UK Business Environment Analysis: British Airways Case Study

This report provides a comprehensive business environment analysis of British Airways, a leading British airline. It covers various aspects, including the company's revenue-generating sources within the UK sub-sector, a value chain model analyzing internal environmental factors, and an examination of micro-environmental forces affecting the business. The analysis incorporates academic models like Gibbs' reflective cycle to evaluate the internal business environment. The report highlights British Airways' market position, competitive strategies, and operational efficiencies, as well as challenges and opportunities within the dynamic airline industry. The document is contributed by a student and available on Desklib, a platform offering study tools and resources for students.

Business
Environment
Analysis

Table of Contents
INTRODUCTION...........................................................................................................................1
MAIN BODY...................................................................................................................................1
Sub sector business in UK and its revenue generating source.....................................................1
Value chain model of the internal environmental analysis..........................................................2
Micro-environment forces that affect the business......................................................................4
Reflection of the academic model in internal business environment..........................................5
CONCLUSION................................................................................................................................6
REFERENCES................................................................................................................................7

INTRODUCTION
Business environment is an strategic tool which helps in identifying the internal and the
external factors which affect the business. It helps in finding threat and the opportunities of the
business so that proper decision can be taken (Schaltegger, Lüdeke-Freund and Hansen, 2016). It
helps in developing the policies and adopting the strategies which help the business to run in
long run. British airways is the British airline and had its headquarter in London, England and
UK the company was founded in the year March 1974. The topics covered under this report are
the overview of company and its revenue generating source, Value chain model, Micro
environment forces that affect the business and its reflection.
MAIN BODY
Sub sector business in UK and its revenue generating source
British airline is second largest and based on the passengers carried and the fleet size of
the airways behind the Easy Jet. It is the first airline who has generated the revenue of one then
$1 million from the single route only. This airline is listed in the London Stock Exchange. The
British airways is the certified 4-star airline because of its quality onboard products, staff
services. There is a comfort and the loyalty which help in attracting the customers in an easy
way. The flight covers more than 200 destination across the world. The airline got the 4 start
rating because of the seats, food and beverages, cleanliness and the service rating is for both
ground staff and the cabin staff. Due to its services the customers get attracted and the company
get an chance to earn the revenue in an easy way which will give the benefit in long run. This
airline is the safest airline which have a low cost so that the passengers can easily afford the
flight charges. It contributes over £ 10 billion in an year in UK GDP. It provides the excellent
services by which the customers get attracted easily and will get the benefit. As the British
Airways provides the international air services to the customers which help in generating the
revenue in the organisation (Calabrese, 2018). The British airways provides high revenue in the
UK as this is the flight which is mostly used by the people because of its low fares and the
services provided is of better quality which help in increasing the revenue so that the business
can run for long run in future. The loyalty of the British airways helps in increasing the profit as
the people will prefer this flight only for short and for the long routes.
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Value chain model of the internal environmental analysis
Value chain model refers to the model in which the business takes the step to transform
the product and services and ideas into the reality. It helps in increasing the efficiency of the
business which helps in delivering the most values at the very low cost and the income will be
generated. It helps in increasing the productivity with the reasonable cost. The theory includes
the 5 primary activities and 4 supporting activities. British airways transform its ideas into the
reality and provided the best quality to its customers. The value chain model is described below:
Primary Activities- These are the activities which helps in adding the value and help in
gaining the competitive advantage. Inbound logistics: It includes the functions like managing the inventories, receiving and
warehousing so that the efficiency will increase. British airways helps in managing the
inventories and the operations are complex and the timely delivery of goods (Prajogo,
2016). IT helps in building the good relationship with the suppliers and have proper
control on stock and proper trainings are provided. Operations: It helps in transforming of the raw material into the finished goods or the
product. British airways helps in increasing the security of the luggage and quick check-
in services to the customers. It helps in proper utilisation of the technologies which help
in getting the benefit. Outbound logistics: It helps in distributing the final products to the customers. It helps in
efficient handling of the baggage of destination and using the advanced information and
the communication system should be proper. Marketing and sales: It includes the strategies adopted by the customers which helps in
increasing the visibility of the target customers and use different promotion activities by
which the customers get attracted easily in an organisation. Marketing and the sales are
the best way of increasing the customers. British airways directly communicate the
message to the target customers and describe its efficiency, safety, reliability and
convenience (Čepel, 2018). It also have an effective utilisation of the marketing mix such
as media, advertising, promotions, events which helps in gaining the competitive
advantage. Service: It helps in maintaining the products and the services which helps in enhancing
the experience of the customers so that the results will be achieved easily like it helps in
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providing the best customer services and proper maintenance , repair funds and exchange
of goods. British airways helps in providing the post sale services which helps in
achieving the competitive advantage in the market and helps in gaining the market share.
