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Introduction To General And Competitive Environment Management Essay

Introduction: The word of strategy spread rapidly in discourse of business. The purpose of defining strategy is to accomplish competitive advantage for an company. Strategy use in decision - making is the principal way which administrator account of an constantly changing exterior environment effective strategy allows those to use their company resources and capacities to explore opportunities and restrain dangers in the exterior environment. (P, Dobson, 2004). (A Henry, 2008).

General Environment: The wider world also follows management insurance policies, and a pestel evaluation. Causes in the exterior environment include the economical, political, social, technical and legal. The GE alloys refer to the relevant issues external to the organisation. The GE is the broadest category of issue in the surroundings to which director must be give consideration. The Technology and theory permit manager to act in response, concentrate their attention quicker.

Competitive Environment: The competitive environment includes the precise organisations with which the company interacts. The competitive environment includes rivalry among current rivals in same strategic groups, threat of new contents, risk of substitutes, ability of suppliers.

For understanding the general and competitive environment let us take an example of a company in an industry which is on the verge of its decline level where no expansion is visible. It is very problematic for any air travel to survive without stronghold and ecological competitive advantage which can give them economies of scale they can leverage. English Airways offers some major competitive advantages over the complete flight industry: Brand Image, Partnerships & Alliances, Financial size and steadiness, Terminal 5. BA's strategy is highly customer target and constant service development.

With these competitive advantages they differentiated their services and various pricing strategy for each segment-first school, business, and overall economy.

As reduced flight BA's customer segmented and BA's marketing mixture is slightly different for each segments.

PESTEL Evaluation:

Economical: Deterioration in world market will have an impact in British Airways budget. Higher inflation rate in UK will reduce holiday travels. Businesses are no longer happy to pay high grade price for his or her staff for less than three time.

Political: The Regulatory requirements in flight industry is increasing and features many of British Airways activities, including airport slot access, soaring routes, security and environmental control buttons. The ability to both adhere to and impact any changes in these rules is key factor to maintain Uk Airways operational and financial performance. British Airways proposed merger on North american Airlines will impact if there is a limitation.

Environmental: The UK Government blueprints to significantly increase such as environmental taxes with the release of per airfare taxes, the European UET Design and the other environmental fees will have an adverse impact upon demand for flights and/or decrease the profit margin per ticket. BA's competition may be benefited from these taxes by minimizing the comparative cost to do business using their hubs.

Social: THE UNITED KINGDOM has an maturing population. Potential opportunity for BA is old people will spend more time in leisure pursuits like international travel.

Growing unemployment rate and federal government cuts will increase bargain ability as an employer.

Understanding culture can be an important issue for each and every business. British isles people are highly individualistic, uncertainty avoidance plus some practice of masculinity. So a diverse labor force is necessary for British airways.

Technological: Technology is a significant driver of globalization and is vital for competitive advantages. A key issue of technological advancement is the fact can offset the upwards pressure of gas and maintenance cost.

Porter's Five Forces:



Competitive rivalry: cost competition is very high

A British Airways catersfor both long hauls, medium and short haul plane tickets. Within long term there's a little differentiation between United kingdom Airwaysand their competitors, in conditions of value proposition.

The brief haul market is more fragmentedwith many small players(Ryanair, Easy aircraft)

In Medium haulCompetitive rivalry is fierce; Virgin isstronglyopposing British Airways and AA suggested merger.

Consolidation among competitors has increased competition.


Power of suppliers:

Two airplane manufactures-Boeing, Airbus. there is no signal they start airline flight service

British Airwaysrestricted by only supplier of gas to the air port.

British airwayshighly unionisedand employees use collective bargaining through trade unions to increase their bargaining electric power.


Power of Clients: as market is shrinking customers power may increase

Low focus of buyers to suppliers means they have little bargainpower.

Increasing usages of internet has amplified understanding and relationship of customers.


Threat of new Entrants:

Significant obstacles to entry High regulatory requirements, high capital cost requirements and a higher competitive environment in this stage of Life Cycle

Barriers to exit are set up which deters new entrants.

If funding is cheap there's a probability of new entrants.


Threat of substitutes:

There arefew immediate substitutes:

1. brief haul plane tickets: coach operators:the Euro legend or ferry

2. Long haul plane tickets: no well known substitutes.


Customer research: As full service airline English Airways customers are first, business and current economic climate. Their demand differs. Business and luxury holidaymakers who are willing to pay high price for 'in-flight' better quality service. Business class look at a specific city and timetable and frequent airfare departure and modern communication and entertainment facilities. They will be the key source of revenue. There is an increasing demand of quick check in, safe flight, networking, and technology. Customers become environmental mindful. So the services for each segment should be different according with their needs, CRM and R&D is essential in this respect.

In 2010 the average insert factor for BA was 78. 5% that is higher than industry average.

Conclusion: Predicated on the PESTEL Research and the Porter's five forces analysis it is obvious that flight industry is hyper competitive. Purchasers may be powerful in this stage zero total game looks. Market share is essential providing leverage against suppliers in conditions of cost. Mergers and acquisition is typical. Though Uk Airways is a prominent player in this industry they ought to create significant turning cost through their core competencies and VP to stay competitive. Bargain with cabin staff is necessary to avoid service disruption.

British Airways must have strategic fit to contend with different strategic teams. As flight industry is facing stiff competition Uk Airways can get customer through differentiated service and worker efficiency and morale.

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