Comprehensive Report: British Airways Business Environment Analysis

This report provides a comprehensive analysis of the business environment impacting British Airways. It begins by examining the purpose and structure of different types of organizations, including non-governmental organizations, public limited firms, and co-operatives, and their relevance to British Airways. The report then explores the extent to which British Airways meets the objectives of various stakeholders, such as employees, the community, investors, and consumers, along with its responsibilities. The analysis further delves into the economic systems that allocate resources, specifically focusing on free market, centrally planned, and mixed economic systems, and their implications for British Airways. The report assesses the challenges posed by fiscal and monetary policies, regulatory and competition policies, and legal changes on the airline. It also examines the market structure of the airline industry, particularly the oligopoly structure in which British Airways operates, and its impact on pricing and demand. Furthermore, the report investigates how market forces and the cultural environment shape the behavior of British Airways. Finally, it evaluates the impact of global changes in trade regimes and other global factors on the company, concluding with an assessment of the impact of EU policies on UK organizations. The report offers a detailed understanding of the external factors influencing British Airways' operations and strategic decisions.

BUSINESS
ENVIRONMENT

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
1.1 Purpose of different types of organisation............................................................................1
1.2 Extent to meet with the objectives of different stakeholder..................................................2
1.3 Responsibilities of the organisation and strategies to meet them.........................................3
TASK 2............................................................................................................................................3
2.1 Economic system for allocate the resources.........................................................................3
2.2 Challenges due to fiscal and monetary policies on the business environment of British
airways........................................................................................................................................4
2.3 Impact of regulatory, competition policies and legal changes in British airline...................4
TASK 3............................................................................................................................................5
3.1 Market structure of airline industry which impact to the pricing and demand for airline....5
3.2 Ways through market forces shape to organizational response............................................6
3.3 How cultural environment shape to the behaviour of British airways..................................7
TASK 4............................................................................................................................................7
4.1 Impact of global changes in trade regime.............................................................................7
4.2 Global factors that create impact on British airways............................................................8
4.3 Evaluate the impact of policy of EU on UK organization....................................................9
CONCLUSION .............................................................................................................................10
REFERENCES..............................................................................................................................11

INTRODUCTION
Business environment plays a vital role which assist in finding opportunities and threats
for the corporate. In this context, protection and sustainability development are main
responsibilities of every organisation (Elzinga, Gulledge and Lee, eds., 2012). For present study,
British airways is being considered which is engaged into airline services. Its strategy
consistently work for healthy and qualitative services which can be provided in an effective way.
This report focuses on different types of policies and practices which create impact on business
environment. It emphasizes on identifying purpose of different types of organisations who
conduct operations at global market place. Furthermore, impact of fiscal and monetary policy on
the business organisation and their activities is assessed throughout report. Moreover, report
judge’s manner in which business and cultural environment shapes behaviour of the cited firm.
Lastly, report evaluates impact of global factors on cited businesses in United Kingdom.
TASK 1
1.1 Purpose of different types of organisation
Distinct set of business units' organisation have range of goals and purpose to serve. In
this context, they also follow different types of structure such as tall and flat (Meiners, Ringleb
and Edwards, 2014). In this context, following are different types of organization and their
purposes:
 Non-governmental organisations: These businesses aim at enhancing sales and profits
of the company. In UK market Virgin group take place as non-governmental. Their
purpose is to increase loyalty in customers’ mind so that they can easily create brand
value of the enterprise (Baesens, Bapna and Zhao, 2014). These types of businesses are
carried only by private concern.
 Public limited firms: British airways is public limited organisation and it creates value
for economic development of the country. Various companies strive to earn more money
from business operations. Their main purposes is to uplift society by providing healthy
and qualitative services (Pham, Segers and Gijselaers, 2013). In addition to this, their
only purpose is to understand needs of customers so that they can deliver services
accordingly. Main aim of public Ltd. company is to make brand image of enterprise
through maintain loyalty of customers towards the business.
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 Co-operatives: In these types of organisation, people work together for achieving same
set of objectives within the business (Agarwal, Grassl and Pahl, 2012). Its main aim is to
fulfil needs of customers according to their requirements. For example, CBH and
Wesfarmers Ltd. are working as co-operatives society.
