Contemporary Developments in Business and Management

This document discusses the external influences on business and management, including political, economic, social, technological, legal, and environmental factors. It also explores the relevance of CRM for organizations and the effectiveness of British Airways' response. The document provides insights into the contemporary developments in business and management.

Contemporary Developments
in Business and Management

Table of Contents
INTRODUCTION...........................................................................................................................3
TASK 1............................................................................................................................................3
Overview of an external influences towards which an entity is subjected to and explaining the
significance of each and every external influence to an enterprise.............................................3
TASK 2............................................................................................................................................6
a. Relevance of the CRM for an organization .............................................................................6
b) Effectiveness of British airways response...............................................................................7
C) Areas for improvement in response of British Airways.........................................................8
CONCLUSION................................................................................................................................9
REFERENCES................................................................................................................................1

INTRODUCTION
Contemporary business development relates with the external influences that impacts the
performance of an enterprise, Such factors includes the economic, political, social, technological
changes that affects the performance and the position of the firm in an overall industry.
Moreover, it highlights the different customer relationship management practices that is adopted
by British airways in order to develop better relations with its customers.
TASK 1
Overview of an external influences towards which an entity is subjected to and explaining the
significance of each and every external influence to an enterprise
The British Airways is counted as an international Airline company of UK. There fore it
is affected by various external factors in operating the Airline Business that are as follows-
Political factors- It relates to the government regulations along with the stability and
instability of the government. The airline industry is seen as subjected to the highly strict
regulations. Such regulations are considered with respect to the routes which has been selected
by an Airline company, the status of an Airline used, fare set, business partners with which the
company is working and cost paid regarding infrastructure (External factors. 2018).
Governments of several countries across the globe had put forward many of the security
measures in fighting towards the breach of rules and regulation and illegal immigrations. Airline
company participates with various governments bodies for guaranteeing the security and the
safety measures. In case of the British Airways, it operates in very challenging and risky political
environment that is always carrying the threat of terrorist attacks which as a result leads to the
political stir. Moreover, in the previous year, Brexit had sparkled a political turmoil that has
impacts the economic performance of the country. This factor has negatively influenced British
Airways as it has lost large amount of the money. Because of all such issues, government has
made strict regulations with respect to the product and prices which has influenced the proper
functioning of the British Airways. So, the British Airways requires to show utmost care towards
the political influences and the legal regulation for achieving smooth functioning of the business.
Economic factors- This factor refers to the economic performance of the country, it also
includes change in interest rate, exchange rates, disposable income of consumers and an overall
economic condition in UK that has direct an impact on the performance of British Airways. Cost
of the fuel is counted as the most important factor for the British Airways. In the year 2015,

British airways has used nearly 5.7 million tonnes of fuel. For example, in 2015 , British
Airways expenses on the fuel has been decreased by the amount £ 484 million, or the 13.8% in
comparison to previous year along with increasing the scope of its operations. However, the
decrease in the fuel prices has proved to be an important factors which is beneficial for the
business (Zinovieva and et.al., 2016). Moreover, there are wide range of other economic factors
that has an impact on the revenues of the organization. For example- rapid fall in the prices of oil
in the past two years, resulted a drop in the number of corporate customers on the key oil routes,
that has resulted in decrease in the revenue of passenger amounting to GBP 288 million. Thus,
due to an uncertainty following a Brexit situation, BA faced range of economical impacts.
Because of the political stir and the intervention of the government, rate of the pounds
depreciated and revenues of the British Airways were adversely affected. Despite getting
advantage from interest rates and lower fuel prices, the problems tends to persist with the
occurrence of adverse natural external influences. The sharp downturn in the economy from past
few years has affected demand of air travel which has affected BA.
Social factors- British Airways has formulated and implemented newer tactics and
strategies with respect to their target customer segment. Thus it could be analysed that the
organization has identified the needs of the customers and has provided a low cost services
facilitates the changing attitude. In case of the BA, it has faced huge number of issues like ATC
strikes in France. Because of this factor, ATC union strikes and government had cancelled
several flights over France (Vatharkar, Gao and Fomin, 2018). By considering all such
scenarios, it is ascertained that social and cultural factors need to be considered as it impacts
customer needs and potential market size. It is important for the British Airways in focusing on
the lifestyle, constant trend changes, tastes as such aspect could seen as significant opportunities
in overcoming the limitation.
Technological change- It acts as the most important external factor that has the great
influence on the working of the Airline companies. It could be understood easily as this industry
requires heavy use of the technology. Nowadays, passengers prefers to book and access the
tickets online along with the check-in services through their devices instead of standing in the
line or manually booking the tickets. Failing in being technical-savvy results in loss of client. In
other words, it also means that an aircraft are lighter that provides fuel and speed economy.
Increased level of technological advancement could make an Airline gain an advantage of

