Strategic Management and Business Environment

This assignment focuses on understanding the crucial role of strategic management in navigating a complex business environment. It examines theoretical frameworks like resource-based view, PESTLE analysis, and business models. Students will analyze how factors like government policies, economic systems, and global influences shape business strategy. The assignment also emphasizes the importance of corporate foresight and aligning business goals with technological advancements.

BUSINESS
ENVIRONMENT

Table of Contents
INTRODUCTION...........................................................................................................................3
TASK 1............................................................................................................................................4
1.1 Different types of organisation and their purpose.................................................................4
1.2 Objectives of different stakeholders of British Airways.......................................................5
1.3 Actions of BA to fulfil responsibilities of their stakeholders...............................................5
2.1 Different types of economic system......................................................................................6
2.2 Challenges of fiscal and monetary policies on BA...............................................................6
2.3 Impacts of competition policy, regulatory and legal changes in airline industry.................7
TASK 2............................................................................................................................................8
3.1 Market structure impacts on pricing and demands...............................................................8
3.2 Market forces shapes organisation's response.......................................................................8
3.3 Working practices and culture of countries..........................................................................9
4.1 Impact of global changes in trade.........................................................................................9
4.2 Other global factors which may impact on the BA.............................................................10
4.3 EU policies can impact on the BA......................................................................................10
CONLUSION................................................................................................................................11
REFERENCES..............................................................................................................................12

INTRODUCTION
Surrounding of a business entity which impacts on business and activities can be stated as
a business environment(Kelliher and Reinl, 2009). Combine factors of internal and external
environment is making huge impacts on firms. Organisations have to be aware about these
environmental factors and they have to adopt their impacts in their strategies and policies. Micro
environmental can be controlled by business organisation, it includes suppliers, employees,
investors etc. which is completing internal environment. Political, social, technological,
economical, legal and environmental factors makes external environment. External factors can
be distinct in different demographical zones. This assignment is having focus on the British
Airways which is a biggest airline in the United Kingdom. They are having huge impacts of
external factors like; changes in petrol prices and international economical changes so they have
to be prepared for these changes. This report includes different types of organisation like;
charity, which is having distinct purpose to work. Fiscal and monetary policies are having huge
impacts on the organisation. Report is having brief details of BA in different situation and their
strategies to work in these conditions.
TASK 1
1.1 Different types of organisation and their purpose
Each organisation haves their purposes and objectives which determines their strategies
and policies to attain them(Kelliher and Bernadette Henderson, 2006). Here is some examples
available to describe different types of organisation and their purpose;
Private limited company; Companies which are having LTD. In their last can be recognized as a
private limited company. Business entities are having liability which is limited to their shares.
Mostly these types of organisations are having a single purpose to make profits as per their
objectives and share it in their shareholders. PRIMARK is a perfect example for this which is a
UK based retailer company.
Charity organisation; Organisation which is focus to deliver their services for social benefits,
these are established in non government supports(Kang and Han, 2008). Their purpose is provide
to services to society in a particular subject. Non profit organisation like; Save children is a NGO
which is working for children welfare in developing countries.

Public sector company; Organisation which are listed on the London stock exchange to provide
their profit details in public domain. These companies are owned by the government and having
purpose to provide services to peoples(Johnson, Lenartowicz and Apud, 2006). NHS is a perfect
example for public sector company, it is a regulatory body on health and social care organisation.
It is working to maintain a standard in health care organisation to provide their services.
1.2 Objectives of different stakeholders of British Airways
British Airways is a well known brand in airline industry and as well as in the world.
They are having focus to deliver superior services by their work. They have set out their
objectives which divided in two parts short terms and long term. The organisation want to set out
a standards in airline industry and they are having focus top be worlds leading global premier
airline company. They has divided in to shorter goals like; deliver outstanding services to their
clients, be the customer's choice airline, presence in global cities, meet the needs of customers.
These objectives can be attain by the company if they accomplish their stake holder's objectives.
As they are delivering their services in international market, they are having huge dependency on
their stakeholders(Johanson and Vahlne, 2009). Some stakeholder are given below with their
objectives and challenges which impacts on them;
Customers; Travellers are having huge expectation form British Airways against to their fair.
Most of the customers wants their flights on time and proper services e.g. foods in their charters.
It is a responsibility of the airline company to provide all facilities and timely flights to
customers which have booked their tickets in British Airways, otherwise customers are having so
much options like; Easy jet.
Employees; Mainly staff members demands respectable salary for their efforts which helps them
to provide their services to their clients. If the British Airways fails in this, they can reduce their
efforts for the company and they can be go for a strike.
1.3 Actions of BA to fulfil responsibilities of their stakeholders
As the British Airways is having many types of stakeholder which supports them to make
their business activities. Company is liable to provide proper remuneration against to their
efforts. BA is having several types of employees like; ground staff and airlines staff, these are
having differentiation in their needs(Hawken, 2007). So it is the responsibility of the
organisation to make suitable actions for their efforts. For an example; customer's are having
multiple choices when they are booking their tickets. So why they choose British Airways not to

