Business Environment Sample Assignment by Expert Writers

BUSINESS
ENVIRONMENT
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Table of Contents
INTRODUCTION...........................................................................................................................1
Task 1...............................................................................................................................................1
Lo 1.1...........................................................................................................................................1
Lo1.2............................................................................................................................................2
Lo 1.3...........................................................................................................................................2
Lo 2.1...........................................................................................................................................3
Lo 2.2...........................................................................................................................................4
Lo 2.3...........................................................................................................................................5
Task 2...............................................................................................................................................5
Lo 3.1...........................................................................................................................................5
Lo 3.2...........................................................................................................................................6
Lo 3.3...........................................................................................................................................7
Lo 4.1...........................................................................................................................................7
Lo 4.2...........................................................................................................................................8
Lo 4.3...........................................................................................................................................8
CONCLUSION................................................................................................................................9
REFERENCES..............................................................................................................................10
INTRODUCTION
Business environment is the combination of internal and external factors that influence
organizations operating situation. It is very complex and requires a deep study. The study of


business environment facilitates keeping business flexible (Carr and Stone, 2009). Business
environment include factors such as suppliers, owners, government activities and economic
trends. This report discusses about the business environment analysis of British Airways.
Business environment of the company is getting complex because of many competitors in the
market. For making business environment effective British Airways has to develop unique
strategy. This report also discusses about the mission, vision and companys goals and objectives.
Various challenges faced by the company in the market.
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Task 1
Lo 1.1
The purposes of different types of companies are as follows:
Sole trader Sole trader is the sole owner of the business and operates on very small
scale. The main purpose is to earn small level of profits so that a good level of livelihood
can be attained.
Partnerships Here a business is established on the basis of two or more than two
partners. The profits and expenses are shared on an agreed ratio of agreement.


Private & public firms Company could be private or public limited. The ultimate aim of
such companies are to earn profits and market share.
Charity or NGO These are called non-profit organizations. The main objective of the
bodies is to fulfill social responsibilities and work for the welfare of the society.
British Airways is a British PLC. The mission and vision of British Airways is to become the
worlds leading global premium airline by fulfilling the needs of customers and developed
guiding principles.
Mission of British Airways: Mission statement is a summary of the values and aims of a
company. Mission of British Airways is to offer top quality aviation services to its
customers (Crowther and Aras, 2011). Innovation, creativity and customer loyalty are top
priorities for the organization
Vision of British Airways: Vision defines the organizations primary objectives and
purpose. The vision of the company is to officially approve for carbon offsetting schemes
and to reduce carbon emissions. BA works towards applying strategic approaches in
order to make sure that there is no bad effect on the environment surroundings.
Goals: British Airways support international communities and charities in the countries
Crowther and Aras, 2011). The short term and long term objective of the organization is
to continuously work on improving the flight experience of customers in order to achieve
customer loyalty.
Objectives: British Airways facing unexpected market conditions over the last few
months. But then also they concentrated on the strategy to become the worlds leading
global premium airline. They take several actions to make the cost more effective and
focus on customer service. British Airways also create more efficient working
environment for their teams throughout the world (Kensler, 2007). The main objective of
the company is to increase its market share and overall profitability.


Lo1.2
Stakeholder is a person and group that have an interest in an organization. It can affect
the companys activities, objectives and policies. British Airways has many different stakeholder
groups. Good knowledge and skills of the stakeholders can help the company to grow in the
competitive market (Lee, 2005). The key stakeholders of British Airways are:
Customers: They are the main source of earnings for the company and it decides how the
company is managed. British Airways aims to attract new customers and wants to keep
the existing customers by its good services quality.
Employees: British Airways have the ability to influencing the customers (Maloney and
Stanford, 2006). But lack of facilities to their employees leads to strikes and
dissatisfaction. The image of British Airways is heavily unionized. This shows that they
dont have good relationship with their employees.
Competitors: British Airways has a lot of competitors such as Japan Airlines, Virgin
Airlines and American Airlines. The company makes different strategy to compete with
its competitors (Sloman, 2006). British Airways mainly work on the certain route by
which they have a monopoly and can charge a higher ticket price.
Suppliers: The main suppliers of British Airways are Boeing and Airbus. They have big
impact and high interest on the company. British Airways also depends on online travel
agents because they are convenient and provide cheaper deals to the customers.
Financial institutions: They have high impact and interest in British Airways. The need of
funding depends on the company gearing ratio and liquidity (Zhifei and Joo, 2013).
Financial institutions have the power to refuse or grand funding.
Lo 1.3
In order to fulfill the requirement of various stakeholder groups the company has adopted
different strategies which help to achieve the overall target. The key stakeholders of the company
are; customers, employees, competitors, suppliers and financial institutions. Customers provide
profit to the company so British Airways mainly focus on fulfilling their needs by giving them
proper amount of quality services and satisfaction (Clarkson, Miller and Cross, 2012).


