Business Environment 2 Assignment Example | Topics and Well Written Essays - 1000 words

Business Environment 2 - Assignment ExampleMarket structures, pricing and sidetrack decisions The key factors that influence British Airways pricing and output decisions include aerodrome capacity, technology, fuel costs, costs of leasing or buying aircrafts and cost of labour. Accordingly, the route structure and blank space of freight must(prenominal) be factored in the pricing decision. Network-Legacy Airlines use the Hub & Spoke model for the international flights, and retentive routes and mainly consider the number of passengers flying the route. For the domestic flights, British Airways flies directly to the destination airport and ensures a low-cost structure in the costing system (Stonehouse & Houston, 2013). The airline operates in a oligopoly foodstuff structure that is characterised by few large players that control the pricing decisions in the market. In this case, the airline must consider the strategical pricing decisions made by other competitor airlines. The ai rline industry in the UK is characterised by high barriers of both entry and exit due to high capital outlay ask to start trading operations and cumbersome regulatory environment. In addition, the dominant airlines enjoy consider equal economies of scale of operations and price wars in order to attain high market share (Stonehouse & Houston, 2013). ... The company is agitating for the clean Skies policy that will enable its flights to access US airports and total liberalization of the aviation industry crossways the major markets. Market forces affecting British Airways Several market forces affect the operations of British Airways crossways the world. The pricing decisions are influenced by the supply and demand of air travel operate in the fact geographical market. The airline has attained economies of scale in North American and European markets and thus has been able to implement a low-cost travel plan through its Iberia subsidiary. Accordingly, the industry is characteri sed by formation of strategic alliances and partnerships such as the SkyTeam and Star alliances that dominate the European market. The airline has entered in to partnerships with major sporting teams, logistical companies and hotels in order to provide full services to its customers. The company is currently increasing its presence in key international cities and building its leadership position in London. Accordingly, the airline has embarked on delivering differentiated services and attaining superior customer value for longhaul premium customers. The airline must improve its margins through creating new revenues streams in order to remain competitive (Stonehouse & Houston, 2013). Business and cultural environment of British Airways British Airways operations must comply with the business and cultural environment prevailing in the external market. The airline operates in unchanging political environment in the North American market and European countries. However, the current po litical upthrow in several Asian countries has hindered the operations of the airline in the affected countries thus leading to a decline