BMP4003 Business Environment: Macro-economic Activity & Virgin

This report assesses the influence of macro-economic factors on Virgin Atlantic Ltd, a British company with diverse operations including Virgin Atlantic airline. It explains the impact of factors such as inflation and unemployment rates on the airline's business outputs. The report further analyzes how the UK's current growth rate, considering the economic life cycle, GDP, and inflation, affects the company. Government intervention methods like fiscal and monetary policies, and the furlough scheme are also examined for their effects on Virgin Atlantic. Finally, the report identifies global challenges facing the business and provides recommendations for overcoming them in the current economic climate. Desklib provides past papers and solved assignments for students.

BSc (Hons) Business Management
BMP4003 Business Environment
Assessment 2
Influences of Macro-economic
Activity
Submitted by:
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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 busines? (e.g., fiscal and monetary policies, furlough
scheme etc) 6
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 main conception of the organization's situation suggest is the variety of elements
which includes external as well as internal factors that impacts the capability of the
company. These factors matches the needs of consumer and the workforce, demand
and supply, individual interest, administration, fiscal change, and the raw material's
contractors. This aids the researching of the business and works on the
presentation, development and the growth of the firm. The macroeconomics
activities introduce to the variables which integrate pecuniary actions, unemployment
rate and many more which aids in gathering the data related to the economy which is
controlled by the government of the nation(Awadallah and Elsaid, 2020). The
company which has been taken into consideration in the report is basically based on
Virgin Gathering Ltd. Virgin gathering is a British company which is founded back in
the year 1970 and this company gives an infinite operations in the set like the virgin
aircraft, virgin media, virgin occasion, and many more. The report further cover the
aspects which are creating a impact on the functions of the Virgin Atlantic airline
which incorporates the enlargement, unemployment rate, growth (Mitchell, and et. Al,
2019).
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.)
The word full scale is basically known as the monetary field which is the
researching of the financial movements. For example, monetary rates, growth,
development, expansion, GDP rate and so on. The big scale of the monetary system
can be classified in 3 different types which are positive, negative, nonpartisan. The
broad scale of the money calculate help with the estimation what is in the store
footstep of expansion, unemployment rate and many other various elements. This
figure rates the option taken by the authorities and associations(Birbirenko,
Zhadanova and Banket, 2020). The demonstration of virgin Atlantic's business is
influenced by the large number of outer components which lead to collect the
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planned targets and the company's search demonstration. The virgin Atlantic's
collection way is a British international aircraft carrier which was made ready in 1984
to fly from London to Falkland Islands. Basically it is the portion of the virgin
assemblage. The impact of the climate also affects the Atlantic aircraft as well as the
techniques. There are several components which impact the whole Virgin Atlantic
Airlines outcomes. These are discussed below:
Inflation: It suggests that the tax which is grown in the regular expenditure of
working class and the goods and services in a particular time period in the economy.
Enlargement is basically essential for the measurement of the general-purpose
increase the price. It is footstep of expanding expenditure of product at expressed
period of time(Bogoviz, Ragulina and Barcho, 2018). The occurrence of beginning of
labour and products which are due to the expansion of the lookout. Virgin Atlantic
Airline's Rising prices is impulsive which is making an impact on the overall
expenditure. The company is facing a large number of issues in supplying the
products due to the rise in the cost of production. This has also made a huge impact
on the execution systems of the organisation in the present year. This is the reason
people are not willing to buy the management of the business which is a bad sign for
the CEO. The organisation added the advantage in the fuel which is helping in flying
and also sharing the vital data with all the business partners.
Unemployment Rates: It is related to the lack of employment opportunities for the
people. The rate measures the level of unemployment in a particular workplace. The
present situation rises when there is change in the pecuniary condition. The existing
condition is liberal and the development of economic system has solidified the
position. The covid-19 pandemic has has impacted the overall unemployment in UK
due to the falling of economy rates and places of the people. Virgin Atlantic Airline
has been very impulsive in the market since most of the air travel strength lies in
organising and managing the workers. In this worse time, the market techniques will
play a crucial role in reviving the business. The company is trying to recruit additional
employee's for making contribution in the employment of the economy(Borthwick, Ali
and Pan, 2020).
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How will the UK current growth rate impact on the chosen
business (give reference to economic life cycle, GDP,
inflation, unemployment rate)
On the basis of the analysis, it identified that economic system rates of UK in 2021
has increased by 7.5% and the in 3 months GDP growth is 1%. UK has a fantastic
outlook for routine conveniences according to the people, it is an processing
company, The consequences of Covid-19 crisis is causing to many organizations
which is termination of 9.4 % fall perpetually finishing in 2020 which is similarly
measured that individual’s well-being are causing an impact on the lookout the
people of UK has been largely impacted by this global pandemic and moreover on
UK's economic system. There are a couple of definite sources which is approached
by Virgin Atlantic Airline that tremendously impacts the fiscal improvement rate.
