External and Internal Business Environment

This document provides an overview of the external and internal business environment and its impact on management. It discusses the competitive environment using Porter's five force analysis and analyzes inbound logistics, operations, and outbound logistics. It also explores the value chain and identifies key value adding activities. Study material and solved assignments on this topic are available on Desklib.

External and internal
business environment

Table of Contents
INTRODUCTION...........................................................................................................................3
TASK 1............................................................................................................................................3
Introduction on organisation........................................................................................................3
Provide background information and discuss products and services of an organisation.............3
TASK 2............................................................................................................................................4
Analyse competitive environment by applying Porter's five force analysis................................4
TASK 3............................................................................................................................................6
Analyse inbound logistics, operations and outbound logistics....................................................6
Analyse any two support activities in Porter's Value chain.........................................................7
Identify key value adding activities with justification.................................................................8
TASK 4............................................................................................................................................9
Summarise and reflect how business can deploy information technology and use innovative
idea to improve its business processes and to enhance its competitive positioning....................9
CONCLUSION..............................................................................................................................10
REFERENCES..............................................................................................................................11

INTRODUCTION
The marketing environment of company comprises of both internal and external factors
which can affect the abilities of management in order to manage successful relationship with
essential stakeholders. Internal environment is more specific as it comprises role of owner,
worker or material which participate to control organisational activities and incur smooth
operations. On other side, macro which is a part of broad environment comprises of societal
forces that can affect overall society and the business has to make modifications accordingly
(Aguilera and et. al., 2015).
To better define the topic Emirates Airline has been selected which is a part of aviation
industry and one of the largest airlines of Middle East. The company has more than 3600 flights
and currently operate around 80 countries. This report cover topics like overview of the
background and services offered by Emirates, analysis of competitive environment by
successfully applying Porter's five force model and Determination of inbound or outbound
logistics. Apart from this support organisational activities by applying Porter's value chain
application of model and deployment of the use of information technology to enhance the
existing operations and gain competitive positioning are also covered in this project.
TASK 1
Introduction on organisation
Emirates Airlines was founded in the year 1985 under leadership of Dubai Emirates with
the objective to enhance infrastructure of UAE. Today, Dubai's airline has evolved as one of the
largest airlines of world that help to generate enormous amount of capital. The company has
more than three thousand flights which cover wide destinations in over eighty countries from its
hub which is in Dubai. The main reason for immense growth of company is that it offer modern
and comfortable arrangements for its guest, invite diverse workforce and adopt latest technology
to constantly enhance aircraft services (About Emirates Airline, 2019).
Provide background information and discuss products and services of an organisation
Background information: Emirates is fourth largest airline all over the globe which was
incorporated by royal family of Dubai in year 1985. Initially, for the first time flight EK600
covered distance from its hub that is Dubai to Karachi then after high cost carrier successfully
diversified its business and carry national and international traveller effectively (History of

Emirates Airline, 2019). As the company operate independently, so in 1980 it gain major
technical as well as administrative assistance from Pakistan international airlines. Additionally,
Pakistan aviation sector lease Boeing aircraft to carry out sustainable operation's. Partnership and
strategic alliance with global airlines like SkyTeam, Star Alliance and many more were the
major expansion strategies that helped company to bring transition and rapidly expand its
operations across national periphery. Like, in the year 1990 Emirates was considered as fastest
emerging airlines whose revenue constantly increased. Even in present Emirates Airlines has
gain renowned position and immense loyalty of customer which led company to gain the
advantage of long term sustainable development.
Product and services: The internal manager of Emirates company always makes best
possible effort to maintain global position for which they either launch new aircraft or modify
existing ones. Being a leading brand, company does not comprise the quality due to which it has
formed strategic alliance with One world and SkyTeam that help in brining favourable
alternation. Along with that it receives the order of aircraft from well known supplier that is
Boeing and Airbus like it is largest operator of Boeing 777. In 2000, Emirates airlines ordered
around 25 Boeing 777 as well as eight and three Airbus A340-500s, A330-200s airlines
respectively. Therefore, with the increasing size airline place the order which is based on latest
technology for the convenience of existing and potential customer.
TASK 2
Analyse competitive environment by applying Porter's five force analysis
Competitive environment comprises the role of external forces that can affect operations
of particular industry. Based on the level of intensity for competitive forces like high competition
rate Emirate company needs to determine favourable strategy in order to sustain its market.
Although each forces directly impact the operations of business, so by ascertaining the impact it
is likely possible for Airline to suitably access its market position. Emirates airline being high
cost carrier has adopted differentiate strategy due to which it charges high prices for its quality
services. Thus, it is basically possible for competitive companies to determine diverse strategic
changes with objective to gain long-standing profit (Berchicci, 2013). Therefore,by applying
porters five force model the organisation can access ways to capitalise its market and gain
competitive edge over other rivalries present within aviation sector.

