Analyzing the Business Environment: EasyJet Airlines Report

This report provides a comprehensive analysis of the business environment impacting EasyJet Airlines. It begins with an introduction to the business environment, highlighting both internal and external factors. The report then delves into various aspects, including different types of organizations in the UK and their legal structures, examining how EasyJet fits within these categories. It also explores stakeholder objectives and how EasyJet meets its responsibilities to customers, employees, suppliers, and government organizations. Furthermore, the report analyzes different economic systems (command, free market, and mixed) and their influence on EasyJet, along with the impact of fiscal and monetary policies. Market structures, market forces, and the influence of the business and cultural environment are also examined. Finally, the report investigates the significance of international trade, global factors, and the impact of European Union policies on EasyJet's operations and strategic decisions. The conclusion summarizes the key findings, emphasizing the importance of understanding the business environment for organizational success.

Business Environment

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
1.1 Different types of organization in UK and its legal structure..........................................1
1.2 The extent to which an organization meets the objectives of different stakeholders.......1
1.3 The responsibilities of an organization and strategies employed to meet them...............2
TASK 2............................................................................................................................................3
2.1 Different economic systems.............................................................................................3
2.2 The impact of Fiscal and Monetary policies on the organization....................................4
2.3 Impact of the Competition and other regulatory mechanisms on the organization..........4
TASK 3............................................................................................................................................5
3.1 Different market structures:..............................................................................................5
3.2 The ways in which the market forces influences the working of the organization..........5
3.3 The impact of business and the cultural environment on the Business organization.......6
TASK 4............................................................................................................................................7
4.1 Significance of international trade on the organization....................................................7
4.2 The impact of global factors on the organization.............................................................7
4.3 The impact of Policies of European Union......................................................................8
CONCLUSION................................................................................................................................9
REFERENCES..............................................................................................................................10

INTRODUCTION
The organization operating in the fierce competitive market place is influenced by many
external and internal factors. The external factors include the political, economic, social,
technological, legal and environmental factors. The internal factors include the customers,
employees, management, supply and demand and the business regulations. The sum total of
these factors is known as the Business Environment. The business organization operating in this
environment gets affected significantly in all the aspects (Bitzenis and Nito, 2005). This report
investigates the operations of the organization in relation to the local, national and International
environment. To identify the objectives of the organization and the influence of the stakeholder
and other factors, three different types of organizations is taken into account. Easy Jet, Walmart
Retail and Thomas cook. The selected organization for the research is The Easy Jet airlines. Easy
Jet is the Europe's leading airline operating in 30 countries on over 600 routes headquartered at
London. It is a low cost airline operates domestic and international scheduled services.
TASK 1
1.1 Different types of organization in UK and its legal structure.
Based on the ownership, formation, liability, taxation and structure the organizations are
categorized in the following manner. In this task three organizations are selected from different
industries for the better understanding. Walmart Stores, the multinational retail corporations,
Thomas Cook the leading travel agency of Europe and the Easy jet, the British airline carrier.
1. Sole proprietorship: The organization with the single owner is called as the sole
proprietorship. The owner is the sole decision maker (Welford, 2013). British Airliner is
the example of sole proprietorship.
2. Corporations: Corporations or the public are the organizations whose share are
distributed publicly. With the certificate of formation, corporations are legally formed by
incorporating the articles in the agreement. Walmart is the example of this type of
organization.
3. Partnerships: The organization that has two or more than two number of owners. In the
formation, the partners sign the memorandum of understanding in which the rules, share
of profit, responsibilities and liabilities are laid down (Hajkova and et.al, 2006). One such
example is Thomas cook tour operator. Mission of these organizations is to maximize
profit and consolidate large number of customers with it.
1

4. Voluntary organizations: Organization which function for any good cause funded by
public or government aid are voluntary organization. Cancer research which functions to
bring ways for diagnosis, treatment and prevention of cancer. Its mission is to decrease
the number of deaths due to this disease around the world in significant manner.
1.2 The extent to which an organization meets the objectives of different stakeholders
The organization has the vision to provide there passengers the optimum level of journey
at make them reach the destination on time. The organization intend to provide the journey
experience in the best possible way at the affordable price. There are various stakeholders who
influence the functioning of the organization:
1. Customers: The foundation stone of the working of the organization Easy jet Airlines are
the passengers. They influence the organizational strategies in the very significant
manner. Their demand for the services affects the pricing structure and the policies made
in order to pursue the operations (Iskanius, Page and Anbuudayasankar, 2010). Objective
of customers is to attain maximum satisfaction level by seeking products fulfilling their
needs and requirements.
2. Colleagues: The lifeline of the Airlines are the employees working in the organizations in
all the departments such as the crew members, the service providers at the terminals, the
policy makers, research analysts who perform the market trend analysis to support the
policy makers and the operational management team. Objective of employees is to
increase their returns in the form of better work conditions, economic benefits, career
opportunities and other related.
3. Suppliers: The Airlines operations are fragmented into different department and sections.
Each section in endowed with the variety of rules and responsibilities. Each department
has the number of suppliers who supply the requirements. The efficiency of these
suppliers contribute the profitability in the considerable manner. Objective of suppliers
associated with easy jet airlines is to maximize their values and increasing efficiency and
productivity of organizations.
4. Government organizations: The organization operating in the economy is also
influenced by the rules and regulations laid by the Government and the other legislative
bodies in regard with the areas the organization is working. The Easy jet Airlines is
affected by the laws laid by the organization related to the employment issues,
2