1.2 Extent to meet with the objectives of different stakeholder
Stakeholder demonstrates significant role within the enterprise. British airways has
various participants and their requirements from business unit. Thus, they have to meet with
them carefully for achieve their goals (Reed, Shedd and Cahoy, 2013). Below are list of
stakeholders who possess interest within operations of chosen company: Employees: Employees are a key element of organisation who work for same goals of the
company. British airways provides incentives, bonuses and high salaries to employees.
In this way, employees feel satisfied at the workplace (Grabara, Modrak and Dima,
2014). In addition to this, cited organisation provides job security to reduce labour
turnover so that workers feel happy and perform better at workplace. Community: Group of people form as community who are directly and indirectly affected
by British airways activities. Some times business face problem due to in effective
qualitative services to customers. For solve this problem, cited firms offer more
employment opportunities within the society (Yee-Loong Chong, Ooi and Lin, 2014). Investors: British airways operating their functions in effective way through they can
satisfy their investors easily. Investors of the company want to earn more profits on their
money. It will be helpful to cited firm for offering well and good services to attract
potential customers which assist to increase sales in the enterprise. Therefore, chosen
organisation can easily meet with investors’ expectations (Beaumont, Whitaker and
Pedersen, 2013).
 Consumers: British airways is dealing in airline services by providing healthy and
qualitative services to customers. The consumers in present scenario aims to get quick
and hygiene services and cited firm. Thus, cited firm provide training to their employees
which aids to offer the best services at workplace. With helps of this way, skilled
employees can be get within the enterprise (Wilden, Gudergan and Lings, 2013). Further,
the chosen company wants to increase its brand image in front of customers so that they
can provide services at the low cost.
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1.3 Responsibilities of the organisation and strategies to meet them
British airways is operating as the famous organisation in UK. For meeting goals of cited
enterprise, it is very important for the organization to behave responsibly. The cited firm has
different responsibilities towards their stakeholder which are as follows: Responsibilities towards workers: British airways has duty to provide effective working
environment to their employees so that they can easily enhance sustainability of their
workers (Işık, Jones and Sidorova, 2013). The business objective is to fulfil the needs of
employees so that conflicts never take place. For this, they organize training programs for
staff-members which increases their skills and knowledge. It also assists to coordinate
various activities at the workplace so conflicts can be reduced easily. In addition to this,
the company has to determine reward system at workplace in which they provide
monetary and non-monetary benefits to workers (Elzinga, Gulledge and Lee, eds., 2012). Responsibilities towards government: Each organisation needs to follow certain rules
and regulations which are made by government. British airways fulfil responsibilities
through paying taxes on time and following laws as well. It can support to economic
development of the country. Responsibilities towards the customers: Customers want to get hygiene services from the
cited firm (Pham, Segers and Gijselaers, 2013). Thus, British airways need to identify
needs and requirements of customers and provide them services accordingly. In addition
to this, cited firm have to care for them at time of travelling.
 Responsibilities towards the society: British airways has another responsibility to create
more plants and keep safe surrounding in business. For fulfilling these responsibilities,
they have to use waste material and recycling them for reducing wastage (Baesens, Bapna
and Zhao, 2014). With help of this way, they can serve best in the society and works
better in business environment.
TASK 2
2.1 Economic system for allocate the resources
There are different types of economic system that exist such as free market, centrally
planned and mixed economic system. It is essential to allocate the resources effectively through
several ways which are as follows:
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 Free market economic system: Mainly this system applies on those where all decisions
taken by only enterprise. In this system, decisions are taken on the basis of demand and
supply of organisation (Chadee and Roxas, 2013). British airways cannot influence to
their customers to purchase their services. Thus, with utilize impressive resources
business can support to economic development of country.
 Centrally planned economic system: According to this system, all major decisions are
taken by government which are related to allocate the resources (Pham, Segers and
Gijselaers, 2013). Government authorities allocate their resources effectively so that
economy does not face unemployment problem.
 Mixed economic system: Mixed economic system consist mixture of socialism and
capitalism. Private organization utilize resources effectively to generate more profits and
socialism consist the resources as per the company requirements. With taking joint
efforts, organization can perform better functions (Chadee and Roxas, 2013).
2.2 Challenges due to fiscal and monetary policies on the business environment of British
airways
Organization activities are directly or indirectly affected by fiscal and monetary policies.
