International business in context Essay Example | Topics and Well Written Essays - 1500 words

International business in context - Essay Example One of the recent such examples is that of the Eyjafjallajokull volcano which erupted in Iceland on 14th April 2010, leading to a huge loss of lives and property and a heavy strain on the economic forces of the nation. Due to the volcanic ash cloud, the air travel came to a complete halt leading to several passengers being stranded on airports, affecting several businesses in the process. The manner in which the industries affected by it reacted such as the hospitality industry, the airline sector, as well as various other tertiary sectors such as internet cafes etc reacted to such an emergency is discussed in the paper. The accounts of the tragedy as narrated by Dr. Nigel, of the Oxford Brookes University, is used as a part of this study, to discuss, analyze and understand the impact and consequences of natural disasters on the external factors of organizations; their competitive strategies; the types of organizations affected and the manner in which they reacted; and the element of ethics with regard to the whole scenario, is discussed in the following sections. Impact on the external environment: When the volcano erupted, several industries were severely affected of which the airline industry and the hospitality industry were the hardest hit. ... Consequently, most of the economic activity moved from one sector to another - such as the road and rail transport industries recorded higher bookings while air travel suffered. Furthermore, several other sectors such as travel and tourism, lodgings and boarding etc suffered huge losses, as travellers were unable to reach their destinations. The hotel and hospitality industry, also, benefitted largely, on account of such a calamity, and raised their prices owing to the huge demand for accommodations. There was a significant level of competition amongst various sectors, such as within the hospitality industry. Various hotels had increased their prices while several others offered accommodations at more or less the same prices. Similarly a fierce competition was observed within the airlines and road travel sector. Each of these sectors within different industries were trying to benefit from the losses or setbacks suffered by the other for a greater share in profit. Several passengers w ere unable to leave the island, while several others were unable to arrive. Thus, the hospitality industry was likely to suffer huge losses, as a result of mass cancellations. The industry thus tried to set off its losses by increasing its tariffs and capitalize on the current situation, rather than facing huge losses. Competitive environment: Marketers usually face two types of competition, namely: direct and indirect. The direct competition is faced with respect to similar goods and services such as competition amongst two hotels or two airline companies. The second type of competition, i.e. indirect competition occurs when a good or service can be easily substituted or replaced by the consumer, but has more or less the similar values with respect