Developments in Business and Management Assessments

Overview of an external influences towards an entity

The British Airways is counted as an international Airline company of UK. There fore it is affected by various external factors in operating the Airline Business that are as follows-

Political factors- It relates to the government regulations along with the stability and instability of the government. The airline industry is seen as subjected to the highly strict regulations. Such regulations are considered with respect to the routes which has been selected by an Airline company, the status of an Airline used, fare set, business partners with which the company is working and cost paid regarding infrastructure (External factors. 2018). Governments of several countries across the globe had put forward many of the security measures in fighting towards the breach of rules and regulation and illegal immigrations. Airline company participates with various governments bodies for guaranteeing the security and the safety measures. In case of the British Airways, it operates in very challenging and risky political environment that is always carrying the threat of terrorist attacks which as a result leads to the political stir. Moreover, in the previous year, Brexit had sparkled a political turmoil that has impacts the economic performance of the country. This factor has negatively influenced British Airways as it has lost large amount of the money. Because of all such issues, government has made strict regulations with respect to the product and prices which has influenced the proper functioning of the British Airways. So, the British Airways requires to show utmost care towards the political influences and the legal regulation for achieving smooth functioning of the business.

Economic factors- This factor refers to the economic performance of the country, it also includes change in interest rate, exchange rates, disposable income of consumers and an overall economic condition in UK that has direct an impact on the performance of British Airways. Cost of the fuel is counted as the most important factor for the British Airways. In the year 2015, British airways has used nearly 5.7 million tonnes of fuel. For example, in 2015 , British Airways expenses on the fuel has been decreased by the amount £ 484 million, or the 13.8% in comparison to previous year along with increasing the scope of its operations. However, the decrease in the fuel prices has proved to be an important factors which is beneficial for the business (Zinovieva and et.al., 2016). Moreover, there are wide range of other economic factors that has an impact on the revenues of the organization. For example- rapid fall in the prices of oil in the past two years, resulted a drop in the number of corporate customers on the key oil routes, that has resulted in decrease in the revenue of passenger amounting to GBP 288 million. Thus, due to an uncertainty following a Brexit situation, BA faced range of economical impacts. Because of the political stir and the intervention of the government, rate of the pounds depreciated and revenues of the British Airways were adversely affected. Despite getting advantage from interest rates and lower fuel prices, the problems tends to persist with the occurrence of adverse natural external influences. The sharp downturn in the economy from past few years has affected demand of air travel which has affected BA.

Social factors- British Airways has formulated and implemented newer tactics and strategies with respect to their target customer segment. Thus it could be analysed that the organization has identified the needs of the customers and has provided a low cost services facilitates the changing attitude. In case of the BA, it has faced huge number of issues like ATC strikes in France. Because of this factor, ATC union strikes and government had cancelled several flights over France (Vatharkar, Gao and Fomin, 2018). By considering all such scenarios, it is ascertained that social and cultural factors need to be considered as it impacts customer needs and potential market size. It is important for the British Airways in focusing on the lifestyle, constant trend changes, tastes as such aspect could seen as significant opportunities in overcoming the limitation.

Technological change- It acts as the most important external factor that has the great influence on the working of the Airline companies. It could be understood easily as this industry requires heavy use of the technology. Nowadays, passengers prefers to book and access the tickets online along with the check-in services through their devices instead of standing in the line or manually booking the tickets. Failing in being technical-savvy results in loss of client. In other words, it also means that an aircraft are lighter that provides fuel and speed economy. Increased level of technological advancement could make an Airline gain an advantage of offering more safety and an valuable services. After the terrorism attack of 9/11, Airline industry is been undergoing with a digital disruption. Digital revolution is significantly changing the structure of the cost of an Airline industry. In respect to the British Airways, it is reviewed that an entity is exploiting for several technological advancements in reducing an effect of disruption. The company is making more and more investment in the varied technological innovation in providing the quality support and the safety measures to its

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