Introduction

The following course work will discuss how different factors such as economical, legal, political
etc. influence the working of a company and what would be the major responsibilities of a
company to deal with such situations. The course work will cite the example of Virgin Atlantic
airlines, which is a part of Virgin group, to understand the subject in a better manner.

Virgin Atlantic is a British company which has its airlines working all around the world. It is
majorly owned Sir Richard Branson. Branson wanted to explore the global opportunities with
Virgin Atlantic. 49% of stake in Virgin Atlantic belonged to Singapore airlines and Branson was
never going to sell Virgin Atlantic. Branson invested a huge amount of money to get nature
savvy with his airlines.

Recession hit the world from 2008 to 2013 and had its impact on UK. This case study will
discuss how different things should be handled by the organizations and what would be their
responsibilities to the different stakeholders. This case study will use different theories like
PESTEL to assess different factors impacting a business. Virgin Atlantics example will be cited
throughout where appropriate and different theories will be used to better understand the subject.
Different markets and scenarios will be also be discussed in this course work.

1.1 Purposes of different types of organizations:

The mission statement as on their website (http://www.virgin-atlantic.com) is very simple to
embrace the human spirit and let it fly

The objectives of Virgin Atlantic are to attract and retain more customers with the best services
they can provide. They also aim at stakeholders satisfaction whether within or outside the
organization.
For a firm like British Red Cross which aims at helping people in crisis, the objectives will be
different. British Red Cross will aim at helping as many people as they can who are unable to
survive or unable to survive on their own.

The purpose and aims of Virgin Atlantic and British Red Cross would differ in a way that Virgin
Atlantic would be focused at generating revenues and expanding their business through selling
their products or services, whereas British Red Cross would generating revenues through
charities and events and professional tie ups and would aim to provide as much help to the needy
as possible.

Virgin Atlantic is a private limited company and has clear objectives in terms of business and
strategies.

British Red Cross is non- profit organization and it makes the campaign easier. Thus, there is a
difference in private firms like Virgin Atlantic and an NGO like British Red Cross when it comes
to the business objectives and how they run their business.

1.2 Stakeholder objectives:

Anyone who is related to how the business performs is called the stakeholder of that
organization. The most common stakeholders of any organizations are the customers, partners,
staff, government etc. Each of these gatherings may have distinctive targets for the business. A
few goals may be expressed plainly and others are suggested. (http://smallbusiness.chron.com)

The different stakeholders of Virgin Atlantic are as follows;

Customers: In order to keep the customers happy, Virgin Atlantic tries to provide the best
airline services and give the peak journey satisfaction to its customers. It tries to deliver
the services at an affordable rate to the customers. It doesnt matter which class whether
economy or business, Virgin Atlantic looks to satisfy the customers in the best possible
manner as per their needs.
Partners: 51% shares are owned by the Virgin group and the remaining 41% is owned by
Singapore airlines(cited from case study). Virgin Atlantic will communicate its strategies
to the partners and move ahead in a synced manner. It will not be selling off the business
without consulting the partners.
Employees: As per the statement of purpose, they asserted that Virgin Atlantic is an
association where individuals adoration to work. Richard Branson said that "The
 individuals who make up Virgin Atlantic make Virgin Atlantic". Additionally, from the
site, "Virgin Atlantic is an organization that won't exist without vitality, the mind and the
shrewdness of their kin." It demonstrated that they have an extraordinary regard on their
staff, they regarded their worker as the single critical part and seen them as a feature of
their advantages.

1.3 Responsibilities and strategies for the stakeholders:

The legal, ethical and social responsibilities of Virgin Atlantic are as follows:

Energy:

Albeit the vast majority of Virgin Atlantic's effect on nature is brought on via flying machine
operations, they are most certainly not overlooking what happens on the ground. Along these
lines, in organization with the Carbon Trust, they are undertaking a vitality audit to set up the
carbon foot shaped impression of the regular exercises in their workplaces, air ship support
offices and air terminals, and to help them recognize chances to lessen it. These outcomes
will be distributed on their site. Focus: By 2020, they will create all the power needed for
their principle UK locales (http://www.virgin-atlantic.com). By 2012, they will decrease their
utilization by 10% and by 2020 they will lessen it by 20% at all Virgin Atlantic-controlled
destinations around the globe. At all of the primary UK locales they at present purchase
power from renewable sources, however even so they are resolved to decrease the utilization
through;

- Educating staff on energy saving techniques.

- Buying and implementing energy saving appliances
- Constantly on the look out for saving energy on major things such as heating, cooling,
lighting etc.

