Q1: What is meant by the external business environment and what are its main components? External environment refers to the environment that has an indirect influence on the business. The factors are uncontrollable by the business. The external environment of an organization is those factors outside the company that affect the company's ability to function. Some external elements can be manipulated by company marketing, while others require the organization to make adjustments. Some main components of external environment are:
•Growing use of internet
•Law and Order situation
Q2: Show how changes in one of these components have had a significant impact on airlines in recent years? A major change in the airline environment since September 11th has been in airport security, as a result of political and legal pressures. Airlines today have to operate in a much more security conscious environment and this has considerable logistical and cost implications for airlines, including the development of much more security conscious booking and baggage handling procedures, the requirement to use security staff on cross Atlantic routes has also added to costs.
Q3: How significant is competition in the external environment? Competition is always important in the external business environment. It is particularly important in the airline business where there are a number of major airlines competing on similar routes. United Airlines has positioned itself as a premium carrier and its marketing mix is designed to differentiate it from rivals in a number of respects relating to high quality and service.
Q4: What must companies like United Airlines do about changes in their external environment? Organisations need to respond to changes in the external environment by making appropriate changes in the way they operate, e.g. the airline industry has become far more...