Contemporary Developments in Business and Management at IAG

This report provides a comprehensive analysis of the International Airlines Group (IAG), focusing on contemporary developments in business and management. It begins with an executive summary and introduction, followed by an in-depth examination of external factors impacting the organization, utilizing PESTLE analysis and Porter's five forces model to assess the competitive landscape. The report then delves into the marketing communication mix, analyzing its relevance and influence on IAG's policies and decision-making processes. It critically evaluates the effectiveness of the organization's responses to market challenges and identifies areas for improvement. The report concludes with a summary of key findings and includes references and an appendix for further information. The analysis covers various aspects of IAG's operations, including its subsidiaries, services, financial performance, and its response to external pressures such as Brexit and the COVID-19 pandemic. The report emphasizes the importance of adapting to changing business environments and utilizing strategic tools to gain a competitive advantage.

Contemporary
developments in
business and
management

Table of Contents
Executive summary .........................................................................................................................3
INTRODUCTION...........................................................................................................................3
TASK 1............................................................................................................................................4
External factors influence on the organisation ......................................................................4
PESTLE Analysis...................................................................................................................4
Porter's five forces model ......................................................................................................6
TASK 2............................................................................................................................................8
Marketing communication mix .............................................................................................8
Analyse relevance marketing communication tool of International Airlines Group and how it
influences policies and decision making .............................................................................11
Critically evaluate effectiveness of organisation response .................................................11
Areas of improvement in response of an organisation ........................................................12
CONCLUSION .............................................................................................................................13
REFERENCES .............................................................................................................................14
Appendix .......................................................................................................................................16

Executive summary
This project is related to the evaluation of the contemporary developments in the business
and the management. It is based on the International airlines group company that is the largest
airline company in the UK. This study helps in analysing the external and internal factors that
will impacted the business and its operations. For this it involves the PESTLE analysis and
Porters five forces that helps in gaining the competitive advantage within the rival market so that
firm will earn higher profits and revenues. Further marketing communication mix helps in
attaining the goals and objectives because it is an effective tool in today's business environment
for taking appropriate decisions regarding profit earning and enhancing the market growth.
INTRODUCTION
In today's world involvement of external and internal factors of business environment
place an major impact on the growth and success of the company. A business enterprise may
easily examine the internal factors but for companies identifying the external environment is
complex. As it covers the vast areas and also place a reason for earning higher profits and growth
as it is also impacted the operations of the business enterprises. This report is based on
contemporary development in business and management which is based on business
environment. It represents the fluctuating nature that will create major challenge for the
organisation in their success and longer sustainability in the marketplace. This project report is
represented the International Airlines Group that is the largest Anglo- Spanish airline holding
company that registered office is place in Madrid, Spain with the headquartered in London ,
England. They work with their subsidiaries firms like British Airways, Aer Lingus, IAG cargo,
Avios Group etc. It provided the varieties of services like Airline service, Air Frieght services,
and the passenger air transport services with a annual revenues of € 25.506 billion. In the
company around 64,734 employees are working in all over the world. It is bifurcate into the two
aspects in this they focus on the external environment of the firm for gaining profits in the
country like UK. And secondly it shows the relation with extrinsic factors so that they get more
profits and revenues with longer sustainability in the marketplace(Renwick and et. al., 2016).

Illustration 1: source: International Airlines Group, 2020
TASK 1
External factors influence on the organisation
Business environment is the contemporary approaches that involves the intrinsic and
extrinsic factors which affected the revenues and growth of the business enterprise. In every
organisation the influence of macro factor is major on the operations of the company. In business
world external contemporary environment is very competitive. Due to this they create more
pressure on the firms in gaining the higher profits with optimum utilisation of resources.
International Airline group is the largest company that was founded in 2011 on 21 January with
their registered headquartered in Spain and Madrid and Head office in London, England. It offers
the varieties of services like Passenger air transport service, Air freight services, Airline services
etc. for enhancing the profits and revenues of the company manager can adopts the use of
PESTLE and Porters five forces model that helps in capturing more opportunities and gaining the
competitive advantage in the competitive business world. These factors can be shown
below(Virigineni and Rao, 2017).
PESTLE Analysis
This factor is based on the six framework that reflects the major impact on the business
enterprise and its operations. In context of International Airline Group this six factors can be
shown below. On the basis of this factor organisation can do major changes that helps in gaining
high market share.