2.1 Economic systems and resource allocation:

 Free market economies:-

Markets that create general advantageous exchange in the middle of manufacturers and
purchasers, and processes that rely on business sections to take care of the economical
concerns are called market economies. (http://www.economicsonline.co.uk) A free market
economy demands that resources are distributed through the connection of free and self-
coordinated business section powers. It means that what to manufacture is dependent on
consumers, the manufacturers define the methods of delivery, and the purchasing powers of
the customers dictates that gets the products. Market economies function with the allowance
of the immediate association of buyers and sellers who are taking care of their own particular
self-premium. The surge for self-premium the prime thing in free market economies...

Command economies:-

The other answer for the budgetary concern is the dispersion of exceptional assets by
government, or a body named by the law. This framework is insinuated as central
orchestrating, and economies that exclusively use central masterminding are called charge
economies. So to speak governments direct or charge advantages for be used as a piece of
particular ways. A valid example, governments can compel nationals to pay surveys and pick
what number of lanes or mending offices are produced.

Command economies have remarkable territories of enthusiasm when contrasted with free
market economies, correctly as far as crisis. (http://www.economicsonline.co.uk)

2.2 Fiscal and Monetary policy:

Fiscal policy influence:-

Fiscal strategy usually encompasses variations in tax and buying approaches. Lesser
expenses result to larger discretionary cash flow for customers and larger finance for
associations to render assets into employments and hardware. Jolt spending assignments,
which are fleeting in nature and frequently incorporate framework undertakings, can in a
similar way help drive business request by creating transient occupations. Greater wage or
utilization assesses more precisely mean less discretionary cash flow, which, after some time,
can slow down the business functioning. (Basu)

Monetary policy influence:-

Varieties amongst interest rates impact long haul interest rates. Lesser premium rates mean
lesser premium cost for affiliations and bigger money for purchasers. This blend commonly
implies that there are higher business preferences. Lesser rates in like manner mean all the all
the more renegotiating of existing home advances, which may in like manner engage
purchasers to give a thought to diverse purchases. If interest rates are on a higher side then it
can have the opposite effect on the associations: more cost on interests, lesser arrangements
and meager advantages. If the interest rates alter then it can have effect on the stock expense
which in turn can impact the buying power of the customers. (Basu)

2.3 Impact of competition policy and other regulatory mechanisms:

Virgin Atlantic is one of the top airlines in the UK. Airline industry is incredibly
troublesome and every association contributes bundle of money on thing and organization
progression and they are matching each other to get high ground. Competition methodology
propels contention and enhances showcases and improves the efficiency of diverse
affiliations. It promises broader customer choice; specific headway which progresses
dynamic capability and convincing quality competition between supplies. Competition
methodologies are in light of four game plans: antitrust & cartels, market liberalization, state
help control and merger control. Every one of those game plans limit competition including
worth settling and diverse abuse. Competition methodology breaks the monopolistic market
and assurances straightforward entry on new contenders. On the other hand, regulations are
executed by government to guess how a business segments capacities and the outcomes
which comes to fruition for both customers and producers. A couple of regulations are
sensible trading, standard customer organizations, and environmental methods and so forth.
Managerial board screen expenses, ensures rules customer organizations, surrogates
contenders and opening up business parts. (http://www.economicsonline.co.uk) Virgin
Atlantic is standing up to troubles from distinctive contenders like Fly Emirates, British
aviation routes, Qatar aviation routes and so forth for worth, nature of support and
organizations and so forth.

3.1 Market structure and pricing and output decision:

Perfect Competition:

A perfect competition industry establishment is one that typifies different little merchants and
buyers. Firms that incorporate the business produce equivalent things and clients have
complete and exact information about their expenses. All associations have proportional
access to unrefined materials, capital, work and development. An impeccably engaged
industry, as needs be, has no single business pioneer or monopolistic firm. Each and every
taking an interest organizations are vaguely used and each must offer wonderful things to
hold buyers. (http://smallbusiness.chron.com)

Pure Monopoly:

A pure monopoly business model industry establishment exemplifies a singular creator or

supplier of a thing or an organization which does not have any close-by alternatives. The lone
business player dictates all advantages and advancement and pieces potential contenders
coming into the business. Limiting bases are open or private. Open forcing pans of action
serve the general populace and their fundamental goal is not advantage growth. Tests of open
syndications consolidate close-by telephone associations and water associations. Private
limiting bases are generous, exclusive organizations, consistently multinationals, which have
advantage extension as their fundamental goal.