Company holds the following responsibilities towards its stakeholders:
Employees - These people are the real assets for the business and they should be given
appropriate reward and benefits for their contribution for the company.
Suppliers BA is required to maintain long term business relations with its suppliers so that they
can supply quality inputs and raw materials.
Customers Organization must focus on offering amazing air experience to its customers so that
they remain loyal towards the services all the time.
Government In front of the government there is a responsibility of doing the business in ethical
manner. Government bodies always keeps an eye on the business practices of the organization
Shareholders These people expect adequate returns from the shares which they have invested
within the company. It is the responsibility of BA to offer attractive returns for its investors.
British Airways successfully satisfies the basic requirements of their customers and has
the ability to influence and make them loyal customers. Employees are having the power to
influence the customers. But employees are not satisfied and have issues regarding their jobs.
British Airways has to satisfy their employees by providing them sufficient amount of salaries
and other facilities such as bonuses, incentives and rewards (Dettwiler, Lindelf and Lfsten,
2004). By giving them all such facilities they can perform well and increase the productivity and
fulfilled the customers needs.
There are so many competitors of British Airways such as Japan Airlines, Virgin Airlines
and American Airlines. Other low cost airlines can affect the business decisions of BA. In order
to survive competition, company will have to continuously offer attractive discounts and offers
for its passengers. Financial institutions also keep a interest in the financial information of BA
and they can deny granting funds to airline if they find it in a bad gearing & liquidity position.
Media also carries a great impact on image of the firm, especially in case of
controversies. BA is trying to portray its image as good corporate citizen with lowering the
carbon footprint and developing good business relations with local communities.


Lo 2.1
An economic system is a system of distribution and production of goods and services,
and allocation of resources in the national community. Economic system is of three types; free
market, command and mixed economy. This system is mostly affected by production of goods
and services due to limited supply of several elements such as land and labor (Kelliher and
Henderson, 2006). British Airways operates its business where mixed economy is present. In this
economy major decisions are taken on the basis of market conditions. A mixed economy
combines elements of both free private enterprises and government intervention. For effective
allocation of resources in the mixed economies, the company has to change the policies from
country to country. In mixed economy some resources are owned by the government and others
by the private sector.
In free market economy system, government involvement is kept to the minimum and
private players take important decisions on the basis of market mechanism (Wilkson and
Grugulis, 2007). This means that no freedom for individuals to select what they produce and
what they consume.
In command economies decisions are taken by government. In this economy government
decides how to allocate resources based on customs and tradition. Command economy has non-
existent property laws and services are allocated according to social conventions and sometimes
according to a hereditary class system (Russell and Reynolds, 2004). This economy is not
respond effectively to real market forces.
Lo 2.2
In order to control the market conditions fiscal and monetary policies are used by the
government. Fiscal policy relates to revenue collection and government spending. It involves
spending and government taxation. Monetary policy relates to the size and rate of growth of
money supply. These policies make an impact on all manner of business decisions (Ling, 2010).
Government affects their nations economies through monetary and fiscal policy.