environmental issues, organizational structure, consumer protection and other related
(Chi, Kilduff and Gargeya, 2009). Government organizations seek that business entities
operating in different fields abide all the laws and regulation in reference to their
respective fields.
1.3 The responsibilities of an organization and strategies employed to meet them
The organization Easy jet Airlines realizes the significance of all the stakeholder and
meet its responsibilities in the very effective manner.
Customers: The Airlines has the vision to become the Europe's preferred short haul airline. The
organization has the aim to provide their patrons the comfortable journey at the most affordable
prices and they are continuous working towards it. The group always finds new ways to make
the travel easy and possess the genuine passion for the customers and the work they do.
Employees: The employees working there get the most exciting, progressive and enjoyable work
Environment. The group allow the employees top work together with the open plan and open
culture (Dong, Wu and Hou, 2009). They provide the environment of working together, sharing
experiences, supporting each other with the tinge of fun and enjoyment in it. The future growth
of the Easy Jet Airlines possess the immense growth potential.
Financial institutions: The financial institutions such as the banks, mortgage lenders and the
creditors affects the financial structure and scenario of the Easy Jet Airlines (Craig and
Campbell, 2012).
Government agencies: The organization, Easy Jet Airlines takes their organization responsibility
very seriously and make the sincere efforts to fulfill them. Government at the local, national and
international level has imposed the rules in different areas. Easy Jet abides all the laws such as
the equality act, Non discrimination act, Company act that are related to employment issues.
Further the mentioned company is committed to its responsibility towards the community. It has
raised more than £2.1m for UNICEF and also organizes vaccinating 5.3m children
Environmental groups: The Aviation industry affects the environmental factors on many
grounds such as the composition of carbon emission from the aircraft, the waste emitted and in
other related ways. The organization realizes it accountability towards the environment hence
always works to minimize the harmful impacts on the atmosphere in air and on grounds. For
instance, the aircraft emits 22% less carbon per passenger Km than the other traditional airlines
flying in the same route and the similar aircraft (Chow and et.al, 2012).
3

TASK 2
2.1 Different economic systems
The economic systems are categorized on the basis of the degree of rights over the
decision making in the following ways:
1. Command Economy: The economic system in which The Government has the complete
control over the decision making process in respect to the pricing and outputs. If the
organization Easy Jet Airlines are operating in the command economy, the organization
has the limited rights over the decision making with respect to the fares and tariffs. There
are imminence amounts of regulations and rules imposed on the working. Easy jet
operating in command economy is not empowered to take decisions with respect to
pricing and outputs. These are decided by market forces that is demand and supply of
product and services.
2. Free market Economy: The economics system where the allocation of resources is done
by the market forces demand and supply of the goods and products in the economy. The
organizations operating the free market economy is free from the regulations by the
Government and the legislative bodies. If the organization Easy Jet Airlines shaped into
the free market economy, the pricing of the fares and other services are solely decided bu
the board of directors of the airlines group with no limitations (Beck and Demirguc-Kunt,
2006).
3. Mixed Economy: The economy possess the characteristics of both the types of economy.
The organization working in this economic system has the powers and rights to take
decision with some regulations. For instance, Easy Jet working in the aviation industry
has to comply with the laws laid down in respect to the customer satisfaction, impact on
atmosphere and employment issues. In this type of economy, organizations such as Easy
jet make decisions with respect to their fares and output but with certain limitations.
2.2 The impact of Fiscal and Monetary policies on the organization
The central organization functions with the aim to bring stability and legality in the
economy. For such reason these organizations adopt certain measures which trickles down to
each and every unit operating in the economy (Lambsdorff, 2007). Fundamentally there are two
types of policies which affects the units in the most considerable manner. Fiscal policy and the
monitory policy.
4

