high levels of innovation (Salomo and Gemünden 2015). The organization can think of taking the innovative steps as it is capable of implementing the activiti4es easily and in an effective manner as well. British Airways can thereby maintain its flag bearer position in the industry with the help of implementation of the new innovative services within the different operations. The customers can also be served in an effective manner with the help of innovation (Palacios-Marqués, Merigó and Soto-Acosta 2015).

Conclusion

The report can be concluded by stating that British Airways has the capability of increasing its capabilities in an effective manner with the help of its innovation based activities. The ways by which the organization can plan for the implementation of innovation have been based on the management of the organization. The leader of the organization has played a major role in the ways by which the innovation capability can help in increasing the speed of operations. The requirement of human resources has also been reduced effectively with the help of automation based activities. The report has also been able to state that the training provided to the employees is also able to play a key part in the organizational operations.

The innovation capability of the organization is thereby considered to be an important part of the increase in revenues of British Airways. The analysis has also been able to state that the financial capability of the company is able to support the ways by which British Airways is able to operate in the industry. The new service which has been suggested in the report is the implementation of Biometrics for the purpose of self-check in. The speed of check-in can be increased in an effective manner with the help of biometrics. The implementation of this innovation capability will prove to be helpful in the profitable operations of the company in the competitive airlines industry. The organization will be able to gain competitive advantage in the industry with the help of proper implementation of innovation capabilities. The capabilities of the company will thereby be able to play a key role in the ways by which British Airways can maintain its share in the market. This will play a major role in the effective operations of British Airways in the airlines based industry.

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