British airways also increases the service position which helps in increasing the profit and
the loyalty of the customers.
Support Activities: It helps in making the primary activities more efficient so that the decision
can be taken properly in an organisation. If the efficiency of any of the four activities of the
support activity increases it has its affects in the primary activities also by benefiting it. The
support activities are marked as the overhead cost in the income statement of the company
(Palepu, 2020). British airways adopt this strategy and have proper support activities which helps
in benefiting the organisation in an proper manner and will also get the benefits from its primary
activities. Procurement: It helps in showing the concern how the raw material will be obtained from
the environment in an easy manner. Raw material is an important part before starting up
of the business which helps in generating the profit in the long run so that the objectives
will achieved easily in the future. Raw materials increased the efficiency of the company
and help in generating the revenue for the long run. The British airways have good
economies of the scale which help in building the good relationship with the supplier. Technological Development: It is used by the firm for the proper research and the
development programme which help in increasing the efficiency and the productivity of
the organisation and also helps in designing and developing the techniques so that the
customers get attracted easily in an organisation so that the results will be achieved easily
and will be benefited for long run. The resources are required in the British airways
which should be innovated but British airways failed in the proper utilisation of the
technology which means there is wastage of resource or the less resource. Human Resource Management: It involves the hiring and retaining the employees and
helps in providing the proper training to the employees which helps in increasing the
benefit and the productivity of the organisation so that the goals will be achieved in an
easy manner. It helps in designing, marketing and selling the product in the organisation
so that the needs are fulfilled in the organisation. The British airways introduced the
customer service training which helps in influencing the employees and helps in getting
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the feedbacks from them so that the benefits will be get after training the employees
properly and the customers get satisfied easily.
 Infrastructure: It includes the system of the company and helps in proper management
which help in preparing of the team in an easy manner which is very important for the
organisation to run in the long run (Palalic, 2016). It helps in proper planning, financing,
accounting and controlling so that results will be achieved in the proper manner. By
increasing the effective knowledge the British airlines helps in gaining the competitive
advantage and the efficiency will be increased automatically.
Micro-environment forces that affect the business
Micro-environment forces are the forces which effect the elements which can be easily
controlled by the management in an easy way and does not affect the companies, size ,capacity
and the other factors because of the success micro-environment factors are different which affect
the company. Micro factors of the British airways are discussed below:
 Competitors: There are various forms of competition in the market which help in
determining the individual business to stay in the market for the long run. There is a
brand and the price competition which may easily shift the taste of the customers. British
airways has high competitors like Delta, Virgin Atlantic and many other. British airways
is the combination of the focus and the differentiation which helps in increasing the
efficiency and help in gaining the competitive advantage which helps in increasing the
customer experience.
 Customers: Customers are the important resource which increase the efficiency in the
organisation without the customers no revenue is incurred by the organisation. Customers
are very important in every field which help in increasing the profits of the company.
British airways make there customers in a comfort zone and help in providing them the
safety and the loyalty and good services by which they get attracted easily and help in
providing better services.