Fiscal policies are concern with taxation as high tax rates create more expenditure for British
airways. On the other hand less taxes create impact on the earnings of the company and their
returns. PSNB is connected with fiscal policy which consist role when firm face issue due to
expenditure higher than returns. It creates direct impact on the customers due to high prices by
British airways for their services (Baesens, Bapna and Zhao, 2014).
In addition to this, monetary policies are related with supply of the money in country.
Government make control on the money and fluctuation of interest rates according to demand. If
interest rates rises then credit, it creates more cost for British airways so that firm need to
enhance their prices which affect to the sales. Further, if high currency exchange rates consist
then the exports it creates more cost and affect to value of country (Hair, 2015).
2.3 Impact of regulatory, competition policies and legal changes in British airline
British airways is the fastest growing company in UK marketplace. There are so many
policies generate impact on the business operations. Competition policies are connected with the
price stability and competitive environment at the workplace. Several acts and legislations made
by the government which create impact on the organization (Beynon-Davies, 2013). Competition
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Act 1998 regulate with business practices and determines protection of the cited firm position in
the marketplace. In addition to this, Enterprise and Regulatory Act 2013 consist policy which
establish for new competition within the market. It creates positive impact on cited firm because
it helps to enhance productivity and skills in corporate marketplace.
In addition to this, Regulatory mechanisms assist to reduce trade barriers from British
airways. With considering this legislation, cited firm can perform better at the workplace (Pham,
Segers and Gijselaers, 2013). Competition policy also play major role to keep functions at low
prices of services. Competition policy also encourages to cited firm to make their operations in
new areas with creating positive economical results.
TASK 3
3.1 Market structure of airline industry which impact to the pricing and demand for airline
There are different types of structure consist within the market such as monopolistic,
perfect, monopoly and oligopoly, etc. British airways operating their functions in oligopoly
market structure (Agarwal, Grassl and Pahl, 2012). In this way, few organization take place to
compete the enterprise. On the other hand, there are few suppliers take place within the market
who have full control on the industry. Thus, cited firm earn more profits from the operations of
the marketplace. If the price element fluctuate, it creates impact on the sales of chosen enterprise.
Features Perfect
competition
Oligopoly Monopoly Contestable
Market
Number of
enterprise
In UK there are
several firms
which operate
function in this
type of
competition.
Very few firms
take in the
marketplace.
Few firms
working in the
monopoly market
structure.
Several
organization are
works in this
structure
Different types of
products
This type of
competition
provides
homogeneous
This type of
industry offers
differentiated
products (Bryman
It has very limited
products.
Products can be
differentiated.
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products. and Bell, 2015).
Short term profits This structure
earn profit in
short period.
Yes Yes Profits are
possible
Long term profits No Yes Yes Hit and run entry
Pricing ability Price taker Affected by
market structure
Price can be
influence by
demand curve
with changes in
regulations
(Bøllingtoft,
2012).
Pricing power is
limited but they
are price maker
Non price
competition
No competition
accompanying to
price exist
High Moderate High
Economic High Low portion Low allotment High dependency
Barriers of entry No High barriers
consist within
market (Reed,
Shedd and Cahoy,
2013).
High barriers Low entry exit
barriers.
3.2 Ways through market forces shape to organizational response
There are various market forces consist which create shape to enterprise such as demand
and supply, customers perception, etc. With changes in customers demand, British airways face
major issue. Thus, cited firm need to meet with customers requirements and supply to create long
term relationship with them. When demand goes high then supply, prices decreases and when
demand is low firm increasing their prices. This is because, manufacturing cost will be high of
business so chosen company have to enhance their prices (Grabara, Modrak and Dima, 2014).
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British airways need to maintain their price system to meet with demand and supply for
creating more money. In addition to this, customers perception also thing that can be affect to the
overall organization. Due to changes in customers behaviours demand of chosen enterprise
services reduces. If the company adopt effective strategy, cited firm easily enhance demand of
the products and services (Yee-Loong Chong, Ooi and Lin, 2014). For instance, chosen business
can provides discounting services on holidays packages which helps to attract the tourist of
different nation.
3.3 How cultural environment shape to the behaviour of British airways
Cultural environment consist values and ethics of British airways which create major
impact on the business activity. When the company operate their functions in different nation,
cultural factor create major role to make shape the enterprise. For example, UK perceive high per
capita income that other places (Beaumont, Whitaker and Pedersen, 2013). Thus, products price
in UK is high then other areas. On the other hand, the chosen enterprise also operating their
functions in Egypt where unique, stable and complex culture take place. Thus, it creates direct
impact on the organization due to stability cited firm cannot effectively operate their functions.
