Contemporary Trends in the Global Business Environment - Coursework Example

Business scenario report The executive summary Qantas is a company operating in the airline industry, which major in international as well as domestic destinations to various places. In this light, its environment has various trends and the industry is undergoing various changes as time goes by. On this note, this report assesses the key elements in the business environment, which are key to identifying the trends in its business environments as a key towards establishing a plausible scenario in the future of this business. The report further details a concise systematic approach into the analysis of exploring a business opportunity for Qantas with due consideration of environmental analysis. Introduction Qantas Company seeks to analyze its environment for a sustainable future in the highly competitive market. Indeed, various trends have characterized the market and it is important for a clear analysis to be made so that the business can evaluate its continued viability. To this end, the company seeks to introduce new flights to Tehran, Iran, which it hopes that the idea will put the company in a better position to beat its competitors like Fly Emirates that have strongholds in the Middle East. This report assesses the business in terms of the goals it will aim at achieving in the future. Businesses analyze their environments and plan in many ways. Indeed, most of these trends have evolved from the 1950’s to their present form. From a background where planning was considered in the rubric of budget concerns, modern organizations largely embrace scenario-based planning which takes into account the future of the company (Durand & Dameron, 2008, p. 110). Qantas in this perspective uses a variety of strategies in its environmental analysis. Scan and monitoring of the external environment Recent studies into the external environment of the business reveal that it contains three components, including the market, industry and the expansive macro environment. As an important aspect of the external environment, the market defines the clients of the business who make it possible for it to conduct its operations (Fisk, 2011, p. 29). The market for any business is different from others and specific to the industry. The industry on the other hand, incorporates all the businesses that are involved in the airline venture. Industries have trends such as the legal requirements for safety, purchases of new planes in the market as well as the increasing need to expand the number of destinations that the company operates. The macro environment on the other hand, focuses on certain aspects such as political, social or technological issues that affect the business’s operations (Martin, 2008, p. 52). Indeed. A clear analysis at this stage leads to the formation of workable projects as well as calculated future planning for the business. Environmental scanning Another notable trend in the modern business analysis is the environmental scanning technique. As a key contributor to an assessment of the future, trends, the technique seeks to provide a foresight to the business management of any impending danger that may result from external activities at an early stage. Indeed, the earlier the warning of any danger or threat, the better it is for the business to adjust its strategies to match the market trends (Mendell & Pessolano, 1995, p. 76). The environmental scanning perspective is an all-encompassing approach towards making rational decisions that are able to handle any challenges in the environment and therefore a key management tool. Environmental monitoring After scanning the environment, modern studies proved that the business should conduct the monitoring of its environment. This involves selection of criticism in terms in the macro environment, and carefully monitoring their trends into the near future (Schultz, 2006, p. 42). Indeed, Qantas may find monitoring very useful to the extent that it provides to the extent that the management tool provides a clear picture of the past and future implication of current trends as well as an estimation of the viability of current strategies in light of the future events. Monitoring utilizes trend described as the most important aspects in the identification of relevant information that could be used to trace the continued viability of the business. In perspective, Qantas would seek information that contains predictions or speculation on the result of the future trends that are most prevalent in the airline industry (Taoka & Beeman, 2001, p. 95). Scenario as a planning pillar Scenarios are important decision making tools, to the extent that they offer businesses in the airline industry a platform where decisions can be reached through consensus. When used with environmental scanning and monitoring, they provide Qantas with future perspectives and generation of alternatives in the uncertain events in the future (Taoka & Beeman, 2001, p. 49). In this sense, the future is an unknown variable, whose prediction may be of importance to the business of setting goals and strategies that deal with the challenges that may occur. Indeed, a plausible scenario for the future is important for Qantas, eliciting the need to be concise in the development of the plans, their scanning and monitoring in the way that they meet the objectives (Mendell & Pessolano, 1995, p. 80). To this end, a practical scenario for Qantas is profiled. Owing to the fact that the industry is very competitive and most players are getting huge profits from the Asian market, the company seeks to expand its operations in Tehran in the next three years. Using the trends in the modern global airlines business discussed above, Qantas will develop a concise scenario for the new venture in the following steps: Identification of focal issues It is important that Qantas identify various key issues that will help in decision making on the opportunity to widen its market. Indeed, these are strategic decisions that will guide the process in the next three years. It is vital to assess the impacts of the technology in the industry, as a guide towards making plausible decisions in the program (Morales & Anderson, 2013, p. 36). Because the decisions to be made for the future are uncertain, the company will utilize scenarios to explore future chances as well as strategies to be pursued. Qantas began scenario development by redefining its objective and seeking answers to the future of the company in terms of its travel destinations. Indeed, stability of performance is important for the company’s continued success even in the future. Applying the key decision metrics Indeed, there are many ways of testing the opportunity in terms of its viability and benefits. This is with due consideration to environmental factors that may affect business operations in the modern setting and in the future destinations. There are many drivers towards the success of any idea. The PESTLE analysis in this sense would provide an analysis of the environment to evaluate its viability (Fisk, 2011, p. 45). In this perspective, the political factors affect the legislations and legal operations in any destination. In this respect, Qantas would be forced to evaluate its idea based on the legal provisions in Iran, regarding the company’s operations. There is need to know what licenses to get, the profit repatriation laws, the labor laws as well as the taxation policies that the government of Iran imposes on foreign inventors in the country (Smith, 2005, p. 88). Economic factors are also vital for consideration, regarding the analysis of markets, consumption and spending behavior in the new established market, in this perspective, it is important to establish what economic factors drive most people to use planes in Iran, which will determine if the idea can thrive in that country (Morales & Anderson, 2013, p. 71). Social factors are also important as they determine the success of the business idea in a specific locality. Indeed, factors such as demographics and culture of the new business environment will influence most of the decisions made by Qantas. It is important to note the composition of the population that is targeted as well as the flying trends for the Iranians who will use the planes (Fisk, 2011, p. 38). On the other hand, technological innovations in the market will be important to be considered by Qantas, to the extent that the innovations in the contemporary airlines industry may portray a successful or unsuccessful venture for Qantas. This relates to the innovation, research and level of technology that is currently being used by the other airlines operating in the new market (Taoka & Beeman, 2001, p. 93). The legal factors in new destinations affect the operations of the business. There are many provisions of foreign laws that may serve as hindrances or chances to foreign investors. A legal analysis exposes the profitability and success of the business opportunity in light of legislations relating to customer safety standards, labor laws among others (Smith, 2005, p. 107). The environmental factors are generated by the surroundings and affect business operations. In this analysis, the idea of extending operations to Tehran is analyzed in terms of the climate of the place, the weather patterns or changes witnessed and the location analysis, which seeks to determine the advantages to the business that are as a result of operating in a certain place (Schultz, 2006, p. 50). Qantas would determine whether there are other environmental factors that could affect its international flights to that destination. A further analysis of the macro environment can be determined by the Porter’s diamond analysis, which seeks to determine the national advantage of operating in certain environments. In the analysis of the Qantas business idea, there is competitive advantage if Iran possesses skilled labor in terms of pilots and assistants who would drive the operating flights as well as able management to manage operations in Iran (Ramírez, & Selsky, 2008, p. 65). Another competitive advantage is owed to superior technology in that country and high education levels. In addition to promoting a higher capacity to offer the best services in the industry, a good technology base drive cost down and makes the destination preferable and viable (Ramírez, & Selsky, 2008, p. 69). Porter further identifies government support, where most successful operations in the modern world are fruits of well-coordinated government operations. Governments may offer incentives and subsidies that will see Qantas’ operations very successful in Iran. On the other hand, unfavorable government operations may collapse any plans for Qantas with the new idea. The diamond also explains the culture, to the extent that the cultures of Iran will be a key motivator to the success or failure of the new business opportunity. Although analysis of the decision metrics in the macro environment makes the most sense to the establishment of the business opportunity by the company, an internal analysis through SWOT is worth taking (Martin, 2008, p. 61). The strengths of Qantas will determine how well the company will establish itself, as well as its capability to handle internal issues in its microenvironment. The weaknesses will further provide a mirror for the organization to analyze its ability to explore the chance, while opportunities will give the available options that can be explored by the company in the new destination. The threats will serve to show the factors in the new environment that may hinder operations or prove as serious challenges to attainment of profits (Martin, 2008, p. 70). The next step in the development of the idea pertains analysis and prioritization of the environmental factors. These important identified issues in the new destination are vital for the success of the idea. It is also important to conceptualize the new environment and know what to prioritize as key forces (Durand & Dameron, 2008, p. 40). For example, Qantas may identify competition as the key force to beat in the new market. Establishment of scenario logics This is where the realities to counter the challenges ahead are met. Indeed, this stage demands creativity and insight to counter forces in the new environment (Amara & Lipinski, 2003, p. 54). This is where Qantas comes up with new ideas of value to counter the competition, which is its greatest force in the new market. The appropriate scenarios for the opportunity to operate in Iran are chosen and expounded to expose any underlying issues. At this stage, the scenarios are turned into strategies. Critique of the idea The idea critique is based on the existence of other excellent competitors, which questions the success of the venture. Further, it would be challenging to meet the expectations of customers in Iran and to raise the necessary demand for profitability. This time lag may lead to huge losses in the short run. In the event that the legislations and legal perspective, prove challenging for the company to operate, very huge losses may be incurred while getting the necessary certification for operation. Conclusion The work proves that environmental analysis is vital for contemporary businesses, and further in establishing of new products or exploring alternative opportunities. Although the process is lengthy and expensive, it is paramount that the management of modern organizations pursues this noble cause in establishing their operating environment. It is plausible to state that with the support of the management, the analyses will continue to be of use to organizations even in the future. References Amara, R., & Lipinski, A. J. 2003., Business planning for an uncertain future: Scenarios & strategies. New York: Pergamon Press. Durand, T., & Dameron, S. 2008., The future of business schools: Scenarios and strategies for 2020. Basingstoke: Palgrave Macmillan. Fisk, P. 2011., Creative Genius: An Innovation Guide for Business Leaders, Border Crossers and Game Changers. Hoboken: John Wiley & Sons. Martin, D. 2008., Managing risk in extreme environments: Front-line business lessons for corporates and financial institutions. London: Kogan Page. Mendell, J. S., & Pessolano, F. J. 1995., Nonextrapolative methods in business forecasting: Scenarios, vision, and issues management. Westport, Conn: Quorum Books. Morales, P. J., & Anderson, D. 2013., Process simulation and parametric modeling for strategic project management. New York, NY: Springer. Ramírez, R., & Selsky, J. W. 2008., Business planning for turbulent times: New methods for applying scenarios. London: Earthscan. Schultz, H. M. 2006., Business scenarios: A context-based approach to business communication. Boston: McGraw-Hill Irwin. Smith, W. A. 2005., The Shell global scenarios to 2025: The future business environment : trends, trade-offs and choices. London, England: Shell International Limited. Taoka, G. M., & Beeman, D. R. 2001., International business: Environments, institutions, and operations. New York: HarperCollins. Read More