Fiscal policy: It frequently affects the level of taxation faced by business. If
government increases taxes, businesses dont have sufficient money for investment
and might pass the increase on to consumers in the form of higher prices. This policy
negatively affected British Airways because the company has to pay more taxes
(Langford and et.al., 2005). This leads to increase in the expenditure and decrease in
the income and profitability is low. They also left with the fewer amounts for
development.
Monetary policy: It has a major impact on the overall economy by affecting the
ability of businesses to obtain credit. An expansionary monetary policy leads to
decrease in rates of interest and help to access to credit easily. This policy reduces the
flow of money and makes it more difficult for companies to borrow (Britton, 2010).
British Airways has to pay high rate of interest in this policy by which expenditure
increase. If company takes loan on the short term basis so they have to pay more
interest.
Fiscal and monetary policies involve the opposite actions. Both policies have pros and
cons on the business activity. Fiscal policy involves time limits. If the business is falling,
government take time to work and improve the business conditions. In monetary policy the
immediate impact of fed policy is on interest rates (Dickinson, 2013). The increased supply of
money holds down interest rates and making it easier to borrow money for capital investments.
Lo 2.3
Competition policy is related with the use of good practices in competing with main
players in the market. Competition policy and other regulatory methods are two important and
inter related areas of public administration and regulatory policy (Li, 2008). Competition policies
are framed so that companies can compete with each other in fair manner and healthy
competition can be encouraged within industry.


There are various tools used by government to improve the quality of new regulations
which includes forward planning of review, public consultation and hearing and regulatory
performance indicators. British Airways operates in the market which is highly competitive in
nature. The intensity of competition changes from route to route in aviation sector, depending on
the nature and number of competitors (Riddle, 2011). For domestic flights there is a free market
within the whole Europe. European airline allowing all airlines to function on any route and they
decide their own fares according to the market conditions.
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Environmental regulations cover emissions to the global atmosphere, disposal of solid

waste, noise and other relevant factors. In managing the environment performance British
Airways aims to develop new rules and regulations and laws for safeguarding the environment.
The company has to use natural resources effectively (Wessels, 2011). BA must have to compete
in ethical manner through adopting right business activities. Company is required to fulfill its
corporate social responsibilities in effective manner.


Task 2
Lo 3.1
Market structure plays a very important role in the identification of price and production.
Different types of market structure carry different impact on pricing decisions of the company.
These are as follows:
Perefect competition There are many firms under this market. They earn normal level of profits
on the basis of homogeneous products.
Monopoly Under this market, only one company dominates the market. There are barriers to
the entry also.
Oligopoly It is an industry dominated by few companies.
Monopolistic competition There is a freedom of entry and exit for the companies but the
products are different from one another.
Perfect competition is present in the aviation industry. The key competitors of British
Airways are Japan airlines, American airlines, Delta airlines and Virgin airlines. These
competitors are varying from route to route. The aviation industry is competitive and highly
exposed to changes in the customer behavior according to their preferences (Kew and Stredwick,
2005). British Airways keep their fares low to sustain in the competitive market because
customers have lots of other option available.
When cut down their fares they face financial crises and to overcome with such problem
governments have resorted to bailout programmes. This has been particularly true in a number of
major markets such as China, Russia and India (Halbert, 2014). British Airways get success in
their London operations because there the customers are not price sensitive and believed in
quality services.
Lo 3.2
Market forces have direct impact on the operation of company and such forces consist of
economic conditions, consumer behavior and technological advancements. The economic


condition of UK where British Airways mainly operates its business has mounted a strong
recovery over the past few decades (Levy, 2009). Most of the business and regions of the
economy where the company starts its new operations are now showing positive growth with
recent signs. When UK faces recessions, the people of the country doesnt have sufficient
amount of money to buy air tickets which can negatively affect the business. During the time of
recession British Airways cut down the fair to sustain in the market which helps them to maintain
their sales.
Customers of British Airways believe that if they travel through air so it harms the
environment badly. Several steps are taken by the company to safeguarding environment and
work towards sustainable tourism practices (Twomey and Jennings, 2012). British Airways take
positive steps to encourage environmentally responsible tourism. They solve environmental
problems through individual departments. The company now has a clear environmental laws and
regulation consistent with best industry practice.
Over the last few decades airlines industry came up with innovative technology. With the
help of this latest technology British Airways operates it business in many part of the globe. They
use SOA (Service oriented architecture) to serve over 600 passenger and airports system (Carr
and Stone, 2009). The main aim of the company is to provide the better travel experience for
their customers.
Lo 3.3
Pestle analysis of BA
Political environment Incidents such as hijacking and terrorist attacks affects the
functioning of the airline. Due to this the air bodies are required to increase the safety of
the passengers. British Airways is directly affected by the environment of country. UK is
known for having wide diversity in population. The population consists of people from
different religion, creed, race, culture etc.