 Political factor- This factor involves the government regulation, laws and rules imposed
by government of the country, fiscal policy, monetary policy etc. and all this factor create
a major impact on the operations, profits and growth of the business enterprise. Because
of internationalisation in businesses, involvement of the government rules and policies is
major due to this company operations will be affected in positive and negative terms. In
case of International Airline group this factor place an great influence on the smooth
running of the plans. In UK, Brexit occur in the country due to this uncertainty company
cannot purchase the resources and raw material on low cost that will enhances the
charges for consumers. Intervention of UK government is increasing in safety, security
and right flying routes, environmental control etc. that includes cleanlinesses, proper
availability of the medicine, food, and their entertainment. Due to this taxes would be
increase on the airlines company and will adversely impact the air travel and their profit
margin but it also create positive impact because of all safety measures can be control by
the government due to this customers feel safe in travelling(Priyankara, 2019).
 Economical factor- This factor includes the inflation rate, saving rate, foreign exchange
rate, interest rate etc. helps in determining the overall demand and overall investment in
the economy. As current condition of the UK government is not more stable because of
Brexit occur in the country and also the pandemic condition due to COVID 19 reflects
the harmful impact on the companies like airlines and their operations and their success
and growth. Due to locked down occur in the various countries passengers cannot travel
from one place to another. In this way both impact negatively on the economy and the
regular activities of the International Airline Group. In this, coronavirus will be impacted
the whole world economy due to which all airlines company can cancel their flights for
travelling and transferring their goods and services. After reducing the impact of COVID
19 all activities and operations are in their regular routines(Moritz and et. al., 2020).
 Social factor- This factor includes the beliefs, attitudes, values of the people that will
impacted the business operations and the environment of the society. It shows the current
trends that was present in the environment and influence the changes in the business
environment. Due to Brexit and COVID 19 occur in the country social trend changes a lot
and now people focus on exploring the domestic places and goods rather than
international places and companies. Due to this International Airline Group sales and

profits will be affected as all the flights are cancelled from one country to another due to
this there sales will be effected.
 Technological factor- This factor shows that in present business world digitalisation is
very trending and this shows the revolutionary changes in the operations and practices of
the company. It shows the positive impact on the airlines business and their growth and
success of the International Airlines Group in all the countries. To maintains the profits
and revenues company can implemented the latest technologies in their regular
operations and offers a varieties of services to there customers by adopting the advanced
technology in delivering the goods and services from airways and for passengers
travelling. Digitalisation helps in earning higher profits and longer sustainability of the
firm within the marketplace(Grefen and Turetken, 2020).
 Legal factor- This factor shows the legal implications and regulations that was imposed
by the government of the country for the betterment of the employees and customers so
that operations within the business venture can be done smoothly. This factor positively
affect the International Airlines Group because in this manager of company can regulate
many laws and policies such as equality act, safety and health law act etc. for their
employees so that they work effectively and efficiently.
 Environmental factor- It is an essential factor in the success and growth of the
organisation in the business world as it affected the operations of the enterprise. As
International Airlines Group is a service oriented company that provides the airline
services to the people in a way of travelling, freights etc. in all over the world. As in this
organisation can take proper attention on making the environment clean. For this
company can follow the corporate social responsibility by improving the labour policies
and many implemented healthy and clean environment on the airport for the customers
due to this customers are getting attracted and firm will enjoy large amount of profits and
revenues(Nudurupati, Tebboune and Hardman, 2016). This helps in increasing the brand
image in the marketplace so that it can sustain for a longer period of time.
Porter's five forces model
It refers to that framework which helps in analysing the competitive advantage in the
same industry by including the five forces model that helps in determining the intensity in
gaining competition. It was proposed by the Micheal E. Porter. In context of International

