Industry Analysis and Possible Adaptations : Report

Added on - 21 Jul 2020

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Industry Analysis andPossible Adaptations
TABLE OF CONTENTSINTRODUCTION...........................................................................................................................1MAIN BODY...................................................................................................................................1Use of PESTLE model and Porter’s 5 model..............................................................................1Analysing internal business environment using Value chain model..........................................3Reflective writing........................................................................................................................6CONCLUSION................................................................................................................................8REFERENCES................................................................................................................................9
INTRODUCTIONAround the world there are many companies that deliver their customers with similartype of products and services. Focus of these organizations is to gain maximum profit. This isonly possible when they are able to understand requirement of customers. Taste and preferencesof customers changes frequently and it is important for the business to understand them areappropriate steps are taken (Nataraja and Al-Aali, 2011). To carry out the report in appropriatemanner, British Airways is taken into consideration. Cite firm focus on understanding theircustomers and delivering them services with high quality. This report covers influence micro andmacro environment on airlines sub sector in UK economy. Further, it covers analysing internalbusiness environment of British Airways. Lastly, it also includes reflection on usefulness of 5forces model.MAIN BODYUse of PESTLE model and Porter’s 5 modelThere are different types of models that are helpful enough to make analysis of the macroand micro environment. In this context, there are two models implemented and this will help tomake proper analysis of the airlines sub sector in UK economy. More specifically, PESTLE andPorter 5 forces model is used:PESTLE analysis: First thing that comes in mind for airlines industry is comfort andluxury. However, many other aspects also considered in this industry. Many airlines companiesare facing high operation cost and reduced margins and profits. Below given are the 6 factors ofthis model:Political: The type of environment in which airlines industry operates is political inwhich customers are favoured. Main reason for this is that safety of people is paramount andthere are strict regulation followed so that (Asrar, Ali Omar and Syed, 2017). Apart from thispassengers can push themselves towards other airlines as the type of services delivered will besimilar but the cost will different. As per the type of perception that is carried out by individuals,they prefer to get services that are delivered to them at low cost but high quality.Economic: Due to the terrorist attack increases has high negative impact over thebusiness of airlines. Apart from this, the prolonged recession, changes in prices of oil andimminent global slowdown and considered to be the economic factors that are negativelyaffecting the business operations of airlines. It is important for airlines industry to cope up with1
high fuel prices, high competition, labour demand, etc. When these type of condition arise, thenthere are conditions in which the price of services increases so that these costs can be met(Ancell, 2016).Social: There are major social changes that are identified due to change from millennialgeneration’s emergences into customer’s class. The demand of customers has raisedtremendously. In this context, there are frequent changes that have to be made so that they areable to satisfy the requirements of service users. In order to meet up the requirements, it isimportant for the airlines to stabilize the cost.Technology: With time, there are many changes has taken place in relation withtechnology. It is important for the airlines industry to make sure that new or updated technologyshould be used so that high quality services are delivered (Abdi and Sharma, 2010). When theseare not done, then it becomes difficult for the business to satisfy customers. By using advancedtechnology, the use of fuel can be used effectively and thus the cost of services can be reduced.Legal: In recent years, there are many lawsuits that have raised on the side of bothcustomers and employees. Further, the regulators are very conscious and strict towards theairlines industry. Apart from this, legislations are helpful enough to make sure that customersand employees get proper services and all their needs and requirements can be satisified inappropriate manner.Environment: Environment of the countries play vital role in airlines industry. In thiscontext, when the climates of the countries are not favourable, then it becomes difficult for thebusiness to deliver their services. Apart from this, the airlines need to make sure that all theservices that are delivered by them are effective enough in which customers are satisfied.Porter five forces: Unique services are delivered by airlines industry. With huge level ofconvenience, passengers are transported and this cannot be delivered by any other industry.Below given are the five aspects that are covered in this model:Bargaining power of buyers: There are two group of buyers, first are the individual flyersand other one is the buyers. Individual flyers are the people who buy plan tickets for number ofreason like personal or business reasons (Pringle and Huisman, 2011). On the other hand, buyersare the online portals and travel agencies. Second group work with many companies in order todeliver customers with best flights possible. Both these groups focus on making purchases based2
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