A Study On British Airways And Iberia Management Essay

A Study On British Airways And Iberia Management Essay The learning point behind this assignment is to assess the financial consequences of the merger of British Airways and Iberia. In this activity I have studied the importance of Merger activities and how does the merger of BA Iberia will benefit the stakeholders. In short words I have execute a strategic analysis of the merger plan between the two organisations with the help of various strategic tools and models. 2. Introduction: 2.1 Merger and Acquisition In the contemporary world Merger and Acquisition is an inevitable tool for the organisations willing to expand and make a mark in the highly globalised market. In the first half of 2007, there appeared no end in vision to the unprecedented global boom in Merger and Acquisition, it even outstripped the dot.com era of the late 90s. But things appeared rather difficult with the so-called sub-prime credit crunch making credit availability scarce and expensive towards the end of 2007. There is no suspicion to the fact that at the multi-billion dollar deal end of the market, credit crunch did build a brick wall to the Merger Acquisition activity for the financial buyers. There are still plenty of strategic investors looking to expand in spite of the doom and gloom of the credit market. Merger and acquisition will still be required to fill up the growth gaps that organic growth cannot fill. [The European Consulting MA Report 2008, Equiteq p12] 2.2 History of British Airways British Airways was formed in 1974 by the merger of two British government owned airlines the BOAC (British Overseas Airways Corp.) and the BEA (British European Airways). BOAC operated long hauled international routes whereas; BEA operated Short hauled European routes. BA was floated on the London Stock Exchange (LSE) in 1987, when it acquired the competitor British Caledonian. In 1992 BA acquired Dan-Air. In the drive to make itself more competitive BA introduced the oneworld alliance in the 1990s. BA airways acquired 9% share in Iberia in March 2000 for  £155m (Ptas 41 billion). Today, BA is the UKs largest international airline flying to 148 destinations and fleet of 245 aircrafts in service. [www.ba.com/history] 2.3 History of Iberia Iberia was founded on June 28, 1927 by Horacio Echeberrieta. It was not only Spains first airline, but also the first to fly between Europe and South America (as of 1946), the first to establish a walk-on air shuttle service (between Madrid and Barcelona), and the first in Europe to offer an international frequent flyers customer loyalty programme (Iberia Plus).Today Iberia is an international transport group operating in around 100 airports. It is a member of one of the most important airline alliances, oneworld, and is renowned for its corporate social responsibility. Iberia is a Leader in Spain and in the Europe Latin America market. It flies to more than 100  destinations  all over the world. It has Europes most modern fleets. [www.iberia.com/uk] 2.4 Research objectives As the title of my Research and Analysis project suggests the main objective of research was to study the drivers and the financial and operational consequences of a merger between the renowned BA and Iberia. Research Questions and Objectives: Strategic analysis of the Merger decision The first objective of this assignment was to analyse the strategic decision of merger. How did the Environmental Variables affect the decision of the merger and what are the strengths and weaknesses of the decision? What would be the effect of the culture of both the organisations on the decision? How would the resultant organisation benefit from the merger? How will the decision fulfil the expectations and aspirations of the stakeholders? Identify the stakeholders and analyse how will the merger affect them? What are the views of the stakeholders on the merger decision? How will the fears and resistance of the employees and other stakeholders resolved? What were the Financial and Operational Consequences of the merger? After the above questions were answered, I wanted to find out what will be the financial and operational consequences of the merger, to what extent will these organizations be successful to maintain and acquire their merger objectives. What will be the ultimate effect of the whole event on the resultant organisations constitution, its management and the financial report? 2.5 Research Approach/Methodology: The Research was started with the collection of background information on Merger and Acquisition and the basic information on BA and Iberia. The main objective of this was to gain the understanding of the topic area and the acquaintance with the organizations in concern. After the general background information the preliminary research was conducted to outline the research methods to be used, and the sources for information to be collected. The research is mainly based on the qualitative and quantitative information collected from the secondary data sources like books, case study materials, annual reports, magazines, news paper articles and online search engines. The information gathered is analyzed using The Johnson, Scholes and Whittington (JSW) model of strategic management. It consists of three elements Analysis, Choice and Implementation as explained below: The Strategic position/analysis Strategic Choices Strategy into action (implementation). [ACCA Paper P3 Business Analysis The Complete Text 2007/08 p10] 3. Literature Review 3.1 Merger and its types A merger is a complete absorption of one company by another, wherein the acquiring firm retains its identity and the acquired firm ceases to exist as a separate entity. [Corporate Finance Fundamentals by Ross, Westerfield Jordan, Eighth Edition Chapter 25 p816] Acquisition by merger results in a combination of assets and liabilities of the acquired and acquiring firms. 