Porters five force model: Emirates airline is the leading company that successfully carry
out global operations in diverse regions. Application of this model can help to gain insights about
the competitive environment of airlines and existing position within market to formulate
effective strategy and carry out smooth operations effectively. This framework is basically used
to devise effective strategy and positively carry out operations in order to gain competitive
advantage. Explanation of different forces in context to Emirates airline is determined below:
Threat of new entrant: The barrier to enter aviation sector is significantly high as it
involve huge start up or operating cost which leads to low threat of new entrant for Emirates
Airlines. It is relatively challenging for new company to undergo with such massive expenditure
and spread awareness amongst people. Although within middle east region due to the easy
availability of financial sources new start up can extend credit limit and can incorporate their
business (Porter's five force of Emirates Airlines, 2018). Additionally, the policies, rules and
regulation are quite flexible for start up or new entrant. However, Emirates Airlines has already
established massive position and have government support as well as advantage of economies of
scale. This determine that even after accessing resources it is complicated for new entrant to
compete against them. Therefore, these force determine that aviation sector is saturated and the
number of operation is prominently high so it is not feasible for new start up to gain monopoly
and build strong customer base by wiping out competition.
Threat of substitution: Within airlines industry Emirates company bears moderate
amount of competition from leading rivalries. The customer can substitute to cheaper or low cost
carrier as well as other modes of transportation like railway to travel within national boundaries.
However, in case of international journey Emirates Airline is highly preferred as it provide
supreme level of quality services for which most of the loyal customer are also ready to pay
premium prices. On other side the other airlines charges competitive prices unlike Emirates
company which increases the threat for it. Thus, it constantly practices to identify the changing
requirement of people and offer them desirable service and spacious seating arrangements in
order to make tourist journey desirable enough.
Competitive rivalry: There exist high level of competitiveness to carry out airline
business within global market (Botha, Kourie and Snyman, 2014). Existence of intense rivalry
puts immense pressure on company in terms to maintain supremacy by carrying out optimum
level of expenditure. The internal manager of Emirates airline needs to enhance the quality of

services and update their aircraft in order to maintain competitive edge within industry. Thus, the
company need to run loyalty programmes and spread brand awareness to maintain its market
share. The main rivalries of company are British Airways, Qatar Airways and many more so it
needs to build desirable strategy and remain competitive with the objective to differentiate its
services significantly.
Bargaining power of supplier: In order to gain success and explicitly enhance internal
operation it is vital for airline to establish and share effective relationship with their vendors or
supplier. Within aviation sector the two leading suppliers are Boeing and Airbus to whom most
of the companies depend which leads to high bargaining power of supplier. Thus, in order to
timely deliver energy sources as well as raw material these supplier can easily charge excessive
prices and the companies are not instate to further negotiate (Mavlanova, Benbunan-Fich and
Lang, 2016). Herein, Emirates Airline share healthy relationship and consistent network with its
supplier due to which they gain desirable amount of resources and aircraft for expansion within
stipulated time zone. Thus, to gain competitive advantage and maintain renowned position of
company Emirates can formulate partnership with supplier that can help both parties to leverage
the advantage of overall profitability. Therefore, it is considered as an effective practice to wipe
out competition and constantly upgrade the position.
Bargaining power of buyer: Buyer have low control over the charges of airfare as they
are not liable to exert any influence in terms to change the prices of services. On the basis of
disposable income consumer can only compare the prices of airline services and accordingly
makes viable decision. This led airlines companies like Emirate to change prices based on
seasonal influence such as during peak season company can increase the prices of services and
during off season these prices goes down. As Emirates airline has well established image in
global market due to which high income group people does not hesitate paying premium charges
to avail its services.
TASK 3
Analyse inbound logistics, operations and outbound logistics
The primary activities of Emirates Airline is directly associated with producing as well as
selling the services to target market effectively. Adequate analysis of inbound logistics, operation
and outbound logistics can help the company to enhance it performance significantly.

