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IAG business model

Large organisations such as International Air Group (IAG) have the responsibility to strategically plan for the whole group – IAG are a group that include; British Airways, Iberia, Iberia express, Vueling, Aer Lingus, Cargo and Avios. As part of their strategic planning they have a business model that demonstrates how operationally they will seek cost efficiencies and revenue synergies.

 

The IAG business model functions on a few key concepts; “seeking revenue synergies, cost synergies, maintaining flexible capital deployment and having a parent company structure that retains flexibility” (IAG, AR, 2014).  IAG believe that by focusing their operations around these factors they will be able to retain core assets, brands and products in each operating airline, which will secure customer loyalty.

Management accounting is more than just numbers, the day of the old bean counter left many decades ago.  Although keeping a close eye of the costs and profits is essential to all businesses you have to put the numbers into context and the context is the strategy of the organisation.  The business model helps to demonstrate the relationship between the numbers and the strategy.