Monopolistic competition:

A monopolistic rivalry identifies with an industry structure that has characteristics of rivalry
and forcing plan of action. The business includes various associations, which offer substitute
things, and various buyers. Regardless of the way that the things are substitutes, they are
isolated on the reason of physical properties, picture, advertisements and running with
organizations.

Oligopoly
 Oligopoly is an industry structure that is summoned by a situated number of firms that limit
unreservedly of each other. The two blends of oligopoly are undifferentiated and isolated.
Undifferentiated oligopoly implies associations that offer the same thing or thing, for
instance, a barrel of oil or an ounce of gold. Isolated oligopoly is when particular associations
offer the same things yet with isolated components. (http://smallbusiness.chron.com)

3.2 Market forces:

Powers that focus the value level in the economy. Business sector powers can be;

Demand

Supply

Workers

Customers

Suppliers

Here, only supply and demand will be discussed in details

Supply and demand of the goods or services are the most vital factors determining the
functioning of any organization.

Demand is determined by the magnitude or the measure of which a particular product or service
is being desired by the customers.

Demand dictates the extent to which the customers are willing to buy the product or service and
the relationship attached with it is called supply relationship.

The supply of products or services will establish how much business can be generated from a
particular region. Supply is the extent to which an organization is willing to provide the products
or services to the customers in a particular region. Both demand and supply are interlinked in
more than one ways.

Circulation from the Supply/Demand point of view is the place the Supply overcomes Demand
and stops the upward move and inevitably starts the descending move. Dissemination alludes to
the end of a long venture or theoretical position and regularly includes setting up a theoretical
short position by expert hobbies in reckoning of a decrease of cost. In the circulation region the
expert financial specialists or examiners who had beforehand purchased stock, offer their stock
to the general population. The general population purchases and it by and large purchases due to
uplifting news of different sorts. Uplifting news on the organization, its item, the economy or any
news which will lure untrained individuals to legitimize there purchasing choice. The best news
of all is the progressing of the cost of a stock.

There is a critical relationship between supply/demand and cost. Yet, there are additionally other
deterring figures a business sector. (https://www.boundless.com)

3.3 Business and cultural environment:

PEST analysis:-

POLITICAL

In UK, there are some political factors that will influence the working of Virgin Atlantic. There
are political decisions for the allowance of foreign people in the country. These political
scenarios do have an influence.

ECONOMICAL

UK, like major part of Europe, has been affected by the economic recession. VAA has to
consider this and will have to deliver the pricing of its services to its customers accordingly. The
spending power of the customers has been largely affected by the recession hit economy of the
United Kingdom. Customers would be less willing to spend a higher amount on air tickets.

Besides this, VAA also has to consider its employees and their pay. Whether it will have to
increase or decrease, will solely depend on how many employees it wants to work with. The
employees will have to be paid as per the market scenarios.

SOCIAL
One debate encompasses the issue of aircraft organizations fixing their seat limitations for
corpulent travelers. A few organizations have ventured to charge an overweight individual the
expense of two seats on account of their size.

Aircraft organizations have experienced an emotional move in the wellbeing insurances they
take, raising the stakes in efforts to establish safety because of late terrorism assaults.
Discernment is a central point by the way we see the world. It is additionally one of the most
seasoned studies in brain science. How we see ethnicity, as it identifies with air travel, has much
to do with September 11, 2001. From that point forward the eyes of the world have developed
progressively touchy to the ethnicity of travelers going on planes. It has made something of a
negative recognition for specific races and religions.

TECHNOLOGICAL

There are constant technological updates and advancements in the airline industry. There are
technological advancements in terms of better flight fuel consumption and emission of gases.
Technology also plays role in the better working of flight. VAA will have to consider all these
factors in terms of technology. (http://www.managementparadise.com)

4.1 International trade significance to UK business:

Creation of proficiency is to indulge in practices where the things which are in demand are
offered at lower costs. Global trade laws and stocks does have an effect on UK business.
Companies operating within UK are impacted by trade laws like EU.

Also sometimes the UK firms look to outsource their business to cheaper countries so that their
cost of running the business is lower as compared to when they run the business in UK. They pay
cheaper labour costs to such countries.

There are also possibilities that the products of UK organization are manufactured outside UK to
get lower manufacturing costs.

They can import machines and change remote advancement. They send their analysts to
component nations to get acknowledging which are essential to need of their making budgetary
matters. UK business affiliations purchase assets for their business from the poorest nations.
(http://business-finance.blurtit.com)

4.2 Impact of global factors:

-Recession: recession is a major factor that has affected the economies all around the world.
Recession will to a large extent determine the buying trends of the customers and hence will
affect functioning of the organizations in the UK.