Economic - The majority population of UK is youth and they like to work in the
challenging environment. British Airways mainly focus on resolving industrial relation
problems and organizational conflicts. Such issues did not allow them to respond in an
effective manner in this rapidly changing environment (Guy, 2009). Young people were
brought in to give the company an effective result.
Social - Culture of an organization is reflected from its employees. British Airways is
known for diversified range of employees who jointly contributes towards goals &
objectives of the airlines. They have the power to influence the customers. Sometimes
costs improvements adopted by the company leads to dissatisfaction among the
employees. This results in strikes from crew staff. Hence BA must ensure long term
sustainable relations between management and employees.
Technological Most of the customers visits the price comparison sites in order to avail
cheaper tickets due to recession period. Online technology is also used by the people for
check ins. BA has to take care of these customers in order to get technological
advancements.
Ethical - British Airways is committed to promoting diversity and understanding. They
provide information, guidance and support to their customers related to latest
discrimination laws and have compliance and behavioral training on diversity.


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This culture serves as promotional tools for British Airways because it increases the
efficiency and it become easy to achieve overall objectives of the company (Dettwiler, Lindelf
and Lfsten, 2004). They create an environment where people feel free to come out and express
their ideas, and their ideas are taken into consideration. The culture change activity in the
company make a strong commitment to profits, productivity, and customer service, lifting the
company out of insolvency to become one of the worlds most respected airlines.
Lo 4.1
There are various things in an organization that are important for international trade and
global market (Kensler, 2007). Businesses wouldnt be as profitable without international trade.
If the company based in the UK trade their products domestically, the country would completely
limit its potential. The business may always get success from UK customers, but if they traded
with other countries they are not able to gain from that country. International trade is very vital
for companies because it increases traffic, sales and customer figures.
Implication of international trade to UK based business can be understood by referring to
the concept of comparative advantage (Langford and et.al, 2005). The concept trade between the
countries can be made in an equally beneficial manner, if each country has comparative
advantage to manufacture products. Earning from the sale of goods and services in UK are
around 30 percent of the UK gross domestic product. These are the income generated through


British associations and their investments both within and outside the country (Ling, 2010).
Shares of exports in GDP terms are much lower as compare to United States and Japan.
Lo 4.2
There are different global factors which affect British Airways. These factors help the
company to modify its system of decision making. Such factors are:
Political: The political environment in which British Airways operates its business has a
significant influence (Russell and Reynolds, 2004). The company decides policies on the
basis of customer preferences. British Airways achieved its goals for growth with
alliances with a number of airlines in 1988.
Economic: The economy was facing recession in the year 1995, in the climate British
Airways was the most profitable western airline industry because they cut down the fares
to maintain their sales. Such factors include increased competition from low cost
operations and increased fuel prices.
Social: The cultural and social influences on a business changes from country to country
(Wessels, 2011). The identity of an organization is socially influence in the country in
which it operates its business. The company believes if they satisfy the consumers needs
they become the world leading airline.
Technological: It plays an important role in the competitive advantage and it is a principle
driver of globalization. Technology advancements of the late 1990 allowed British
Airways to employing skill and introduce effective and efficient systems.
Lo 4.3
European Union has designed different policies that impact on the organization (Wilkson
and Grugulis, 2007). The main aim of such policies is to remove unemployment and promote
high level of employment and encourages business to fair practices of trade and commerce. The
two European Union polices that affect British Airways are:
Competition policy: Most of the market in which aviation industry operates is highly
competitive in nature (Britton, 2010). They face competition from their competitors on


the similar routes, from charter services, from indirect flights and from other modes of
transport. The intensity of completion fluctuates from area to area, depending on the
nature and number of the competitors. There are some international routes on which other
airlines are limited which helps British Airways to capture the market by its monopoly
and decide the fares according to the market condition. Their pricing decisions are
affected by competition from airlines on many routes with different carriers (Halbert,
2014). They decide the fare according to their competitors. British Airways provide better
quality services with low fare to their customers to make them regular and loyal.
Cultural policy: British Airways create a working environment that engages, motivates
and develop the colleagues. Diversity and inclusion team of the company have developed
a strategy that engages all the linked people with the aim of recognizing talent and
promoting flexible thinking (Zhifei and Joo, 2013). Through senior level sponsors this
strategy is integrated in all departments. This helps the company to find out and meet the
various needs of the consumers.


