Global Market Trends and Their Effect on British Airways By Rapid Assignment Help
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Business environment is stated as the collection of different factors including internal and external. The internal environment of a business are those factor which help the company to run their daily operation and can affect the company directly like customer, shareholder and employees etc. Further micro environment are those element which affect the decision making, production of the company and cover the internal part of the organization so it also known as the internal environment of the organization. There are some factors like social, economical, political, environmental and technological factor which handle the external environment of the company is known as macro environment of the business. The preset project is based on company British Airways which was founded in the year 1974 and is UK largest international airline. The aim of the current study is to evaluate the impact of brexit and the pandemic over working of company. Further the impact of both brexit and pandemic will be analyzed over the internal, micro and macro environment. In the end the impact of recovery plan of UK’s government will also be analyzed over performance of the company.
British airways is a global airline working from last 100 years and connects United Kingdom to the rest of the world through airways. It was founded on 1919 following World War 1 and officially started as government based airways in 1974 Till 2011 BA got merged with serval airlines become an international airway. In early 1978 British airways become public in order to sale share. And now there revenue was £3693 million in 2021, with market share of 1.7% and there total flying destination are more then 600.
As British airway is a part of aviation sector mean it help to transport there passenger via Air ways there are different industry operation performed by British airways like passenger service they focus mainly remain on whether there passenger are having a good experience or not and regularly updating there technology to increase the revenue, innovation and customer loyalty toward the airline (Cooper, 2021). They provide both kinds of services domestic and international flights and it included different kind of services like economy, business and first class sections for every type of customer. Other then this BA also provides currier services to the passengers to transport mails, gifts, products and other materials. At the same British airways are continually changing and updating their aircraft and oil to provide their passenger with quality service. And British airway also has merged and acquire different airline to broad their networks and increase the no. of destinations.
As a global airline British airways also have to face direct and indirect competition worldwide. Some of the direct competitors are like American airline, Delta airline, Emirates, Singapore airline, and air India is also giving a good competition to British airways. Indirect competitor are low cost carrier, online travel agencies etc.
British airways like to follow hierarchical structure because the flow of information goes from senior director to workers. They have different director for each department like director of engineering, director of investment, commercial director and chief executives, who make decision for their division and further followed by manager, supervisor and employees. Thus, BA focus on there customer needs and always ready for new innovation to make there passenger journey more comfortable, and provide them with good experiences. Hierarchy structures help the company to execute their operation effortlessly and to avoid any confusion in internal environment (Blank, 2020.). The customer center business structures help them to satisfy their passenger and earn revenue’s.
In 2020 British government officially withdraw themselves from European Union territory. This treaty has affected many airlines like British airways. Because before the withdrawal UK based airlines had to follow regulation of European territory but now they have to established their own set of regulation for their passenger's safety and security (Gupta, et. al, 2019).
Impacts which internal environment have faced includes increased cost. This is particularly because now they have to obtain license from each country of Europe from where they want to operate. It is due to the fact that before Brexit with the help of single license under EU was needed. This increase in the cost and this whole process takes a lot of time and resultantly there are delays of flights. This withdrawal also lower the value of pounds the UK currency which resulted in it become more costly for British airlines to purchase fuel and other equipment (Salman and Seiam, 2021). In terms of passengers now they need visas to travel in Europe so Airlines had to include more non European destination. But at the same time it created a new opportunity for British airways to offer more domestic flights in the country.
UK government has launched new guideline and plan to recover the tourism after if got heavily affected by the Covid-19 pandemic and brexit. Those plans will help the aviation sector of British to navigate to the future (Sivaprasad and Mathew, 2021). There are some impacts this plan has on British airway internal environment some of them are like, government changed some regulation that helped the company to operate more easily and also government have focused on opening new opportunities for the worker by which British airways in giving employment so that they can recover their skill force. Government also imposed some new policies regarding health which giving a confidence to the passenger to travel again without any worry.
Passenger safety and right’s: to recover the tourism UK government had imposed many policies regarding the safety of the passenger because before 2020 they had followed the regulations by European policy. Because of which the passenger are again travelling without any worries. Because after covid pandemic the people are become more worried about their health so government has make those policies to win back the trust of passengers (Jones, 2022). Also they made it clear what kind of rights passenger has during travelling. Resulting British airway domestic passenger is increasing day by day. And there are possibilities the international passenger will also increase.
