Business Environment Analysis Report: Virgin Atlantic Airways

This report provides a comprehensive analysis of the business environment surrounding Virgin Atlantic Airways. The report begins with an introduction to the importance of understanding the business environment and the use of tools like PESTLE and SWOT analysis. It then delves into the relationship between various organizational functionalities, such as research and development, human resource management, production, accounting and finance, and marketing, and how they link to Virgin Atlantic's core objectives. The report also examines the positive and negative influences of the macro environment on Virgin Atlantic, using PESTLE analysis to assess political, economic, social, technological, environmental, and legislative factors. Furthermore, the report includes an interior and exterior analysis, likely involving SWOT analysis, to evaluate Virgin Atlantic's strengths, weaknesses, opportunities, and threats, and how they interrelate with the macro environment. The conclusion summarizes the key findings and insights from the analysis.

BUSINESS
ENVIRONMENT

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
P 1 and P2....................................................................................................................................1
Covered in PPT...........................................................................................................................1
P 3. Relationship between various organisational functionalities & its link to objectives.........1
P 4. Positive and negative influence of macro environment on Virgin Atlantic.........................3
P 5. Interior and exterior analysis of Virgin Atlantic..................................................................5
P 6. Inter-relation of strengths and weaknesses with the extraneous macro factors...................6
CONCLUSION................................................................................................................................7
REFERENCES................................................................................................................................8

INTRODUCTION
Every organisation operate within a business environment wherein different types of
factors are present that give impact on their overall performance. These influences are sometimes
in control but sometimes it might not be controlled by venture. But this has been recognised that
such effects may be negative or positive as well depending on their nature. Thus, it is important
for all corporation to become familiar about such factors before starting their commercial
activities in specific country. For doing so, they can conduct PESTLE analysis and find out
impacts of those business elements. At the same time, a company also needs to know about their
own strength, weaknesses, opportunities as well as threats in order to get acquainted with their
capabilities and weak factors so that they can improve their abilities by converting imperfection
into powerfulness (Aterido and et. al., 2011). In order to perform similar, SWOT analysis is
required to carry out by firms. The current report is based on Virgin Atlantic wherein various
aspects associated with business environment is going to be described. In this project, several
types of businesses along with their legal structure has been described clearly such private,
public, voluntary, etc. In addition to this, various stakeholders linked with such ventures is also
going to be explained.
TASK 1
P 1 and P2
Covered in PPT
P 3. Relationship between various organisational functionalities & its link to objectives
Virgin Atlantic airways is having unique coronation - al functions that is inter- linked
with their core objectives and organisational structures. This can be observed easily that distinct
types of organisational division are associated with the objectives and benefits of company. This
can be better understand by following mentioned points :
 Research & development Division: It has been seen that Virgin is being investing
higher amount of revenue in their R & D department. For doing the similar they are
carrying out several surveys for knowing about the demands as well as request of the
civilians. This is very important since without attaining their satisfaction, they could not
increase their sales level (Blanchard, Tolbert and Mencken, 2011). Therefore, they are
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giving much of time and money as well in such chores in order get familiar about actual
requirements of passengers and issues associated with their existing services so that such
problems can be resolved as soon as possible. Hence, this can be state that the research
and development division of Virgin Atlantic provide proper information and authentic
data in relation to the demands, trends, strategy and market position of organisation
helping company to achieve their set standard objectives. Research department is
interrelated with marketing division in each manner. The company are conducting
research for analysing marketing situation and also know that where they need to put
place in the large market place.
 Human resource management : Virgin Atlantic is also attempting a lot in making
strong work force. For doing the same, they are having a specialised HR department
where – in managers are responsible for recruiting skilled and qualified employees by
recognising their characteristics and attributes such as self confidence, educational
qualifications, nature, speaking abilities in more than 3 languages, personalities and many
more (Boons and Lüdeke-Freund, 2013). For employing large number of personnel, they
are also taking use of online platforms. For instance, online interview is being conducted
in order to save time and money too. Therefore, the division of HRM assist whole
company in attaining their business objectives as this help in managing, performing and
nourishing the human resources of organisation according to organisational demand.
With the assistance of marketing department, HRM division can post ad of recruitment
vacancy regarding specific designation for an organisation.