CONCLUSION
Business environment refers to the various forces or surroundings that affect industry
operations. This report discussed about the vision, mission, goals and objectives of British
Airways. Mission of the company is to provide unique service to its customers. The main aim of
the company is to provide the full service experience to its passengers. The environmental goal
of the company is to reduce carbon emissions, noise and waste and improve local air quality.
British Airways help international communities and charities in the countries. The main objective
of the company is to increase its market share and overall profitability.
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REFERENCES
Books & Journals
Bitzenis, A. and Nito, E., 2004. Obstacles to entrepreneurship in a transition business
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Carr, I. and Stone, P., 2009. International Trade Law. Routledge.
Clarkson, K., Miller, R. and Cross, F., 2012. Business Law: Text and Cases: Legal, Ethical,
Global, and Corporate Environment. Cengage Learning.
Cornelissen, S., 2006. The Global Tourism System: Governance, Development, and Lessons from
South Africa. Ashgate.
Crowther, D. and Aras, G., 2011. Governance in the Business Environment. Emerald Group
Publishing.
Dettwiler, P. Lindelf, P. and Lfsten, H., 2004. Business environment and property management
issues: A study of growth firms in Sweden. Journal of Corporate Real Estate. 8(1). pp.110-
130.
Dickinson, G. P., 2013. SMEs and the business reality of Estonia's tax regulation environment.
International Journal of Law and Management. 56(3) .pp.283-296.
Guy, F., 2009. The Global Environment of Business. Oxford University Press.
Halbert, T., 2014. Law and Ethics in the Business Environment. Cengage Learning.
Kelliher, F. and Henderson, B. J., 2006. A learning framework for the small business
environment. Journal of European Industrial Training. 20(7) .pp.512 528.
Kensler, M. C., 2007. A Study of the Impact of Learning Styles in a Business Environment when
Learning is Conducted Virtually/electronically. ProQuest.
Kew, J. and Stredwick, J., 2005. Business Environment: Managing in a Strategic Context. CIPD
Publishing.
Langford, D. A. and et.al., 2005. Strategies for managing environmental issues in construction
organizations. Engineering, Construction and Architectural Management. 3(2), pp.171
185.
Lee, Y. T., 2005. Development of management philosophy for Chinese business environment.
Management Decision. 43(4) .pp.542-550.
Li, X. X. L., 2008. Manufacturing capability development in a changing business environment.
Industrial Management & Data Systems. 100(6). pp.261-270.

Ling, L. X., 2010. Manufacturing capability development in a changing business environment.
Industrial Management & Data Systems. 10(6) .pp.261 270.
Maloney, K. and Stanford, P., 2006. The craft of people management. Human Resource
Management International Digest. 16(2). pp.13-15.
Riddle, L., 2011. Contemporary Cleopatras: the business ethics of female Egyptian managers.
Education, Business and Society: Contemporary Middle Eastern Issues. 4(3) .pp.167-192.
Russell, L. and Reynolds, J. J., 2004. Case study: how a Weyerhaeuser unit executed a winning
strategy using Desert Storms fast-cycle, strategic action approach. Strategy & Leadership.
32(40 .pp.45-54.
Sloman, J., 2006. Economics and the Business Environment. Financial Times Prentice Hall.
Twomey, D. and Jennings, M., 2012. Anderson's Business Law and the Legal Environment.
Cengage Learning.
Wessels, L. P., 2011. The South African business environment in which accountants function and
the role of information technology in that environment. Meditari Accountancy Research.
12(3). pp.130-145.
Zhifei, S. and Joo, M. E., 2013. A survey of inverse reinforcement learning techniques.
International Journal of Intelligent Computing and Cybernetics. 5(3). pp.299-310.
Online
Levy, A., 2009. Developing Business Environment and Internal Control Factors for Operational
Risk Measurement and Management. [pdf]. Available through: <
http://www.apra.gov.au/crossindustry/documents/info-paper-developing-business-
environment-and-internal-control-factors-april-2008.pdf>. [Accessed on 28th May 2014].
Wilkson, A. and Grugulis, I., 2007. Managing Culture at British Airways: Hype, Hope and
Reality. [pdf]. Available through: <
file:///C:/Users/abc/Downloads/HR4S15_Resit_Coursework_Case_Study.pdf>. [Accessed
on 28th May 2014].


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Environmental regulations cover emissions to the global atmosphere, disposal of solid

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