others, it is the biggest question for them. Most of the time customer's wants full facilities and
their flight on right time. So airways company has to provide services as per their tickets and
bookings(Gardner and Laskin, 2011). One of the biggest thing time, their flights has to be on the
right time which is mentioned in the flight ticket, if it is delayed for some reasons, BA has to
make covey this information to their customers. These types of actions makes a positive impacts
on the customer's and it helps to gain consumer attraction. Employees are having so much
expectation from their company, air hostesses are having tight having a tight schedule and
having different timings of work, so it is the responsibility of BA to provide a cab facility to
them to pick and drop to them from home and airport.
2.1 Different types of economic system
Economic systems helps to allocate resources as per the requirements according to plans
and strategies. Each country is having adopted a particular economical systems which helps them
to divide their resources like; information, labour, educational and services. As a nation is having
their own satellites which helps in several types of activities like; national security, weather
analysis, mobile connectivity, internet services etc. this economic systems helps to divide their
services as per the needs of different sectors. It depends on geographical and financial
conditions.
Planned economy; It is a perfect example of decentralized economy which powered on straight
allocation of inputs(Ferreira and et. al., 2009). CUBA has adopted this model using it perfectly,
most of the manufacturing industries are government owned and state government determines
needs of employees in different industries. Service industry, agricultural and manufacture are
main sectors which is having needs allocation and government has planned about them. Service
industry is having large share in the GDP so government is having so focus on this sector and
enlarging this.
Free market economy; Government has permitted to some markets to make their own prices
rates for their products and services, and organisation which are working in this sector can divide
resources as per their needs. It is a perfect method to develop a market to supports nation
economy(Enshassi, Al-Hallaq and Mohamed, 2006). UK is using this economic system to
allocate resources.

2.2 Challenges of fiscal and monetary policies on BA
FISCAL Policy; It is a type of policy which helps to set out spending levels and tax rates to
evaluate it's impacts on the national economy(Dong, Wu and Hou, 2009). Fiscal policy helps to
maintain profitable level in inflation rates. It is having regular changes in every financial year
and government makes changes every year in this to manage and control a profitable level in
inflation rates.
MONETARY policies; It ruled and controlled by the central national bank, these banks makes
changes in the interest rates to managed price stability and value of their currency. Whenever a
nation is having higher inflations and lower inflation rates in their economy, their regulatory
banks are making according changes to manage prices and control on their market.
These both policies are having a direct impact on the British Airways, in the past BA
passed from economical recession. In the recent times UK government increased their tax rates
due to cover their bank losses, it had huge impact on the BA and affects on their revenues. It
reduce their business profits(Dollinger, 2008). Bank of England had increased their interest rates
on their loans, by this airline company had to pay more for their loans. It makes crucial situations
for them in the recession times and it emphasis to expand their business activities.
2.3 Impacts of competition policy, regulatory and legal changes in airline industry
BA is having huge impacts of regulations made by UK legislation and authorities of
aviations in the UK. Civil aviation authority is making polices and strategies for customer
welfare which is impacting on the BA. They have to make adjustments according to these. In
2009 IATA members have to pass International Operational Safety Audit to make more safe
travel for their consumers. As per this BA has to make changes in the r plans and technology to
monitor their flights. The aviation authority is highly focus to make safe travel from terrorist
attacks. Most of the airline companies are making competition on the basis of service and prices.
The British Airways is focusing on superior services for their customers and they attracting
customers by increasing services. Some companies are using price skimming policy to reduce
their competition(Chi, Kilduff and Gargeya, 2009). This helps them to increase their customers,
but impacts on their services and facilities. So BA has to maintain a standard in their facilities
and services which is making a crucial conditions for them. They are having limited prices in
which they have to produce their services, provide facilities to customers and make their own
profitability. Legal changes like; change in employees acts emphasis them to make changes in

their structure, they have to adopt these changes in their acts(Chesbrough, Vanhaverbeke and
West, 2006).
TASK 2
3.1 Market structure impacts on pricing and demands
As the British Airways is providing their services for all countries and as well as on some
routes which are having high risk factors. Monopoly, oligopoly, duopoly and perfect competition
are examples for different types of market structures. Airline industry comes in oligopoly market
where few firms dominates on the market. EASYJET and British Airways is dominating in the
aviation industry, they are making combine services on some special routes. Some small firms
can also work in this sector. British Airways and Air France is making their services for some
routes, they are close competitors. In this type of market structure companies are making lower
trips on those routes to manage demand of customers. Regular demand supports to manage a
high price levels to their flight tickets. This one is helps to the company to maintain profits and
revenues which helps to manage business activities. The aviation organisation is having regular
demands on this routes which helps them to give a standard services to their customers. As there
is lesser competition in the companies, they are making equal profits by high prices of their air
tickets(Cantwell, Dunning and Lundan, 2010). Both companies can be divide their customers as
per they does not get full their flights. This market structures helps them to maintain a profitable
conditions for them and manages a suitable market conditions to make their activities.
3.2 Market forces shapes organisation's response
Market forces are having potential to make changes in the business activities and make
changes in the polices and strategies. Demands and supply are the main factor in market forces
and it creates a compulsion situations for the company to make changes according to these. As
the British Airways is the largest organisation in the airline industry and as per their work they
are the second one. They are having huge demands of their customers, demands can be stated as
a number of customers in their flights on a particular route. In winter vacations demands has
arise from customers so airline company has to arrange some more flights for particular
destination(Beck and Demirguc-Kunt, 2006). It built a pressure on them and it is a profitable
condition for them to make more revenues for them. As the company is highly focus to their
customer's services and safety so most of the customers wants to go by their airline services.