 Suppliers: Suppliers are the person which have the strong bargaining power if they are
the only one in the market they can easily charge the high prices from its customers and
the customers have to purchase them. British airways purchase the goods or the raw
materials which help in building the trust and the good relationship and help in increasing
the efficiency and the productivity of the organisation from where the goods are
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purchased and helps in increasing the loyalty so that the suppliers remain permanent for
future and the airways supply good services to the customer on the basis of quality.
Reflection of the academic model in internal business environment
Gibbs' reflective cycle is a framework which help in learning from the experience and the
plan which help in learning from the things and can perform better in the organisation. The
Gibbs' model has the six different stages which are described below: Description: It helps in describing what had happened and what are the reason of
happening something in the organisation (Jenkins and Williamson, 2015). It describe the
full situation in detail. British airline describes all its strength, weaknesses, opportunities
and threat which helps in identifying the reasons of its success and the failures. Feelings: It refers to the feelings and the thought that had experienced by the feeling
regarding that product or the source by which we get to know about the people thinking
about that product. British airways provide good services to its customers and provide
good quality by which the customers get attracted and have a positive point of view
regarding the British airways because of its quality and low fare charges. Evaluation: It helps in evaluating the performance what actually worked and what not
worked in the organisation. It helps in knowing the positive and the negative impacts so
that evaluation become easy in an organisation. British airways helps in evaluating the
negative impacts and improve in comparison of the competitors performance so that
people get more attracted to it. Analysis: It helps in identifying what actually happened in the organisation why the
issues have arises what are the reason proper analysis of the work is done so that actual
performance can be measured. British Airways helps in analysing the actual performance
so that the set goals and targets will be achieved easily (Fleisher and Bensoussan, 2015). Conclusion: It helps in knowing the overall conclusion of what actually happened in the
organisation. British airways helps in identifying the overall positions so that the decision
can be taken in an easy manner.
 Action plan: It helps in actioning the plan if the same situation will occur in the future
what actions are to be taken in an organisation. British airways helps in action the plan
that helps in achieving the targets different in different situation.
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CONCLUSION
From the above essay it has been concluded that Business environmental analysis helps
in analysing the internal and the external factors which affect the business which help in
increasing the overall performance of the company and the company have high growth in the
near future. The business are affected by the environment as they are using the resource from the
environment. The overview of the company is done and find the factors which helps in
increasing the revenue in UK and the value chain model is studied its primary and the support
activities which affects the business and the micro factors like customer, suppliers are also
studied. GIBBS reflective cycle model is used for the internal business environment.
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REFERENCES
Books and Journals
Calabrese, M. and et. al., 2018. From mechanical to cognitive view: The changes of decision
making in business environment. In Social Dynamics in a Systems Perspective (pp. 223-
240). Springer, Cham.
Čepel, M. and et. al., 2018. Business environment quality index in the SME segment. Journal of
Competitiveness.
Fleisher, C. S. and Bensoussan, B. E., 2015. Business and competitive analysis: effective
application of new and classic methods. FT press.
Jenkins, W. and Williamson, D., 2015. Strategic management and business analysis. Routledge.
Palalic, R. and et. al., 2016. Students' entrepreneurial orientation intention, business environment
and networking: insights from Bosnia and Herzegovina. International Journal of
Foresight and Innovation Policy. 11(4). pp.240-255.
Palepu, K. G. and et. al., 2020. Business analysis and valuation: Using financial statements.
Cengage AU.
Prajogo, D. I., 2016. The strategic fit between innovation strategies and business environment in
delivering business performance. International journal of production Economics. 171.
pp.241-249.
Schaltegger, S., Lüdeke-Freund, F. and Hansen, E. G., 2016. Business models for sustainability:
A co-evolutionary analysis of sustainable entrepreneurship, innovation, and
transformation. Organization & Environment. 29(3). pp.264-289.
Online
Vanessa, 2020. What Are Internal & External Environmental Factors That Affect Business.
[Online]. Available through:<https://www.mageplaza.com/blog/what-are-internal-
external-environmental-factors-that-affect-business.html>
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