Impact of External Environment on Organisation

Business strategy

Table of Contents
INTRODUCTION...........................................................................................................................3
Task 1...............................................................................................................................................3
Analysing the impact of external environment on the organisation............................................3
Internal environment and capabilities of VAA............................................................................5
Task 2...............................................................................................................................................6
Evaluate the level of competitions faced by the Airline industry................................................6
Appropriate strategies and interpretation of data for analysing tactical management decisions
and directions...............................................................................................................................8
Task 3...............................................................................................................................................9
Designing of a strategic plan for the company supported on the environmental analysis...........9
CONCLUSION..............................................................................................................................12
REFERENCES................................................................................................................................1

INTRODUCTION
Business strategy is basically a long standing plan made for the organisation which helps
them to attain their craved objectives and targets. This strategic planning includes factors like,
the sort of services and products they wanted to offer and manufacture, what will be their target
customers and market, and determine organisations goals, mission, vision and also identify the
techniques to implement them. Virgin Antarctic airlines was formed in 1984 with its origin in
England. The company has declared that, because of this COVID situation they are going to
exclude thousand of employees and reducing their passengers count in upcoming years. This
following report will analyse the impact of macro-environment and its tactics. It will also
examine the capabilities of the organisation and their internal environment. Further the report
will evaluate the competitive forces of the market as well. Lastly it will examine the applications
of various theories, concepts and strategic plantings and models.
Task 1
Analysing the impact of external environment on the organisation
The external factors of a business are knowns as its macro factors, these are
uncontrollable and unmanageable because these aspects include sociology, environmental,
governmental component etc. It is not depend on a particular business or organisation it is a
national or regional components which a company need to be manage in order to function
seamlessly (Soltanizadeh and et. al., 2016). For a brief understanding of macro-environment
PESTEL analysis is applied below:
PESTEL model:

Political: Virgin airline have to face various political implications like national and international
taxes and charges obligated on custom duty. Airlines have to authorised several licensing and
routes of their operations. As they function internationally they have to pay different charges on
arrival and fuel taxes also differ from one country to another. There are other juridical factors too
like complying with employee law and custom duty charges etc. The custom cost create issues
for the airlines as they are restricted to trade many products in US markets. Establishment have
to obey the labour regulations by providing minimum wages, take care of tormenting,
exploitations and bullying of workers within the workplace.
Economic: Establishment is compelled to lower down their flight prices to maintain the
competitive advantage in their line of work, as they are facing extensive competition from
various airlines industries (Çitilci and Akbalık, 2020). That cause them a huge loss in terms of
profit. One of the other monetary factor firm have to handle is the increased prices of fuels and
also have threat from the new participants in the industry, which provide better modified services
with lower prices in order to secure their place in the economic market. Increased unemployment
is also a cause for decreased spending power of people which financially effected Virgin airlines.
Social: They have to be socially responsible in managing and ensuring passengers safety and
security on the flight. They have to be equipped with all the necessities and essential equipments
and tools which should be needed at the time of emergency. Virgin Atlantic put a major
Illustration 1: PESTEL model
Source: How to do a PESTEL
analysis. 2016