British Airways: Business Environment Analysis and Strategic Response

This report provides an analysis of the business environment impacting British Airways, a major player in the UK's intercontinental airline industry. The report examines the influence of various global environmental factors, including political instability, economic recessions, changing socio-cultural trends, and rapid technological advancements, using a PEST analysis framework. It highlights how these factors affect British Airways' operations and strategic decisions. The report also details the strategies employed by the airline to manage these changes, such as cost reduction, low pricing strategies, and the adoption of new technologies, to maintain its competitive advantage in the market. The conclusion summarizes the key challenges and the adaptive measures taken by British Airways to navigate the complexities of the global business environment.

Business Environment

Table of Contents
INTRODUCTION...........................................................................................................................1
Recent changes in Airline industry.............................................................................................1
CONCLUSION................................................................................................................................3
REFERENCES................................................................................................................................5

INTRODUCTION
Organisations in today's world are facing a lot of challenges due to various changes in the
global business environment. The present report is in context to British airways, it is UK's largest
intercontinental airline. The report will identify various changes in global environment that
influenced the company along with the drivers of change in the airline industry. The study will
also include the ways in which the British airways managed those changes to achieve success in
the business.
Recent changes in Airline industry
There are various changes in the global business environment which are affecting British
airways and its business operations in the airline industry. These environment factors can be
described using Pest analysis.
1. Political factors – The unstable political global environment highly influenced British
airways, in recent years the political environment in the UK was not at all stable due to
coalition government and major reduction in the spending for increasing saving and
decreasing the national debt (Williams, 2017). It affected the expansion plan of the
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Illustration 1: British airways

airline. The British airways reduced its cost in order to increase their profitability and
finally bought the Heathrow airport that enhanced their revenue.
2. Economic factors – The economic factors are also one of the most influencing element in
the business environment that affects British airways and its business activities. For
example – Recession is one of the impact on the airline, due to this factor number of
travellers decreased heavily. The customers in Europe have a cheaper option of travelling
by train. There are other factors such as poor exchange rate and rising fuel price that
affected British Airways. In order to overcome this changes British airways used low
pricing strategy to increase it sales.
3. Socio-Culture changes – The factors such as Ageing population and changing trends of
travelling have also influenced the chosen airline company The global population is
consisting a more number of older generation individuals (Ciliberto, Watkins and
Williams, 2018). It is an opportunity for British airway as older generation have more
leisure time to travel. Therefore, the company introduced cheaper deals and discounts for
customers above the age of 60. It helped the company to increase their sales in the global
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Illustration 2: PEST Analysis

industry. On the other hand the company also developed new social goals such as making
customer the key focus, improving safety and security of the culture and individuals etc.
4. Technological changes – Technology is the fastest changing element in the global
business environment. It highly affect every organisation or business. British airways
introduced various new technologies such as online internet services, Self service check
in, security check technologies etc, to overcome the changes in technology within the
airline industry (Taneja, 2017). The changing technologies in the airline industry highly
affects the British airways, hence implementing the above mentioned changes in the
company it effectively managed to sustain its competitive advantages in the market.
CONCLUSION
The above report concluded that there are various changes and factors that influence
British airways in operating its business in the global market such as Changing technologies,
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Illustration 3: Technological changes
(Source :Technological changes, 2017)

Trends of travelling, Political power etc. In order to overcome these changes the company used
various strategies and methods that helped it to survive its position in the industry.
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REFERENCES
Books and Journals
Williams, G., 2017. The airline industry and the impact of deregulation. Routledge.
Ciliberto, F., Watkins, E. and Williams, J.W., 2018. Collusive Pricing Patterns in the US Airline
Industry.
Taneja, N.K., 2017. Driving airline business strategies through emerging technology. Routledge.
Online
Technological changes. 2017. [Online]. Available
through:<http://candytyysussex.blogspot.com/2013/11/pestle-analysis.html>.
Pest analysis. 2017. [Online]. Available
through:<https://www.visual-paradigm.com/guide/strategic-analysis/what-is-pest-analysis/>.
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