BMP4003 Business Environment: Virgin Atlantic & Macro-economic Factors

This report examines the influence of macro-economic factors on Virgin Atlantic Airlines, a UK-based organization with diverse operations, focusing on its airline sector. It discusses the impact of inflation and unemployment rates on the airline's outputs, highlighting challenges like increased labor costs and reduced passenger demand. The report also analyzes the UK's current growth rate, referencing the economic life cycle, GDP, inflation, and unemployment, emphasizing the adverse effects of the COVID-19 pandemic. Furthermore, it explores the impact of government intervention methods such as fiscal and monetary policies and the furlough scheme. Finally, the report identifies current global challenges like unemployment and rising fuel costs, offering recommendations for Virgin Atlantic to overcome these obstacles. Desklib provides access to similar solved assignments and resources for students.

Business Management
BMP4003 Business Environment
Assessment 2
Influences of Macro-economic
Activity
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TABLE OF CONTENTS
INTRODUCTION..........................................................................................................................3
An explanation of two macro-economic factors that the chosen business will need to
consider and the influences these could have on its business outputs (macro-economic
factors e.g., economic output, unemployment rates, inflation etc.).....................................3
How will the UK current growth rate impact on the chosen business (give reference to
economic life cycle, GDP, inflation, unemployment rate) .....................................................5
How can the government current intervention methods affect the selected business?
(e.g., fiscal and monetary policies, furlough scheme etc.).....................................................7
What are the current global challenges facing by the chosen business and
recommendations on how to overcome them in this current time? ....................................8
CONCLUSION..............................................................................................................................9
REFERENCES.............................................................................................................................10
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INTRODUCTION
The conception of business environment includes the mixture of external as
well internal variables which can directly impact the capacity of the business
enterprise. These factors are compatible with consumers demand ans supply ,
proprietors interest, formation of the workforce , needs and aspirations and
contractors of raw material which aids in development of the organization and helps
in the investigation of the business(Chen,2022). There are few variables like
monetary actions jobless rates etc are initiated by the macroeconomics actions that
directly helps in collecting the data regarding the economy which is handled by
governing bodies of the nation. The company which is chosen for the analysis is
virgin gathering limited, a reputed uk based organization established by Robert
Bronson and nick Powell in 1970. this organization produce numerous kinds of
operations such as virgin occasion, virgin media virgin aircraft etc. this report will
examine wide range of element which directly effect the day to day operations of the
virgin Atlantic airline
MAIN BODY
An explanation of two macro-economic factors that the
chosen business will need to consider and the
influences these could have on its business outputs
(macro-economic factors e.g., economic output,
unemployment rates, inflation etc.)
Monetary field is a term of full scale financial element which includes the
inquiry of the financial movement such as GDP expansion, cost etc. there are three
kind of features of the large scale monetary element which includes negative,
nonpartisan positive. This element helps in estimating the jobless rates , pace of
expansion and different variables etc. There are no, of factor through which virgin
Atlantic business is affected by no. of factors which mean to gather the presentation
of examination and goals of the organization. Virgin Atlantic aviation route is a British
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global career which is lay out in 1984 to fly between London to Falkland islands.
Following factor which directly impact the output of the virgin Atlantic are
 Inflation: it is related to the rates of expense of the labor and product in the
economy for a particular period of time. expansion is essentially computing
the increment cost (Hawryszkiewycz,2022). The inflation rate of the virgin
Atlantic is showing the huge cost on the lookout. There are no. of hindrances
which are coming out while the supply of product and administration due to
cost of expansion of work which directly impacts enterprise economy
execution for a particular year. Due to this traveler of the virgin airline are not
buying the administrations.
 Unemployment Rates: unemployment rates are basically used to measure
the health of the economy. It indicates the performance of the economy in a
certain period of time in which employment rates are too low and its surprising
consequences for the business.(Hu and Kee,2022) Emerging of COVID 19
pandemic emergency directly influence the economy of the UK. No, of people
lost their positions and their roles due to increase in the rate of unemployment
due to pandemic . The management at virgin Atlantic airline deals with the
situation by additionally increment their staff by recruiting no. of worker which
helps in dealing with joblessness
How will the UK current growth rate impact on the chosen
business (give reference to economic life cycle, GDP,
inflation, unemployment rate)
The UK economy is estimated to have grown 7.5% in 2021 and its GDP to
have increased by 1% during the previous three months, according to research. As
per the opinion of people, the UK has higher expectations for basic comforts, and its
industry is growing (Iivari and et. al., 2022). The COVID-19 emergency is having an
adverse effect on many organisations, which is causing a continuous 9.4% drop in
revenue that will end in 2020 and is also measuring how people's well-being is being
impacted (Singh and et. al., 2022). The pandemic has a huge impact on UK citizens
as well as the country's economy. There are a few specific sources that Virgin
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Atlantic Airline has access to that have a significant impact on the rate of financial
development rate.
