British Airways: Business Environment Analysis, Internal and External

This report offers a comprehensive analysis of British Airways' business environment. It begins by defining the business environment and its importance to a company's decision-making processes, emphasizing how external and internal factors influence strategy and profitability. The report then explores the internal environment, followed by a detailed examination of the external environment using Porter's Five Forces and PESTLE frameworks. The Porter's Five Forces analysis assesses the threats of new entrants, substitute products, the power of buyers and suppliers, and competitive rivalry. The PESTLE analysis evaluates the political, economic, social, technological, legal, and environmental factors impacting British Airways. The report concludes that British Airways holds a strong position in the market, with positive environmental factors contributing to its performance. The analysis highlights the company's ability to adapt to changes, its strategic partnerships, and its focus on customer needs.

British airways
What is the business environment
Business Environment is a collective approach of analyzing the internal and external factors
which can be controlled by the organization for better performance, increasing profits, and
growth in the market. (Business Jargons, 2019)
The business environment shows various changes and creates more opportunities for the
organizations. It characterizes a firm's competitive factors to bring changes and seek
efficiency in the current strategies. A company overcomes challenges arising in the
environment and adopts changes to improve performance as it brings development. (Taouab
and Issor, 2019)
Importance of the business environment for company
1. The process of making decisions depends on the business environmental factors and
strategy applied to gain profitability.
2. The business environment changes across the globe so the company needs to analyze
decide and implement strategies accordingly.
3. British Airways need to develop such outputs that bring marginal productivity by
setting the prices according to the business environment.
4. Strategies are implemented and developed that accompany globally and bring positive
change in the environment.
5. British Airways adopts cultural norms and ethical standards that are supported in the
business considerations. (Symeonidis, 2014)
Types of business environment internal and external
Business environment indicates two types internal and external which influence a firm's
activities and decisions.
Internal Environment
Conditions and actions are taken within the company such as human resources, physical
facilities, financial activities, communication, and tasks. Based on these elements'
organizations seek goals and objectives.
External Environment

The environmental factors which are outside the organization are created in the external
environment. It affects the organization's performance and operations; it is controlled by the
organization to bring sustainability. These factors bring opportunities and threats in the
market and change the firm's position.
It is further divided into 2 levels:
Micro and Macro environment
The Microenvironment consists of those elements that indirectly affect the business process.
The Macro factors include politics, economical conditions, social, technological, legal, and
environmental factors that exist in the country. (iEduNote, 2017)
The internal environment of British airways
(Source: Research Methodology by John Dudovskiy)
External environment of British airways
Micro Porter 5 forces

Threats of New Entrants
British airways face low threats due to the following facts:
1) Large capital investment is needed to enter the market
2) The market is saturated by other competing partners like Ryan air and Easy jet.
3) High power is needed in the airline hub for setting up routes
4) Many of the other entrants are already failed.
The threat of substitute products
The threat of substitute products/services is low as they offer low prices in the transportation
industry, also their brand image is very strong in the market.
Power of Buyers
There is high power of buyers due to the cheaper rates of airlines in the UK, customers switch
to the other airlines if high rates are provided by the British airline. Most of the tickets are
booked online so customers have the power to choose the alternatives.
Bargaining power of suppliers
British Airways obtains high power of suppliers. They have the risk from 24 suppliers as
they’re working with all of them to get the airline supplies.
Competitive rivalry
Competition is not so high for British airways as they offer various packages for long flights,
but still, there is competition in the market as they use various marketing tactics.
Macro Pestle
Political: There are strict restrictions and laws applied from the political environment for
British Airways which leads to stopping the flights in some destinations and they lose huge
amount of profits.
Economical: Revenue is negatively affected due to the restrictions and the global economy
faces a downturn due to the low traveling demand.

Social: New strategies are implemented to target a specific group of people to increase the
demand and meet the needs of customers. British Airways focuses on lifestyles, changing
trends to overcome cultural barriers and satisfy the social norms adopted by the society.
Technological: There have been significant changes that occurred in the digital revolution,
British airways it can be reviewed that the company is also exploiting various technological is
investing in various technological developments to secure the data and to provide safety to
the customers. (Ho, 2014)
Legal: The legal factor which is affecting the British airways is a trade union. It negatively
affected the company's operation and the flight was canceled due to the strikes. Also, many
passengers didn't take the flights in such conditions.
Environmental: Bad weather conditions can cause travel issues and cancellation of flights
for British airways as customers' safety comes first. (Lahrech, 2017)
Conclusion
In this study, the Business environment is thoroughly analyzed of the company British
airways, it results that the position of the company is strong than other competitors. Many
other leading airlines partnered with British airways to segment the market. They provide
long routes and prioritize existing customers. Most of the environmental factors are positive
and show the quality performance of the company which brings profitability and change in
the business environment.
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