 Fiscal Policy: The policy framed by the government to stabilize the conditions in the
economy is called as the fiscal policy. The government bodies uses the tools such as the
taxation policy and the government expenditures. At the time of inflation the government
increases the taxes on the products and services in order to stabilize the economic
condition. Further, with increasing the government expenditure in the social overheads,
and other areas the government eases the business units. Apart from this government
initiative to attract the investment and FDI in the country also affects the economy in the
positive manner and the organization Easy Jet Airlines as well (Ayyagari, Beck and
Demirguc-Kunt, 2007).
 Monetary policy: The steps taken by the central bank to control the money supply in the
economy is called as the Monetary policy. The central bank adopt certain measures such
as the changes in the interest rates, bank rates to control the circulation of money affects
the profitability and financial decisions. The bank also sell and purchase the government
securities for the purposes. When the interest rates and bank rates increases the Airlines
increases its fares in order to check its profitability and vice versa.
2.3 Impact of the Competition and other regulatory mechanisms on the organization.
In order to regulate the mechanism in the trade activities various organizations operates
in this area. The competition commission functions to monitor the working of the organization
to check if it is complying with the trade laws and its authenticity. They interfere the
organizational working and the authenticity of the mergers and to check if they are operating
with respect to the laws and regulations (Kovacic, 2004). The government and private bodies
working in this area is the OFA that is the office of fair trading, CMA that is the competition
mechanism authority that investigate the areas such as the consumer protection, the trade
proceedings and other related. They also work to prohibit the non competitive practices. Under a
specific point of the competition policy to regulate the practices of trade in market, Easy jet
undergo many investigations in different departments of its working. Further, there are some
organization such as ofgem and ofwat that regulate the use of resources such as electricity, water
and natural gas.
5

TASK 3
3.1 Different market structures:
Based on the ways of allocation of resources the economic system is categorized in the
following manner: Perfect competition: The economic system with the large number of sellers and buyers is
referred as the perfect competition. Easy Jet working the economics system has no
control over the pricing and output decisions (Czinkota and et.al, 2009). Monopoly: The economic system with only one seller and the large number of buyers is
the Monopoly. The seller has the full command over the pricing structure. The
organization Easy jet Airlines working in the economic system decides the fares and
ticket charges without any regulation. Monopolistic: In this economic system there are few numbers of sellers and large number
of buyers. Organization shaped into the monopolistic competition faces the fierce
competitions. The organizations with the competitive prices aims to establish the
prominent position in the market place by providing the distinguished services. Easy jet
operating in this system provide distinguished services and competitive prices.
 Oligopoly: The very rigorous competitive economic system in which the pricing and the
output decisions of the organization are dependent on each others decision (Czinkota and
et.al, 2009). If aviation industry falls in this category, easy jet and its rivals decides fares
and tariff interdependently. Such as if fares falls in one organization it directly influence
the price structure of Easy jet.
3.2 The ways in which the market forces influences the working of the organization
The market forces such as the demand and supply of the organization's offerings, the
elasticity of the demand, the customer's perception and the actions has the significant impact on
the effective strategies made by the policy makers and the marketing criteria. Demand and supply: The fundamental factor that affects the pricing of the organization
Easy Jet Airlines is the demand and supply of the offerings of the company. At the time
of financial boom, the demand increases. To increase the profitability, the Airlines
increases its fare charges. Further, at the time of festivals and the international events the
business flow of the company increases (Wiklund and Shepherd, 2005).
6

 Customer's perception: It significantly affects the working and functioning of the
organization. The Airlines decide its product line as per the customer's demand and
preferences. The company has the “Customer Survey” team who seeks the choices of the
travelers and their need for improvements in the services Easy Jet provides and made
changes accordingly. For instance, the comfortable seats are provided for the Long- haul
journey in the aircraft. The facility of Airport lounges and hotels is provided for waiting
(Teece, 2010).
 Acquisitions and mergers: In order to increase the customer service standards the
organization come into the agreement with the airports, terminals and the suppliers. This
enhances the efficiency of the organization with affecting the profitability positively.
3.3 The impact of business and the cultural environment on the Business organization.
The working and the functioning of the organization is impacted by the business and
cultural environment in the following manner:
Core Markets: The aviation industry is fragmented into the number of sections in the very
complex structure. The ability of handle and manage the core of all the departments affects the
smoothness and efficiency of The organization. It includes the crew members, the workers at the
airport terminals, the operational management team and the technical department (Amoako-
Gyampah and Salam, 2004).
Business Culture: The Easy Jet is working in UK where there are many business hubs such as
London, where the major international trade agreements are signed. Considering the fact, the
organization makes the respective arrangements for them such as the arrangements for long haul
trips and tours. The operational management such as at the airports and terminal are made very
speedy and accurate. Culture existing in different countries enables the organization such as easy
jet in taking decisions with respect to providing services and fares at that place.
Employees skills: The caliber and efficiency of the employees impact the profitability of the
organization in the very large manner. The aviation industry in solely customer-centric. The
optimum level of service is expected to hold the customer base and their trust on the quality.
Workforce of Easy Jet is diverse in nature due to its establishment in different countries.
Diversity exist with respect to efficiency, productivity, backgrounds and other which makes the
selected organization Easy Jet to bring in uniformity in work by training and development
programs.
7

