Analyzing the Business Environment: A British Airways Report

This report provides a comprehensive analysis of the business environment of British Airways (BA), a leading UK-based airline. It begins by defining the business environment and its impact on corporations, focusing on both internal and external factors. The report examines different types of organizations, including private, public, and charitable entities, and their respective purposes. It then explores the size, scope, and objectives of organizations like British Airways and Tesco. The analysis delves into the relationship between organizational functions (HR, finance, marketing) and their influence on achieving company goals, along with the impact of macro and micro environmental factors on BA's operations. The report also examines the interrelation of internal strengths and weaknesses with external factors, concluding with an overview of the key findings and references used.

Business and Business
Environment
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Table of Contents
.....................................................................................................................................................................2
Introduction.................................................................................................................................................3
Assessment..................................................................................................................................................3
P1 Different types of organization and their purpose.............................................................................3
P2 Size and scope of a range of different types of organizations............................................................4
P3 Relationship between different organizational functions, objectives and structure..........................7
P4 Positive and negative impacts the macro environment.....................................................................9
P5 Internal and external analysis...........................................................................................................11
P6 Strengths and weaknesses interrelate with external macro factors................................................15
Conclusion.................................................................................................................................................15
References.................................................................................................................................................17
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Introduction
Business environment can be explained as set of internal and external factors that influence
operating situation of corporations. There are many elements which are beyond the control of entity and
firms have to modify their operations according to these components (Halinen, Törnroos and Elo,
2013). In addition to this, some factors are in control but they affect the business activities too. Due to
these elements performance, profitability and sustainability of the corporation get affected to great extent.
Present report is based on the British airways (BA) which is the leading and intercontinental airline of
UK. It flies in more than 300 destinations and carried approx 33 million passengers. Initially the cited
firm was established by UK government in 1972 but in the year 1987 BA turned into private firm. Now it
has become the largest airline in United Kingdom (Beckmann, Hielscher and Pies, 2014).
Current assignment will discuss the purpose of different types of organizations. Size and scope of
several entities will be illustrated in this study. Positive and negative impact of macro and micro
environmental factors will be covered in this report. In addition, study will explain the interrelationship
between external factors and internal strength and weakness (Khanagha, Volberda and Oshri, 2014).
Assessment
P1 Different types of organization and their purpose
There are several types of organizations that are working in the UK market such as private,
public, non-profit, charitable firms etc.
Private organizations:
These are such entities which run and operate by private individuals. British airways (BA) is the
private entity which is working in the UK well (Galaskiewicz, 2016). Cited firm is providing
satisfactory services to the customers. Main aim of the cited firm is to enhance profit and expand business
across the world. Company wants to sever its clients best so that they can be loyal towards the brand and
retain in the organization for longer period. For that cited firm provides them products as per their needs
and budget (Beckmann, Hielscher and Pies, 2014). So that they feel satisfied and be associated with
the corporation for longer period. Increase market share is another purpose of the private organizations,
they work in such direction that can help the firm in increasing its market position and support in the
development of the enterprise.
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Public organizations
These are such corporations which are governed or ruled by government. NHS is public limited
organization which is working in the health and social care sector. It provides health care services to
patients and work to improve their well being. Their main purpose of such type of firms is to provide
beneficiary products and services to the consumers. Sainsbury is another example of public limited firm
(Steurer, 2013). Objective of public limited corporations are to serve the best quality services to
community. Apart from this, such type of corporation work for increasing employment opportunities in
the nation so that economy can get raised. Profit earning is secondary purpose of public firms but mainly
they focus on satisfying the consumers and providing them beneficiary products.
Charitable organizations
These are non profit firms, they are differed from public and private organizations. May trusts
come under charitable organizations (Galaskiewicz, 2016). They mainly work for social welfare. Profit
earning is not the motive of such type of corporation, they just want to improve conditions of society.
Their purpose is to provide people standardize services so that they can live a healthy life. Profit earned
by the trusts is used to recover their operational cost, rest amount is reused for the welfare of society.
Voluntary sector
It is type of organizations in which no government intervention is here. Their main purpose is to
create social wealth (Halinen, Törnroos and Elo, 2013). Such type of organizations do not work for
material wealth. Though, voluntary sectors are separate from public firms but sometimes government get
involved in their activities. That helps in delivering quality services to the society members. American
Red cross, Human rights watch, World wildlife funds are working as voluntary sectors.
Working of all private, public and charitable firms are differed from each others. They all work
for different purposes (Khanagha, Volberda and Oshri, 2014). They all work in such manner so that
they can accomplish their objective soon.
