Business Model Analysis and Innovation

This assignment delves into the crucial relationship between the business environment and firm performance. Students will examine how factors like ownership, regulations, and market dynamics influence organizational success. The analysis extends to explore the role of innovation, particularly sustainable and digital strategies, in shaping contemporary business models. Key concepts include PESTLE analysis, SWOT analysis, and the evolving nature of business model design.

BUSINESS AND
BUSINESS
ENVIRONMENT

Table of Contents
INTRODUCTION...........................................................................................................................3
TASKS ............................................................................................................................................3
P 1 Different types and purposes of organisations......................................................................3
P 2 Size and scope of a range of different types of organisations.............................................4
P 3 Relationship between different organisational function......................................................4
P 4 Positive and negative impacts of macro environment.......................................................6
P 5 Swot analysis of Emirates airlines........................................................................................8
P 6 How strengths and weaknesses interrelate with external macro factors...............................9
CONCLUSION..............................................................................................................................11
REFERENCES..............................................................................................................................12

INTRODUCTION
Business Environment means those factors that affect the decisions of a company.
There are two factors. The former one are external(political,
legal,technological,social,economical and environmental) and the latter one are internal
(Strength, Weakness, Threats and Opportunities). These all are beyond the control of a
business. Whatever, company uses some strategies to face those elements (Weske, 2012). They
conduct local as well as global survey in order to find out the demands or basic needs of
consumers. The present report is based on business environment of Emirates and Virgin
Atlantic. In this project, three main sectors (Public, Private and Voluntary) are
explained by providing their size, functions and scope.
TASKS
P 1 Different types and purposes of organisations
There are different sectors of organisation that existed in United Kingdom namely
private, public and voluntary sectors. Private sector business are owned and run by an individual
person. Aims and objectives of this type of organisation is to make profit and expand their
market by maximising their sales. Virgin Atlantic can be best example of public sector
organisation. They privately deals in the business of airlines. They deal with franchises,
partnership and trade-holders, etc. in order to run their market (Granger and Schroeder, 2013).
On the contrary, public sectors involves those companies that are operated by government.
They have a motto to provide services to common people that are living in country. They are not
interested in making profits and expanding their market sales. Here, people have to pay taxes to
government and that money is used in running these enterprises. Main aim of this type of
corporation is to provide or make available several types of public services to civilians and do
welfare services for community. Emirates can be the best example of public sector organisation
that are giving airline services to people of nation. Apart from these sectors, third sector also
exits that is known as voluntary sector. It is a non profit corporation that aims to provide social
service. But these are not run and owned by government but they are also not interested in
making profit and expanding their market. Oxfam is example of this sector of organisation. It is
a non government organisation.

P 2 Size and scope of a range of different types of organisations
Emirates Virgin Atlantic
Employees 64768 8875
Customer 38,0000 32,0000
Net income 140.5 million Euro 153.2 million Euro
Area served Dubai, United Arab, Garhoud England,North America, the
Caribbean, ,London,Africa, the
Middle East and Asia
Emirates have 64,768 employees in year of 2016 to 2017. Also they a large number of
consumers that is approx 38,0000. The company operates their business in Dubai, Garhoud and
United Arab and have a net income of 140.5 million Euro. On the contrary, Virgin Atlantic
serves the different locations like England,North America, the Caribbean, ,London,Africa, the
Middle East and Asia. They also have a large number of employees and customers that are 8875
and 32,0000 respectively. They have a net income of 153.2 million Euro.
P 3 Relationship between different organisational function
Each organisation have different functions but have some common goal that is to
gain profit and grow their market. Relationship between Emirates and Virgin Atlantic are listed
below:
 Production: Both companies are providing best airline services that are luxurious that is
why large number of passengers are getting attracted towards their flights for travellings.
They are also offering additional benefits to Islamic passengers during the month of
Ramadan like providing different foods and beverages to them (Onetti and et. al., 2012).
 Research and development: These enterprises have invested a large amount of revenue
in the process of R&D. To know about need and demands of common people, they have
to conduct surveys all over the globe. Their money as well as time spends in recognizing
lifestyle of local people so that they provide services as per their need. This removes
issues of common people which they face while travelling.
 Purchasing: They purchase raw materials like best quality aeroplanes and flying jets,
make their own healthy foods of good quality,, etc. in minimum prices so that they sell

