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Business Environment

Introduction to Business Environment

Business environment is combination of internal and external factor that influence a company’s operation. It includes clients, supplier, competitor and owner. Business environment require improvements in technology, government activity, social and economy trends (Bukhari, 2013). Thomson airline providing services to customers by offering satisfactory tariffs with a broad worldwide flying to centrally-located airports. This report will explain purpose of business and impact of fiscal, monetary policy on organization. Moreover the report will examine market forces, pricing and output decision of business. In the end it will discuss significances of international trends and global factors (Cento, 2008).

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1.1 purpose of various kind of business companies

Business companies arrived into markets to achieve their goals that are their mission to accomplish in the completion market. The public sector firm develops their business to provide emplacement and help the country in admiration of defense. In contrast the Ltd (Cento, 2008). companies come into market to make money through implementing business plans for increasing their market. The fulfillment of their aims depends on the nature of business either it is public or private sector. The principle of organization is to earn profit by offering service to customers to keep hold of them for future (Daniela and Blettner., 2011).

Thomson Airways most annoying and successful airline company of UK. In 1962, organization started as Britannia airways. The Thomson Airways brand was launched on 1 November 2008. After that they renew their strategy and set mission to known as “TUL Spirit” that inspire organization to deliver their goals (Diane, 2004). Mostly the supervision of Thomson Airways is within their management and being private organization they proves to be profitable. The Thomson Airways is targeting international market, because many other airline companies join their domestic market. To turn out to be a famous world class airline Thomson Airways trying to provide better services for pleasing the customers across the country. The future planning of the organization is reflection of the past success and activity they are doing in present. That is passion of the Thomson Airways and company is keep working on it (Gaskell, 2001).

1.2 Types of Stakeholders

The people who will manipulate the ongoing programs of the Thomson Airways are called stakeholders. They plays significant role in the strategic planning of the company. They are classified in two major categories (Diane, 2004).

External stakeholders: The policies of government have major impact on Thomson Airways profit. They have to pay taxes on business revenue and charges for use the airport facility. On the other hand, creditor provides money to the organization for fulfill their daily operation expenses, the ultimate aim of them is to gain profit (Goel, 2009). Shareholders of the Thomson Airways always look for insured return for their capital invested for airways establishment. These all are external stakeholder for the organization and influence the decision of the company (Huettinger, 2014).

Customers: They pay money for acquiring service of the Thomson airways. Customer’s main objective is to get satisfactory services on minimum prices.

Employees: The objective of employees of the organization is to provide desired services to customers and increase their own knowledge base in respect of the firm. Company is paying them for identify problems and plan for solution (Kwong and Lee, 2009).

Owner: Their aim to approve plan for providing better services and mark improvement in the quality and control over management for Thomson airways. They only want to see the growth of the organization (Loukia, 2012).

Manager: The purpose of a manager is to implement the strategy into organization proposed by the top management to generate profit. Their main work is to communicate massage in the company.

1.3 Responsibility of organization towards stakeholders

Manager: They are making cooperative environment in the Thomson airways. Managers take feedback from the employees and make decision according to that (Namukasa, 2013). The organization required to pay attention on their activity and provide them good support to control all work.

Supplier: These people provide fund for fuel, food and other necessary things to Thomson airways. The company fulfills their requirements by timely payments.

Costumers: Consumers main objective is to get best services from the Thomson airways as they are paying for that (Neal-Smith and Cockburn, 2009). The organization can please them by providing satisfactory services.

Employees: The objective of the member of staff is to get good environment, payments and support by management. Company can meet their objective by the good incentive plan and provide them better facility. They have to made polices that can be accepted by all of them (Reynoso, 2010).

Owner: objective of owner is to get more and more profit by providing best services to their employees and customers. Organization can fulfill their object by implementing strong strategic and policy that attract consumers to buy their services. That will generate more revenue for firm.

Competitors: All the competitors try to expand their market in comparison of others. Thomson airways required to make strong strategy to bit them and maintain their business profit (Shaw, 2007).

