The cost minimisation strategy employed by British airways during the recession proved to be an influential choice. It forced BA to be sensitive and cautious about cost and the passengers' volume has been cut down in terms of business and tour travellers. The industry competition is getting fiercer as by the joining of the lower cost airliners which indicates BA has to master the value creation process, or the value chain, with business perspective and cautious. In addition, the cares on the stakeholders in each stage of the business should be paid attention to, or it may leads to the negative impact to BA such as the staff strike took place in January 2007, which gives BA's brand image a big shock. These cuts the company has to make resulted in employee dissatisfaction.
Conversely if the sales mix were changed in favor of one of the lower contribution margin aircraft then the volume of aircraft sold would need to be increased in order to make up for the reduced profit per aircraft. 3.
With these factors taken into consideration, a decrease in consumer expenditure would be a direct causation to a lowering of both organisations activity. For example, due to recession unemployment will rise as the companies can’t afford to pay employees, and therefor people as a whole have less money to spend, and so donating to causes such as Oxfam would come more unlikely as there will be less money revolving them. This could cause a cut on their government funding as more money will need to be invested to government funding for those out of employment. With a low flow of money inward to the company it means they wont afford the expenditure necessary to fund projects for helping those, therefore lowering the activity of the charity. The same rule may apply to Arsenal FC.
Economic scale: European airline industry has achieved economic scale in which it creates a barrier of entry that the new entrants have to compete on a large scale (eNote, 2012). In order to compete to the existing competitors, easyJet offered low fares by minimizing cost as much as they can. easyJet’s low fare strategy focuses on offering airfare without meal service and business class seating. Moreover, easyJet also encouraged Internet sales to reduce the business operation cost generated by hiring reservation agents (Kumar, N & Rogers, B 2000). b.
During the period of hard time, the consumers definitely need a firm which can concern and appreciate the most out of their injected resource, since the shrinking in their purchasing power, we can obviously see the constraint from the already limited resources, any company which fail to implement efficiency with its business process would eventually lead it to the diminished business activities. Q2: What distribution
The economy is not run by a single entity, which means that it is the individual or individuals that are driving our economy. The difference in motives and operation styles from company to company will mean that there are flaws within the economy. In a time of recession and high unemployment this has to be complemented in another way to counteract the recession and promote economic growth. The classical model is an accurate indication of the economy if businesses were operating as one entity, or under government control, which is not the case in our society. Supply does not match demand because the goal of the production entity is revenue and the goal of the consumer is spending.
Many may argue that the falling economy and the wealthy not wanting to share their shares is to blame for the raising rates of poverty here in the states. Poverty of course, has a lot to do with money and income but underneath that it is has a deeper story. Stories of how different people are suffering from it and how they are managing to live day by day. It almost seems as if it’s a foreign nation of its own and you only understand the concepts if you are in it. There is no doubt that here in America we are dealing with one of the greatest economic downfalls.
These facilities and software systems enabled both companies to reach a 99% arrive-on-time rate in their famous overnight/morning deliveries. However, this became an advantage for Airborne. The top management of Airborne understood clearly that they could not be everything to all the people. As a result, the company has positioned themselves differently from the big two, and to put more attention in its afternoon/second-day deliveries. This strategy has helped Airborne to reduce a large sum of costs because the afternoon/second-day deliveries could be transported using trucks, subsequently to save two-thirds the costs of owning and operating an aircraft capacity.
Such technological advancement placed a lot of financial burden on the operations of Jet Blue. The airline industry continues to feel the effect from the U.S economic slowdown and rise of crude oil/jet fuel prices, which have risen to record numbers with no predictable end in sight. The slow economic growth has compelled both business and individual travelers to cut back on travel expenditure thereby compelling airlines such as Jet Blue to initiate energy conservation measures, targeting specific markets and exploring the possibility of partnership with other airlines. Linked to the volatility of jet fuel prices is the increased in competition posed by new entrants to the airline industry. New entrants such as Virgin America are bracing the competition by offering lower fares to customers.
Why people should saving part of income The term “saving” refers to the act or process of setting money aside for future use. Saving a part of your income - whether it’s for home, college, education, retirement, or any other goal. Saving and investing are different because saving carries little or no risk of loss while investing, does pose risk and the possibility of loss. A regular savings plan can become the foundation for successful investment program. Saving can also be for a more general need or purpose, such as three to six months of living expenses or saves for a rainy day.