Sample Solution On Business Environment of The Heathrow Airport

Question: Describe about the Heathrow Airport of London and also describes their Mission? Answer: Introduction The Heathrow Airport of London is one of the major international airports in the West London, United Kingdom. It is considered to be the busiest airport in the country and ranks third globally. Mission The Heathrow Airport has developed a mission statement that states that it aims at providing the best services to all its customers around the globe. Vision The Company has its vision of operating sustainably in the industry it operates. Objectives The management of the Heathrow Airport aims at being the leader in its industry and provides best aviation services to the passengers, so that the company enjoys increased profitability (Muellbauer, 2002). PESTEL Analysis Understand the nature of the national environment in which business operate Airports have always been an attractive target for tourists which provide gradual increase in threats for all aviation companies. Beefing up of security measures result in delays and this renders the journey of the passengers quite uncomfortable. This often leads them to take up alternative methods. On account of the recent credit crunch or the arising crisis situation in the UK, the borrowings of the public sector are fixed to 8% of the GDP during the year 2014-15. Though the rate of inflation has remained stable in the country, it has increased recently from 4% to around 5% (Sabatino, Solazzo Britter, 2011). The GDP of UK expanded by around 11.6% amidst 2003 and 2007, and had reached 1,000.69 billion during the first three quarters of the year 2007 as compared to that of 960.9 billion in 2006 which means a hike of around 6%. Potential as well as developing economy is highly favorable for the industry in the form of contribution for enhancing the disposable income of the customers. However, on account of the recent credit crunch or the arising crisis situation in the UK, the borrowings of the public sector are fixed to 8% of the GDP during the year 2014-15% (Winters, 2014). Though the rate of inflation has remained stable in the country, it has increased recently from 4% to around 5%. Thus the increase in inflation would cause rise in the aviation charges at the Heathrow airport since this is directly related to the retail price index (RPI). The development of high speed railway system as well as increasing popularity of the railway travel on account of increasing awareness amidst people regarding the environmental preservation resulted in the rise of travelling by train in the country of UK. The environmental aspects have been favorable since ages as local people of UK and that of other nations are at constant travelling from one place to another (Winters, 2014). This has been the cause of such popularity of airline industry. Even though railway services are effective within the nation, the need for international travel and travelling abroad for multiple reasons such as business meetings, vacations, etc would keep up the need and significances of airline industry. Understand the behavior of organizations in their market environment The continuous growths of the routes that are effectively serviced by low-cost airlines give a potential foundation to incorporate growth within the airport market (Callister, 2002). The market in the airport industry is quite concentrated in freight sectors as well as that of passenger sectors. Although many big and small aviation companies operate in this industry, yet the Heathrow airport has its own potential market due to the large-sized services and flight facilities provided by the airport. The airport industry provides an attractive investment opportunity for several investors as well as investor companies on account of increased rates of market growth. The market is quite competitive. The concentration ration of the airport authority is relatively high in UK as compared to that of any other country. Also, the number of airports owned by a single firm is regulated by CAA for ensuring fair competition as well as prevention of monopoly. Currently, around nine firms own and operate different UK airports (Carruthers, McHugh, Jackson Johnson, 2011). The Heathrow airport acts as a facilitator where business converge for providing a particular service. It is an attractive option of business for many firms. So, the power of suppliers is quite moderate upon the services they supply. As the airport does not function as the only entity of a business, over the period of time the developments at the airport front enables big picture of the airport industries. Thus, the power of bu yers is relatively low in case of the Heathrow airport. Population history of UK would suggest that the country happens to be one of the major attractors of EU nationals in the factor of employment and so it explains constant rise of population figures. Rise in population leads to rise in the overall travelers (Coebergh, 2013). From some recent figures it is evident that number of passengers taking flights from local or small airports is on rise on account of lower congestion; hence playing favorably for low-cost airlines that enjoys increased profitability. Assessing the significance of the global factors that shape national business activities The economy of UK has been based on foreign trade on a large scale. The national government favors free as well as unrestricted trade with other nations. On account of dependence on trade, the national government has imposed only few restrictions upon international trade. The potential of the countrys pound as well as economic state has rendered the country to be an attractive investment opportunity for international investors(Ghatak, Silaghi Daly, 2009). The increased practicing of international trade within UK has cast its impact upon all industries, specifically the airline industry. This in turn impacts upon the Heathrow airport. As the national government focuses increasingly