Shareholders: The main objective of shareholder for Thomson is to get timely and better return for investment. Now Airline Company satisfied them by obtaining higher profit by sales.

Government: The aim of government for airline firm is well-timed submission of taxes and security of people who travel in Thomson airways (Srinidhi and Manrai, 2013). The company fulfills them by setting standard for services and submitting tax on time for airport facility.


2.1 Economic system to allocate resources

All over the world many type of economic system are followed for expanding business and development of that. In the business terms 4 types of monetary system are generally followed. Traditional is oldest system and mostly accepted by the organizations (Stephen and Treanor, 2012). This is particularly basis of the customer’s activity. In that case the buyers influence the organization to set the price according to them. That system is usually followed by the private business companies the percentage of government interface is very little. In the other hand, government have all right in their hands to change and apply in business is called command system. Private organization never agree to adopt them, because this not flexible and sometime fails to recognize changes in buying behaviors of consumers (Turban, 2006).

The Thomson airway follows the mixed economic system in that government also take part but the command on the management is in hands of organization. This system helps the company to achieve their objective and expand their business in aviation industry. Company don’t have to follow the polices of government, they can make changes according to them. It will help them implement strategies and develop by Thomson airways (Zagelmeyer, 2009). Now the company is free from government limitation and management control which helps Thomson Airways to make changes according to the need and requirement of the clients

2.2 Monetary policy

The policy which is planned by the central bank of the country is called monetary policy. The bank analysis the supply of money in the market and control or influence that central bank up and down the interest rate (Company information. 2012.). The increase in rate affect the cost of fuel, due to that Thomson airway required to make changes in the ticket price. It also affects the investors to invest their capital in the business. By that the demand of the airline services decries. For that issue government has to plan strategy to make stability in the market.

The desired and non-planned expanses which manipulate the financial state of a country come under the fiscal policy. Government invests money to perform their daily planned and non-planned activities. For that they need to manage their income resources like tax. Tax rates are fluctuating by the money supply as the time of recession it will be low and at inflation it will be high. It will also affect the profit of Thomson airways, as they have to pay more tax for additional services (Fact sheets. 2013).

2.3 Impact of completion policy

To avoid the monopoly of the some organization in the aviation industry completion policy are developed and implement. This policy keeps the interest of consumers in companies to acquire the best product at the minimum cost. The competitive policies develop to generate the competition in airline industry (Special assistance. 2013). As per the policy Thomson airways required to maintain reasonable and obvious ticket charges. This policy is formulated to guard the benefits of the customers. This will increase the brand image of all over the world.

A Thomson airway is operating their business under Secretary of state for Transport and Civil Aviation Authority. Airline industry is having high risk in their business. The government of UK had planned regulation for commercial movement; all the companies have to follow the rules made by the government. The CAA monitors and controls the economic, management and procedure of Thomson airways. All the airlines companies have to follow rules of ICAO that is formulated for airlines right to flyover or stop at other nation (Zagelmeyer, 2009).


3.1 Implication of worldwide tread to Thomson airways

Thomson airways can expand their business profit through the transferring cargos goods. It can include the exchange of money one to another country. I help them to target new areas for the business, because there are less traffic barricade in export and import of good by air. It will help other business of UK to increases their tread in international market. Other companies find more opportunities find new business market (Shaw, 2007). That ultimately improves the productivity and provides stability for their economy by outsourcing of goods. It will also help to develop UK’s tourism and hotel industry to grow. The biggest threat for worldwide tread is oil price. The price of fuel affects not only Thomson airways but also countries to keep their price low. International trade develop strong economy and strong economy provide support to Thomson Airways and other airlines company to set low price for service they are offering to customer (Loukia, 2012).

3.2 Analysis of global factors on Thomson airways

The major global factors that have impact on the Thomson airways are as follow:

Tread associations: The associate countries do treading regularly with minimum regulations. The Thomson airways can expand their business revenue by participating in the business treads. That will also put impact on increasing brand loyalty across the world (Lawton, Rajwani, and O'Kane, 2011).