Airlines Group this factor helps in gaining competitive advantage within the airlines industry in
all over the world. This five forces can be shown below.
 Bargaining power of suppliers- The bargaining power of the suppliers are moderate in
the airline industry because the policy of the International Airlines Group is that they
purchase the raw material and machinery from the limited number of suppliers due to this
they can charge the prize whatever they want(Yi, 2016).
 Bargaining power of customers- The power of the buyers are relatively low in the
service sector companies because there International Airline Group can do their business
with some specific policies and standards according to this they can control their
operations this helps in attracting the buyers towards the company itself. Therefore
customers can pay the amount of tickets that was decides by the particular airline
company.
 Threats of substitutes- This factor is containing low and high power according to the
nature of the travelling. If the people travel in the home country they can adopts the
various substitute like train, bus, private vehicle etc. this shows the high power of
substitute on International Airline Group and if people travel international countries
power of substitute is low this helps in earning higher profits and growth of the
firm(Bratton and Gold, 2017).
 Threats of new entrant- In airline industry this factor contains low impact on
International Airline Group that is the largest airline company in the UK and in all over
the world. And also there are more competitors are available in the market that level of
service are also huge due to this entry of the new firm in the same sector is difficult with
same amount of capital and resources. In this they can also focus on getting the trust
because it helps in gaining the customer base and earning high profits. So entry of new
firm is restricted and low in the airline company(Myers, 2019).
 Rivalry of the firm- This factors shows the high power on the International Airline
Group because there are number of competitors are present in the airline industry and to
make their place strong company need to introduce the new services so that they can
attracts the large number of customers and company will sustain for a longer period of
time.

Illustration 2: source: Porter’s Five Forces of Competitive Position
Analysis, 2020
TASK 2
Marketing communication mix
Marketing communication mix refers to the blend of the various promotional tools that
helps the marketers to help them in reaching their goals and objectives. It shows the frameworks
that helps in promoting the goods and services to the people of the society and creating
awareness in the mind of the people about the company image and their offerings. It helps in
creating the strong connection between the organisation and customers. For earning higher
success and growth company depends on the various tools related to the marketing
communication mix. This concept reflects the activities that helps in gaining more profits and
revenues so that business venture will sustain in the market place for a longer period of time.
This marketing communication mix term helps the International Airline Group to communicate
with their different stakeholders effectively such as Clients, shareholders, customers,
government, employees, partners etc. so that they helps in enhancing the growth and share of the
business enterprise into the market. This term represents the various tools or approaches like
sales promotion, public relation, personal selling, direct marketing, internet marketing,
sponsorship etc. In International Airlines Group, marketing communication mix helps in convey
the services of the company that they offered to their customers in an innovative way in the
market so that they can attracts the large base of customers for earning higher profits in the same
industry. These tool helps in conveying the specifications about the services, goods and brands
directly or indirectly to the customers with the purpose of encouraging them to purchase. This

term helps in enhancing the goodwill in the marketplace. Some of the marketing communication
tools can be shown below(Wittenzellner and Teske, 2018).
Illustration 3: source: Marketing communications mix, 2020
 Personal selling- It shows the traditional form of the marketing communication mix in
which salesperson is directly approach the targeted customers by informing them about
the features of the goods and services in which they deal. It shows as a most reliable form
of communicating. This term helps in enhancing the relations of the customers with the
firm in an effective and efficient way. In International Airline group, this factor helps in
strong connection with the people so that they can attracts the large base of customers
who can enjoys the travelling by taking the advantage of company services.
 Direct marketing- It is an another effective approach of marketing communication mix.
In this organisation can adopts the digitalisation techniques for promoting the goods and
services such as social media, fax, e-mails, mobile phones where International Airline
Group can effectively communicate with their targets and potential customers without
involvement of the third party. It is very trending in today's business environment for
conveying the company products and services to the people of society in a short period of
time(vom Brocke, Zelt and Schmiedel, 2016).
 Sales promotion- It defines those terms of the marketing communication tool that shows
the media and non media communication for enhancing the base of the customers within
a pre- determined time period. International Airlines Group can offers the services to
their targets customers with some short term increments that helps in retaining them for a

longer period of time. In this they provides some discounts in buying the tickets so that
they can attracts the new customers and it helps in sustaining in the marketplace for a
longer period of time.
 Public relation- This term is defines an essential marketing communication tool because
it helps in reflecting the relation of the company that helps in maintaining the goodwill of
the business enterprise with the customers eyes with the use of paid and non paid
communications frameworks. In recent environment International Airlines Group can
make their relation by using the social media tool, traditional tools etc. so that they make
strong connectivity that helps in retaining the people from the company. It also helps in
saving the positions of the brands in front of the many customers in all over the
world(Harmon, 2019).
 Events and experiences- This marketing communication tool shows that to maintains
the strong brand image many companies can sponsor the large events like sports, non-
profit events, entertainment events etc. with the main purpose of reinforcing the brand
and the mind of the customers for a longer period of time. In this International Airlines
Group can sponsors some sports and entertainment event that helps in gaining more base
of customers.
 Advertising- This term reflects the any paid type of promoting the products and services
by adopting the use of the specified sponsor. In this International Airlines Group can
promote their services and products by focusing on using the different methods like
magazines, radio, newspaper, bill boards etc. so that company will easily attracts the
large number of people and due to this they can face maximum success and profits. It is
the best and effective way to communicate with the large audience in a very short period
of time(Shi, Yuan and Kong, 2019).
 Interactive marketing- In present business environment this marketing communication
tool is very effective as in this International Airlines Group can interact with their
passengers and customers about the company services and goods that they offered to
them via use of social media or their official website in which consumers shows their
reviews about their feeling and firm will focus on resolving this issues by giving them
effective solutions. It helps in earning market growth and efficiency in the marketplace.