Economic life cycle: The generic state of economic system is analyzed by the 4
stages of program which is incorporated the improvement, elevation, constriction
and box(Bosire, 2018). These factors aids the investigation the actual time period of
the fiscal series. Example of the factors are enterprise, client, enlargement, economy
and many more. UK's existing improvement pace that impacts on Virgin Atlantic
Airline can be measured by the four phases of monetary series which helps in
improved understanding for the people. below are the phases which helps with
determining the on-going evolution.
 Expansion: The level the economy experience which tends low-level of
involvement rates, increment in the industry and re- develop the existing
market in new places. The rising prices of Virgin Atlantic Airlines are due to
the increasing need by the customer's and also the price of the fuel is rising
continuously(Nielsen, Asmussen and Goerzen, 2018).
 Peak: It is the time period where the growth of the economy is exploited with
upper limit pace. The phase makes an essential impact on the accurate
instability of the economy. Virgin Atlantic Airline can restrict this high growth to
make the operations more stable which will help in development of the
organization.
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 Contraction: It is related to the falls or downs which are operating in the
economy over a period of time. The rectification of rates of employment,
changes in value, slow growth etc. Virgin Atlantic Airlines can analyze the
faults which happened by contraction and try to resolve the issues properly.
 Trough: It is related to the low-level exploit of the life cycle of economy.
Virgin Atlantic Airlines can analyse the environment of the business
organisation and try to develop a peaceful atmosphere among the
operations(Reddy, Nayak and Nagendra, 2019).
Gross Domestic Product: This is refers to the GDP which evaluates the actual
worth of producing the commodities as well as services in the economy in the given
period of time. The estimation of UK's GDP is calculated on monthly basis and it is
known as short term elements. The GDP in the year 2022 grew by 1% due to the
increase in the number of travel agencies in UK.
Inflation: Rising prices means the state where the rates of the goods and services
increases which also increase the market value. Inflation is the measurement of the
total increment in the rate and value. It is the change in increased value of products
over a specific time period. This is a condition where the need of the commodity
increases in the marketplace. Virgin Atlantic Airline's price rates is starring due to the
huge value in the market.
Unemployment rate: This can be defined as a rate which measures the rate which
analyze the number of persons who are not currently doing any work or are
unemployed. It considers the number of labor who are unemployed. This situation
comes when the economic situation modifies and the economy rates are falling
which is creating a risk on the existing jobs in the market. The rate of unemployment
is rising day by day due to the global pandemic which is making a adverse impact on
the working of the business(Yavas and Malladi, 2020).
How can the government current intervention methods
affect the selected business? (e.g., fiscal and monetary
policies, furlough scheme etc).
There are very several people which are dominating the market because of
their capacity to modify the work condition and strategies which includes the
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monetary and fiscal aspects. This directly affects the overall working of the business.
It also assists in increasing the rate of interest and raise the value of the domestic
currency. In relation to the Virgin Atlantic Airlines, there are different government
policies which can be used by the company. These are discussed below:
• Fiscal Policy: It is the strategy which is utilized by the authorities for controlling the
economic conditions such as inflation, growth, unemployment and many more. The
existing balance of the budget after combining two or three rules exceed the total
GDP forecast by 3 % and with the meeting of rule of government by 5% of GDP.
Virgin Atlantic Airlines has gone through big losses in the marketplace as compared
to the other companies due to the fiscal policies. The policy focused on debt of
nation and on the other factors which are essential for the national budget. The fiscal
rule states that the debt will be shared three times in a year in the nation. The
existing balance of the state budget is showing surplus for the forecast period.
• Monetary Policy: It can be defined as a set of policies which helps in managing
the amount of money circulating in the economy. It also covers the channels through
which the money is circulated in the nation. The government controls the supply with
the help of various tools such as interest rates and demand as well as supply of
money in the marketplace. The modification in interest rates are the basis for the
change in supply of money. Virgin Atlantic Airlines keeps in mind all the policy which
are made by the government in order to operate the business in an effective and
efficient manner. The company has to analyse the cash flow on the basis of the
interest rates prevailing in the market.
• Vacation program: It is the leaves which is taken by the employee's for any
particular situation or condition. This is temporary in nature since it is generally taken
for a small period of time. This program is formulated for providing the support to the
staff and workers in the situation of the covid-19 pandemic. The members of the staff
are given option to take leave on the basis of their conditions. Virgin Atlantic Airline
have given the benefits of this program to the senior staff and the other employee's
where they can take a temporary leave with permission. It is assisting the company
in maintaining its dominant position in the market. The workers of the organisation
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are doing their jobs properly which is helping the business as a whole. This is the
reason which is ensuring the sustained profitability of Virgin Atlantic Airline.
