Beruflich Dokumente
Kultur Dokumente
Business
Environment
Analysis of
British Airways
Executive Summary
This study aims to provide business environment in which British Airways works. The
organisational purpose and mission and vision of the company along with its
objective in the short and long term form the foundation of a company. The company
is responsible towards its stakeholders and keeps their interests in mind before
taking decisions. To understand the nature of business environment deep knowledge
of economic environment and government monetary and fiscal properties is required.
The regulatory and competitive policies needed to be followed along with the legal
challenges. The impact of market structure and other players on the demand and
supply of airline seats impacts the pricing due to competition.
The business expansion and operating in other countries is affected by working
practices and cultural variations. Global factors shape up national policies of a
company and thus the way business is done. The trades between two countries are
affected by value of respective currency, trading rules, civil aviation authority and
tourism bodies The European policies on travel, competition and aviation affects
British Airways. Stricter policies related to environmental protection need to be
followed. The management requires proper training and needs to be assertive in
allocating resources to staff. The union problems need to be solved in effective way
for long term gains.
Table of contents
Executive Summary......................................................................................................2
Introduction...................................................................................................................4
Task 1............................................................................................................................4
LO1: Organisational purpose of British Airways.......................................................4
1.1 Mission, vision of British Airways and short and long term objectives...............4
1.2 Key stakeholders of British Airways....................................................................5
1.3 Responsibilities of British Airways towards its stakeholders..............................6
LO2: National environment where British Airways operates....................................6
2.1 Challenges pertaining to Economic systems......................................................6
2.2 Impact of Fiscal and Monetary policy on British Airways....................................7
2.3 Regulatory, Competition policies, Legal Challenges on British Airways.............8
Task 2............................................................................................................................9
LO3: British Airways in its market environment........................................................9
3.1 Market structure and different players affecting price and demand...................9
3.2 British Airways response to Market Forces........................................................9
3.3 Impact of working practices and cultural variation on British Airways..............10
LO 4: Global factors shaping National Business activities of British Airways.........11
4.1 Impact of Trade, Civil Aviation, Tourism bodies on British Airways...................11
4.2 Impact of Global Factors, policies and regulation on British Airways...............12
4.3: Impact of EU policies on British Airways:........................................................12
Conclusion..................................................................................................................13
References.................................................................................................................14
Task 1
LO1: Organisational purpose of British Airways
1.1 Mission, vision of British Airways and short and long term
objectives
The different types of organisations are sole traders, partnerships, franchise, private
and public companies and voluntary organisations. Sole traders are those
organisations which are owned by a single owner and the purpose behind such an
organisation is quick decision making as well as close relationship with the
customers. Partnerships are the organisations formed by individuals or organisations
entering into partnership deeds. The purpose of formation of such organisations is
the sharing of knowledge, skills and risks of business. Similarly, franchise is an
organisation which an alternative to the formal chains formed by giving license to
other organisations to produce the franchisors products and services. The purpose
of formation of such organisation is reduction in investments for business expansion.
On the other hand, private organisations are formed by private individuals with an
intension of maximising profits, increasing market share etc.; whereas public
organisations are those which are formed by the government to provide the public
facilities and services for the social benefits (Ghuman, 2010). Lastly, voluntary
organisations are set up by a group of people who feel their moral and responsibility
infrastructure of airports, runways, security and services. The good news is in the
form of personal allowance which is increased from 560-10,500 in 2014-2015
meaning a lot of people will get exempted from tax bracket and will affect consumer
spending behaviour with disposable income to fly and holiday (Commons:Transport,
2013). The current interest rate of 0.5% is constant from past few years so British
Airway can borrow funds at earlier interests without paying extra. State regulation
and state aid regulates the financial assistance.
Task 2
LO3: British Airways in its market environment
3.1 Market structure and different players affecting price and
demand
Market structure helps in deciding the prices and calculating profits virtually before
working on ground level (Shaw, 2012). Airline industry is not facing a perfect
competition as the numbers of players are many. In monopoly one company decides
pricing and in duopoly two companies take the whole market while in oligopoly they
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industry is that as the departure date nears the price of tickets increase. But this
notion has been proved wrong mainly by low cost airlines whose prices depend on
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European members. State secretary for transport, United Kingdom has the power to
ask airlines for measures against criminal violence which exceeds the guidelines laid
by International Civil Aviation Organization and European regulations. All the states
are protective about their commercial airlines and in times of need have come out
with bail out packages to safeguard interests of their private jets.
result, British Airways is able to freely access all routes within EU and also easily
access licensing process for carriers. British Airways is subjected to single market
policy across 28 EU natons as per EU regulations (British Airways, 2008). This is
reflected in pricing policy of the airlines.
EU is stringent about various safety measures to be adopted for air travel. EU law
mandated the incorporation of maintenance and safety standards based on the
IACO and IAA standards. EU and its member states are advised about various air
safety issues by European Aviation Safety Agency which was an independent body
that was set up (British Airways, 2008). British Airways need to adhere to all the
safety standards mandated by these bodies.
Conclusion
British Airways has come a long way since its inception under state government.
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