Business Environment Scan

This report discusses the external and internal forces that affect business operations and how to overcome them. It focuses on Qantas Airways and its challenges in the airline industry. The report provides solutions to political, economic, social, technological, legal, and environmental factors.

Running head: BUSINESS ENVIRONMENT 1
Business Environment Scan
Student’s Name
Course
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BUSINESS ENVIRONMENT 2
Table of Contents
Introduction and Background Information................................................................................2
The body of the discussion............................................................................................................3
Political factor............................................................................................................................4
Economic factors........................................................................................................................5
Social factors...............................................................................................................................6
Technological Factors................................................................................................................7
Legal Factors..............................................................................................................................7
Environmental factors...............................................................................................................8
Summary and conclusion..............................................................................................................9
Reference........................................................................................................................................9

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Introduction and Background Information
Business is a single identity operating on its own. All operations of the business are
carried out within a certain environment, either external or internal environment. Therefore,
means that they are internal and external forces which affects the business operations (Charles
and Katuse, 2018). The internal forces are under control of the business management meaning
that they are controllable. External environment forces are beyond the control of the
management, therefore are not easily controlled by the management. These external
environmental forces includes: political forces, economic forces, social forces, geographical
forces, technological forces, and legal forces. All these environmental forces both internal and
external they require a good scan for the success of the business (Gregg and Parthasarathy,
2017).
In this scenario, Qantas airway is the business under consideration. Qantas airway is the
airline organization in Australia which needs to cope with environmental changes and remain at
the frontline of its competitors. The history of Qantas airways is very long and detailed, since, is
the biggest and oldest existing airline in Australia. This business has kept all his eyes on the
means of maintaining a good relationship with external factors within the environment.
Customers’ behavior has been a challenge to the organization since the organization competitors
are coming up with new strategies to attract new customers and maintain the existing one
happily. Economic factors have affected negatively the income of the customers thus reducing
the turnover in the transport. Not only that, the government has allocated resources and efforts to
support the airline sector regarding to the condition and policies of operation. However, the same
government regulations are affecting the business negatively, therefore, reducing competitive

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edges (Iroham, Ogunkoya and Owolabi, 2017). Other effects are from competitors' strategies,
several competitors are offering several and similar products which acts as alternative advantages
to the customers. This becomes the biggest challenge to the Qantas Airways to operate smoothly
within the environment.
In this report is going to respond to the environmental risk which was discussed on part A
of the environmental scan. Therefore, the following discussion are the solution of the
environmental challenges facing Qantas airway in Australia.
The body of the discussion
For the business to operate successfully in the environment should be ready to accept the
input from the environment and process them, later on, give the result to the environment
(Wingo, Ivankova and Moss, 2017). Therefore in order to survive and succeed, the organization
should match its environmental input with the conditions of output. The business should have
strategies in place to face any changes from the environmental factors. Those strategies are
supposed to be flexible so as to change as the environment changes. Failure to change these
forces will force out the business from the market. Therefore, a good strategic plan is required
for Qantas airline to survive in airline industry. The following are challenges and solutions on
how Qantas will handle this challenges to survive in the environment of operation.
Political factor
As discussed in Part A, the market territories of Qantas airline is across the world,
therefore affected by the different political factors across the territories of operation (Tur-Porcar,
Roig-Tierno and Llorca Mestre, 2018). One of the biggest challenges, which is the main issue,
here is that different political disruption are arising toward one organization. Political disruption

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results to free sky boundaries to be interfered with and the normal route of operations brings
problems. Another challenge which affects Qantas airline negatively is terrorist in Middle East
regions.
The required strategy. The solution to this challenge is that both the Qantas airline and
Australia government should be involved in dealing with it. The government first, should set
favorable conditions and policies which will govern the airline transport industry. This is
collaborative with several bodies which are relatively involved in the airline industry together
with lawmakers' body of Australia government. They should come up with new and improve the
old policies both targeting to achieve Qantas organization objectives. From this point, the
government should put a strong support to the airline companies by forming common rules and
regulation governing worldwide airline transport. If this is agreed across all countries network
Qantas airline operates, it will reduce political disruption amongst skyline boundaries. Also, the
Australian Government should support Qantas airline to establish headquarters in every country
lands to act as an ambassador. These headquarters offices will assist in influencing the decision
making of the country they belong since the company will employ the original citizen of those
countries.
The terrorism in the Middle East should be reduced or eliminated for better operations of
the Qantas airline. This is only done by encouraging peace within the country and the Australian
government should enter in between to act as a peacemaker on those countries. If the Australian
government will manage to intervene peace in the Middle East, the Qantas airline company will
operate smoothly without obstacles within those countries. All this will encourage a favorable
relationship on political factors for both the Australian government and another government
airline industry operates.