. Economic life cycle: An economic cycle is a four-step process that describes the
overall state of the economy and aids in identifying the current stage of the financial
cycle. It includes the stages of expansion, peak, contraction, and trough. The current
development rate of UK is analyses through the following four phases of monetary
life cycle (Iivari and et. al.,2022) . Following are the phrases given below for
deciding the current development of the organization :
 Expansion: This cycle line is moving in the direction of the steady growth
line, which represents the expansion of the business cycle and results in an
increase in output, employment, wages, profits, and demands, among other
things. The inflation faced by virgin Atlantic due to increasing in the demand
which lead ti increment in the price of fuel
 Peak: it is the stage where expansion eventually slow down and reaches to its
peak. It is also known as peak phase as the business cycle achieves its
maximum limit . Virgin Atlantic airline create this peak growth by correcting
their improper operation which helps the organization in growing in future
 Contraction: It is the stage of slow working that is measured for the current
period. There is change in prices leading to slow growth and improvement of
employment fails. The overall errors are measured in context to virgin atlantic
airlines through this stage for future(Mariappan and et. al 2022).
 Trough: The economic activities becomes negative when the trough period
starts. Virgin Atlantic Airlines is able to analyse the business environment
through business regrowth.
 Gross National Product: It is sometimes referred to as GDP and measures
the value of goods and services produced in a nation over a given time frame.
Monthly estimates of the UK's GDP are frequently referred to as short-term
indicators. In 2022, the GDP increased by 1% thanks to an increase in travel
agencies
 Inflation: It is a reference to the rates at which the average cost of goods and
services in the economy is rising at a specific moment. Inflation essentially
measures the overall rise in cost and price. In other words, it is the rate of
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increases cost of goods at specific time period. It is the situation which is
began when the demand of goods and services increases in the market.
Virgin Atlantic Airline's Inflation rates is leading because of having the vast
price in the market (Mozumdar and et. al., 2022).
 Unemployment rate: It is the percentage of the labour force that is not
currently employed in any capacity. It is the proportion of the labour force that
is unemployed. This circumstance develops when the economy's growth rates
decline and market unemployment anxiety increases. Because of the COVID-
19 problem, which is used to measure how well the economy is doing, the
unemployment rate in the UK is rising.
How can the government current intervention methods
affect the selected business? (e.g., fiscal and monetary
policies, furlough scheme etc.)
Due to their ability to alter work environments and regulations, including fiscal
and monetary ones, some people are actively participating in the market. Which also
includes the market's general operational function. It aids in strengthening the
currency and raises revenue and interest rates. There are various types of
governmental policies that have an impact on Virgin Atlantic Airlines. The following
are the methods:
 Fiscal policy: It is described as a strategy that the government use in
conjunction with spending and taxation to create the conditions that lead to
the demand for goods and services, employment, inflation, and growth. The
guidelines, which are based on a mixture of two or three forecasts, state that
the government must exceed the norm by 5% of GDP in order to maintain the
current budget balance. When compared to other fiscal policies, where the
government covers the loss of GDP in the huge market, Virgin Atlantic Airlines
has a significant loss in the market. The government's debt has been the
focus of the policy, which also aids in budget analyses. The debt rule share in
the country is three times per year, and the government dubbed it the basic
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fiscal rule. For the anticipated timeframe, the government's current budget
should be in surplus (Popescu, 2022).
 Monetary policy: It is referred to as a series of actions that serve to regulate
the amount of money that is present in the economy as well as the channels
that provide new money. In other terms, it refers to the tools that the central
banks use to sustain rates, such as interest rates, money, supply, and
demand. It is a money supply that is shrinking as interest rates change. It is
controlled by central banks, who also alter the money supply and interest
rates. The main objective of Virgin Atlantic Airlines is efficiency, which can
benefit the business by greatly varying its monetary strategy. Virgin Atlantic
Airlines measures how well its employees are performing in order to predict
peoples' interest rates and determine whether money is flowing in the proper
direction.
 Furlough scheme: It refers to leaves of absence taken by employees that
are only temporary in nature and are motivated by personal or professional
requirements. It may be temporary or ongoing. The purpose of this
programme is to support employees and workers in a COVID-19 situation by
allowing them to take temporary leaves as needed. Regarding Virgin Atlantic
Airline, they offered this programme where top level employees and staff
could take this leave on a temporary basis. By dominating the sector, it
benefits the business. Additionally, it aids Virgin Atlantic Airlines in obtaining
better work from its staff, which benefits the business. This strategy allows
employees to take time off and improve their performance in order to increase
the company's profitability. (Semerádová and Weinlich, 2022).
What are the current global challenges facing by the
chosen business and recommendations on how to
overcome them in this current time?
