A Good Example Of Environment

Strategic management is the art and science of formulating, implementing and evaluating cross-functional decisions that will enable an organization to achieve its objectives. It involves the systematic identification of the firm 's objectives, nurturing policies and strategies to achieve these objectives, and acquiring and making available these resources to implement the policies and strategies to achieve the firm 's objectives. Strategic management, therefore, integrates the activities of the various functional sectors of a business, such as marketing, sales and production to achieve organisational goals. It is the highest level of managerial activity, usually

Managers generally consider the rivalry among competitors as a major source for deriving strategy. As explained by the Michael Porter it is a narrow view of competition. A set of other parameters should be evaluated, mentioned in article as five competitive forces, along with industry

See Chapter 1, Exhibit 01: Strategic management consists of the analyses, decisions, and actions an organization undertakes in order to create and sustain competitive advantages:

This section will examine each of the five competitive forces that are active in the European Airline Industry. In this instance the buyers in the industry will be taken as passengers. Fuel companies, aircraft manufacturers and employees are the suppliers. Substitutes stem from modes of transport that fall under land and sea transit. Potential entrants are any airlines based outside of Europe or newly founded airlines based in Europe.

Pearce, J. A. II, & Robinson, R. B. (2009). Strategic management: Formulation, implementation, and control (11th ed.). [University of Phoenix Custom Edition e-text]. New York: McGraw-Hill. Retrieved August 20, 2011, fr

Strategic Management is the theory and practice of making decisions that shape the future of the firm. This course looks at the content and process of strategic decision making from the perspective of managers who are responsible for an entire business unit. These may be individuals who are acting in the capacity of a Chief Executive of a company, divisional General Managers, or departmental heads. It is also the perspective most

What Is Strategic Management a process for defining and addressing the management implications of an organization's strategic and operational plans? A long-term context for short-term activities. Strategic management is the analysis of the work done by the management of an organization on behalf of the owners. It gyrates around expressing the purposes of the organization and coming up with an appropriate mission and vision statement. Mission and vision statement together are used to help develop policies and plans to be used in long term and short term goals often categorized as projects or programs. It also involves the right resources of management to ensure that the business profit are maximized to grow the company. Strategic Competitiveness

To deal effectively with the wide array of factors affecting the ability of a business to grow and prosper, managers need advanced processes they feel will facilitate the optimal positioning of the business in its competitive environment. Such positioning is possible with strategic management because this process improves preparedness for unexpected internal or competitive demands.

The strategic management is actually defined as the process in which an organization actually formats and also implements the plans which espouse the objectives and goals of that organization (Diana Wicks, 2011). The process of the strategic management is continuous and it changes with the evolution of the organizational goals and objectives.

Fiscal policies of the government can have significant impact on the industry’s performance. Governments generally impose high taxes on airline industry, which is passed on to the customers in the form of higher air fares, alternatively airlines reduce the number of staff is cut down costs. An example is United Kingdom, when the UK government imposed high taxes on the aviation industry, the number of cargo operators reduced sharply in order to reduce costs (My-Efficient-Planet, 2010).

Porter’s Five Forces analysis is a tool to analyze the external environment in which an industry operates. In the European airline industry, the threat of new entrants is low. Entrants will need high capital investments to compete with existing firms. The substitutes in the airline industry are the railway networks, rental cars and sea transports. Rental cars and sea transports are more expensive than the airlines therefore they don’t pose a threat to the industry. It takes longer to reach a destination by train than plane, which causes the threat of railways be low. Existing firms pose a threat to the industry because there are 35 firms operating in the European airline industry, which creates intense price rivalry among firms. Customers are price sensitive and

“Competitive strategy involves positioning a business to maximize the value of the capabilities that distinguish it from its competitor’s” (Porter 1980:47). A successful business plan requires first and foremost the formation of an appropriate strategy. Through the implementation of a suitable strategy, the company is able to obtain its own industry niche and gain an understanding of its customers (Porter 1985). Whichever strategy is adopted it must be adequately integrated within the firms goals and missions to achieve a competitive advantage (Parker and Helms 1992).

For the low cost strategy prices of taxes, fuel, and governmental regulations are especially important. The airline deregulation not only helped Ryanair but also increased competition under different airlines and air traffic.9 The result of this is increased regulations by the EU government in terms of safety and environmental rules. This again raises operating costs within the EU. When Ryanair wants to maintain its low fares it has either the possibility to cut costs elsewhere in order to compensate

Also, the cost of aviation fuel is another element would effect Ryanair’s profitability. In view of fact that accessibility of oil decreases, global demand increases, and the unpredictable exchange rate, the Ryanair model, i.e., to be as low-cost, would be

The environment is defined as the sum total of all surroundings of a living organism, including natural forces and other living things, which provide conditions for development and growth as well as of danger and damage.(Business dictionary,2014) This means that every business always meets dangers and damage in a different environment, especially, in an unstable environment. For example, Malaysian Airlines have endured financial problems by an aircraft crash, which result in Malaysian Airplane losing 10 million dollars for paying compensation to victim families.This incident demonstrates the environment has always changed , sometimes it could be a good opportunities to develop the businesses or great disasters to damage it. This essay will discusses the changing factors of business environments in detail , following by the sections:how economic systems attempt to allocate resources effectively,the impact of fiscal and monetary policy on business organisations and their activities,the impact of fiscal and monetary policy on business organisations and their activities.