Inbound logistics: It is vital for Emirates Airlines to maintain supplier supply
relationship with companies like Boeing, Airbus in order to successfully receive the material and
deliver adequate services. This analysis assist company to extensively focus on conversion of
raw material into desirable output. Emirate company has the team of expert engineering, cabin
crew members, airline maintenance, pilot as well as air craft controller that help to maintain the
internal service as well as flight time properly.
Operations: Operation activity takes place once an organisational receives quality raw
material from their suppliers. It simply involve processing of raw material into final unit with the
objective to successfully launch innovative product and services amongst customers within
market. In relation to Emirate company require such activities to perform machining, assembling
as well as testing the parts of aircraft. It even involve repairing as well as maintenance of
equipment to significantly deliver optimum quality of services (Nazari, Herremans and
Warsame, 2015). Moreover, the company operate wide fleet varieties by using air planes of
Airbus as well as Boeing due to which it has become wide fleet aircraft. Thus, it is considered as
a successful stage because it helps to improve overall productivity and maximise efficiency of
staff by gaining immense competitive advantage.
Outbound logistics: It encompasses diverse activities like transportation, material
handling, using warehouses to store inventories, carry out order processing and successfully
deliver final product to destination. In relation to Emirates airlines needs to optimise outbound
logistics in order to explore competitive advantage by scheduling flight successfully. If all the
activities and production process are timely managed then it helps to optimise cost and
maximises overall quality in order to provide immense opportunity and maximises customer
satisfaction.
Analyse any two support activities in Porter's Value chain
Porters Value chain analysis involves the actions performed by an organisation in order
to deliver value to final customer. Most of the large company outsource its parts in order to bring
specialisation for the convenience of final customer. It comprises of primary and secondary
activities that assist customer to derive out desirable value for which company gets huge
profitability margin.

Supporting activities are facilitated by business entity in order to coordinate with the
functioning of primary value chain. The explanation of secondary and supporting activities in
relation with Emirate airlines are determined below:
Human resource management: It comprises of diverse range of activities that assist
Emirate company to effectively optimise its value chain. This function helps in managing the
quality of manpower, handle legal matters incorporate financial planning as well as strategic
management. The company offer employment opportunity to diverse or inclusive workforce due
to which it has offer employment opportunity to more than sixty thousand employees. The HR of
company perform recruitment and selection cycle mainly through campus recruitment (Williams
and et. al., 2013). Like, the Emirate Aviation college shapes the knowledge of students and offer
them core value in order to make them an essential of company. With the help of training
session, personal appraisal and reward programme is conducted to improve the performance of
overall staff effectively.
Technology development: Adoption of latest technology as well as innovative is the most
essential part of airline company that helps to create unique image within market. To maintain
competitive position Emirates company has its in house research centre that helps to cater
desirable insights from market. This supporting function helps to bring recent trend within field
by accommodating the requirements of customer successful.
Identify key value adding activities with justification
As the whole process of value chain helps to deliver signifiant amount of value in terms
to expand business operation and deliver services to final customer. Amongst diverse activities
the explanation of two value addition activities which helps to generate immense amount of
revenue are determined below:
Marketing and sales: Emirates is the premium brand that offer luxurious services to
customer in order to make valuable in flight experience. To spread market awareness and retain
its customer base, company sponsor various sports events with the objective to establish unique
brand image. This is considered as an essential value adding activities as it is handled by
professional as well as skilled workforce to maintain the global image of company (What is
Value Chain Analysis, 2018).
Services: From the subsequent years Emirate Airline is well rated company in terms to
deliver preferable amount of in-flight entertainment services. In comparison to other companies,