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Economic factors
These are factors which influences consumer behavior, production and interest rates,
income, inflation and employment opportunities of the country (Adams, Shumway and Getchis,
2011). The main issue is the economic slowdown in Australia has affected a lot the Qantas
operations. This situation brings in the challenge of dealing with a high cost in flying. Other
challenges are that profitability and market share of Qantas is affected negatively by an increased
budget of airliners. Also, the other challenge is due to the increased price of fuel and the number
of competitors in the market. All this has negatively affected the revenue of Qantas Airline
Company. The possible solution may be:
The required strategy. All this economic downfall has been influenced by money
circulation in the economy (Bryant and Nguyen, 2017). They are several ways to overcome these
challenges. The government should influence and improve the tourism sector in Australia.
Should find means of increasing tourism in the country which means, the same time the money
circulation in the country will increase perpendicularly. Also, the Qantas airline company will
improve its revenue by transporting many tourists inside the country. The government also
should encourage exports within the country, which will influence the inflow of foreign
currencies to the economy. The exchange rate gains from foreign currencies can be used to
improve the economic sector by paying government debts and reducing transport cost. The
government should minimize the production cost in all organizations thus reducing the consumer
cost which results in standard life for all (Shen, Zhang and Zhang, 2017). This will make sure all
citizen in Australia have to afford flight since the production cost of fuel will be of low cost thus
lowing the flight cost. The Qantas airline can manage this economic factor by reducing extra
expenditure where is not necessary therefore maintaining the income inflow in the organization

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plus among the employees. Also, the government has to control the expenses in different fields
within the government like investing heavily in weapon military and salaries towards executive
positions should be avoided.
Social factors
These social factors influencing the business include, economic social status, believes
and customs, lifestyle, religions and the cultural shape of the society (Kim, Jang and Yang,
2017). The main challenge is, Qantas airline has been affected by this factor in many ways and
becoming a challenge to handle them. Qantas airline is a business which deals with the customer
of high social economic class in Australia and worldwide. Also, the customers' demand is rapidly
changing and becoming difficult for Qantas airline to adopt those changes in the industry. The
customers are demanding hospitality services of high class not only the transport services.
The required strategy is that Qantas airline should be ready to provide extra services
which will make customers happy. These will be auxiliary quality services like Juices,
accommodation, and other foods to the customer while in flight or waiting to serve. These
services will be of subsidized price or free of charge. Other major area of which needs to be
handled is about security (Medina Munro and Belanger, 2017). Qantas must ensure customer
have total security throughout the services provided. This is by proving different types of
security equipment and personnel. To maintain social factor influence positive to the
organization, the Qantas should use its advantage of having a good image to the market since it is
the biggest and oldest airline in Australia.
Technological Factors
This is the rapid change of technology which influences customers, society and business
behavior in general (Tchamyou, 2017). This is accompanied by research, innovation, and

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creativity which is introduced in the business sector, therefore, influencing its operations. The
challenge of Qantas airline experiencing from this force is that, is dynamically rapid changing
and growing with high speed which is the main issue with Qantas.
The required strategy, is that the Organization should ensure that, it has quality
personnel in the technology field. This team will help in doing research in all fields related to the
Qantas airline and update the system accordingly (Kraslawski and Hallikas, 2017). Also, this will
help to stay ahead of the competitor since, the new technology will make operation easy and
produce quality services within less time. Also to overcome this technological challenge, the
Qantas airline should be ready to invest heavily and timely in this sector of technology.
Legal Factors
These are factors which are very important in the organization. They are used to
determine organizational success worldwide. These factors are rules and regulation imposed by
the government and other related bodies (Jernström, Karvonen and Hallikas, 2017). For example,
the main issues here is, the outlines of how the business should operate within certain conditions
towards the company and government benefits. Like rule on tax collection and required for
business to operation. The challenge of Qantas is from the usage of carbon which is taxed
according to the emission. This tax is very high since the emission of carbon is a must to be
available in the airline industry.
The required strategy. To overcome this challenge is impossible since is unavoidable
for carbon usage in the airline industry. The management of Qantas should manage the use of
carbon well which it will attract less tax. Another alternative is, if possible to come up with
another product which is less expensive and will not attract tax in usage will be good.
Meanwhile, Qantas airline should set conditions which will allow them to use carbon at its rate

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of comfortability zone. Other ways to overcome legal factor from affecting the organization
negatively is only to be ready to adhere to them accordingly (Kabakova and Plaksenkov, 2018).
Environmental factors
These are factors which affect the physical environment of the business. For examples
like pollution, noise, air, destruction of physical objects and all mechanism which can be seen
and touched (Babatunde and Adebisi, 2012). Therefore, regulations and policies are set by
different bodies to protect this destruction of the environment. The challenge to the airline
industry is that are the main pollinators of the environment both noise and air. Therefore, Qantas
being one of the airlines is affected by the regulation and standards of the environment.
The required strategy. Qantas airline cannot failure to operate because of these
regulations. The organization should be ready to adhere to those standards and policies so as to
ensure smooth operations of the business (Charles and Katuse, 2018). Also, Qantas airline should
be ready to incur any expense towards those standards, like permit license due to the pollution.
Therefore, Qantas as they prepare expense and profit records, how to achieve Qantas objective
and others, they should be ready to face environmental factors knowing are unavoidable.
Summary and conclusion
External environmental factors are factors which affects the organizational activities without any
or limited control form the management. To overcome these forces is very difficult, only the
solution is to reduce the effects to a certain level. However, when the organization comfortably
accept the influence and handles them keenly the effects will be enjoyable and positive to the
organization operations. Therefore, if Qantas will apply the possible solution alighted above, it
will achieve its goal without much struggle despite the effect from the external environment. The

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Business, government and other related bodies should be ready to work together tirelessly to
avoid negative influence from environmental factors. The organization should have a good
strategic plan outlining the objectives to be achieved within a limit time and set them in such a
way that are flexible towards external environment forces if arises.

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