British airways is the global airline. Also, it is the biggest traveling medium in UK.It is flying over 170 destinations in all over the world (Hoffmann and Weill, 2007). Along with that, British Airways has a fleet of more than 280 aircrafts. the British airways is working of the strategy of their presence in key global cities by lots of partnership witt custish Airways is delivering hisgher performance standards to the customers at each and every points of their needs and wants. The Business environment of British airlines is mainly concentrated between four areas that isi.erkplace, marketplace, environment and stakeholders as well as it is working progressively towards the goal by considering four areas on which success depends.
Owner of the business might be a single person or a group of people. So there is different kind of ownership is present in many organization and this ownership depends upon the purpose of the organization and their business. (Huiguang and Huaizheng, 2009).
Main Types of business organization are as follows:
Partnership: A partnership is formed by two or more members. A partnership firm involves some basic terms and condition like amount of capital that each member should provide and division of profit as well as loss among members etc . for the growth of small and medium size business, partnership is giving the opportunity to business for enhancing the profit. an optomer buss. Exan Lewis partnership.
Private limited company: It is different from partnership as business is owned by shareholders and run by directors who shall be appointed by Shareholders. A private company is for those who wish to take advantage of limited liability but at the same time desires to keep control over the business within a circle. Example: United Biscuits (Buxel, Esenduran and Griffin, 2015).
Public limited company: This is the business owned by government of different nations. can be t bougic limited company profit of the company depends upon the share market. The shares can be bought and sell in stock exchange and the profit of the company depends on it. The purpose of company is related to the prestigious profile along with greater access to capital in share market (Fernando, 201mpesco.
Co-operatives: These kinds of company are formed by co-operations. The purpose is related with the fulfillment of need and obtains a product or service. the three basic types of co-operative organizations are retail, marketing and workers co-operative business. Some banks also come sin this category. as well.
Public Sector: not fullyentsof customers uic sector is connected to the general public and there business depends upon the providing opportunity to the general public. They also prevents the exploitation of the people. (Kew and Stredwick, 2005). The company is owned by government and a high capital investment is there. Example: NHS.
“British Airways” is a Public limited Company. The airline industry is the sector which is facing continuous change due to new technology sued by firms according to customer’s need and other types of changes as well. British Airways needs to continue its current strategy by looking at re-engineering stage (Arnold, 2015).
Vision: British Airway’s vision is “To be the Leading Airline that provides high quality service with continued growth rate” together with embedding core values like Honesty and customer satisfaction. It has continued to the use of technology to improve customer service.
Mission: Its mission is to enhance the stability and quality of life through innovations, care and optimisms. It is likely to be concerned with the overall purpose of organization also with its scope and boundaries (Blankson, Mbah and Abeson, 2015).
The relationship models helps to explaing the integration relationship between organization and its stakeholders and the extent to which they are influencing each other . in raisinieand profit of the company can be increased by involvement and understanding of stakeholders. ionly ten st ways” is having ten important stakeholders as their working is dependent upon these stakeholders. These ten stakeholders are dominating on the business of British airline (Aras and Crowther, 2011).
Different stakeholders of “British Airways” are:
Customers: Customers is the basic element of any business as the profit depends upon the customers. But they are having very little impact on the management and administration part airlines. That's why British Airways is working for retaining their existing customers and attracting new customers (Shaikh, 2010).
Employees: Employees is the next important thing that can affect the company. They have power of moving the company to the profit and loss.
Competitors: It is the largest UK airline by turnover and hence, competition does not affect it very significantly (Bello, 2005).
Suppliers:Boeing and Airbus are in the list of suppliers of BA. They are impacting the company in big way.
Financial institutions: Financial institutions are impacting the company in the interest of british airways and for themselves.
Shareholders: RElationship between the shareholders and company is very important for the organization as they have high interest in success of the organization and impact its decision making as well.
Local Communities: British Airlines has good corporate relation with citizen of the country.
Government: This sector has wide range of legislations that need to be abided in order to ensure smooth functioning.
Stakeholder relationship: British Airways has promised to reduce its carbon dioxide emission (Johnson,2006).
British airways is creating an attracting workplace for the people of the company where they can work comfortably. The company is performing all these functions to meet customer's need and wants and social responsibility of the company toward common people. (Leonard, 2014).