Investor: the government have invested a lot to recover the aviation sector. As this sector got backup by the government itself, some other investor are also started to invest in the company’s like British airways (Raki, et. al, 2021). As now British airway has funding they started to navigate through the future and started working on their operations and built world wide range for their airlines so that they can increase the no. of passenger. Also after brexit the value of pound become low and it become expensive for the company to buy fuel and other equipment with the help of government funding and investor the company is also trying to solve this issue.
Culture: As new policies got imposed like the employment policy, the company has started to give jobs opportunity in local and global market. Thus, with help of this people from other countries are joining the company through which the culture of the company is becoming more diverse in nature (Varley, 2023). This in turn will help the company to get more new ideas, skilled workforce, innovations etc. and having a diverse working culture in a global company like British airways is very essential.
Competitor: British airways have many direct and indirect competitors like American airways, Emirates, Air India, Singapore airways and etc. As the UK government had changed lot of regulation, made new policies and helping the airlines in many ways, this all efforts of the government recovery plan helping the British airways to operate more easily (Hamawandy, et. al, 2021). They are getting more funding, now they can invest more on R&D, innovation and customer services and they can give a good competition to their competitor and with good strategy they can make themselves different from there competitor and make this as a competitive advantage.
The global pandemic covid-19 has impacted the economy of all over the world. In terms British airways there are many impacts on the internal environment the company had to faced are the demand got decrees, the no. of flight postponed increase which impacted the operation of company and at the same time brexit taken place which increased the problems of British airways and they started to layoff employees to reduce the cost (How British airways was affected by Covid-19, 2023). They had to take safety measure more seriously while following all covid regulations. Overall scenario was reduction in revenue.
Business get affected by external environment like political factor can impact a business in many ways because politics can never be stable (Macilree and Duval, 2020). For instance, recently because of Russia-Ukraine war many travel destinations got cancelled. Also Russia had banned UK airlines because of the political tension between both countries. Also the local and international policies also impact the company operations.
It is very important for a company to make decision while considering the economical factor because it can impact the overall performance of the company. Like the year 2020 was very crucial for them because they had to face the brexit and covid which affect the UK economy a lot (Coles, 2021). With resulted in the demand got decrease, many flights got cancelled, and revenue got affected.
A company don’t work in isolation they work in the society. So they have to be aware about the changes, trends, upgrade of the society to satisfy the need and demand of passenger. In recent the British airway have done many changes by analysing the feedbacks from passenger and the mindset of the people for example they have minimize the legroom to increase the seats so they can minimize the cost of the tickets.
The technology is getting upgraded day by day so British airway also have to invest in technology so they can compete with their competitor in term of technology (Olimovich, 2020). And technology not only help show there new designs but with the help of R&D technology also can help a company to minimize the cost.
British airway is a global company so they have complied with both national and international laws of the government. Hence, if they break any Law it can create many controversies regarding British airways (TING, 2023). For example at the time of pandemic many flights cancelled but they didn’t refunded to the passenger which resulted in not only they had to face lawsuit but had impacted there brand image as well.
In terms of environment British airway has taken action and it becomes first airway to use sustainable fuel to reduce the carbon emission. And also they are working and investing more into R&D to increase the more sustainable carriers and fuels. This is an opportunity for attracting the consumers post pandemic.
CONCLUSION
While considering the internal, micro and macro environment analysis in the case study it is concluded that there are some thing which British airway can improve or work upon are in internal environment they should work on cost management and employees engagement. At micro environment giving training on customer services, upgrade their cabins, minimize the cost of tickets at macro environment there are lot of opportunities they can grab like using more sustainable aircraft, fuel to minimize the carbon emission, making upgrade in technology, investing more on innovation and they should oversee laws more carefully to improve their reputation in the market and increase their brand image.
As British airway is one of the best airlines in the UK they can lot benefits from UK government recovery of tourism plan. As it has been discussed in the case study like they should use the employment policy to employee people from around the world (Kassem, et. al. 2022). As the government is giving backup to them they can use this as competitive advantage, they can raise fund, improve the safety of their aircraft, increasing the list of destination as government is promoting their tourist spots world widely. They can reduce the cost and increase the demand which can affect their revenue in positive way.
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