This is because, company not make changes in their existing operations. Beside this, when they
maintain their functions according to culture of country it will generate positive impact on the
enterprise (Işık, Jones and Sidorova, 2013). As results, the company can easily give shape to
business through they can generate more income.
In addition to this, work practices considered important aspect which demonstrate safety
hazards at the workplace where British airways operating their functions effectively. For
example, flexible working hours need to be provided by the company. Further, chosen enterprise
can also provide adequate and sufficient machine guards with effective conditions. Unsafe work
practices can be create adverse impact on the enterprise performances (Wilden, Gudergan and
Lings, 2013).
TASK 4
4.1 Impact of global changes in trade regime
In international trade generating more revenues within the enterprise. British airways
leading with UK and other areas with spreading their services. Global trading give various
positive impact on the cited firm which are as follows:
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 Growth and expansion of organization: British airways operating their functions in new
markets. It will helpful to generate foreign currency from the different nation (Elzinga,
Gulledge and Lee, eds., 2012). In this way, chosen business can easily grow and expand
their organization in the great extent. Enhance sales and profitability: International trade also gives advantage to British
airways for increasing sales and revenue to the company. With the help of this system,
chosen enterprise can invest more money which enhance economic value of the
organization. Increase market share: Cited firm perform very well in the global marketplace which
helps to enterprise for increasing their market share in various parts of the world
(Meiners, Ringleb and Edwards, 2014). In this way, company will easily make their
products share at high level for delivering effective services. Brand value: British airways can easily enhance their brand image in the global
marketplace which gives positive impact on the organization. Market opportunities: British airways dealing with international marketplace so that it
provides more opportunities to enterprise to grow the company. The chosen organization
is the member of EU which is the great achievement of the enterprise (Baesens, Bapna
and Zhao, 2014).
 Constant income: Through entering in global marketplace, British airways has more
revenues which helps to achieve their objectives. As results, it will assist to develop their
market easily with new strategies and outcomes.
4.2 Global factors that create impact on British airways
There are many global factors includes which create impact on the cited firm which are
as follows: Competition: British airways serving their effective services which create changes in
their strategies (Pham, Segers and Gijselaers, 2013). It generates unique services to
survive within the marketplace for long time. Beside this, higher competition also harm
to the income of organization. Thus, profitability of the company get reduces in the
marketplace. Recession: Recession considered major impact on the profitability of the organization. If
in UK bad economic conditions take place, customers are unable to buy products and
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services (Agarwal, Grassl and Pahl, 2012). In recession time British airways terminate
their employees so that unemployment take place within the organization.
 Government rules and regulations: When the enterprise take place in global market,
British airways need to follow rules and regulations of the country. With considering
rules and regulations, cited firm can make their changes in existing services (Reed, Shedd
and Cahoy, 2013). The chosen enterprise mainly face taxation policy in the other country
which create impact on their performances.
4.3 Evaluate the impact of policy of EU on UK organization
EU policies and regulations supports to the organization but it also creates negative
impact on the organization performance. In this context, below are the policy explains within the
enterprise: Employment policy: British airways follows employment policy of UK and treat their
employees well. They provide flexible working hours, job security to their workers so
that they are performs better within the enterprise (Chadee and Roxas, 2013). Any
changes create burden towards the company to formulate the business plan of business. Inflation policy: Fluctuations in interest rates affects to the organization in term of
increasing rates. Due to high cost British airways need to raise their prices and it creates
direct impact on customers that they are not buy products from the company (Beynon-
Davies, 2013). As results, sales of the organization decrease. On the other hand, interest
rates goes down it create positive impact on the company operations. Taxation policy: Changes in fiscal and monetary policy can also create impact on
profitability of the organization (Yee-Loong Chong, Ooi and Lin, 2014). British airways
need to pay more taxes so that company's profits goes down. In addition to this, the
chosen enterprise cannot easily invest more money within the enterprise operations.
 International policy: EU encourages to British airways for entering in global
marketplace. It gives better revenues to the organization and increasing economic values
of the enterprise as well (Beaumont, Whitaker and Pedersen, 2013).
CONCLUSION
From the above report it can be articulated that British airways performing better in UK
marketplace. In the market several factors take place which affects to the operations of
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