P2 Size and scope of a range of different types of organizations
There are many organizations those which are working in the United Kingdom. They all
different objectives and their size, scope are differed from other entities (Welford, 2013).
Mission and Objective:
British Airways is the private firm that is working in the airline industry well. Cited firm
is having objective of expanding the business across the world. It wants to serve best to the
passengers and planning to provide them quality services so that they feel happy and satisfied.
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Company majorly concern for its workers and consumers (Bah and Fang, 2015). It adopts
customer centric approach and offer products as per the needs of users. The main objective of the
BA is to gain competitive advantage and enhance its revenues in order to sustain in he corporate
market for longer duration (Reynolds and Rohlin, 2014).
Tesco is public limited firm which focus is to fulfill needs of consumers and make them
satisfied. Company wants to create unique image in the market and its main objective is to
satisfy its consumers. Its mission is to offer wide range of quality products to the users of
supermarket at affordable prices (Kotb, Sangster and Henderson, 2014).
Size:
In the year 2011 British airways profit rose to €2.3bn. In the year 2016 it carried approx
100 million passengers that was too high as compare to earlier years. Profit of the BA is growing
day by day. After changes in fuel prices its revenue got raised that has created the benchmark in
the airline industry. In the year 2015 revenues of the BA was £11,421 billion (Bryman and Bell,
2015).
On other hand Revenue of Tesco is completely differed from the British Airways. In the
year 2014 cit ed firm has earned the profit of €29.293 billion. Its sales got high in the year 2015
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and it reached to £1.57 billion. Statistical figures show that tesco food figures were very low in
the year of 2015 but it is expected to increase till December. Due to its quality products company
has earned unique brand image in the retail industry in UK country and rest other locations (De
Klerk and et.al, 2013).
Scope:
Though British Airways is not turned into private firm but initially it was ruled and
government by government. Still, government of UK is supporting the cited firm and providing
funds so that it can run its business well. Company is gaining the competitive advantage and it is
using wide range of advanced technical equipment (Fleischmann and et.al, 2014). That helps the
cited firm in sustaining in the corporate market for longer duration. It contributes well in the
development of economy and increases employment opportunity in the United Kingdom.
On other hand tesco being a public limited firm is getting full support and contribution
from the government of the nation. Authorities has good scope of expansion in the international
market (Masood, Jahanzaib and Akhtar, 2013).
Number of employees
In the British Airways there are approx 39309 workers. Most of the employees are
working in the organization since longer duration. They all are loyal and satisfied with the
working environment of the company. On other hand Tesco is having approx 476000 employees
across the world (Amin, Bin-Humam and Iqbal, 2013).
Structure
British Airways follows flat structure in which cited firm involve it s workers in the
decision making process. It gives opportunity and power to them so that they can take rt heir own
decisions. Its main purpose is to satisfy its employees so that they retain in the organization for
longer duration (Navickas and Malakauskaite, 2015). In the cited firm managers take feedback
from the staff members in order to enhance their satisfaction level. By this way people are
supporting to the management of BA and they are liking the workplace environment. Cited firm
always try to create positive environment so that they can improve their capabilities and share
innovative ideas with the high authorities.
On other hand Tesco follows tall structure in the workplace (Dutt and et.al, 2016). Being
a large public limited organization cited firm can not involve people in the decision making
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process because all decision are taken by higher authorities. But company motivates its workers
by giving rewards and recognition (Welford, 2013). Tesco evaluate the performance of its staff
members and according to their performance, it promotes them and give benefits.
Size, structure and scope of different organizations are differed from each others. It is
link with the company’s objective to great extent. Being a big firm Tesco can not involve its
workers in the decision making process. There are many layers in they system and people cannot
communicate directly to higher authorities (Botha, Kourie and Snyman, 2014). As power is in
the hand of top management thus decisions are taken by the firm soon. That is suitable for the
Tesco by this way it can accomplish its objectives soon. As company wants to provide quality
services to consumers thus with the help of sufficient monitory resources it improves its quality
of products that helps to provide quality products to the customers that make them satisfaction.
On other hand British Airways is the private firm and leading brand of the airline industry. Cited
firm follows flat structure which helps in achieving goal of the company to great extent (De
Klerk and et.al, 2013). By this way it enhances satisfaction level of its staff members and they
serve quality services to the consumers. That would help in increasing revenues of the entity.
Thus, this structure and size is suitable for the BA and supports in accomplishing business
objective significantly.