tickets at low prices to their consumers. They offer online business and booking can be
done via internet from home also. This reduces crowd from airports and also diminishes
road accidents.
 Human Resource Management: Companies are using practises of human resource
management in order to hire skilled workers in their corporation. They need to recruit
talented employees as this is very important because life of millions of people are
depending on them. So, pilots must be experienced holders. Air hostess should also be
hired by examining their talent (Aterido and et. al., 2011). They should have good
interpersonal as well as intra personal skills, politeness in their nature, effective
communication skills, etc. If corporation is hiring freshers then they must arrange
training and development programs so that these skills can be developed in them. They
may be given 6 or 7 months as this is enough time to learn new things and they can
become experts in their jobs. In order to recruit best or talented employees, corporation
have to conduct a survey in which all universities or institutes are covered. This takes a
lot of time and money also. They can also offer online interviews, this may takes less
time and give better result.
 Accounting and Finance: To calculate overall expenditures and income is a rigid task.
So, Virgin Atlantic and Emirates manages task of accounting and finance very carefully
and effectively. They uses modern techniques in which special software are used like
Ubuntu, spreadsheet, Ms excel, etc. so that there will not occur any error. This will
reduces labour of man or physical work as well as the errors occurred from those paper
tasks. Some formulas are used to enter in software, and calculation get automatically
completed. This increases quality of work in corporations (Cavalcante and Ulhøi 2011).
Emirates uses divisional organisational structure. By following this, they expand their functions
or services across branches. Company has different product lines so these product lines are
divided into several areas such as marketing, sales, research and development, accounting and
finance departments, etc. But the is disadvantage of this structure is that every employees of
each divisions are performing similar tasks or functions. This causes lot of redundancy. While
Virgin Atlantic uses matrix structure. This offers them more flexibility in terms of business
functions in relation to a hierarchical company. Every worker is working in a sector which is
project based such as marketing, accounting and finance, etc. While they perform their duty

under several mangers as they are working with different types of products. This structure work
as per the function of corporation because needs of users are changing day by day. Chain of
matrix becomes more cloudy and ambivalence, this is major disadvantage of this structure.
P 4 Positive and negative impacts of macro environment
Macro environment can be defined as the conditions that exists in economy as a whole
rather than in particular or special area. It involve trends in GDP(Gross Domestic Product) ,
employment, changing or updating costs, spending and fiscal policy (Klapper and Delgado,
2011). In order to examine external macro environment, PESTLE analysis is performed
whereby impacts of government policies, social factors, technology, economical conditions,
environmental factors and legal factors is analysed. Each of this is described below:
 Political impacts: Air line industry is getting easily affected by change of political
factors. This shows sensitive nature of company. Political conditions involves wars and
various commercial situations going on in nation. Today economy as well as instability
in political policies in Asia gives them a chance to earn more profitability (Chow and et.
al, 2011). Civilians depends on Emirates in comparison to preferring their flights of own
nation. There are certain political factors that bound the company that are following:
▪ Emirates airline should follow rules and regulations of Dubai government as
they are property of Dubai government.
▪ They have signed agreements with other nations also. So, their routes have to
opened for all over the world.
▪ Increasing rate of terrorism and wars led a negative impact on services of
corporation. So, it is responsibilities of company, to provide safe and secure
travel to their customers.
▪ Different government have restricted their rules, in specific on outside
transporters. Apart from this, enterprise plays a vital role in acquiring aims and
objectives of promoting tourism. This is profitable for government of Dubai's
policies and norms.
 Economic factors: The economical conditions of all nations affects profit, capital
availability and demand for-cost. If there is low cost capital and demand buyout, then
surely it will attract different firms to grow and invest so that they can make their
business more profitable. Emirates is one competition making airlines that is being stable