It is re-inventing the way it used to work coupled with creating a leaner organization with a distinctive, high-performing culture through its flagship change programs. Company is managing its operations by:
Restructuring management: It is a long term management program.The restructuring is performed in the organization for attracting more talented people in the company and making the company's workplace more efficient and effective for working of employees is useful in retaining good employees in the organization by encouraging them and attracting new people to the company (Palmer and Hartley, 2006).
Leadership development: British airways is the leading airline of the airlines industry and maintaining this leadership of the company in global market could be done by only a good leader. . For each capability, specific standards are to be established so that monitoring the performance level becomes easy for the organization.
Management of business: On the weekly basis board meeting should be done for considering vision and making strategy according to it. This is the responsibility of operations executive to design the the strategies of the company by considering the needs and demands of the customers. ca( Also they are ensuring highest standards of safety of the customers (Taylor, 2006).
These are some economic systems that are used to allocate resources economically in British Airways:
Command Economy: Systemed mammand economy is the key element of this scenario. It is a kind of system which is used to determine the quality of the goods to be produced in the market, the time of production, the time of delivery and the place of delivery. This should be decided by the management not the customers. In some operations of “British Airways”, command economy is used to control the service criteria and new technology production. It is ald econ terwn as the planned economy. Planned economy is some modification in command economy as the decision part is based on the management but they also consider the information about the customer's wants.(Squire, 2006).
Free Enterprise: ownershiterprise is the combination of the government ownership and individual person. Which includes limited ownership by the government. This system is also having minimum restriction on trade. This system is formed for reducing trade restriction on the business enterprise.
Mixed Economic System: This economic system is the integration of both socialism and capitalism in the business and society. It is having essence of both government restriction and private company's freedom. They are having freedom of freely use of capital in the business. But government interfere in the economic activities of the business.
Transition Economic system: transition economic system can be defined as the system in which planning is changed from the central and free zone. After facing the problem in communication, UK has applied transition economy.
United kingdom is reviewing their fiscal and monetary policy from the last many years. They want to increase the employment in the country and growth of the country. They are finding the opportunities of the opportunities for the people of the country for increasing the jobs for them. They are working on creation of more vacancies and jobs in the country (Worthington and Britton, 2006). they also working for dealing inflation in the society and increasing the buying power of the country people. British Airways is considering the monetary and fiscal policy and enhancing the marketing of the company to attract more and more people for employment in the company.
Monetary policy: Monetary policy is concerned with the decreasing interest rates and fixed capital spending.
Fiscal policy: This is just opposite to the monetary policy. This policy is about the increasing interest rates. It directly adds in the balance sheet of the company.
Impact of competition policy: “British Airways” is gaining advantage from travel and tourism sector because of their competitive advantage in the market because of their innovation and variety of services at competitive price. Regulations on the implementation of British Airway’s rules on competition that falls under the field of competitive advantage for company.
Regulatory mechanism’s impact: the regulatory mechanism considers the impact of costume unions and directorate general of taxation for implementation of tax policies across the country.
Scheduled ansome of tcome British Airways in working over many routes of the different countries and intercontinental. It is working for domestic market of United Kingdom, European market and other foreign market. In these routes some are highly competitive in nature and some are centralized. (Fitterman and Sandoval, 2014).
The airlines industry's structure in market in oligopoly in nature. It means that they are having many competitors in the market but there are only one seller of the product in the market. Oligopoly nature is more competitive than monopoly. This means that there are only limited companies which are selling this product.
British Airways’ has made increase in price during 1980 which was not matched by other UK airlines as British Airlines has enhanced its average price by changing market trend from 1980 to 1984. Oligopoly is the condition in which there is very high competition in the market. This was the reason for a change in price of British Airlines.British Airways has enough power to increase the revenues of the company in negative condition of the market. this is the difference between other airline companies and British airways.( market every company is having their right to fix the prices according to their management team plan. But the company's pricing strategy is affected by their competitors in the market. Oligopolies are the industries whichgopoly market where set up costs are extremely high in comparison to the competitor.market. So, the pricing decision wilsed on competitors as well as on brand image.
