A Study of Business Environment in India with special reference to Aviation Industry

Business Objectives
Profit and Growth Focus and goal oriented Employee satisfaction Quality products and services

Business Environment
Composed of two word Business and Environment. Business: selling goods and service to consumers for earning profits. Environment: the area in which something exist. Business Environment is a set of condition (Social, Legal, Economical, Political) that are uncontrollable in nature and affects the functioning of organization.

Components
Suppliers Customers Micro Environment Internal Environment Business Environment External Environment Competitors Public Economic Environment Macro Environment Non-Economic Environment Market Intermediaries

Non-Economic Environment
Political Environment Socio Cultural Environment Technological Environment Natural Environment Demographic Environment International Environment

History of Civil Aviation in India

1912 1932
First domestic air route between Karachi and Delhi by Indian State Air Services Founded the first India Airline by Tata

1948 1950
1971 1980

Air India International LTD was established by the Government of India and Air India Government set up the Air Traffic Enquiry Committee Share was 55.8% which went up to 65% and declined to 58% during 1972-1975 Number of airlines was 35 and rose to 49 in 199697

Market Size
Expanding aviation sector in India handles about a staggering 2.5 billion passengers across the world in a year. About 5.33 million passengers were carried by domestic airlines during January 2012. Huge foreign direct investment (FDI) worth US$ 429.70 million from April 2000 to December 2011. 10 per cent increase in the number of international passengers last year, a further increase up to a 10-12 per cent range over the next 12 months is expected.

SWOT Analysis
Growing tourism Rising income levels
High spoilage rate Untapped Air Cargo Market

Strength

Weakness

Opportunity
Investment Opportunities Technological advancements

Threat
High Operating cost Shortage of skilled man power

Case Study
The Kingfisher Airlines financial crisis refers to a series of events that led to severe disruptions within Kingfisher Airlines. By early 2012, the airline accumulated losses of over 7,000 crore (US$1.32 billion) with half of its fleet grounded and several members of its staff going on strike.

What went wrong?

Delayed salary Fuel dues Aircraft lease rental dues AAI reports Income tax Bank arrears

Kingfishers Crisis
Fleet grounding Frozen bank accounts Arrest warrant against Mr. Vijay Mallya (Chairman)

Thanks!!!
Done by: Abhinav Gupta MBA General