What are the current global challenges facing by the
chosen business and recommendations on how to
overcome them in this current time?
There are various issues which are prevailing in the environment all across
the world. These issues are related to the pollution, unemployment, lack of
education, changes in the climate etc. These hugely impacts on the working and
operations of the business. In the recent situation of pandemic, it has been analysed
that Virgin Atlantic Airlines has faced various problems and difficulties in its business
and it need to make strong and effective policies so that it can resolve all the issues
and try to get on track regarding the performance. There are various
recommendations which needs to be implemented by Virgin Atlantic Airlines in its
business. These are discussed below:
 Unemployment: It is defined as the worker which are not actually working or
are unemployed. The covid-19 pandemic has made a huge impact on the jobs
of the people. Most of the individuals have lost their jobs which has resulted in
increased rate of unemployment. It has been seen that unemployment
influences the net income of the people. The current situation is leading to
people going to depression due to the lack of jobs available in the market.
This has impacted the economy as a whole.
 Fuel: It has been seen that the complete value of the fuel is increasing day by
day. It is making an impact on the business operations of the Virgin Atlantic
Airline. It is the most important aspect when it comes the airline industry. It is
affecting the revenues of the company since it has increased the prices of
tickets of the organisation. There are various airlines companies in the world,
so the enhanced value of the fuel is a basic and simple thing. Virgin Atlantic
Airline has to reduce the profit margins to be able to sustain for a long period
of time. It is the most common problem which is faced by every airline
organisation in the industry.
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 Passenger experience: It is very essential for the airline company to take
care of the comfort level of the passengers. This is directly related to the
image of the organisation in the market. Virgin Atlantic Airline provides best
quality services to the guests which satisfies the expectations of the travellers.
It also helps the company in attracting a large number of persons. The
organisation should also ensure the safety measures of the passengers which
is another essential aspect in the operations. The needs and requirements of
the travellers should be taken into consideration while providing services to
the passengers. This makes a direct impact on the revenues of the company
and help in achieving great success in the future.
Conclusion
It can be concluded from the above report that macro-economic factors are
very essential for the business. These factors impact the unspecific enterprise
economy. The above report is prepared by taking into consideration is Virgin Atlantic
Airline. The economic system of the business can be evaluated by the improvement
in economic conditions and GDP. There are various factors which are impacting the
growth rate in UK. The methods which are used by the government to control the
stability such as monetary policy and fiscal policy are also discussed in the above
report. The planetary changes which are influencing the business such as natural
issues, environmental issues and many more are also examined in the report. The
organisation should take into consideration all these factors for the smooth
functioning of the operations. The company will have to utilize all the available
resources in order to do well in the market. The complete-scale financial effect, aid to
investigation of the company's opportunities and work on the exhibition as well as
abilities for the upcoming future betterment.
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References
Books and journal
Awadallah, A.A. and Elsaid, H.M., 2020. Investigating the impact of macro-economic
changes on auditors' assessments of audit risk: a field study. Journal of
Applied Accounting Research.
Birbirenko, S., Zhadanova, Y. and Banket, N., 2020. Influence of pandemic of
coronavirus infection COVID-19 on economic resilience of Ukrainian
enterprises. Economic Annals-XXI, 183.
Bogoviz, A.V., Ragulina, J.V. and Barcho, M.K., 2018, April. Influence of innovations
on regional socio-economic development. In International Conference
Project “The future of the Global Financial System: Downfall of
Harmony” (pp. 1200-1207). Springer, Cham.
Borthwick, J., Ali, S. and Pan, X., 2020. Does policy uncertainty influence mergers
and acquisitions activities in China? A replication study. Pacific-Basin
Finance Journal, 62, p.101381.
Bosire, E.M., 2018. Macro-economic factors and foreign direct investment flows into
eastern Africa region. International Journal of Economics and Financial
Issues, 8(5), p.200.
Nielsen, B., Asmussen, C. and Goerzen, A., 2018. Toward a synthesis of micro and
macro factors that influence foreign direct investment location choice. In The
Routledge companion to the geography of international business (pp. 190-
212). Routledge.
Reddy, R.V., Nayak, R. and Nagendra, S., 2019. Impact of macro-Economic factors
on indian stock market-A research of BSE sectoral indices. International
Journal of Recent Technology and Engineering, 8(2 Special Issue 7),
pp.597-602.
Yavas, B.F. and Malladi, R.K., 2020. Foreign direct investment and financial markets
influences: Results from the United States. The North American Journal of
Economics and Finance, 53, p.101182.
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