3.1.1 Advantages and Disadvantages of using a merger to acquire a firm: Advantages A primary advantage is that a merger is legally simple and does not cost as much as other forms of acquisition. The reason is that the firms simply agree to combine their entire operations. Revenue Enhancement is one of the important reasons for an acquisition. The combined firm may generate greater revenues than two separate firms. Increased revenue come from marketing gains, strategic benefits and increase in the market share and reduced competition. The driving force behind many mergers is the concept of synergy. The synergy of two like companies joining forces can often increase revenues drastically. One of the other important reasons to merge is that a combined firm may operate more efficiently than two separate firms. Operational efficiency increases through economies of scale and complementary resources (missing ingredient of success). All firms must invest in working capital and fixed assets to sustain an efficient level of operating activity. A merger may reduce the combined investment needed by the two firms. Disadvantages A primary disadvantage is that a merger must be approved by a vote of the shareholders of each firm. Obtaining necessary votes can be time-consuming and difficult. Furthermore the cooperation of target firms existing management is almost a necessity for a merger. This cooperation may not be easily or cheaply obtained. 3.1.2 Types of merger Mergers may be broadly classified in Congeneric Merger Congeneric merger occur where two merging firms are in the same general industry, but they have no mutual buyer/customer or supplier relationship. Congeneric mergers are of two types (a) Horizontal merger: In this case both the companies are in the same stage of production and also in the same industry e.g., a car manufacturer merger with a car manufacturer (b) Vertical merger: Two companies selling different but related products in the same market e.g., a cone supplier merging with an ice cream maker. Conglomerate. A conglomerate is a combination of two companies engaged in entirely different businesses together into one overarching company. There are two types of mergers that are distinguished by how the merger is financed. Purchase mergers As the name suggests, this kind of merger occurs when one company purchases another. The purchase is made with cash or through the issue of some kind of debt instrument. Consolidation mergers With this merger, a brand new company is formed and both companies are bought and combined under the new entity. 4. Analysis 4.1 Strategic Analysis of the merger decision The study of the Environmental Variables using the PESTEL and SWOT analysis was conducted at this stage of the research to evaluate the points for the merger of the BA and Iberia. The Analysis of these factors affecting the decision is detailed as follows: 4.1.1 PESTEL Analysis Political Factors: One of the preconditions for the merger deal is getting appropriate confirmations from the UK and Spanish Civil Aviation Authorities as to the suitability of the UK and Spanish bodies and as to the implementation of the structure. Economic Factors: Merger is expected to generate annual synergies of approximately à ¢Ã¢â‚¬Å¡Ã‚ ¬400 million. The new group will combine the leading positions of both the companies, attain EOS and substantially increase the market share, thus enhancing their presence in international longhaul markets. Social Factors: Merger is expected to bring significant customer benefit. BA customers will gain access to 59 and Iberia customers will gain access to 98 new destinations with better frequencies, connections and reduced prices. Technological Factors: BA customers will benefit from modern fleet of aircrafts of Iberia airlines. Legal Factors: Merger cannot go ahead without appropriate antitrust and other regulations clearance. Iberia reserves the right to terminate the agreement if the outcome between BAand its pension trustees on the deficit is not satisfactory. 4.1.2 SWOT Analysis Strengths The new group will save some à ¢Ã¢â‚¬Å¡Ã‚ ¬400m annually by cutting overlapping routes, and by combining maintenance, office functions and business-class lounges. The pair may also have more muscle when it comes to negotiations to buy new planes from Boeing and Airbus.   