The scenario of this report determines the competitiveness of business environment in a market in which numerous organisation operate their business activities. Thus, it is required for an organisation to evaluate the impact of such factors over the business decision making.
- Determine different types of organisation as well as explain their size and scope.
- Explain the interrelationship between functional departments of British airways.
- Evaluate the positive and negative impact of macro environmental factors over the British airways.
- Identify internal strength and weaknesses of British airways as well as evaluate the interrelationship with macro-environmental factors.
All internal and external factors that govern the method how a company works and handles employees, customer management, business adjustments, and the demand and supply inter relationship; can altogether be named as Business and its Environments. The success rate of a business is judged by how it responds to changing environmental conditions and allocating its resources wisely and timely manner and how well it adapts itself accordingly. The raw materials, the demand and supply of goods, customer preferences all are variable and it is the job of the business head board to act accordingly for success of the business. As opined by Farkas (2015), an UK based company has been selected for investigating the types and sizes of business; this firm has to face competition with. British Airways Limited has been chosen to find its position and the features of the business environments and the competitions in the market.
P1: Different types and purposes of organizations
Business environment can be broadly classified into two categories:
Micro Environment (Internal Environment): This includes the factors that strike immediate effect in the performance of a firm. The supply, the demand, the customer preferences, the trend, work power, associations, competitions are the factors that fall in this category (Hellman, 2010). These provide immediate variations in the planning and directing of a business firm.
Macro Environment (External Environment): The factors under this sector do not affect immediately. These factors are determined on the basis of a long time. These factors include demographic changes, economic changes in the nation, political turnovers and trends. These elements are outside a business form that is inevitable and the regulations are done in the internal environment, according to the changes in the external environment.
First World Problems include complaints like ones that whine about “business class product”. British Airlines has taken innumerable progressive steps towards the satisfaction of business class flight experiences, bringing competition speculations between them and American Airlines. British Airways Limited has a large number of complaints about its bookings and transactions that are quite tricky and cost consuming. British Airline Services Limited has excelled in almost every other subcategory towards customer satisfaction.
Various political incidents such as the elections, terrorist assaults, Brexit, Military operations are included in the external factors that govern the Macro Environment. Fuel Price hikes and higher interest rates to fall on this category British Airways Limited, failing to change the outcome of these factors.
As intended by Leong (2015), customer behavior and preferences are ever changing factors in the business environment, which keeps the managerial board busy in taking quick decisions. British Airways Limited has been using demographic and psychographic segmentation to learn the business trends and the probable market characteristics to identify where they need to excel and evaluate the mindset and attractions of customers. Customer class based positioning strategy is used by British Airways Limited. British Airways Limited has spread across 82 nations with over 300 airbuses. Various business subsidiaries like BA & AA Holding limited Bealine Plc., British Airways Holdings Limited, British Midland Limited, and Overseas Airtravel Limited; have come to use for managing business. It has decided its services into two broad parts- passenger and cargo, the former using the BCG Matrix into Stars seamlessly. Both direct and indirect competitors come in their way of grasping the Airlines market. The competitors having a connection with the British Government often take an upper hand with the low cost tickets as the British Airlines comparatively posing ticket prices on the upper side, being a totally private firm. Vrigin Atlantics, American Airlines, Silk Air are its competitors (Britishairways.com, 2018).
P2: Size and scope of range of different types of organizations
According to Strategy Theory, the British private organizations can be classified into four types:
Sole Proprietorship: These are small organizations run by a single head (the trader). All business decisions are taken by the trader. No complex paper is done, direct and primitive communication and feedback occurs between the sellers and buyers. The sole trader himself makes the gross profit.
Partnership: Two to twenty partners coming together towards the fulfillment of a common business goal with proper sharing of liabilities, work force, capital, profit and loss; is known as partnership. An impartial solicitor is hired by joint discretion of all the partners to judge and share everything between the partners.
Companies: When a group of shareholders appoint a director to give proper plans to a business, managers hired to manage the floors, executive seniors to see that the job is done regularly and with ease, together form a company.
Franchise: Franchise is simply a committee that follows a safe method of buying ideas from a group and selling them to another with the correct flow of money. It can also be defined as a link between the customers and a large company (Norton, 2015). The franchisor sells a part of its supplies to the franchisee, keeping in mind the quality of a product. Due to the risk of investing a capital, the franchisor takes an extra percentage for profit, in return, checks the quality of commodities and services provision. Trainings and developmental projects are held by the franchisee itself.
British Airways is a global airway service that takes its place in the world airlines at 3rd spot in terms of revenue generation. Its main base is at London Heathrow Airport. The greatest competition of British Airways in United Kingdom is EasyJet, participating ina neck to neck fight with British Airways flying 36.5 million passengers in 2008 and Easyjet carrying 44.5 million, but in recent years, the trend has changed and British Airways tightened its spot in the Airlines market. With a sore in the trend in the lifestyle of United Kingdom, with increased economy, customers using Airline Services have taken a hike that has been beneficial to the company. Mostly frequent global premium fliers and the upper middle class and the upper class group enjoy British Airways’ services. Their satisfaction level is always on a watch to remove risks of losing them to the competitive market.