and posses stability in their economy. There are certain airlines which face many crashes
and bad conditions, but Emirates have successfully managed to strive good in order to
achieve best economic situations. It does not faces any aviation downturn. This is result
as major strategies of marketing are used to promote Dubai as a destination of tourist and
making it look more attractive to civilians in another countries.
 Social factors: It involves demand and taste of people. This vary as per non- refundable
income factors. The common modifications in service of an airline may affects
corporations. It is best to utilize opportunities and take care of particular threats.
Marketing saturation is changed for many products as time passes, and this may occur
due to promotions as well as pricing strategies (Boons and Lüdeke-Freund, 2013).
Emirates Airline is fully aware of various demographics changes and might be impacted
because of regions, affluence, age factor and number of workers that are working. This
will also influence demands for specific services and products. However, culture plays a
critical role in operating a flight. Work party needs to be full aware of all cultural vales
of different passengers. This will give service as per the need of consumers. For example,
crew have to respect values of Islamic passengers during months of Ramadan by
offering them different drinks and snacks. Different circumstances of society will greatly
impacts corporation working. Enterprise is bound to provide similar opportunities and
benefits to each and every consumers.
 Technological factors: The development or advancement of technology is widely used
and greatly identified specifically in services of Emirates airlines. Corporation is
designed extraordinary so that all perspective of meeting competitive benefits is achieved
by them (Zott and Massa, 2011). Entry of internet and information and technology's
system allows traveller to avail during their flights. They have presented latest trends so
that more people get attracted to it. However, updated technological services offers
greater aviation work. Certain new air crafts introduced by Boeing and Airbus provides
several entertainment facilities to their consumers.
 Environmental factors: Emirates is more concerned about several environmental
factors. The random change in weather or climate affects credibility of airline service
directly. To overcome such a drastic situation, company should follow some strategies.
Modified service offered by corporation known as recyclable cutlery that enables the

travellers to get attract towards them. Environment is one of the major concern that
needs to more focus. However, Emirates are more concerned about pollution level and
due to this adopted many recycling methods.
 Legal factor: Many government are working under paternal policies in pacific areas.
Some of policy prevent airlines from external elements specially the political and
environmental factors (Commander and Svejnar, 2011). Modifications done in these
factors will ineluctably affect generated money and reputation of enterprise. Rules and
regulations imposed by government allows airline corporation to be more cautious in
both global and local dealing. To resolve such issues, it is good to practice business. The
actions and operations of company are legal and are managed to allow users to enjoy safe
and secure travel.
P 5 Swot analysis of Emirates airlines
Emirates airlines being a subsidiary of Emirates group, come under international premium
airlines serving in corporates , upper middle class and middle class sections of society works
very well in economy. Airline company with their tag-line 'Fly Emirates' have been performing
strongly in their sector in middle east. The internal analysis of Emirates airlines has to done by
assessing their strengths and weaknesses of organisation, and their possible opportunities and
threats in market. SWOT analysis is must if company has to know what is wrong with the
internal performance and how can they uplift their activities to do well in market.
 Strength: Strong backing of United Arab Emirates government has been most strong
point for Emirates Airlines. Government has been constantly supporting company and
giving them subsidies in many needed services in sector (Hamilton and Webster, 2015).
Another major strength of organisation is that they belong from a country and based
presently in Emirates which is rich of oil, which gives them an additional advantage.
They have a strong base in Dubai, even though they provide services worldwide being
based in UAE itself. Airline customers mostly prefer Emirates Airlines and customers are
very much satisfied with services they are being availed by airlines firm. The total
workforce of company of more than 50,000 employees worldwide is also one of their
strengths. They have been providing airline services by covering 72 countries in 6
continents.