 Production Division: This is the process of manufacturing merchandises or deliverables
and offering the similar to passengers. Virgin aims to give luxurious facilities to their
clients such as best quality food items, comfortable sitting and sleeping arrangements,
protective measures, loyal workers, etc. so that numerous of people get attracted towards
their services and refer them for travelling any place. This has been found from a survey
that they attempt to provide especial facilities to the those groups who belong to Islamic
religion at time period of Ramadan. For example, they used to offer them various
varieties of beverages and food stuffs by considering their festival. In addition to this,
Virgin also think about their pricing strategies and try to make it flexible in accordance
with the existing marketplace since their motto is to earn competitive advantages. In
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context to this, they are also looking after the services being provided by challengers and
effort to supply better in relation to them. The production department assist in managing
work according to the demands and provide significant product quality which is key asset
of company to earn capital. Hence, this can state that this is fundamental for business
organisation. This department is also interrelated with other marketing department where
they analyse their customer requirement and needs with the help of marketing analysis
and then they manufacture product which are mostly demanding by customers and satisfy
their customers all wants in proper manner.
 Accounting and finance Division: This is considered as very complex and risky work
since small mistake would change the whole scenario of ending profit or losses which
they have attained by selling their services or goods (Bryman and Bell, 2015). Thus, for
handing such kind of risk, they are taking help of modern or digital technologies so that
no mistake would occur while calculating these income or investing reports and they
easily know the amount of turnover they have acquired at the end of month or year. For
doing this, Virgin are utilising contemporary systems along with updated software such
as Ms – excel, Spreadsheet, Power - Point, Ms- word, Ubuntu, etc. Apart from this, they
also need to focus on using various software that is used for protecting sensitive data so
that no information could be leaked from their company. Therefore, by managing finance
administration in appropriate way, company can introduce significant events and
activities leading to gaining business objectives in better manner. This department is
connected with marketing division because they are making their budget as per the
current marketing situations and condition effectively.
 Marketing : In order to reach at large number of audiences, Virgin Atlantic is commonly
using social media applications like Face book, Twitter, E - mail, Yahoo, You tube,
What's app and many more (Cai and Yang, 2014). By adopting such digital apps, they are
making awareness for their newly developed services such as information associated with
prices, special services being offered, etc. Besides this , work forces performing in this
company also use such tools in doing communication or conveying messages from one
division to another. This departments manages activities related to the marketing, sales
and advertisement leading to better productivity and performance significantly. Virgin
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Atlantic through properly conveying their organisation can achieve their business
objectives significantly.
Hence, by evaluating overall market, this can affirm that each and every department of
company is associated with each other for coordinating the referred activities accordingly. The
combine work and performance of each of them result to the achievement of goals and services
in more significant manner.
P 4. Positive and negative influence of macro environment on Virgin Atlantic
For knowing about the impacts of macro factors existing in business environment, Virgin
needs to conduct PESTLE analysis. This is discussed below : Political factors : In the industry of air hose, the applicable political component is
frequently regrading fearfulness of terrorist activities. Since conflicting situations is
existing from west among specific citizens from Muslim or Islamic nation, terrorism
become serious problem now a days for Virgin Atlantic.
◦ Negative impact - This is treated as a negative impact. This element also comprises of
laws and principles made by government bodies.
◦ Positive impact - This effects positively on overall coronation since it creates
effectiveness in nation and try to make it corruption as well as terrorism free. Economical factors : In current days, economical circumstances around globe remains
weak even after the 3 years since nation are trying to recover from its bottom in 2009.
The level of unemployment is being high in United Kingdom , due to this, users are
getting fabian and judicious in affiliation to their expenditures' habits (Cavalcante and
Ulhøi, 2011).
◦ Negative impact - This is impacting adversely on Virgin as their selling rate is getting
reduced.
◦ Positive impact - But it is to be noted that company can turn this in favour of them by
manufacturing goods and services at lower prices because people get attracted on
cheap merchandises. Social factors : Now a days, the sector of airways become more challenging since the
demands of clients is changing day on day and it is a complex task to feel them mitigated.
◦ Negative impact - Thus, it is influencing negatively on the Virgin as they have to
invest more on meeting higher expectations of buyers.
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◦ Positive impact - On the other hand, the activities associated with tour & travel is
increasing in these days (Cavusgil and et. al., 2014). This is giving opportunities to
Virgin groups for expanding their commercial actions and this in turn helps in
enhancing overall turnover of cited venture. Technological factors : This factor is also giving benefits to the organisation since by the
utilization of modern technology Virgin can easily increase their productivity as well as
profitability level. For instance, they can hire workers by taking online interviews with
the assistance of video conferencing options. This as a result helps them in recruiting
large number of candidates in minimum interval of time and this also saves a lot of
money that would invest in organising face to face interviews sessions by going here and
there.
