Virgin Holidays: Navigating Global Challenges and UK Economic Impact

This report examines the business environment impacting Virgin Holidays, focusing on macroeconomic factors such as unemployment and inflation, and their influence on business output. It analyzes the impact of the UK's current growth rate on Virgin Holidays, highlighting opportunities arising from increased consumer spending and reduced unemployment. The report also discusses the effects of government intervention through regulations, taxation, fiscal and monetary policies, and price controls. Furthermore, it addresses current global challenges like the COVID-19 pandemic and offers recommendations for overcoming these obstacles. The analysis emphasizes the dynamic nature of the business environment and the importance of strategic adaptation for sustained success. Desklib provides similar solved assignments and resources for students.

Business environment

Table of Contents
INTRODUCTION ..........................................................................................................................2
MAIN BODY...................................................................................................................................2
Macro-economic factors which needs to be considered by the company and the influence
which it makes on the business output...................................................................................2
In what ways UK current growth rate can impact on the chosen business............................3
How the government intervention can affect the business.....................................................4
Discuss the current global challenges which is faced by the company with its
recommendations as to how the business can overcome........................................................6
CONCLUSION................................................................................................................................7
REFERENCES................................................................................................................................8
Books and Journals.................................................................................................................8
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INTRODUCTION
Business environment refers to the set of people, organisations and other forces which are
within the organization and are also outside the business which impacts the functioning of
business. Business environment is dynamic in nature which keeps on changing and because it
becomes very important to each company that they are making proper evaluation on the factors
which can impact the activities of a business(El Bousty and et. al., 2018). The management of
companies makes the investment on research so that they can make the evaluation of the factors
but with their there are certain factors which provides good opportunity for the business to
achieve success. When the companies makes the analysis of the opportunities then they can make
their first approach towards it which can be helpful in making the improvement of their
organizational performance. Virgin Holidays is a company which is owned by the Virgin Group
which was founded in the year 1985 and is having its headquarters in Crawley, England. They
offer people with different types of holidays and that too worldwide with the destinations. This
report will cover macro-economic factors which influences on the business outputs, how the
growth rate of UK will impact on business, how government intervention can impact and the
current global challenges faced by the business.
MAIN BODY
Macro-economic factors which needs to be considered by the company and the influence which
it makes on the business output
Macro-economic factor is the pattern or condition which has the relation with larger aspect of the
economy rather then the particular section of the population. These factors are considered to be
those which has a larger impact on the elements which exist in the economy. It is very important
for the businesses that they are making the evaluation and conducting proper research on the
factors which can make an impact on their business as this makes the influence on business by
making the alternation in fluctuations(Fadaki, Rahman and Chan, 2020). The other reason for
making the evaluation of macroeconomic factors is that the management can make the use of
their findings which is crucial for making the business decisions so that they can stay above
during the time of any economic shifts. There are some of the macro-economic factors which
makes an influence on the business sometimes directly or indirectly and those have been
discussed below in context with Virgin Holidays-
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 Unemployment- Unemployment is the situation in which the economy is not making
fuller utilisation of the workers which are available within it. It is because of this reason
that the economy would not be able to grow in a quicker way but with which the
economic growth of the country will go down. This is the reason because of which the
business gets affected and this can be the reason for Virgin Holidays also. Firstly, the
unemployment will make an impact on the business in a way that if people will not be
having the jobs then the per capita income in the country will be low. This will lead to
less spending because the consumers will be making the purchase only on those things
which they are finding it to be their necessity other then that they will not make any
investment on the vacations which will make an impact on their sales (Lam and Wong,
2018). The other impact which the unemployment can make on the business output is that
the businesses have to put their prices at low so that people who finds the holidays
expensive will not find it which can lowers the profit of the Virgin Holidays.
 Inflation- Inflation refers to the increase in prices of goods and services within the
economy. Or in other words, it can be said that inflation is the increase of prices of
products and services which makes an impact on the purchases of people. Inflation is the
factor which not just impacts the business but also the economy depending upon the
percent at which the inflation is rising. The impact of inflation on the business is huge
which means when their will be inflation in the economy then it will make costly for the
business owners to run their business. It is because every activity of the business will rise
which will impact the final output which the business is providing(Karpenko and et. al.,
2019). Virgin Holidays will have to pay higher then what they were paying in usual
terms. It is not that in terms of Inflation that it will only make a good impact on the
business but mostly out of it this makes a bad impact on the functioning of a business.