offering more safety and an valuable services. After the terrorism attack of 9/11, Airline industry
is been undergoing with a digital disruption. Digital revolution is significantly changing the
structure of the cost of an Airline industry. In respect to the British Airways, it is reviewed that
an entity is exploiting for several technological advancements in reducing an effect of
disruption. The company is making more and more investment in the varied technological
innovation in providing the quality support and the safety measures to its customers.
Legal issues- Apart from the above external influences, legal factors holds a special
importance in analysing business environment of an industry. There are many laws that is been
implemented for the air traffic and also with respect to security and the safety of the passengers.
There are several regulations that requires an airline company to offer more safe and secure
travel along with the high quality of services. Many rules and regulations has been proposed that
regulates the ways in which an airline treated its passengers. The major legal measure that
affected the business operations of BA is an influence of the trade unions (Wang, 2019). This
had adversely affected the British Airways. Recently, walkout happened that lasted for the 3 days
which resulted in cancellation of the flights. Shortage of the crew members and employees had
affected business operations where a union demanded in the protest for the pay freeze and the
changes in the working conditions. The legal provision creates many issues for the British
Airways where a formal and strategic resolution of the company is required in resolving the
issue.
Environmental- Ecological imbalance has greatly impacted an airline industry in terms
of fuel which has adversely impacted industry and the airlines that are required for investing
more in an environment friendly and the fuel efficient aircraft. Climatic changes and other
weather conditions has a direct impact on an aviation industry but the airlines at present has
identified the needs and is practising for green flying process in order to protect the environment
from its adverse impact. Such practises includes huge funds whereas, airlines could not
compromise on the same because the passengers are been held as accountable for their respective
carbon footprint. British Airways faced a disruption in the business operation because of the
bad climate which leads to cancellation of more than 50 flights. Such external environment
factors causes the travel problems for the company that adversely impacts the customer
satisfaction, future revenues and any other additional cost. An organization ensures of having a
least impact because of an environment and in implementing quality operations for overcoming

an environmental aspects as the government of UK focuses on an ecological factors on a strict
basis.
TASK 2
a. Relevance of the CRM for an organization
For the customer oriented aviation industry, putting the right CRM strategy is very
important and British airways has done it rightly. It flies 145,000 people to more than 200
destination every day. The reason behind what makes customers come back is its successful
CRM strategy. The British Airways Executive club is one of the example of its CRM loyalty
schemes. This scheme is free to join and with no other cost. In this, customers earns points
known as 'Avios” through purchasing hotel stays, flights, car rental through British Airways or
its partners. These earned points can be redeemed on travel or accommodation with British
Airways (Anshari and et.al, 2018). It provides its customers with various options such as meal
and seat preference which makes the customers re-booking experience seamless. In this scheme,
as the customer fly with British Airways , a process is made through the level of executive club
membership, for example, from silver to gold, blue to bronze and then to 'premier' tier. To keep
track of all this, British Airways is using Teradata CRM solution since 2002 which has helped in
creating proper communication. British Airways provides offers and discounts to its loyal
customers which helps in customer retention. It uses customer preferences while providing them
great offers.
British Airways has the centralized information system which helps in avoiding any loss
of data . It analyse the key trends that helps in providing more customer oriented services. In low
times, it tries to manage its prices by managing its cost and making it's price lower than its
competitors to grab more customers. During off seasons, it provides attractive deals to encourage
its customers to have another vacation (The impact of Customer Relationship Management on
your business. 2020). British Airways has been innovating its marketing and branding strategy to
get connected with its customers. CRM has helped British Airways in forecasting the sales
volume and quality of service and in monitoring the overall business performance.
British Airways needs to take decisions with respect to the changing needs of the
customers (Valmohammadi, 2017). British Airways is also present on social media sites which
makes it easy for the customers to share their feedback and review and British Airways can
provide instant answer to their queries. It has segmented the customers based on their profile and