◦ Positive impact - At the same time, with the support of digital techniques, company
can also adopt better machineries in order to insure protection for passengers as well
as workers. On the other hand, rise in technological aspects, drastically increases the
competition in airline industry as various ventures are supplying similar services at
cheaper rates.
◦ Negative impact - This as a result impacting negatively on the working of Virgin
since their potential users are migrating towards different other firms in search of
better and lower costing services. Environmental factors: Today, global warming has become sedate problem which is
influencing people as well as the upcoming generations. Consumers began to get
cognizant about the selfishness of firms and harms that would come from enterprise's
short term entities (Chow and et. al, 2011).
◦ Negative impact - Thus, it is effecting negatively on performance of corporation.
Civilians are demanding practices associated with Corporate Social Responsibility in
the growth & improvement of the business.
◦ Positive impact - Therefore, in order to deal with this situations, Virgin should focus
on minimising the emission of poisonous gas like carbon dioxide which is observed
as one of the primal reason of global warming.
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 Legislative factors: Virgin Atlantic is operating their commercial activities in different
countries, due to several norms are being formed by government of specific nation. Thus,
they need to accomplish their work in pressure of such policies or principles.
◦ Negative impact - This will lead an adverse impact of cited company since it is not an
easy task to follow all such norms and if they will not obey or adopt the same in their
business then they are treated as guilty in the eyes of law. In – fact they have to pay
some recompenses for doing illegal work.
◦ Positive impact - On the other hand, some the rules made by government is also in
favour of organisations that will lay affirmative effects on working of Virgin.
P 5. Interior and exterior analysis of Virgin Atlantic
Virgin Atlantic is a British airline carrier, serving as the UK's best carrier in terms of
punctuality, quality and speed of handling with compensation claims. Here a SWOT analysis is
provided with internal and external performance (Commander and Svejnar, 2011).
Strength
 It is got a position under global top 10 airlines, it is the only British airline which
appeared on first position.
 It got first rank with punctuality, quality and speed of handling with compensation
claims.
 Its new headquarters opened in September. It fleets are also modernized with latest
technologies and services.
 It invested in passenger service systems like mobile application, booking technology and
it also improved kiosks functionality.
 It innovates towards adopting new technology, by assisting new crew tablet services to its
managers that help them to present a personalized service to travellers.
 It is one of the best company in the UK, establishing its own powerful brand image,
especially in Europe and North America.
 It has core of loyal customer whom it earned by offering focused and comfortable and
reliable services.
 It has a joint venture with Delta which will surely enhance its business.
While taking the different important decisions for the referred enterprise the above core
strong aspects are kept in mind so that the final outcomes has maximum chances of giving
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profitable results. If concentration on the strength of management is given than it become
easy to identify the areas which should be kept as priority while taking the decisions for
future working.
Weakness
 It lies only on one person that is Branson, his relation with company that is very
indistinguishable, that can be a risk for the company in future (Commander and Svejnar,
2011). If he will leave the company this will draw the organization in struggle because of
over dependency.
 It has minimum global presence, it has presence in Europe and north America. It is not
extending in Asia, if it does so than it will going to make more profits.
 It has a tough competition with rich gulf airlines, such as Emirates, or Etihad which are
also ply with same route.
 It need to amend flight efficiency. It already has travelling routes are limited, cutting
routes to Chicago and Toronto.
It is required that while planning the future working of the business these weaknesses are
kept in mind so that when new projects are started corrective actions are taken in advance as this
will help in reducing the overall negative impact of the weak areas of business. Proper training
and investments will be done so that the degree of weaknesses can be reduced and minimum
possible returns are achieved.
Opportunities
 its website needs to be revise possible weakness for e- commerce and navigation.
 Government approved third runway at Heathrow (Cuervo‐Cazurra, 2011). This will
implement extra capacity.
 Its leverage brand has strong presence to penetrate internationally.
 It can increase its international routes and destinations, which is needed to broaden its
areas.
The above discussion shows the possible ways through which the present scale of
operations can be raised and therefore they have major influence on the daily operations of
business. Management plan their future programs in a way that it can explore the identified
positive chances which it has. More focus on such areas is given which has the capacity to
give more returns and can lead company towards different scale.
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Threats
 Increasing fuel price and modifying industry regulations affects it.
 Rising labour costs impacting on its margins. Emerging competition in the European
countries also lay down it to risk.
 Unfavourable weather conditions causing to flight delays. Digital disturbance lies round-
the-clock a huge threat.