The business class fare between Heathrow Airport, London and John F Kennedy Airport, New York is £1,452 and one gets an economic class ticket for £386. Like each and every other multinational firm in the world, British Airways Limited shares the same set of competition and environmental hazards both internal and external (Britishairways.com, 2018).
The company has strengthened its position in the market by successfully developing the infrastructure to first class services and racing with the other top organizations. The main medium of distribution of its services is through call centers, agents, and shopping websites. Electronic and print media has helped British Airways limited enhance its reach to the crowd. Innovations like mobile application for the air transport service, dropping prices in the off seasons; have come handy time to time, in fixing a top position for them in the Airlines Market.
P3: The relationship between different organisational functions and the way they link to corporate objectives and structure:
It is mandatory for any business to maintain a proper balance and effectiveness in the industrial market. For keeping its efficiency and reputation, the company should create different stream such as production manager, human resource management, sells and marketing team and many another department also (Hellman, 2016). British Airways Ltd, being a public limited company in the United Kingdom, the company has various departments for its marketing such as services marketing department, IT department, promoting management team, different service providing management and most crucial customer helpline management. This entire department divided the whole process and maintained the pressure load to every employee. Thus the effect of the work incises and at the end of the business its help to improve company's balance sheet by earning more from the market. Nowadays in the market collaboration two or more than two companies have been shown. It is a market strategy to promote company's product to collaborate with other company. It helps both the companies to improve their product by spending a less amount of money. For example, British Airways Ltd promotes its air transport business by giving free tickets to an NGO's children for their vacation tour. As mention by, Leong (2018), in this case, British Airways Ltd collaborates with a particular NGO to promote its business along with a social activity which gives the company an advantage in business fields and also helps to improve its image in customer point of view. Every company follows some essential business rules to maintain their sells and profit balance sheet. Some of these factors are discussed as given below:
Research and Development: To betterment the product and service quality every company has a research and development group. In British Airways Ltd, this group maintains the service quality provided by the company and also try to improve the technology that offers the best experience to the customer in airline travels
Human Resource: Human resource management is the lead departmental management system in every company. This department maintained all others group and divided the work pressure equally among all the groups. From employee recruitment to interview, all this organised under the human resource management system.
Seals and Marketing: This department handles only the seals and marketing portion in every company such as all the investment, shares profit generated by the company. As British Airways Ltd is an airline company, the seals and marketing department looks after all online promotion and seals of airline tickets.
Design and Production: Before sealing a particular product or providing a service it should look good for the customer. Design a business strategy to attracts the customers, the design and production management plays a significant role (Wong, 2018).
Finance: Finance provided a tremendous amount of money for investment in the business. The invested capital entirely depends on its business. In British Airways Ltd, the spent money generally huge.
Every corporation should collaborate with each to promote their products at a low downside promotional cost risk. In a company, all employees should work together to the improvement of the company. Shearing the workload and creative ideas will compress the workload among all the employees. Hence it will reduce the competitiveness of the employees and creates a unique bonding.
Also Read: Environmental Factors in Business Operations
P4: The positive and negative impacts the macro environment has on business operations, supported by specific examples:
Everybody should gain some knowledge about the macro environment before discussing the positive and negative effects on the business operation. Acronym pestle is the ideal word to describe elements of the macro environment. Regarding the macro environment, some significant factors are mentions below (Harrington, 2018):
Social Impact: Border market is the changing altitude in this environmental case, and also it values the customer choice and effects people fashion which effects are purchasing companies service and products. Customer preference is the primary factor which impacts the social, environmental marketing business policy. If the company can build a better image in customers point of view and it also incises the products seals of the company.
Economic Impact: Most of the peoples believe that the environment is the primary influence business strategy, especially in developing countries mainly that are on top of customers and vital economic shocks from outsiders sources. Some of the economic changes can affect the business such as like, the interest of lone suddenly increase and a small company that has a significant amount of solitary from a particular bank has to lower down its business. However if the bank loan interest decrease, then the company will able to expand its business, hence less unemployed people will there, and maximum taxes will be paid, change the economic condition of the country (Ward, 2017).
Political Impact: As suggested by, Hilton (2015), in this discussion some technical, political issue will be highlighted, which is faced most of the companies. Apart from the local political parties, there are various political related NGO's and individual groups that put on a force to change a particular policy with no valid reason. These desperate demands of these groups can affect various companies to bringing down its products and service.
Technological Impact: Nowadays, influence the human beings and grebe most of their times. Technology has an essential role in every business policy or service, and it is also manipulating the way in which business connect with its customers. As directed by, Klusmeier (2018), technology is one of the most significant factors in the industrial market, and one cannot imagine the business work process without the technology. Like most of the airlines business also in British Airways Ltd, most of the significant business part is handling with the help of the computer. In Airways business most of the pieces are controlled by computers software technologies. Nowadays there is a massive change in the way the company deals with customers, most of the deals are occurring in social media platform which saves human time, and the process is hassle-free. In the level of competition without modern technology, it is nearly next to impossible to compete with other companies in t