The BA/Iberia merger will increase BAs dominance at Heathrow with 44% of take-off and landing slots this winter. It is impossible for any other airline to replicate their scale. There is a compelling strategic rationale for the transaction, which is expected to generate annual synergies of approximately 400 million Euros, and benefit both companies shareholders, customers and employees, Weaknesses Iberias cabin crew have just finished one round of strikes and are promising more in a dispute over changes to their jobs. BAs attempts to cut cabin crew and freeze pay could also result in strikes. Ground staff and pilots are equally willing to use industrial action to get their way. The attempt to keep two separate brands alive, with separate corporate operations could eat into some of the advantages of the merger and even prove to be a potential diseconomy of scale. Opportunities This enhanced scale and ability to compete with other major airlines and will enable BA-Iberia to participate in future industry consolidation opening the door for BAs long-held ambition to forge a partnership with American Airlines. The merger will create a strong European airline well able to compete in the 21st century. Threats The credit crunch has hammered ticket sales (especially of premium priced Business class tickets) and fuel has been expensive.  The International Air Transport Association, an industry body, estimates that total losses for the worlds airlines this year will be some $11 billion. 4.2 Expectations and Aspirations of the Stakeholders of the organisations A stakeholder can be defined as someone who has an interest in the well-being of the organisation ACCA course notes from Kaplan financial for Paper P3 Business Analysis In this context, the stakeholders can be identified as the shareholders, managers, employees and suppliers of BA and Iberia and the customers, government, locality and society at large. Success in the strategic decisions can not be achieved without regard to the stakeholders. Shareholders: Shareholders are the owners of the organisations; it is the duty of the organisations to act in the best interest of its shareholders and to maximise their wealth. The benefits of the merger to the SHs can be listed as follows: The anticipated annual revenue of the combined group estimated to be 15 billion euros. Expected cost saving of about 400 million euros a year. The combined group will be the third largest airline. Increased market share and dominance. Suppliers: The merger is set to create the third largest airline and hence bound to reduce the bargaining power of the suppliers. Managers employees: Employees play a vital role in the success of the organisation. Thus the organisation has a duty towards its workforce. According to the recent updates merger is unlikely to bring any benefits to its staff, on the contrary both the organisations have ambitious plans to cut costs by way of redundancy and pay cuts. The unite union has asked for assurances to avoid compulsory redundancies. Customers: According to the sources, the customers of the combined grouped are said to benefit from; Better frequencies More connections Competitive prices Access to more VIP lounges Enhance frequent flyer benefits Government: The government are interested in taxes from the revenue, higher the revenue more the tax. Furthermore it is interested in maintaining healthy competition and abiding of the antitrust law. The deal is expected to improve the future revenue and requires clearance from antitrust and other regulatory organisations, thus it is not threat to the governments interests. Locality and society at large: Locality and society expect the combined group to maintain and improve its CSR policies. The organisations are responsible to the surroundings and the environment in which they operate. 4.3 Financial Consequences The graph reflects the loss making position on BA. There has been an increase in revenue for the year 2009 as compared to 2008. The loss thus can be attributed to the high operating expenses which increased to  £9,212 million in 2009 from  £7,880 million in 2008. However the Operating income increased just to  £8,992 million in 2009 from  £8,758 million in 2008. Key Performance Indicators/Key Growth Indicators The KPIs and KGIs can be used to compare the performance of the organisations. Kpis indicate the improvement in performance, while Kgis indicate the growth of the organisation. The KPI in this scenario can be noted as: Liquidity Ratio The liquidity ratio shows the companys ability to pay its debt. Hence higher the ratio better the performance of the organisation. Earnings per Share (EPS) The performance can be measured based on the return to the shareholders. The increase in EPS reflects the efficiency in performance Number of passengers per year The figures show that the number of passenger carried per year will substantially increase after the merger and thus making TopCo a leading airline in terms of passenger. This is reflected in the figures shown below. Figure 1.1 Figure 1.2 5. Conclusion Objective 1 The strategic analysis showed that the merger is bound to bring various benefits to the consolidated group. The merger will help the companies to reduce the costs and hence reduce the loss to a certain extent. The merger will increase the market share of TopCo and make it the third largest airline company given benefits to its customers and shareholders. There are certain weaknesses which can be overcome and the merger opens up various opportunities and synergies for the future growth. Objective 2 The analysis shows that the shareholders and customers are bound to benefit from the merger decision. However, there is a considerable amount of risk of redundancies and pay cuts due to heavy cost cuts by both the organisations. Objective 3 The financial analysis reflects the need to substantially reduce the operating costs. The merger plan is set to set to save 400 million euro a year from reduced costs. Hence the merger decision can be beneficial in driving the organisations through the economic crisis.

