QUESTION 1. Analysis Political, Economic, Legal, Socio-cultural, Environmental and Technological
Political factors have a great effect on the operating environment of the aviation industry. For Virgin Atlantic, it is compulsory for them to work within an operating restriction that determine the services offered, where the airlines can fly, taxes for landing, fuel taxation, security legislations.
In recent years, the terms of terrorism attacks become a serious issue and have a negative effect on this market.
During the last decade, the global economic environment experienced a sharp downturn in the amount of economic activity, and this issue has a strong affect the air travel demand.
The recession …show more content…
Therefore, in the short time, consumers are getting more careful with their discretionary spending and this lead to a serous drop in passenger volume.
Consumers are not ready to pay former prices for airlines. These changes affect a change in demand of air flights.
Besides, customers are intend to choose a cheaper costs airlines operators when the economy is suffering
It is considered that the airline industry is a cyclical system.
Airlines have to scope with high fuel prices, labor demands, operating and maintaining costs, and declining passengers. So, any fluctuation in the oil price will have a direct effect on the currency and also impact the cost of flying for Virgin Atlantic as well.
Noted that passenger safety is more important than anything else, Virgin Atlantic offers a high regulated political environment where passengers are favored over the …show more content…
By cutting fuel consumption and aircraft weight, Richard Branson stated plans to reduce gas emission on 27 September 2006.
In 2007, as a potential change to future operational procedures, Virgin Atlantic made a partnership with Boeing to save fuel by having aircraft towed.
In February 2008, the companies also volunteered a Boeing 747 for a test of biofuels. With 20% of the power for one engine provided by plant-based biofuel, the aircraft flew without passengers from Heathrow to Amsterdam Airport.
Richard Branson said that they expected to use algae-based biofuels in the future.
Technology in this industry is very expensive and fast moving.
In order to foster technological development and be cutting-edge, airline operators are required to invest huge efforts into Research and Development (R&D). Besides, the focus also lies in the fields of alternative energies and
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Pilots can carry a weapon and act as a federal officer, curtains in first class were removed, and cockpit doors were strengthened. B. Tourism had a major decrease and then a surprising increase after 9/11. I. Travel to the United States reduced the first three years after
Macro-environmental are uncontrollable factors that influence a business’ strategic planning, decision making and operations (Chartered Institute of Personnel and Development, 2015). However, by understanding its macro-environmental factors, the business could take advantage of these factors and maximize their opportunities, whilst minimizing their threats. The 6 factors of PESTEL analysis include: Political, Economic, Socio-cultural, Technological, Environmental and Legal factors. In this case, it highlights the contextual information of the civil aviation competition of uncertain environmental, political and economic anarchy for flight
Executive Summary JetBlue Airways is a company that applies innovative technologies to offer high quality travel services at a lower cost (Shrivastava, 2012). A SWOT analysis of JetBlue airlines shows that despite the numerous opportunities and strengths it has, it is exposed to threats and weaknesses that pose challenges in its operations. The threats include issues like strong competition from other airlines and the volatility of the fuel prices. JetBlue Airlines is relatively new to the market when compared to its major competitors such as the Southwest and Delta Airlines. Most of its strategies have worked to its benefit.
The airline is financially weak and its share price has slumped. Virgin Australia Airlines has a strong market value and image owing to its innovative ideas and creative thinking. It operates a rapidly growing fleet basically comprising of Jets and Airbuses. The low average fleet age helps the company to reduce maintenance cost of the aircrafts. Financial performance of the company was not so encouraging in 2011 because of rising fuel price, high value of Australian dollar and environmental disaster.
Answer: (a): Market segmentation is the first step in defining and selecting a target market to pursue and penetrate. Basically, market segmentation is the process of splitting up an overall market into two or more groups/classes of consumers. Each group of consumers is called as a market segment. Each group (or market segment) should be similar in terms of certain characteristics or product/ service needs. In business world, market segmentation is considered to be a most important tool in enabling marketers to better meet customer needs and requirements.
I feel concerned that anthropogenic activities have damaged the atmosphere which has led to severe detrimental effects over time. Studying Chemistry enabled me to learn the science behind global warming and the consequences for it. This made me think, what current technology could be further utilised to reduce greenhouse gas emission to the atmosphere? Due to this, I want to talk about electric vehicles as I feel that electric cars are the future of humankind. I will persuade you to leave behind the poisonous, toxic, filthy fumes of your present vehicle and switch to an electric car.
Economic Environment Factors such as Crude oil prices, aircraft prices, Economies of Scale may also have effect on the airline industry. Social Environment Tourists and Business travellers contribute to the growth of the airline industry. Technological The use of modern technology by the airline manufacturers can contribute significantly to the growth of the
Scientists have found that renewable energy is a path towards the future for a clean and safe environment. Throughout all the studies and findings, there is a continuing fret whether people should be able to use a traditional way of energy or renewable energy, solar power. Solar energy is seen to be effective since there has progressively been more places that are benefiting from solar usage; however there are also some who disagree. Solar energy sources are derived from natural sources and is implicated throughout our daily lives. From the lights in the streets to the computers we use at home.
Threat of substitutes “The threat of substitutes for Virgin Atlantic is low in the developed countries where people mainly use airlines for both short and long distance travel”. “Virgin has a high group of substitutes. Leading substitutes include innovative products such as IPhones, Blackberries, Times Warner Productions, and Google products. Some of these substitutes products prices are lower, creating buyers to face few high switching costs”. On the other hand, in the developing world, there are threats of different modes of transport for example train.
Political factor Political factor is affected by the policies of local, national and international government. It looks at how government regulations and legal issues impact ability of company to be profitable and successful. It is also influenced by company policies and those of stakeholders, shareholders, managers, employees and trade unions. The checklist of issues of political factors include: tax policies, trade regulations, political stability, social and environmental policy, government and local government policies (Harrison, 2010). 2.
Other Environment factors include Political, Legal, Economic, Socio culture factors etc. After Saudi Arabia, UAE is the second largest automobile Industry in the GCC. Cars account to 80 percent of the U.A.E. Trucks, vans and buses accounting the rest of the 20 percent. POLITICAL Government activities which influences the operations of an organization or business Entrepreneurs and managers give careful consideration to the political condition to determine how government activities will influence their organization.
Political environment includes laws, government agencies, and pressure group that influence and limit various organizations and individuals in a given society. Economic environment consists of economic factors that affect consumer purchasing power and spending patterns. Social factors include the demographic and cultural aspects of the external macro environment. In which demography is the study of human population in terms of size, density, location, age, gender, race, occupation, and other statistics; cutural environment consist of institution of other forces that affect society’s basic values, perceptions, preferences, and behaviors. Therefore, these factors have an impact on customer’s needs and size of potential markets.
The elements cannot be controlled, their effects can be diminished with careful preparation and anticipation (Lewis, 2017). These external dynamics cannot be underestimated, overlooked, or avoided as laws, policy, and regulations change, the economy fluctuates and disposable income varies, and societal views continue to evolve around the globe. These external factors can be mitigated to limit their impact within an organization to some degree by comprehensive strategic forecasting and flexibility. Therefore, let’s take a closer look at some of the political factors impacting the hospitality industry.