 Brexit and Europe still has uncertainty in the business state of affairs and financial
markets.
Last but not the least, there are the different threats that may affect the present scale of
operations of the referred institution. When they are recognised in advance it becomes easy for
doing arrangements for same. This helps in reducing the degree of effect a particular threat may
have in business. This way the decisions are taken accordingly and hence the work is carried out.
Porter's five forces: Hence, this can be claimed that internal market analysis is structured
through the help of external market analysis of organisation. Hence, in order to discuss this, here
are presented external market evaluation by conducting Porter's Five Forces which is mentioned
as below: Exit and Exit Barrier: of Virgin Atlantic or aviation industry is quite high as it require
extensive amount of capital. If the regulators don't fulfil contractual obligation than they
have to exit the market. Virgin Atlantic faces more complicated external environment
relatively for newer entrants to entrench themselves. Industry Rivalry: This can be state that airline industry is concentrated with extensive
carrier entering to the segment to make benefit. The industry rivalry very high as well as
this is affecting the refereed organisation very much. Power of Supplier: The aviation fuel supplier and aircraft makers such as Airbus and
Boeing has a lot of suppliers and few carriers which power of supplier low but in case of
aviation fuel the supplier power is higher. Threat of Substitute: substitute threat is not high for the Virgin Atlantic as there are no
other option to reach quickly to another destination as they are time consuming.
 Power of Buyer: If the airlines industry and referred organisation has maximum an
impact of any factor, this is the buyer of organisation which is leading to the fluctuation
of price etc.
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Hence , through implementing those measured extrinsic environment, Virgin Atlantic can
manage their performance and other operations in more significant manner.
P 6. Inter-relation of strengths and weaknesses with the extraneous macro factors
This has been observed that there is a significant relationship among strength & weakness
of Virgin with the external macro factors. This can be understanding in better ways by following
points:
Strengths: Political Factor: Stableness in political situations aids in gaining profit. Therefore, it is
helping Virgin and would made them stronger in nature (Granger and Schroeder, 2013).
But imposition of tax from the side of government body makes them financially weaker. Technological Factors: Development of modern technologies is befitting Virgin Atlantic
and making them capable for completing their aims & objectives in minimum time frame.
Apart from this, it also generates feeling of satisfaction in clients. But due to
improvement of techniques, rivalries got incremented and as a bad result people are
having more options to shift or migrate. This is creating a weak portion within cited
company. Social Factor: Society is providing various opportunities to Virgin for earning high sum
of benefits as they used to travel more at their native place in the seasons of festivals.
Thus, it is strengthening economic conditions of company. It shows that the macro
factors have great impact on the internal factors of the enterprise as it effects the capacity
of firm to explore the opportunities and develop in the long run.
 Economical Factor: The firms can easily expand their business operations all around the
globe and this is the most beneficial factor which results in enhancing the overall
profitability index of firms.
As new and innovative techniques are implemented at work place this result in gaining
attention of large number of customers and this will enhance customer footfall.
Weakness Economical factor: Due to fluctuations in weather, several accidents occurs and as a bad
result, numerous of civilians get die. This will hamper greatly the image of Virgin
Atlantic and everyone feel fear from travelling to their flights (Hamilton and Webster,
2015). Thus, it would increase the range of weakness. External factors have different
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influence on the capacities of business as when change take place again planning has to
be done in a way that I can meet the requirements of outside surroundings.
 Political Factor: Legal factors also contribute positively as government use to formulate
various laws in favour of organisation. For example, they provide protection against
terrorist attack. Thus, making the company stronger in nature. Whereas some norms are
also against the corporations like high taxation rates. This will make Virgin economically
weak. If there are changes in the plans and policies of government then it will result in
affecting the operations of business and they will not be able to achieve growth and
success in their operations.
CONCLUSION
From the above based report, it can be concluded that different organisations such as
private, public, charity, etc. comprises of variant size, scope and legal structure which has been
covered in this assignment. In addition to this, they are also having contrasting aims and
objectives since their priorities are also different in nature. For example, voluntary sector aims to
serve poor people and try to upgrade their living style. On the other hand, private sector works
for the development of their own business so that they can earn high sum of money in return of
their investment. Besides this, Pestle analysis for Virgin Atlantic has been conducted in this
report in order to determine the impacts of several macro factors such as political, social,
environmental, technological, etc. Apart from this, Swot analysis is also being carried out here
for knowing about the strength, weaknesses, threats and opportunities for the Virgin group. This
would assist them in adopting proper strategies so that they can improve their existing condition
and receive best outcome in return.
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