- Market opportunity: UK has exceptional notoriety everywhere on all through the world for their
advancement being developed and general part permits to UK business relationship to lead
business everywhere on all through the world.

- Worldwide change: general parts permit to expand business all around all through the world
which is amazingly positive for UK economy.

- Developing business zone (BRIC economies-Brazil, Russia, India and China): the economies of
those nations are ending up being quickly and in not too blocked off future they will lead the
world business part. Those nations are truly risk for UK economy.

4.3Impact of policies of European Union on UK business organizations:

A philosophy is a procedure to screen choices and completion results. An approach is executed

as a framework. Approaches are recognized by the primary social event of power inside of the
European Union on UK business alliance where systems are arranged up and expected by senior
authoritative officers. Techniques can help with both specific and target choice making (Clark,
2009).

The impacts of approaches are arranged up to maintain a strategic distance from ruinous impact
that hunt down positive purposes of enthusiasm for the UK business association. Business
securing strategies offer relationship to stay a long way from negative impacts. Affiliations have
game plans that executed through getting system. The UK business alliance had an impact to
expanded possession through approach. Strategies impacts the circumstances that approaches
would like to impact on governments, humanities, enormous affiliations is to uncovering a
method change. Government is to settle on a system choice to build charges of amplifying
commitment pay. The system making method joins a test to study technique influence that
blueprint is sudden orders. (Richard Welford, 2003)

Conclusion:

This assignment is tries to highlight how the business of an organization can is impacted and
changed in different environments. It used an example of Virgin Atlantic Airlines to get a better
understanding. VAA will have to look at the current environment in UK specially in terms of
economy and global warming issues. The business environment in UK is affected by a number
internal and external factors which need to be considered in order for a business to survive and
succeed.

Every organization should analyze its stakeholders and need to prioritize them. VAA too needs
to satisfy all its stakeholder from customers to employees to the government in order to function
with major success. VAA needs to analyze business environment on a regular basis and also
make strategies in order to live upto the mark. It also needs to consider the foreign influence and
the competitors in UK and plan their strategies accordingly.

Bibliography

Bibliography
Basu, C. (n.d.). http://www.ehow.com. Retrieved July 16, 2015, from http://www.ehow.com:
http://www.ehow.com/info_7967081_monetary-fiscal-policy-affect-businesses.html

Clark, 2. A. (2009). Organizations, Competition and the Business Environment (2009).

http://business-finance.blurtit.com. (n.d.). Retrieved July 18, 2015, from http://business-

finance.blurtit.com: http://business-finance.blurtit.com/3334699/1-the-importance-of-international-
trade-economic-integration-and-global-markets-to-uk

http://smallbusiness.chron.com. (n.d.). Retrieved July 15, 2015, from http://smallbusiness.chron.com:

http://smallbusiness.chron.com/stakeholders-objectives-organization-64385.html

http://smallbusiness.chron.com. (n.d.). Retrieved July 17, 2015, from http://smallbusiness.chron.com:

http://smallbusiness.chron.com/four-types-industry-infrastructures-24729.html
http://www.economicsonline.co.uk. (n.d.). Retrieved July 16, 2015, from
http://www.economicsonline.co.uk:
http://www.economicsonline.co.uk/Competitive_markets/Economic_systems.html

http://www.economicsonline.co.uk. (n.d.). Retrieved July 17, 2015, from

http://www.economicsonline.co.uk:
http://www.economicsonline.co.uk/Business_economics/Regulation.html

http://www.managementparadise.com. (n.d.). Retrieved July 17, 2015, from

http://www.managementparadise.com: http://www.managementparadise.com/forums/principles-
management-p-o-m/208730-pest-analysis-virgin.html

http://www.virgin-atlantic.com. (n.d.). Retrieved July 15, 2015, from http://www.virgin-atlantic.com:

http://www.virgin-atlantic.com/in/en/footer/about-us.html

http://www.virgin-atlantic.com. (n.d.). Retrieved July 16, 2015, from http://www.virgin-atlantic.com:

http://www.virgin-atlantic.com/tridion/images/newpolicy_tcm19-540700.pdf

https://www.boundless.com. (n.d.). Retrieved July 18, 2015, from https://www.boundless.com:

https://www.boundless.com/business/textbooks/boundless-business-textbook/product-and-pricing-
strategies-15/pricing-products-96/impacts-of-supply-and-demand-on-pricing-449-1939/

Richard Welford, A. G. (2003). Environmental Management and Business Strategy.