facilitates them in providing offers and deals that meet their expectation. To manage its
customers, it becomes important for the British Airways to take decisions that best suits the
needs and preferences. The services provide by British Airways is such that it helps in dealing
with all sort of customer queries. It includes issuing refunds quickly, transparency of services
and policy, issuing refunds as quickly as possible. These activities and services have helped
British Airways in having a strong customer base and increasing customer loyalty. To be
successful, it requires British Airways to change its policies and all decisions are taking with
respect to the customer expectation and it to take competitive advantage which best suits the
current situation or future trends.
b) Effectiveness of British airways response
Customer relationship management is the best approach used by British Airways to
manage their business interaction with potential and current consumers. It uses data analysis of
clients history with firm to improve commercial relationship with target market, specifically
centring on clients' retention. Executive club is the CRM strategy of company which is quite
effective and beneficial for its business as it helps to retain people for longer and increase sales
higher than before (Dvorak and Razova, 2018). With this scheme, people save their money and
invest in further activities while travelling from one place to another. Throughout executive club
company will generate traffic as compare to their competitors. It has large network of business
partners including restaurants and retailers where people will conveniently earn on their daily
spending. With just couple of flight, consumers easily save their money in future and enjoy the
executive club services effectively. In context of passengers, there are some additional benefits
to join this CRM strategy offered by British Airways, specially when people are regular flyer, for
every flight they can take with BA and earn Avios. On the other hand, Executive Club is not
good for those people to consistently takes flights for travelling, it is not cost effective for them.
The another response taken by British Airways in context of Customer relationship
management, is Teradata CRM solution which provide some benefits to business. It is
considered as one of the best method that help firm identify and action on rapid new revenue and
profit chances across all channels by, offering power to optimize clients relationship with general
understanding of individual passengers, generated from detailed information at interaction phase.
Teradata CRM analysis is tightly integrated between action, learning, analysis and evaluation, it
caters firms with powerful tools in robust environment to analyse and track consumers

purchasing behaviour over period and develop profile to consider opportunities based on new
links discovered between clients attributes and segments (Carillo, 2017). This method applies
information discovery abilities to help British airways build sophisticated models that determine
and predict profitable and meaningful consumers interactions opportunities. Furthermore, with
this response, company is able to learn how frequently they will contact each passenger and
which channels or tools would work better for specific content.
It also helps to determine plan and implement the best communication strategies for each
chance that gain consumers loyalty. Benefits from continuous event based advertisement that
firm will automatically find out & contact to their consumers that meet desired criteria in timely
manner. Teradata CRM makes company able to offer right services and products to right people
at correct time and also strengthen relationships between firm and its target passengers. Along
with all above effectiveness, this system have some negative points that impact on further
business procedure, it is quite expensive instead of other CRM systems that require more
investment which directly impact on British Airways financial budget. The process of updating
system is not possible at every time that consumer a lot of time as well as money. It also
decreases the benefits of row partitioning.
C) Areas for improvement in response of British Airways
Airlines struggle to sustain profit margin and gain market share in today's competitive as
well as economically demanding environment, they will develop and adopt new ways to manager
their consumers relationship to acquire consumer loyalty. The mission of CRM is to increase
operational efficiency, clients loyalty, people retention, long term profitability and productivity.
Microsoft's dynamics 365 is one of the best CRM system that British Airways can use to
improve their response in context of consumer relationship management (Luszczak, 2018). It is
cloud based business applications systems that combines elements of clients relationship
management and ERP along with artificial intelligence tools and Productivity app. This
technique generates smart and colour full study to help firm stay on top of their CR, with this
system company will create personalised and effective looking emails to attract in irreligious
consumers with fresh and clear flight deals & some discounts. It is powered by software giant
Microsoft, developing it one of the most effective and scalable solutions on airline industry. The
advantage of Microsoft's dynamics 365 is that it has experience empowering British Airways
read more about their business partnership with other. It comes up with different features and

