A2:1 - Making Business Decisions GCE

BUSINESS STRATEGY AND PLANNING

Case Study:

Belfast International recently published a 25-year business plan in response to a request from the UK government. The plan summarised the views of Airport management in relation to how they would address the issue of providing sustainable airport capacity for the period up to 2030. The plan considered the key assets at the Airport’s disposal, its key strengths and the challenges faced in the coming years, including its role in sustaining regional economic development.

The Airport has reported increased growth in passenger numbers using the facilities, rising from 1.5m in 1984 to 4.8m in 2005, and this is forecasted to grow to approximately 7m by the year 2015. This is currently accounts for approximately 67% of passenger numbers using N.I. . In addition to long-established airlines operating from the Airport, the Airport has reported an increase in new business, such that additional airlines are flying to/ from the Airport, including Aer Lingus plc, easyJet plc and Continental Airlines (USA). It is estimated that 2m people live within a 2-hour drive of the Airport, and that 80% of Northern ’s industrial base is located within one hour of the Airport. Challenges facing the Airport are numerous, including its out-of-town location, the fact that there is only one access road to/from the Airport (A57), a poor transport infrastructure (no rail-link operates directly into the terminal), the loss of passengers to other regional airports (estimated at over 1m per year), and emergence of Airport, City of Belfast Airport and City of Airport as credible alternatives to passengers and airlines operating therein. Belfast International Airport has recently received unfavourable press in that its’ car parking charges are amongst the highest in the UK for a public car park. In addition, the Airport has lost a number of key airline customers who have opted to operate their services from other regional airports.

Activities:

• Explain what is meant by a ‘business plan’, and why it is necessary for a business such as Belfast International Airport to prepare one. • Summarise the main contents which are commonly found within a business plan, such as that prepared by Belfast International Airport. • Prepare a SWOT Analysis and a PESTEL Analysis for Belfast International Airport. • Using relevant information, prepare an Ansoff matrix and a Boston Matrix as an aid to decision-making, using Belfast International Airport as an example. • Evaluate two strategies that Belfast International Airport might use in order to meet the challenges presented in the 25-year plan. • Evaluate the use of a business plan, as prepared by Belfast International Airport.

Key Terms:

Business Plan; Business Strategy; Objectives; SWOT analysis; PESTEL analysis; decision making; Ansoff matrix; Boston Matrix; Market Penetration; Product Development; Market Development; Diversification; Stars; Cash Cows; Problem Children; Question Marks; Dogs; Market Growth; Market Share.