upon foreign business as well as investments, it would cast positive impacts upon the mentioned airport firm as it is the leading airport service provider in the country. Increasing idolization of travelling of passengers by railways resulted in the lowering of rate of air travelling. The railway has been the constant threat for airports like that of Heathrow airport. The effective and timely services of railway have attracted more and more passengers to the very industry, thereby leading to a tough threat to the airline industry (Gudmundsson, Paleari Redondi, n.d.). This in turn affects the airport firms. Airports have always been an attractive target for tourists which provide gradual increase in threats for all aviation companies. Beefing up of security measures result in delays and this renders the journey of the passengers quite uncomfortable. This often leads them to take up alternative methods (Janic, 2004). Even though railway services are effective within the nation, the need for international travel and travelling abroad for multiple reasons such as business meetings, vacations, etc would keep up the need and significances of airline industry. The agreement of Open Skies amidst that of US and EU is believed to end the constraints upon airlines authorized for flying between Europe and US, thereby providing increased number of EU and US organizations opportunities within the market. There would be increased number of flights across the Atlantic. This would provide scopes for the Heathrow airport to provide services to those airline companies. Leading operators of airport design effective strategic plans that state future development(Lambert, 2014). These plans include adequate investments into terminal refurbishments, building of new runways for the airports, and also developing infrastructure. All these would prove beneficial for the Heathrow Airport. Recommendations: The conditions within the nation look favorable for the airport; however some limitations exists that need to be addressed to pursue its business proposition. All stakeholders of the Heathrow Airport Authority should maintain cordial relationship with each other. Such mutual relationship is advantageous in multiple ways as this creates an effective work environment which enables employees to deliver their best performance towards organizational sustainability (Lister, 2008). This can be done by controlling mutuality to the extent to which the members agree upon who possesses the right power of influencing each other. Trust is another factor. Strategies must be framed to enhance personal networking as well as involvement of stakeholders in the decision-making. This favors effective relationship management. This method identifies the target groups and collects increased information about them. They may include organizational employees, management, competitors, customers, suppliers, etc (Haersolte-von Hof, 1995). The communication system should be effective so that information is timely regulated between organizational members. The practiced processes within the organization may be improved through study of the organizational background, horizon and limits. The management needs to be strong enough to take important decisions on its behalf. Processes may be enhanced by allowing all organizational members, managers and also stakeholders to interact with each other and adopt significant organizational decisions. Lastly the authority should be well aware of the opinions of the local people around the airport area since they are the most affected group of individuals (McNeill, 2010). The information may be qualitative, quantitative, explicit, tacit, official or unofficial, and even policy statements. If the above mentioned factors are bore in mind and adequately addressed to resolve all rising issues, then it would be feasible for Heathrow airport to expand its business on a large scale. References Callister, M. (2002). Pulmonary tuberculosis among political asylum seekers screened at Heathrow Airport, London, 1995-9.Thorax,57(2), 152-156. doi:10.1136/thorax.57.2.152 Carruthers, D., McHugh, C., Jackson, M., Johnson, K. (2011). Developments in ADMS-Airport to take account of near field dispersion and applications to Heathrow Airport.International Journal Of Environment And Pollution,44(1/2/3/4), 332. doi:10.1504/ijep.2011.038434 Coebergh, J. (2013). Working at Heathrow airport may be a risk factor for cardiovascular disease.BMJ,347(nov19 9), f6794-f6794. doi:10.1136/bmj.f6794 Ghatak, S., Silaghi, M., Daly, V. (2009). Trade and migration flows between some CEE countries and the UK.The Journal Of International Trade Economic Development,18(1), 61-78. doi:10.1080/09638190902757426 Gudmundsson, S., Paleari, S., Redondi, R. Spillover Effects of the Development Constraints in London Heathrow Airport.SSRN Journal. doi:10.2139/ssrn.2380226 Janic, M. (2004). Expansion of Airport Capacity at London Heathrow Airport.Transportation Research Record,1888(1), 7-14. doi:10.3141/1888-02 Lambert, N. (2014). Internal diversity and change in the UK: The changing forms and levels of coordination in wages and working conditions within the ceramic tableware sector 1945-2008.Economic And Industrial Democracy. doi:10.1177/0143831x14537356 Lister, B. (2008). Heathrow Terminal 5: enhancing environmental sustainability.Proceedings Of The ICE - Civil Engineering,161(5), 21-24. doi:10.1680/cien.2007.161.5.21 McNeill, D. (2010). Behind the Heathrow hassle: a political and cultural economy of the privatized airport.Environ. Plann. A,42(12), 2859-2873. doi:10.1068/a43124 Muellbauer, J. (2002). Mortgage credit conditions in the UK.Economic Outlook,26(3), 11-18. doi:10.1111/1468-0319.00336 Sabatino, S., Solazzo, E., Britter, R. (2011). The sustainable development of Heathrow Airport: model inter-comparison study.International Journal Of Environment And Pollution,44(1/2/3/4), 351. doi:10.1504/ijep.2011.038436 Winters, L. (2014). International trade regulation and job creation.Izawol. doi:10.15185/izawol.75