The current global changes allude to environmental changes, which are a global
problem. Climate change, pollution, unemployment, inadequate education, and other
challenges are among them. These problems might affect a corporation and also
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affect more effective operating. Recent studies have shown that Virgin Atlantic
Airlines is facing new difficulties that the corporation must overcome. There are
several suggestions for businesses that assist Virgin Atlantic Airlines in overcoming
it, and they are as follows:
 Unemployment: It is referring to the worker or labour who is not currently
employed or looking for work. The effects of COVID-19 on those who lost their
jobs as a result of high unemployment rates. According to study, the loss of
jobs lowers the company's overall earnings. Additionally, there aren't enough
chances, yet modern businesses have made a lot of significant adjustments
that can both enhance employee productivity and ensure the organization's
success (Rodriguez and et. al., 2022).
 Fuel: It has been found that the corporation is incurring additional costs as a
result of the daily rise in fuel prices. It might have an impact on Virgin Atlantic's
financial performance. The primary problem for the business is the rising cost
of fuel. It also has an impact on the airline company's overall profit. The cost of
fuel is rising since there are so many airlines in the world. In relation to Virgin
Atlantic Airlines, they can increase revenue for the business while reducing
profitability. It is the main problem that any airline or other industry faces.
 Passenger experience: Because of how the passenger sector as a whole
operates, passenger experience and comfort are crucial for any airline
company. Virgin Atlantic Airlines offers good services to its customers, which
increases consumer satisfaction and may also help to draw in new customers.
The company's offerings are designed to emphasise how important
passenger safety is. The business should assist its customers by identifying
their requirements and catering to them. It aids the business's expansion both
now and in the future (Ruiz-Palomino and et. al., 2022).
CONCLUSION
Thus, it may be concluded that the Marco-financial aspects are those areas of
study that are concerned with economic returns, unemployment rates, loan charges,
and other factors that have an impact on the overall business sector. In
the further analysis, Virgin Atlantic Airline has examined the organization's whole
economy, which is quantified by its GDP and economic growth. The economy plan,
which includes financial arrangements and a monitory approach, was impacted by
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the public authority's present mediation procedures. There are also many different
types of global changes that have an impact on the organization due to natural
problems brought on by environmental changes, climate change, contamination, etc.
These developments may have an impact on the organization by raising the cost of
fuel, which represents a waste of funds intended for organizational operations. The
study recommended the effective administrations provided by the organization to
assist the firm in better functioning and the addition of workers and goods. The
organization's chances are examined, and work on the presentation and skills for
future development, with the aid of the full-scale financial effects.
REFERENCES
Books and Journals
Chen, T.Y., 2022. A Business Model Feasibility Evaluation Method for Enterprise
Collaborative Business Innovation. International Journal of e-Collaboration
(IJeC), 18(1), pp.1-19.
Hawryszkiewycz, I.T., 2022. Organizational and Business Values. In Transforming
Organizations in Disruptive Environments (pp. 53-68). Palgrave Macmillan,
Singapore.
Hu, M.K. and Kee, D.M.H., 2022. SMEs and business sustainability: Achieving
sustainable business growth in the new normal. In Research Anthology on
Business Continuity and Navigating Times of Crisis (pp. 1036-1056). IGI
Global.
Iivari, M., and et. al., 2022. Opening Closed Business Ecosystem Boundaries With
Digital Platforms: Empirical Case of a Port. In Emerging Ecosystem-Centric
Business Models for Sustainable Value Creation (pp. 67-96). IGI Global.
Mariappan, J., and et. al., 2022. Theoretical Perspective of Role of Technology on
Business Environment. In Integrating New Technologies In International
Business (pp. 269-279). Apple Academic Press.
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Mozumdar, L., and et. al., 2022. Fuelling Entrepreneurial Orientation in Enhancing
Business Performance: Women Entrepreneurs’ Contribution to Family
Livelihood in a Constrained Context, Bangladesh. The European Journal of
Development Research, pp.1-33.
Popescu, C.R.G., 2022. Mindfulness at Work, a Sound Business Investment:
Focusing on the Employee Well-Being While Increasing Creativity and
Innovation. In Handbook of Research on Changing Dynamics in Responsible
and Sustainable Business in the Post-COVID-19 Era (pp. 1-34). IGI Global.
Rodriguez, R., and et. al., 2022. Organisational and environmental indicators of B2B
sellers’ sales performance in services firms. European Business Review,
(ahead-of-print).
Ruiz-Palomino, P., and et. al., 2022. The Circularity of the Business Model and the
Performance of Bioeconomy Firms: An Interactionist Business-Environment
Model. Asia Proceedings of Social Sciences, 9(1), pp.93-94.
Semerádová, T. and Weinlich, P., 2022. Achieving Business Competitiveness in a
Digital Environment.
Singh, R.K., and et. al., 2022. Integration of green and lean practices for sustainable
business management. Business Strategy and the Environment, 31(1),
pp.353-370.
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