Global Business Environment

This portfolio provides an overview of the global business environment in the airline industry and examines how changes impact operations. It covers factors such as political, legal, economic, environmental, and technological influences. The revenue growth and digital disruption in the industry are also discussed.

Global Business Environment

Table of Contents
INTRODUCTION...........................................................................................................................3
MAIN BODY...................................................................................................................................3
CONCLUSION................................................................................................................................4
REFERENCES................................................................................................................................6

INTRODUCTION
Global business environment is referred as the surrounding in distinct autonomous
nations with forces exogenous to local environment of a firm and influence the decision making
of management on utilization of resources and capabilities (Kasemsap, 2015). This portfolio
covers an overview of global business environment of airline industry and how changes impacts
on firm operating in it.
MAIN BODY
Global business environment is defined as the wider surroundings in which a business
perform its operations and functions. There are various factors which impacts on operations and
functions of business. These factors includes political, legal, economical, environmental,
technology, social factors etc. Changes in these factors will impacts operations of business in
positive or negative way. In airline industry, the revenue has grown rapidly which makes the
industry strong (Savrul, Incekara and Sener, 2014). In year 2017, the net profit of sector exceeds
$34 billion. Despite of increasing levels of cargo traffic and airborne passenger, the revenue has
rising sluggishly over the last five years as growing competition and growing fuel prices have
pressure downward on freight shipping rates and ticket prices. Over the past some years, an
increase in animal related accidents on board air-planes has maximised drastically. For example:
Delta air lines reported around 84 percent spike. As airlines acts as a bridge between nations, it
is ineluctable that these wind up in political scuffles. A current example of it includes ban of
Trump management on travellers from certain countries with a Muslim majority. Apart from
this, the dispute of Qatar with Persian gulf neighbours results in banned on national airlines
from its most moneymaking markets. In airline industry, the digital disruption brings huge
changes.
Digital technologies changed the cost structure of sector which enable new entrants like
Wow Air to utilize technology in order to cut off legacy carriers like British Airways. For
instance: digital technology is exploited by Wow Air like internet only booking system in which
physical check in infrastructure is not require to outcompete British Airways. To overcome
competition, British Airways also exploit technological developments to minimise then influence
of digital disruption. The company has invested in boarding pass operations in order to digitalize
it which has made it very easy for passengers. On may 2017, investment in technology was

highlighted by massive failure in IT when the servers of airline at its data centres were damaged
physically which affected over 1000 flights of company (Shenkar, Luo and Chi, 2014).
(Source: Revenue of commercial airlines worldwide from 2003 to 2020 (in billion U.S. $), 2020)
The above statistics represents the revenue generated by airlines all over the world from
year 2003 to 2020. It is expected globally that commercial airlines will generate around 872
billion U.S. $ combined revenue in year 2020.
CONCLUSION
As per the above mentioned report, it has been concluded that in airline industry, there
are various changes takes place since year 2017 which results in drastic changes in operations
of airline industry.
Illustration 1: Revenue of commercial airlines worldwide from 2003 to 2020 (in billion U.S. $)

REFERENCES
Books and Journals
Kasemsap, K., 2015. The role of customer relationship management in the global business
environments. In Trends and innovations in marketing information systems (pp. 130-
156). IGI Global.
Savrul, M., Incekara, A. and Sener, S., 2014. The potential of e-commerce for SMEs in a
globalizing business environment. Procedia-Social and Behavioral Sciences, 150,
pp.35-45.
Shenkar, O., Luo, Y. and Chi, T., 2014. International business. Routledge.
Online
Revenue of commercial airlines worldwide from 2003 to 2020 (in billion U.S. $), 2020.[Online].
Available through: <https://www.statista.com/statistics/278372/revenue-of-commercial-
airlines-worldwide/>