Psychology Debate Essay

Psychology is a human science and should thereby leave the study of biology to the biologists. Psychology, as defined by the APA is, ‘the study of the mind and behaviour’(APA, 2013), this definition states that psychology is indeed separate to that of biology as biology by definition is ‘the branch of science concerned with the structure, function, growth, evolution, and distribution of living and non-living organisms’ (biology online, 2013), this implies that the two are indeed two different disciplines which do not require interaction, as they are simply focusing on different things. A good example of the two disciplines being separate, is psychoanalysis. Psychoanalysis, a method of therapy developed by Freud and still used widely today, focuses on the subconscious and says that mental illness is caused by underlying traumas, repressed memories and unconscious desires. If these are brought to the surface, by the patient verbalising under hypnosis of these repressed, unconscious and underlying issues, it is thought that by uncovering them they will find answers. Psychoanalysis has no foundations in biology and even as it has been expanded upon by people such as Adler and Jung, still does not believe that biology is relevant to psychology (Kandel, 1999). The simple fact that they are, still to this day, separate disciplines again reinforces that they are separate spheres of study and should remain that way. AGAINST: Psychologists need an understanding of biology in order to treat patients, and understand concepts fully.  Psychology could not be practiced if it was not for the fundamental biology that sets human beings apart from any other species. An understanding of the brain, body and how they function and there interactions and co-existence with psychological concepts such as mood, personality, emotions are integral and in fact, psychology needs a biological foundation and understanding to even begin to interpret psychological concepts (Weiten, 1992). When taking a closer look at the definitions mentioned previously, they both study life. Since biology is the study of life psychology fits into this definition as psychologists too study life. In saying that, the study of life should not be left up to the biologists as they are typically concerned with the structure, function, growth, evolution and distribution of living and non-living organisms, whereas psychologists look deeper into the study of life, not just seeing it as a science but seeing it as an avenue to help and better people’s lives through understanding the fundamental biological workings of the brain. But without an understanding of the human brain and body and how it functions psychologists would not be able to put these two disciplines together to achieve their outcomes. It is crucial for a psychologist to understand the work of biology in order to be an effective psychologist. Without a biological basis, there would be no way that psychology would even be a pro-active discipline. Diagnosing a patient today, requires the psychologist to be able to understand the biological forces which influence behaviour (Weiten, 1992).

Top Florida Bar Essay Topics Tips!