Analyse relevance marketing communication tool of International Airlines Group and how it
influences policies and decision making
For International Airlines Group, the marketing communication tool is an essential and
effective theme that is use to enhancing the market share and profits of the firm with attracting
the large number of customers towards the business enterprise. This communication tool helps
the International Airline Group can take the correct decisions regarding the organisation growth
so that targets can be achieves in a very suitable way(Hamilton and Webster, 2018).
It assist in creating awareness in the mind of the people towards the services offered by
the airline company by using the direct and indirect way and with paid and non paid advertising
tool through which they can communicate with the targeted customers. With the helps in this
marketing communication tool company can take the attractive decisions regarding the
marketing mix tools that is related to product or services, pricing, physical evidence etc. In this
organisation may provide the attractive services to their customers in a timely manner. Good and
enchanting communication helps the business venture to take the decisions as per the
requirements of the customers. In this interactive and personal selling approach is an effective
strategy for maintaining the good relations with the people of the society that adopted the
services of International Airlines Group(Gunasekaran, Subramanian and Ngai, 2019).
The major aim of this theme is to deliver the proper airline services to the customers so
that company will sustain in the marketplace for a longer period of time. It also helps in making
the loyal customers due to this company can survive for a longer period of time. Due to this firm
will take the effective decisions for improving their enhancement in profits and sustainability. In
International Airline Group customers value is more important because it is a service oriented
company. This term also helps in making the strong relationship with the external and internal
stakeholders. To connect with the outside world business enterprise can choose the sponsorship,
advertising and interact marketing so that airline company can enhance their profit margin with
more customers(Dundon and Rafferty, 2018).
Critically evaluate effectiveness of organisation response
It is to be critically evaluated that the above marketing communication tool is an effective
concept for the International airlines Group because it helps in maximising their profits and
revenues by maintains the strong communication with the customers, clients, suppliers etc. The
organisation can basically deals with the airline freight, passengers travelling by air mode etc. so

that people can enjoy the travelling and transporting the goods and services from one country to
another. In this, effective communication is very essential because without it there is a major
problem face by the company related to misunderstanding in transferring the goods. Using
effective communication based on digitalisation helps in eliminating the mistakes and
misunderstanding occur in operations of the business. In this direct and interactive marketing
helps in getting the more customers due to this business firm will earn high amounts of profits
and revenues. In this it is a significant work that will positively response the airline company in a
way to timely appraise the employees and workers so that they do their task effectively and
efficiently. In this organisation can adopts the use of various communication network so that
they can strongly connect with the customers and employees. For taking proper follow-ups
organisation can use the digital platform where they can gathered the large base of people via
Instagram, Facebook etc. so that they can improve their services for longer sustainability. For
evaluating, promoting and transferring the employees concerned airline company can use the
intranet and official webmail where every staff member get concerted and information is
communicated with the correct person on the right time. This also helps in taking the appropriate
decisions so that earning profits would be easy and effective(Boella and Goss-Turner, 2019).
Now company can invest more on the digital communication tools because it helps in attracting
the large base of customers and satisfying the needs of the employees so that they can response
in a positive way towards the growth of the firm. In this automation and laptops helped more to
flourish their presence in the international market. Positive response to communication tools on
every step of operations of the company helps in providing the profitable result to the company
and reducing hindrances in the transferring information.
Areas of improvement in response of an organisation
The marketing communication tool is an effective tool as in the today's trending world
and to focus on this frameworks airline company can improve their existence and profits within
the current marketplace and also beat the competition with the marketplace. For this it is very
essential for the International Airline company to modify and improve the quality of services that
they given and provided to their customers for earning higher profits and revenues. In this firm
need to experienced workforce who can tackle the work and problems according to the countries
culture and environment. For this they can hire the applicant who have lots of knowledge about
the different language with good communication skill so that they can tackle the customers on