In what ways UK current growth rate can impact on the chosen business
Economic growth refers to the rise in the value of goods and services of an economy
which helps in creating more profits or revenue to the business. When their will be economic
growth, then the stock prices will also rise which gives the opportunity to the companies to make
investment and to also hire people. The economy of UK is a growing economy in which the
chances of growth of a business is high as this gives them the ample opportunities to grow and
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rise their business. The current time because of which every economy is facing the huge impact
of COVID-19 pandemic but still the economy of UK has been risen by 1.1 % in the third quarter
in which the second quarter growth rate is by 5.4 % which is in the time of COVID-19
restrictions.
The growing economy is considered to be the best economy because this helps the
business to prosper and to earn higher earnings. The percentage of profits which is earned by the
business is higher because the main focus of every enterprise is just to earn profits which can be
made during the economic growth because during this time the confidence of consumer is high
as they have higher disposable income because of which they can make good investment on the
purchase of a product(Antonescu, 2018). For Virgin Holidays especially the growing economy of
UK will be helpful to them because of the higher income which will be in the hands of
consumers so they will be able to make the booking of the destinations in which they want to go
and enjoy their holidays.
The other factor because of which the economic growth is considered to be important is
that it reduces the level of unemployment which is present during the time of not having growth
in the economy. It is because different opportunities for providing the jobs to people gets opened
and people will be able to do work which will help them in earning money. When the individuals
would be able to earn higher amount then making investment on things will also become high
because of which they will be able to spend the money in their holidays. By this way, Virgin
Holidays will be able to earn good amount of profits because of making higher rate of booking to
different destinations. When there is economic growth in the country UK then by this, during the
time of peak season the business of Virgin Holidays be able to earn more. The capital investment
which has to be made by the business also opens up during the time of economic growth when
the country is having higher GDP ratio(Van, Phong and Loan, 2018). This is the reason as to
why the businesses can make higher profits.
How the government intervention can affect the business
The government can make the intervention in the business by using variety of methods and those
has been discussed below-
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 Regulations- The regulations means the policies which is framed by the government
which at times can be useful to the business but mostly the policies or the regulations
which is framed by the government is disadvantageous to business. This is because the
main aim of government is to ensure that the economic activities which is operating in the
country is working in an effective way but for running the economic activities it becomes
very important that the business are functioning in a productive way so to control the
activities conducted by the business and to make the avoidance of unwanted or negative
output government makes the imposition of some regulations(Slagmulder and Devoldere,
2018). There are different regulations including employment law, consumer protection
law, environment and many others which varies from country-to-country.
 Taxation- The taxation policy is made in around every country as this is the main source
of revenue for the government. The government makes the imposition of the taxes on the
basis of different kinds of business depending on the country in which the business is
existing. Virgin Holiday is existing in UK so they have to follow the rules and guidelines
of the government of UK. The government makes use of this tax to increase the economic
capital in which it covers the factors such as roads, bridges, public parks and many others.
But paying the taxes becomes difficult specially during the time of pandemic in which it
is becoming impossible for the companies to earn enough in which they have to keep
some part of their reserve to be paid to government in the form of taxes.
 Fiscal and monetary policy- The fiscal policy can be defined as the concept in which
government of country is making the use of taxes and government spending so that they
can influence the economy. On the other side, monetary policy is used to make the
control of quantity of the money which is available in the economy and also the money
which is supplied by the new channels(Nisula and Pekkola, 2018). The fiscal policy
makes an impact on the business like the Virgin Holidays in the way that it helps in
providing the investment opportunity because of the investment which is made by the
government. On the other side, the option of making an investment in the monetary
policy is reduced because of lack of opportunities which is provided top the businesses.
 Price controls- This is the another way which is used by the government to make an
intervention on the business. This is the method in which the government sets the price
limit of some of the goods and makes it compulsory to the business to follow it. This is
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the difficult side because if the prices which are set by the government is less then which
the company will earn then the business are unable to gain some profits because of which
they would not be able to make any advancements. Their are two types of control in
which price ceiling sets the highest prices for the products and price floor which sets the
minimum.