P3 Relationship between different organizational functions, objectives and
structure
Organizational function, objective and structure are interrelated aspects. There are different
departments in the British airways such as human resource, marketing, administration, customer service,
finance etc. They all work in such direction that can help in accomplishing goal of the company (Amin,
Bin-Humam and Iqbal, 2013).
HR function of the company helps the cited fir in attaining its goal soon. As working in the
airline industry is very complex task and people needs additional quality to work under this. For that
Human resource managers have to hire skilled employees those who can contribute well in the success of
the organization (Welford, 2013). In addition to this HR department has to conduct training for the
employees so that they can develop their skills and can enhance their performance level. This function
supports BA is achieving the goal of the company, it enhances satisfaction level of its staff members and
they put their best efforts for the welfare of the cited firm. That develop relationship with its employees
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and they serve better to the passengers as well. By this way satisfaction level of consumers get improved
(Reynolds and Rohlin, 2014).
Finance function of BA is that finance manager of the company has to allocate funds to all
department and each activity. They have to take effective investment strategies that can support the
organization in getting high returns. By this way cited firm become able to achieve its objective of getting
high profit. Company is investing in the right place that is giving good returns and increasing revenues of
the company (Masood, Jahanzaib and Akhtar, 2013). Such as recently British airways has introduced
cargo services for its passengers, it has helped in enhancing the sales volume of the airline. By this way
profit has increased to great extent. For instance if finance department of BA does not pay attention of
funds allocation and other investment strategy then it would decrease performance of the company and
will negatively impact on the profit margin of the entity (Navickas and Malakauskaite, 2015). Thus,
these are interrelated parts and both impact on each other, if finance department perform their duties well
then it would support in achieving goal of the company soon, on other hand if it does not pay attention on
effective allocation then overall profit will get down.
Customer service is another function of the British Airways, in which department pay more focus
on the increasing satisfaction level of consumers (Botha, Kourie and Snyman, 2014). It works to
resolve quarries of the customers immediately so that they enhance their trust on the entity. Department
head gives training to the front office persons so that they understand the issues of consumers and provide
them pro per solutions. That helps in increasing satisfaction level of the passengers, they keep faith ion
the company and take the experience of travel with BA airline. Thus, objective of increasing sales volume
can get achieved with the help of this function (Kotb, Sangster and Henderson, 2014). On other hand
customer service function and company's objective are interlinked. If managers resolve the issues of
consumers and provide them satisfactory services then company will be able to attain its objective soon.
Marketing is another function of the British airways and cited firm invest huge amount in the
marketing campaigns and promotional activities. The main of the organization is to attract more
consumers towards the brand in order to enhance its profit (Amin, Bin-Humam and Iqbal, 2013).
Effective marketing strategies support the entity in gaining the attention of the passengers. BA is taking
support of social media marketing for the brand awareness. Through social networking sites circulates
information about the latest offers and discounts. That assists in increasing number of customers thus,
profit of the company can get improved. On other hand in the absence of effective marketing strategy
cited firm will not be able to gain attention of the clients. Thus, its mission of profit maximization will not
be achieved (Fleischmann and et.al, 2014). Apart from this BA wants to expand its business across the
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world which is only possible when it makes people aware about the brand. Marketing helps in making
communication with the mass audience and making them loyal towards the organization. Thus, this
department or function supports in accomplishing the goal of the company (Botha, Kourie and
Snyman, 2014).
Administration function is another activity of the British airways in which employees of the firm
keeps records of daily activities, sales and consumers etc. By this way drawback of current process can be
identified by the managers. That helps the cited firm in making effective strategies that can support in
improving the working process of the organization (Fleischmann and et.al, 2014). By this way
objective of expanding the business can be achieved because that helps in minimizing the wastage and
improving cash inflow in the workplace.
Thus, it can be said that organizational functions and objectives are interrelated. Company always
adopt such method that suits to its structure and goal (Bryman and Bell, 2015). BA is following flat
structure that supports in achieving goal of the company to great extent. It enhances satisfaction level of
workers and they put their best efforts for the welfare of the company. So objective, function and
structure are interrelated and they impact on each other.