it allow the client to carry out communication through mobile devices. Along with that the
passenger remain updated about current news posted on screens and gets after sales services like
skyward miles where customer can spend the earned mile across hospitality industry. Being
technology driven company they access all the queries of their passenger, allow them to check in
before 24 hours of their scheduled flight. Additionally, the copy of boarding passes are not
required as they can be accessed through electronic devices. This determines that service is
considered as a value added activity that highly provide convenience to passengers.
TASK 4
Summarise and reflect how business can deploy information technology and use innovative idea
to improve its business processes and to enhance its competitive positioning
Information technology is considered as an essential part of an organisation as it help in
the generation of relevant data that help to gain immense success. With the growth and
successive use of internet has helped company to retrieve as well as share essential informal
successfully. Emirates company has the sole department of Information and technology that is
used to collect essential business information on the basis of customer feedback, advertising,
online selling and many more. All the derived information acts as an opportunity in terms to gain
immense success (Managing Information Systems, 2019). The objective of manager behind the
use of information technology is to improve the competitiveness level and earn preferable
amount of profitability by exploit the advantage of competitive positioning.
Moreover, the airlines has effectively collaborated with other companies of information
and technology like Microsoft which led to the immense growth and development by gaining
adequate data and enhances In-flight services. Application of such technology assist company to
enhance the effective communication between customer as well as company based on which
Emirates Airline can restructure its services. Thus, based on porters five force model Emirate
company experience moderate threat of substitution so with the helps of IT it can successfully
build effective strategy and overpower existence of other competitors. This led to sustainable
decision making process and deliver valuable primary and secondary activities as all the
information of staff, customer and flight are available within centralised database of company.
Therefore, it is used in delivering effective personalised services to maintain unique positions
and gain sustainable positions.

Innovative idea is generated via information technology that leads to systematic
management of information and encourages internal customer to access the data significantly. As
on the basis of Porter's model Emirates company is a part of high competitive industry due to
which it goes through immense pressure in terms to maintain differentiated position. The
manager of company can access the record of their existing customer on the basis of which they
take essential decision in terms to improve their services and meet the standard. Like, earlier the
passenger were supposed to take printed copy of their boarding passes along with them but to
make the task easier now they need not to take any copy (Zhu, Sarkis and Lai, 2013). Based on
IT solution gained at real time Emirate's in-flights services are automatically updated in order to
enhance the positioning of business. On the basis of such technique Porter's value chain ensure
that the company can effectively manages its effort and deliver worthy services for the well
being of overall market.
CONCLUSION
From the above report it has been determined that systematic analysis of internal as well
as external business environment helps the manager to articulate desirable strategy and gain
preferable amount of success. To flourish the operations of business it is vital to manage the
relationship with diverse stakeholders of company. For better functioning it is vital for business
to apply Porter five force model to examine the pressure of different market force and maintain
overall competencies to maintain industry attractiveness. Similarly, value chain analysis is a
framework that involve diversion activities which start from procurement of raw material and
function till the delivery of output. In order to carry out transition this framework involves
primary and supportive activities to deliver value to ultimate customer. Thus, information
technology seek out vital insight from market which is then converted into solution or innovative
idea for sustainable performance of an organisation.

REFERENCES
Books and Journal
Aguilera, R.V. and et. al., 2015. Connecting the dots: Bringing external corporate governance
into the corporate governance puzzle. The Academy of Management Annals. 9(1).
pp.483-573.
Berchicci, L., 2013. Towards an open R&D system: Internal R&D investment, external
knowledge acquisition and innovative performance. Research Policy. 42(1). pp.117-
127.
Botha, A., Kourie, D. and Snyman, R., 2014. Coping with continuous change in the business
environment: Knowledge management and knowledge management technology.
Elsevier.
Mavlanova, T., Benbunan-Fich, R. and Lang, G., 2016. The role of external and internal signals
in E-commerce. Decision Support Systems. 87. pp.59-68.
Nazari, J. A., Herremans, I. M. and Warsame, H. A., 2015. Sustainability reporting: External
motivators and internal facilitators. Corporate Governance.
Williams, B.D. and et. al., 2013. Leveraging supply chain visibility for responsiveness: The
moderating role of internal integration. Journal of Operations Management. 31(7-8).
pp.543-554.
Zhu, Q., Sarkis, J. and Lai, K. H., 2013. Institutional-based antecedents and performance
outcomes of internal and external green supply chain management practices. Journal of
Purchasing and Supply Management. 19(2). pp.106-117.
Online
About Emirates Airline. 2019. [Online]. Available
through:<https://www.emirates.com/in/english/about-us/>
History of Emirates Airline. 2019. [Online]. Available
through:<https://www.emirates.com/in/english/about-us/timeline/>
Managing Information Systems. 2019. [Online]. Available
through:<https://ivypanda.com/essays/managing-information-systems-emirates-airline-
company-term-paper/>
Porter's five force of Emirates Airlines. 2018. [Online]. Available
through:<https://www.porteranalysis.com/porters-five-forces-of-emirates-airline/>
What is Value Chain Analysis. 2018. [Online]. Available through:<https://www.visual-
paradigm.com/guide/strategic-analysis/what-is-value-chain-analysis/>