Discuss the current global challenges which is faced by the company with its recommendations
as to how the business can overcome
There are numerous difficulties and challenges which is faced by the business Virgin Holidays in
which some of them have been discussed below-
 COVID-19 pandemic- The pandemic have made an impact on the working of business
in a numerous ways. It is because of the lockdown which has to be imposed by every
country where the economic activities were closed and people were not allowed to start
their business(Sellappan and Shanmugam, 2020). Virgin Holidays were also impacted
with the situation of this pandemic in which they were not able to make an earning in
their business.
 Competition- The existing competition and the coming of different businesses in the
market which are providing the services similar to that of the Virgin Holidays have
created the issues to the business. The existence of competition is the one way which
helps the business to grow their policies and working but on the other side it also creates
the threat to the businesses. Managing the workflows- After making the identification of team the other factor which
becomes important to the management is that they have to ensure that the employees are
working with great and optimal capacity(Mukherjee and Nuñez, 2019). This is because
there are some employees who are always reluctant to work for the extra time period
while there are some who do not want to work extra. So in this case, it becomes utmost
important that the management is making policies which is providing effective results.
Recommendations-
The best solution which can work out for the company Virgin Holidays is that they must conduct
the research in the market so that they can make the evaluation as what is the market need and
what does consumer wants (Yan, 2018). Other then that, they must make the strategies which is
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being demanded in the market so that the business objectives can be achieved efficiently. The
other best way to come out of the global challenge which the company will be facing is that they
must be make he recruitment of the most talented people who have the efficiency to work harder
and also have talent to provides the unique ideas which can work fro the success and attainment
of competitive advantage of the business. Providing different kinds of offers and discounts can
also work the best for the consumers because there are many existing companies who are
offering the same to the consumers and are achieving success. So, it will be great if the Virgin
Holidays will also provide the same to its consumers (Dwumfour, 2020).
CONCLUSION
From the above report it can be concluded that the impact of external factors on the
business is huge as they are less controllable then the factors which exist within the enterprise.
The macro-economic factors makes an impact on the working of a business which needs to be
evaluated by the business. Also, the country in which business exist makes an influence on the
activities because if the country is growing in terms of GDP then the productivity of business
will also be developed. But the government intervention might impact the business in which they
might have to change their existing policies.
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REFERENCES
Books and Journals
Antonescu, D., 2018. Are business leaders prepared to handle the upcoming revolution in
business artificial intelligence?. Quality-access to Success, 19(166).
Dwumfour, R.A., 2020. Poverty in Sub-Saharan Africa: The Role of Business Regulations,
Policies and Institutions. Social Indicators Research, pp.1-30.
El Bousty, H. and et. al., 2018, June. Investigating business intelligence in the era of big data:
Concepts, benefits and challenges. In Proceedings of the Fourth International
Conference on Engineering & MIS 2018 (pp. 1-9).
Fadaki, M., Rahman, S. and Chan, C., 2020. Leagile supply chain: design drivers and business
performance implications. International Journal of Production Research, 58(18),
pp.5601-5623.
Karpenko, L. and et. al., 2019. Formation of the system of fair business practice of the company
under conditions of corporate responsibility. Academy of Strategic Management
Journal, 18(2), pp.1-8.
Lam, J.S.L. and Wong, H.N., 2018. Analysing business models of liner shipping companies.
International Journal of Shipping and Transport Logistics, 10(2), pp.237-256.
Mukherjee, A. and Nuñez, R., 2019. Doing well by doing good: can voluntary CSR reporting
enhance financial performance?. Journal of Indian Business Research.
Nisula, K. and Pekkola, S., 2018. How to move away from the silos of business management
education?. Journal of Education for Business, 93(3), pp.97-111.
Sellappan, P. and Shanmugam, K., 2020. Delineating entrepreneurial orientation efficacy on
retailer’s business performance. Management Decision.
Slagmulder, R. and Devoldere, B., 2018. Transforming under deep uncertainty: A strategic
perspective on risk management. Business Horizons, 61(5), pp.733-743.
Van, N.T., Phong, L.B. and Loan, L.T., 2018. Antecedents of innovation capability: the role of
transformational leadership and organizational learning. International Journal of
Business Administration, 9(5), pp.1-10.
Yan, M.R., 2018. Improving entrepreneurial knowledge and business innovations by simulation-
based strategic decision support system. Knowledge Management Research & Practice,
16(2), pp.173-182.
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