P4 Positive and negative impacts the macro environment
PESTLE analyses is the framework that supports in analyzing the external environment
of the organization. Business surrounding consists of two major factors macro and micro. Both
these impact on the firms to great extent (Navickas and Malakauskaite, 2015). Macro factors are
those elements which indirectly impact on the operations of the entity and its working
conditions. These are uncontrollable forces and corporations have to modify their working
process according to these elements. Impact of several macro components are discussed as
below:
Political factors:
These are such elements which involves government actions, legislation, policies etc
(Masood, Jahanzaib and Akhtar, 2013). This component affects the business strategy and its
operations. It influences business at local, national and international level. British airways get
affected by this element to great extent. As government has increased prices of fuel due to this
cited firm has to enhance its air tickets prices too. Now it has become more costly airfare for the
consumers. For instance if authorities increases wages rates and make changes in the
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employment rates, in such condition it would be necessary for the BA to follow these
regulations (Amin, Bin-Humam and Iqbal, 2013). On the bases of current legislation cited firm
will have to modify its operations. If there are favorable policies then it can enhance satisfaction
level of workers and they will stay in the organization for longer duration, on other hand if
unfavorable policies then that would create negative situation in the workplace. If UK
government makes new trade agreements then BA will get expansion opportunity that would
help in increasing revenues of the company (Navickas and Malakauskaite, 2015).
Economic factor:
It involves growth rate, inflation, recession, exchange rate etc. This element impact on
the production and decision making process of consumers. For instance if in the country there is
high inflation then company will have to enhance its products price to recover its operational
cost. In addition to this in the situation of high inflation buying power of the consumers get
decreased (Welford, 2013). Thus, people do not invest much amount in the traveling that impact
on the business performance and sales volume of the company get down. For instance if UK
government increases exchange rates then in such situation, budget of traveling will get
increased thus, people will change their mind. That is the negative impact on economic factor.
On other hand if there is high employment opportunities and growth rate is good then it would
support in increasing income level of the consumers and they will invest much amount in the
company (Bah and Fang, 2015). That would increase business profitability of the British
airways. If government makes changes in the tax rates and surcharges then it would be beneficial
for the BA, as because cited firm will have to pay low tax on fuel thus it would be able to offer
quality products and services at cheaper rates.
Social factor:
It is another important element that impacts on the business environment of British
airways directly or indirectly (Fleischmann and et.al, 2014). It includes demographic factors,
cultural elements and population. For instance in the country there is poor education rate then
people will not have good knowledge about the benefits. Apart from this if there are high
employment opportunities then people will invest much amount because their income level is
high and they can afford air travel. That impacts positive on cited firm and it will help in
increasing revenues of the corporation. On other hand if unemployment rate is increasing then in
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such situation demand will get down thus, profit of the British airways will get down (Masood,
Jahanzaib and Akhtar, 2013).
Technological factors:
It is one of the major component that impacts on the BA to great extent. Internet is the
biggest factor that influences the mind of users. Passengers compare the prices and services of
the airline then after they book their tickets. If they found attractive offers from other brand then
they will prefer to buy products of other (Dutt and et.al, 2016). That would decrease the revenues
of the cited firm. British airways provide online booking services to the passengers, it attracts
them because they get cash discount on it and it saves their mind. Thus, people became loyal
towards the brand and that positively impact on the performance of the organization. Cited firm
is using advanced machinery in the workplace, that supports in improving efficiency of the
organization, thus, it will satisfy the consumers and by this way objective of profit maximization
will get improved (Navickas and Malakauskaite, 2015).
Environment factor:
It is the biggest challenge for the BA that to reduce affecting surroundings. For that
British airways has got engaged with CSR so that it can identify the risk and can work in such
manner that can make it eco friendly (Reynolds and Rohlin, 2014). Airline firms have high
contribution in increasing carbon emission. That is why British airways has developed the
program and
P5 Internal and external analysis
Internal and external analyses supports the entity in knowing its market position in the market so
that it can make proper planning to improve its position. in the internal analyses organization takes
supports of SWOT analyses. It is great factor that helps in knowing the internal strength and weakness of
the organization (Bah and Fang, 2015).. British airways uses this method to improve its performance to
great extent. On the bases of analyses description of strong and weak points of British airways are
described as below:
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s
Strength:
 Strong brand image: BA is having strong brand image, people buy its products due to its market
reputation. It is found that 20% business of the cited firm has been increased due to this
company image, people are loyal towards the brand and they buy the products frequently
(Amin, Bin-Humam and Iqbal, 2013).
 Open sky agreement: Cited firm has many agreements that GIVES BEENEFIT TO THE CITED FIRM.
Due to sky agreement British airways has become able to expand its business across the world.
 International operations: Cited firm is having branches across the world. It is foreign customers
and they all are buying its products. International working has helped the BA in improving
efficiency in services (Navickas and Malakauskaite, 2015).
 Skilled and experience staff members: British airways is having skilled people, it hires experience
persons those who have knowledge about the field and those who can serve better to
consumers. Company also train them time to time so that they develop own self. It offers them
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