applications that firm will chose accord to the requirement and situations. By combining with
this CRM system, organization get connected view of info intelligence on passengers records,
behaviours, transactions, preferences along with data about booking and inventory & in
additional to predict insights tools for decision markers.
The biggest advantage of Microsoft's dynamics 365 is tight connection with other
business applications, for British Airway that rely heavily on outlook and office 365 and run
operations on Dynamic 365 caters more beneficial integration with products than most CRM
programs, which usually rely on third party plug. Furthermore, by having programs like
Microsoft's dynamics 365 that scales down and up based on current demands, improved
collaboration sales and strengthens consumers engagement procedure as well (Somani, 2019). It
helps heighten security, change smart investment infrastructure, improve accessibility and
increase mobility rather than before. The simple and easy ideas is that with data gathered,
workers from design unit to production team to those interacting directly with passengers will
have access to in actual time, it allows them to make smart business judgements. When
companies grows, it adds on more abilities and all of these require to be integrated into work
flow. It increases demand for data analytics, their accessibility and implementation of Cloud
based intelligence. The benefits with Microsoft's dynamics 365 is that it provide build in BI and
analytics that will be merged into British Airways business procedures.
CONCLUSION
By summing up the above analysis it has been stated that external analysis helps the
British Airways in knowing the changes in the various factors due to change in the trend. It also
assist the company in taking appropriate measures in relation to cope up with the changes in the
external factors so that it could attain a leading position in an overall market. Through adoption
of various CRM practices, British Airways could be able to maintain good relations with its
customers and could achieve customer loyalty.

REFERENCES
Books and journals
Anshari and et.al, 2018. Customer relationship management and big data enabled:
Personalization & customization of services. Applied Computing and Informatics.
Carillo, K.D.A., 2017. Let’s stop trying to be “sexy”–preparing managers for the (big) data-
driven business era. Business Process Management Journal.
Dvorak, J. and Razova, I., 2018. Empirical Validation of Blue Ocean Strategy Sustainability in
an International Environment. Foundations of Management. 10(1). pp.143-162.
Luszczak, A., 2018. Using Microsoft Dynamics 365 for Finance and Operations: Learn and
understand the functionality of Microsoft's enterprise solution. Springer.
Somani, D., 2019. Mastering Microsoft Dynamics 365 Customer Engagement: An advanced
guide to developing and customizing CRM solutions to improve your business
applications. Packt Publishing Ltd.
Valmohammadi, C., 2017. Customer relationship management: Innovation and
performance. International Journal of Innovation Science.
Vatharkar, S., Gao, P. and Fomin, V., 2018. Factors affecting business and information
technology alignment at the lower levels of a public organisation. International Journal of
Healthcare Information Systems and Informatics (IJHISI). 13(3). pp.35-48.
Wang, W., 2019. Identification of Factors Affecting Business Process and Business Rule
Integration. In Integrating Business Process Models and Rules (pp. 60-72). Springer,
Cham.
Zinovieva, C. G. and et.al., 2016. Study of external and internal factors affecting enterprise’s
stability. Advances in Systems Science and Applications. 16(1). pp.62-71.
Online
External factors. 2018. [Online]. Available through:
<https://www.abcassignmenthelp.com/swot-and-pestle-analysis-british-airways>
The impact of Customer Relationship Management on your business. 2020. [Online]. Available
through:<https://surveypal.com/2018/the-impact-of-customer-relationship-management-on-
your-business/>
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