Report on History of Business and Business Environment Analysis in Etisalat & Etihad

History of Business

(Ebert & Griffin, 2014) Define business as
“Business is an organization that provides goods or services in order to earn profit.”
Business is also perceived as a concept which came into origin after the advance of Industrial Revolution and commercialization of industries as a corporation. The industrial revolution began in history after the invention of the steam engine and trains which later gave rise to companies and corporations that manufactured goods on a large scale using machineries. The process of manufacturing became established and industries started opening. Starting with the steam engine, other products also started being mass produced.
The process of mass producing also entered into the textile industry in England. This increased preference and popularity of mass producing goods in factories was due to the fact that the cost of production decreased in that process. As the factory owners could not handle all the tasks by themselves, additional people had to be employed for managing the different activities related to the production in the factory. As the factory became a functioning unit it began to be recognized as a corporation or an organization which became the advent of business.
Further industrialization became possible as companies needed private investors and financial buildings (also known as Banks) to establish business. The concept of financial investment in banks originated in America. Capital investment and joint stock companies came into existence after the involvement of financial institutions in businesses at large. This mass production started happening in every developed and industrialized country and gave rise to the production era. The production era went on during the years of 1860 to 1920.
The industries became such a huge part of the financial systems that they had a sizable impact on the global economy. Due to the heavy influence of the businesses on the economies of states, a capitalist culture came into existence. The 18th century economist Adam Smith introduced the idea of the Laissez Faire economic theory. This theory suggested that the government should not have an impact on the business because a business would grow better without interferences of any kind. The great age of Laissez Faire was determined to be the years of 1860-1915. There was a huge amount of evidence regarding the success of Laissez Faire theory. Rate of production in the United States increased by 1200% and it grew to become the biggest economic giant. Before its application, United States came after England and France. This is a robust evidence of the impact of Laissez Faire theory on the economy of a country.
The concept of entrepreneurs came into existence after the introduction of Laissez Faire theory and they were recognized as leaders who created business opportunities and formulated the vision of the company. They created a profound basis for businesses. Entrepreneurs came to be recognized as business leaders and were respected for their ideas and management skills. As the advent of entrepreneurs came into light, it gave rise to the state of an entrepreneurial era. (Goodnight, 2011)
In an entrepreneurial sense, there came an era of sales which lasted from 1920 to 1940 wherein, the sales department of a company would handle the selling of the product which went on from door-to-door or the retail outlets. But after the economic boom which came behind the World War II, a marketing department era came into existence in which there came a new approach that to sell the products, reasoning with the customers is not the ideal approach but attracting the customers to buy the products was in order. This came due to the fact that customers started having the power of choice. Due to this, the concept of marketing became necessary and got widely established. The era that began due to this is recognized as the marketing company era which is still in play since the year 1960. (White, 2010)
Globalization as a concept came into existence in 1990 in the world of business but according to many historians, it was going on even in the 1500s. Setting aside the debate, globalization has become prominent and popular in the last two decades. This phenomenon happened to the the rapid transmission of knowledge, capital and trading around the world. The advancements in technology (specifically communication technology) played a huge role in the process of globalization. There is a prominent belief also that the era of globalization began after the sudden decline of transportation costs. (O’Rourke & Williamson, 2000)
The advancements in communication technology gave origin to internet which had a profound influence of many aspects of business. The businesses which had grown due to globalization could be in connectivity due to internet. This phenomenon is recognized as the internet era which is currently going on.
Analysis of Business Environment

There are 5 aspects which form the business environment of a company. The first aspect is the social aspect which includes the impact of trends going on in the society. The legal aspects which include the legal rules and regulations that the company has to comply with. The economic aspect covers the economic state of the economy of the country. The political aspect covers the government policies that are in practice and the technological aspect covers the advancements in technology which have an impact on the progress of the company. The environment of the company also includes its competitors.

Etisalat is a major telecom sector company in the UAE. Telecom sector grew infinitely after advancements in communication technology on which the telecom sector depends on. Etisalat can be recognized as a multinational corporation as it has expanded outside of UAE.
In the social aspect of its business environment, there are very negligible drawbacks and an array of positive aspects which appeal the society of its benefit. It is necessary to a level for the society of the company’s services. Considering the legal aspect of its business environment, it has to comply with international standards as well as rules set by the government of UAE. (Etisalat, 2010)
The government policies of UAE are favorable to the company but it needs to focus on how to adapt to the policies of the other countries in which the expansions are done and ongoing. The technological aspect is essential to focus. Etisalat needs to keep updating its technology according to international standards. It used to be the only telecom company in UAE and has a strong customer base of faithful customer base. The competition of Etisalat includes companies like Telenor, AT&T, Vodafone and DU.
Strength Weaknesses
• The government policies of UAE are favorable to the company but it needs to focus on how to adapt to the policies of the other countries in which the expansions are done and ongoing.
• Provides facility of 3G connectivity and voice roaming.
• Robust brand image.
• Government affiliated. • Managing operations in other countries.
• Expanding can cause a compromise to quality.

Opportunity Threats
• Enhancing technologies to 4G.
• Strong brand image helps in expansion. • Considering the legal aspect of its business environment, it has to comply with international standards as well as rules set by the government of UAE. It has to face a different set of laws in the new countries that it expands to.
New competitors entering the market and the existing competitors in the countries Etisalat has expanded to.

Etihad Airways
Etihad airways is a world leading airline company based in UAE. It has a strong local competitor which is Emirates Airlines and other competitors are international airline companies with similar flight routes. The customer section of Etihad is the upper middle class and high class section of society which wants a luxurious travel medium. (Etihad, 2014)
Strengths Weaknesses
• Affiliation with the Abu Dhabi Government.
• The flight frequency is very high.
• Covers 55 countries.
• Strong brand image with sponsorship of many events. • High amount of reliance on international traffic.
• Very high level of competition from other international airline carriers.
Opportunities Threats
• The fleet is recently purchased which assures customers of a safe flight.
• Chance to expand in terms of global destinations.
• It can affiliate with the airports to provide high quality services. • High amount of competition from local airline companies.
• High cost of fuel.

Ebert, R. J., & Griffin, R. W. (2014). Business Essentials. Prentice Hall.
Etihad. (2014). Annual Report. Abu Dhabi: Etihad.
Etisalat. (2010). Annual Report. Dubai: Etisalat.
Goodnight, R. (2011). Laissez Faire Leadership. In Encyclopedia of Leadership (pp. 820-823). SAGE Publications.
White, S. D. (2010, June 18). The Evolution of Marketing. Retrieved from


Posted on

March 7, 2018

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