Completive advantage overseas: for Thomson airways it is not easy to stay in the market without offering any extra services. Other companies are also trying to maintain the advantage. To gain trust of the consumers Thomson airways needs to put some extra affords (Cento, 2008.).

Economic stability: The economic condition of country has direct impact on the airline industry. The ticket prices of the Thomson airways depend on the financial situation of UK (Daniela and Blettner. 2011).

Technology: Aviation industry is totally demands on the technology and it’s updating with the time. Thomson airways required to adopt best technology to stay in the hunt with other competitor airlines (Diane, 2004).

Exports: The area which is very fruitful for the Thomson airways to target new countries for business. The UK government trying to start treads with other countries to expand their business industries to gain more profit. Thomson airways can provide them opportunities to take their help in exports of goods (Kwong and Lee, 2009).

Poetical factors: The tax policies and rules of UK’s government affect the operation of Thomson airlines. Government plays significant role in strategic development and implementation.

Strategic alliance with foreign firms: The alliances with the other airline company of different country help Thomson airways to start business. It will help them to expand the area of flying and develop new marketplace. That reduces the cost and time to set new business in new environment (Loukia, 2012).

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3.3 Impact of polices of EU on Thomson Airways

The European transport policy has significant influence on Thomson Airways. Underneath are the provisions which are included in European Transport Policy-

SINGLE EUROPEAN SKY (SES): It is initiated by European Commission (EC) to design and inspect airspace. This provision applied across European Union (Namukasa, 2013).

Consumer protection legislation: This provision becomes spotlighted in the recent time due to increase in issues related to safeguarding of customers traveling in the aircraft after volcanic ash eruption in Europe. This provision was established to ensure customers and their families that no individual will be affected from any negligence of the Airlines (Cento, 2008). Government passed special consumer act to protect consumers from any unexpected event.

SLOTS: It is concerned with allocation of slot across the world's airports. It is designed to create business assurance to operators. This provision will assist Thomson Airways to increase the fleets’ size and also helps in enhancing better equipments and initiation of new routes (Bukhari and et.al. 2013).

EU emission trading scheme: It control the gas emission of the aircrafts and that is compulsory to Thomson airline to follow the rules which imposed by the EU ETS.


From this report it can be analysis that a Thomson airway is providing better services in UK and they have better market value too. This report provided the view of vision, mission and key stakeholders to achieve objective of the organization (Daniela and Blettner, 2011). The company is facing problems related to economic conditions of all other nation, its affecting their business too. Report shows the impact of global factors on the organization and gives details of the benefits for international tread. It can help company to increase their market. A Thomson airway is implementing new strategy to have competitive advantage and stay in the business market to create new market for future.


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  • Cento, A., 2008. The Airline Industry: Challenges in the 21st Century. Springer publishes.
  • Daniela., and Blettner., 2011. Adaptation of allocation of resources and attention in response to external shocks: The case of Southwest Airlines. Management Research Review.
  • Diane, 2004. International Aviation: Airline Alliances Produce Benefits, But Effect on Competition Is Uncertain. Diane publishes.
  • Gaskell, K., 2001. ThomsonAirways: Its History, Aircraft and Liveries. Airlife publishes,
  • Goel, S., 2009. Airline Service Marketing. Pentagon press publishes.
  • Huettinger, M., 2014. What determines the business activities in the airline industry, A theoretical framework. Baltic Journal of Management.
  • Kwong, E., and Lee, W., 2009. Knowledge elicitation in reliability management in the airline industry. Journal of Knowledge Management.
  • Lawton, T., Rajwani, T., and O'Kane, c., 2011. Strategic reorientation and business turnaround: the case of global legacy airlines. Journal of Strategy and Management.
  • Loukia, E., 2012. M&As in the airline industry: motives and systematic risk. International Journal of Organizational Analysis.
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