Top Florida Bar Essay Topics Tips! Getting the Best Florida Bar Essay Topics Every word counts and your final mark might vary very hard is dependent on your abilities and excellent quotation you use. As a high school student, there are many things which you need to do to prepare for law school. The room in the place where they give out badges is not so big for how many folks take the exam. If you take a look at the life span of the majority of successful people within the world, many honed their skills in a standard basis, which eventually lead to their present status as successful individuals. New Questions About Florida Bar Essay Topics Don't neglect to bring a strong hook at the beginning (introduction paragraph) and wind up with an impressive conclusion to earn the reader want to go over the interesting persuasive essay topics of your pick. Although the writer is just describing the subject, there ought to still be logic to follow. It is possible to always give more det ails as soon as your listener asks for more. Well, the reply is quite simple, it hardly really matters! If you take advantage of a question, utilize the problem-then-solution format. The questions are made to be difficult. Also, they are not labeled or divided by subject. The multiple choice questions happen in the afternoon. Consider an instance of how you can better your speaking via an illustration of a single change in the manner in which you believe. Sooner or later, it's about you. Irrespective of how much you'll be taking that day, there are a few ways that can help you get through the essay with a minimal quantity of stress. The best speakers know that one of the simplest methods to relax is to learn to breathe properly. The internet questions can be obtained by means of a web browser anywhere an online connection is available. Listen to the class audio lectures anywhere you may carry an iPod. An Apple iPod Nano with all class audio lectures may be used separately for a discount. In school, essay writing has been made to be part of our learning activity. Naturally, not all torts essays include negligence, but you understand! You must have skills to compose a very good essay. A student ought to keep in contact with the hottest trends and know which persuasive essay topics are related to sound convincing in regards to defending personal opinions. Essay plans can be useful in reminding you of important points that may be used to cover in your essay. Questions on Part A are intended to check your understanding of both standard law and Florida law. Test essay questions will be contingent on the topic, needless to say. Facts, Fiction and Florida Bar Essay Topics Typically an essay is going to have an overall principal subject. Persuasive essay is also referred to as the argument essay. Argumentative essay is about arguing and debating on a subject, which is debatable. Perhaps, writing argumentative essays isn't that a simple endeavor. There are lots of aspects about a sport which can be argued in an essay. There are several ways of writing an essay but the fundamental structure stays the same. Incorporating humor in your essay may be enormous benefit. It's especially frustrating if you don't have any idea how to compose an effective persuasive essay. To the contrary, you might not have been extended a particular topic in the slightest. Any truth is much better than make-believe. It's possible to range too far into the domain of the bizarre. How to Get Started with Florida Bar Essay Topics? The essays occur in the morning. In this way, the reader may also feel the best way to be in that specific birthday party. Our nationally renowned bar review course has a number of features we'd love to have a moment to brag about. Sex education provided in school is perceived to be more powerful than when it's supplied by parents. The Fundamentals of Florida Bar Essay Topics Revealed The world wide web is also lik ely to be somewhat useful in providing contact information for organizations and conferences which are hiring motivational speakers. The requirements of writers online have changed since the calendar year 2000, once I published my very first matter. Within 30 days, you'll have implemented a strong advertising strategy. If you're sure you would like to practice law but you've not completed your high school education, most of people may tell you its too early. Lies You've Been Told About Florida Bar Essay Topics Child abuse might also be a cause sometimes. It's possible for you to fill in details and modify the sentence structure after you're clear of what you want to say. You should choose a topic that may be done in a two-year time period framework. Your planning should also consist of finding which words you might need to define and discover out what you could research to create your case stronger.

The Feminist Perspective Of Criminology Essay - 2349 Words

Feminist perspective in criminology is dedicated to examining crime in a way that acknowledges how women experience crime both as offenders and victims. Because rape is a crime that primarily victimises women, it is important to draw on the feminist perspective when analysing it. In New Zealand legislation, rape is defined by Section 128(2) of the Crimes Act 1961 as: â€Å"Person A rapes person B if person A has sexual connection with person B, effected by the penetration of person B’s genitalia by person A’s penis,— (a) without person B’s consent to the connection; and (b) without believing on reasonable grounds that person B consents to the connection.† but by limiting the legal definition of rape to â€Å"intercourse without consent†, the violent nature of sexual assault is being ignored in favour of seeing it simply as illegal sex. By defining rape this way we are not acknowledging the fact that rape is used as a tool to dominate and control the victim and that prevents us from addressing the issue of rape in an appropriate way (Cook Jones, 2007). In New Zealand we have a rape culture that comprises much more than just the physical act of rape. In order to address rape culture we must look beyond rape as a crime and examine our attitudes towards rape, towards victims of rape and towards women in general. Buchwald, Fletcher and Roth (2005) define rape culture as â€Å"a complex set of beliefs that encourages male sexual aggression and supports violence against women† (p. vii). It isShow MoreRelatedFeminism And Criminology871 Words   |  4 Pagesuncover the impact of feminist approaches within criminology. It will demonstrate how these theoretical perspectives have changed our opinion on women as victims, as well as criminals themselves. 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