Supply is a term which is determines for services in the airline industry. The airline organisation
has to maintain their supplies as per their demands, they have to make proper balance in this to
maintain profitable point in their prices(Ayyagari, Beck and Demirguc-Kunt, 2007). The British
Airline company can manage their deficits by increase in demands and it is a tendency in the
airline industry that it has a high price rates for tickets in high demands.
3.3 Working practices and culture of countries
As British Airways is having their services for most of the countries and they are highly
affected by these. As they are having controlling their services from UK and managing their
flights for different countries like; India, Australia and Arab countries. They are highly
influenced by these countries as in the Arab countries, UAE flights are having different some
specialist crew members who knows Arab languages and they know about like and dislikes of
Arabians. It helps to communicate with them and to provide proper services which they wants in
travels. Flight for south Asia countries is having different types of meals which is served in
flights. Because peoples from these countries are having different taste and it impacts on them.
BA is making their services for UAE because UAE rules in GULF countries and they are having
most of the biggest capitalist of the world(Anand and et. al., 2006). So they have to adopt their
impacts in their acts which helps to attract more customers form these countries. The British
Airways is having different costumes for air hostess in those flights which travel in Arab
countries because these peoples are wants to full costumes and dress for their air hostess. This is
helping them to manage activities as per the customers demands and culture of those countries
where they are working.
4.1 Impact of global changes in trade
Global changes is having huge impacts on the business activities and business entities has
to adopt these changes in their work for their own betterment. World Trade Organisation is
working to enlarge market and trade to of the industry. WTO is a regulatory body which helps to
maintain a balance in world economy. Some nations are not having proper resources to develop
airports in their nation and they are having lack of airports. So WTO is providing money and
technology to these nations to make airports(Moutinho, 2011). And they permits to the BA and
other companies who are working in this industry to make their services for this nation. So this
impacts on the company to make their services for these nations. They have to buy some more
plans or they have to arrange their plans to give regular services to these countries. WTO has

declared China as a new emerging travel destination in the world, so they have to make some
special tour packages and plans for CHINA to help to increase tourism of the country(Teece,
2010). Civil Aviation Authority is making more strict rules for immigration to reduce the threats
of terrorist activities in their plans so they have to adopt their rules and regulation in their acts to
support their regulatory bodies.
4.2 Other global factors which may impact on the BA
There are some global factors that can impact the performance of the business
organization when they provide their services throughout the world. British Airways offer its
quality services at global level in order to get the success in the market and generate more
revenues than any other market player. Some of the global factors are:
International trade: Many business organizations are offering their services in other countries
where they can get the raw material and labour at low. Through these, British Airways will be
able to increase their profits and improve their growth in the market.
Market opportunity: Business organizations who are working in UK they are good in technology
field so they will be able to attract number of customers towards their services(Trkman, 2010).
So, they also have some opportunities through which they can improve their brand image at
global level.
Global growth: The global factors also gives the opportunities to the business organisations to
improve their growth at global level. Through this, British Airways will be able to improve their
economy as well as position in the market.
Government Impact: Government made some rules and regulations that have to be followed by
every business organization. These policies can also affect the performance of British Airways.
4.3 EU policies can impact on the BA
After the separation from the EU, UK government is having their own rules and policies
for aviation industry. British Airways are organising their activities under UK legislation. They
are not having impact on their travel and competition. But EU is highly aware about their
employee's and people's benefits and profits, peoples which are working in the British Airways
has to pay equal amount as their remuneration which they are paying to their all employees and
if their peoples are having better opportunity for their career they are free to move(Ullah and Lai,
2011). EU has prescribed common competition policy in a single market, firms has to protect
their customers interest. It promotes economical efficiency in all sectors, this is making positive

and prosperous environment in the economical zone. It is not having so much impact on the
British Airways and they are working as they work. As they are not having so much competition
in their nation, they have proper grip on their target market(Wild, Wild and Han, 2014).
CONLUSION
From the above mentioned report it has been concluded that every business organization have to
perform its operations in its environment. There are many factors that may affect the
performance of the firm such as internal and external. So, organizations can use swot and pestle
model in order to analyse these factors. When enterprise perform its operations at global level
then they have to face some factors that may impact their growth. British Airways have to mange
these changes and identify the opportunities that may boost the economy of the company. Along
with this, they have to monitor the environment regularly so that an effective plan can be made.

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