Demand and supply are the main market forces which affects organizational responses. The elastic behavior between demand and supply characteristics will affect organizational behavior and its structure in the following ways:
Demand: In fact, London Paris British airways is facing lots of competition because of the presence of many competitor at this route. as the demand is fluctuating at this route. In-fact sometimes demand of the British airlines decreased to the point.(Kew and Stredwick, 2005). as the result of this there is fluctuation in pricing of the airlines. So the demand factor is inelastic in nature for this route. It is also applicable for the business travelers for whom demand is relatively inelastic.
Supply: Supply side is also fluctuating or inelastic in nature. In addition to this, airlines industry is largely dependent on the oil industry and supply of it. There is too much dependency on oil and at present, the industry is inelastic in comparison with other industries. Therefore, British Airways is too much dependent on the demand and supply of different things.
In a broad way, “culture” refers to the norms and values which guides the way of people behavior. It also monitors the conduct of people in society and in the organization as well. Culture at the level of British airways referred as organizational culture.
The social and cultural factors influence the business that varies from one nation to another. Also, the society and its influence form the identity of organization. “British Airways” understood that it had distanced itself from the customers embark. The nation's culture is the sum of social values and beliefs, language and the thinking of the people. The culture is affecting the company in their innovation strategy and financial aspects of the airline industry. It is also affecting the way of airline in which they are serving their customers.This was achieved by improving and focusing on customer service, innovation, business and financial performance. National culture is the culture that exists outside the organization at the level of a society or country. . Some employees are resistant to change either consciously or subconsciously. Also, the fear of change is unfounded. So, there is a need for reduction in barriers. So the solution for having control on change in culture is monitored by some of the factors like adaptation of host country culture and acting like locally. This is known as “Globalization”.
Trading with the countries that are outside from European Union, it can pose challenges to the business of any organization. This is due to the long distance and difference in language and cultural difference. This is the reason; it offers a broad range of opportunity to business operations. United Kingdom has a strong network of trade relations with other countries. Where barriers prevent access to the overseas market, British Airlines tries to seek solution of these by negotiation in dealing commitments towards the host countries. World trade organization is the medium of negotiation terms and conditions between European Union and other countries .
There has been a recent development in US national policy to monitor the climate change. Also, there are many advantages to trading with Canada because there is no language difference and business culture is also similar. Moreover, many United Kingdom businesses are already established and running successfully in Canada. Air Transport is associated with the international trade. First reason behind this is that the air transport is traded as a service and secondly, it is a key intermediate service for kids.
The business environment is largely influenced by global forces. From advancement of technology to business, culture has come to be defined as that factor which is influencing trading in international market. Globalization brought uniformity and fierce competition into the market and business has to devise strategies for enhancing competency into it . “British Airways” is facing so many global issues which are occurred due to the global factors that are influencing the trading of company at an international level.
Focus on the sustainability and Environment: To eliminate the global warming and factors that are affecting environment negatively, company is focusing on the sustainability by encouraging environmental friendly practices. “British airways” is claiming for its services and its disposals are green. The net effect is rising in production cost incurred by the manufacturer and the business people along with their society as whole.
Advances in Technology: Advancement in technology is a growing trend because of the information technology sector. “British Airways” is wise to take advantage of information technology for the marketing purpose and also for the technology in aircraft. In order to satisfy the customer’s needs, technology improvement is necessary.
Emerging markets: This point is related to competition point of view. There are so many airline competitors of British airlines that if the company is moving to global market, it is necessary for it to get over linked with the international commerce.
Cultural and Religious Market: This is related to the cultural difference in culture of the home country and host country.
Fiscal and monetary policy: Fiscal policy is about the government’s decision regarding spending and taxing on business (Huiguang and Huaizheng, 2009). This will leads to increase in demand and require more production and the cycle growth of business will continue. Also monetary policy is about the decision regarding money supply and interest rates. This will affect the supply side of curve. Fiscal and monetary policy of government is the base for balance between demand and supply side of any business.
The tourism sector is very heterogeneous and some of the activities like tourist accommodation and long distance passenger transport heavily depend on travel agencies. unch ous last five years the number of jobs and opportunities for the people of the country is increased and this is affecting the economic condition of the country.(Ward, 2015). . Air transport emission is likely to increase rapidly in the future scenario. This could comprise between European objectives and climate change (Makos, 2013).
After the complete analysis of “British Airway”, it can be concluded that the company requires improvement in some areas like Information technology advancement, more focus is to be given on operational management, training and development programs for the individuals and intelligent team of analyst should be organized to monitor the whole function.