 Weakness: They are being a little backward in certain aspects such as they are too much
reliable on international onward moving traffic and thus proved to be weaker when
company is independent. There is a scope of limited market share growth due to intense
competition in airline industry and they are under fear of maintaining bench mark
standards at high cost.
 Opportunities : There are certain parts of industry where they could bring up some
heights with their services. There are opportunities for Emirates Airlines to bring in brand
new fleet where updated leverage technologies can help company improve their
customer confidence in their airline services (Cavusgil, 2014). Airline service provider
could avail facilities by spreading over more international destinations those are popular
among the customers.
 Threats: Middle east market has been raising to be a hub of business confidences and
meetings for majority of firms from around world and therefore there seems to be a lot of
airline service providers coming into the middle east. Increasing competition is a visible
threat to Emirates airlines and also the rising costs of fuels seem to put them in trouble.
There have been a lot of policies and regulations introduced by government which can
prove to be obstacles for company.
P 6 How strengths and weaknesses interrelate with external macro factors
The strength and weaknesses of Emirates are interrelated with external macro factors
such as political, technological, social, economical, legal and environmental. Survival of
corporation is dependent on its strength and weakness as they provide them way to develop their
business in a specified direction.
Strength: This is the potential of company that aids in growing its market. Strength of Emirates
are its brand value, their loyal relationship between their consumers and them,providing
multinational services, etc. (Wild and Han, 2014). Relations on macro factors on them are
described below:
 Political factor: Political stability aids corporation in expanding their business. But on
other hand, imposing of several taxes impacts negatively on working of organisation.
They also form certain rules and regulations like wages related law, employment law,

child labour law, etc. This allows maintaining of discipline in business of airlines. If
company is managing everything properly then it shows that political instability are not
so much affecting performance of enterprise.
 Technological factors : The introduction of new technological services aids in working
of corporation. Internet based system allows organisation in offering online business.
Now consumers can easily book their tickets without going outside from their homes or
without visiting airports (Bryman and Bell, 2015). Certain software are introduced like
spreadsheets, Ms-excel, etc. to perform task of calculation very easily and in very less
time. This improves work quality by removing errors that are occurred due to paper
work. This also removes physical work by doing most of task by system only by writing
some formulas. The internet based system also develop method of communication by
introducing certain apps like social media, video conferencing, messaging, emailing, etc.
From this, employees and clients can now be do effective communication. They can
perform their meeting now without presenting physically. As they talk from each other on
video conferencing.
 Social factor: The society presents a positive impacts on performance of Emirates. They
show their keen interest by booking their tickets and travelling through their airlines as
company is providing services than others to them. For example they are offering
Muslim travellers, a plenty of breakfasts and different healthy juices in month of
Ramadan. So, they attracted towards their flights.
Weaknesses : If organisation is failed to manage everything then, it shows their weak point.
This is consider by their competitors in making profits by strengthen those parts in their own
company. External macro factors are related to weakness of Emirates that are discussed below:
 Environmental factor: The random changes occurring in climate on regular basis
create a bad impact on working of flights (Welford, 2013). For example, cyclone arises
or creation of foggy weather greatly influence working of pilots as they feel difficulties
in running flights as they cannot see clearly. Due to this, many flights get delayed or
even cancelled due to bad weather. And if climate gets worst after taking off, then it
may crash also, due to this many people get dead. So, it gives a negative impacts on the
performance or working of corporation.

 Legal factor: The imposing of certain laws by the government body influences the
Emirates airlines. They allow them to be more cautious while dealing with local and
international business. The laws are made that decide the amount of weight that should be
carried on with the travellers (Wheelen and Hunger, 2011). Above to this, will causes
extra charges. The mobile phones should not working while travelling. So they must be in
switch off modes. Smoking and drinking alcohol is strictly prohibited in the planes.
These all laws must be followed by the passengers. punishment are given to one who
Violates any of them.
CONCLUSION
From the above based report it has been concluded that business environment impacts a
lot on the performance of any organisation. Here, Emirates get influenced by the micro and
macro factors. Pestle analysis describes the impacts of them. They are political,
legal,technological, environmental, social and economical factors. The random changes in the
climate effects the arrival as well as departure of the flights. The influence of micro factors are
explained via swot analysis. This shows the strength, weakness, threat as well as opportunities
of the company. The relationship between the strength, weakness and its macro factors are also
explained here. The different sectors of organisation such as private, public and voluntary are
described. Their scope, size and functions are covered which shows the difference as well as
relationship between them. It is also explained how strengths and weaknesses interrelate with
external macro factors.

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