Technological innovation: The technological innovation are the key attributes in the functioning
of Easy Jet Airlines. To maintain the sound coordination between the terminals, to handle the
flights schedules, to manage the crew members and their shifts and for other purposes.
TASK 4
4.1 Significance of international trade on the organization
In the fiercely competitive era every organization intend to establish its prominent
position in the market. For that purpose the organization aspires to expand its market presence
beyond the borders as well (Kotler, Bowen and Makens, 2006.). The following are the impacts of
international trade on the organization:
Comparative advantage: By expanding the markets into the other countries the organization
gains the comparative advantage over the rivals. For instance the Airlines offer the services in
other country with the low prices which increases its customer base and leads to the increment in
profitability. Further, by increasing the linkages with the suppliers such as of the raw materials
and other services the Airlines increases the efficiency of the customer services. Enhancing
networking and relationships with other organizations in the world enables it to import relatively
low cost goods and export services in Easy jet has comparative advantages such as agreements
signed accrue it lucrative benefits to it. For instance easy jet and SR Technics ratified agreement
for the maintenance of aircraft and the other commercial agreement was signed between easy jet
and transaero airlines to distribute seats between their scheduled routes.
Balance of trade and payment: With the increase in trade agreements and export of the products
and service offering the Balance of trade and payments of the country improves (Kotler, Bowen
and Makens, 2006.). At the same time outflow of currency in form of investments at other
countries impact the BOP of country negatively by increasing deficits in capital accounts.
Market share and the sales: The expansion in the international platform increases the share of
organization in the market place and leads to the increment in sales.
Competitiveness: With launching of products in different countries the degree of failure
decreases. The service offering in the region with the limited competition increases the customer
base and the profitability of the organization.
4.2 The impact of global factors on the organization.
Operating the business on international platform the organization has to under the
influence of various global factors. These factors affect the operational functioning of the
8

organization in the different aspects and ways. To analyses the impact of global factors precisely
the PESTLE model is used (Honig, 2004).
Political factors: The political environment of the countries affect the degree of smoothness of
the functioning of the organization. For instance the favorable policies of the Government with
respect to the Aviation industries attracts the company to work there whereas the politically
unrest country deviates the organization working from there.
Economic factors: The unrest rates, exchange rates, stock exchange fl;fluctuation affects the
financial condition of the Easy Jet Airlines.
Social factors: The social factors include the customers preferences and their perceptions for the
services provided. For that the Airlines comes up[ with the variety of offerings such as the short
haul flights, the airport lounges, airport terminal services, the financial services and other related.
Technological factors: The technological advancement favors the intensity of flights per day and
the services offered (Tayur, Ganeshan and Magazine, 2012).
Legal factors:The Airlines has to abide all the laws and regulations laid by the legislative bodies
and the government of the countries the organization is operating.
Environmental factors: The favorable environmental conditions increases the order of flights
and make the journey risk free.
4.3 The impact of Policies of European Union.
The countries who are the members of the European Union has to follow the norms laid
down in the areas the organization is working. The international organization EU is functioning
to uplift the conditions of the member countries in the economic, social, technological and
environmental aspects. The Airlines have to comply with the following policies in the field of
labor and environmental issues (Bradfield and et.al, 2005).
Labor : The organization complies the laws related to the employees working in the organization
such as the equality of the crew members from different backgrounds, the non discrimination
policies, taking care of the safety of the working staff on air and at the ground duties, the health
issues associated with the job assigned to them, their salaries and PF related issues and many
other areas related to employees.
Consumer protection: EU has laid the policy that the Airlines must keep the fares and charges of
the tickets to comply with the services provided and its standard of offerings. EU keeps the
check on working by auditing the papers and its frequent investigation (Our Environment, 2015).
9

Environmental issues: The Airlines comply the laws of EU related to the environmental
protection such as the minimum emission of the carbon, green house gases, nitrogen and other
harmful gases in the atmosphere. Further, the Airlines are required to minimize the waste
produces and recycle the raw materials.
CONCLUSION
The report throws light on the influence of the external and internal factors on the
functioning of the Airlines. There are many factors that affect the operation of the organization.
External factors include the macroeconomic factors, micro-economic factors, political
environment, social environment and the technological advancement. Internal factors refers to
the customers, organizational structure and its efficiency. The selected organization Easy Jet
Airlines comply with the laws and regulations laid by the government and international
organization in related areas.
10

REFERENCES
Books and Journals
Amoako-Gyampah, K. and Salam, A. F., 2004. An extension of the technology acceptance
model in an ERP implementation environment. Information & Management. 41(6).
pp.731-745.
Ayyagari, M., Beck, T. and Demirguc-Kunt, A., 2007. Small and medium enterprises across the
globe. Small Business Economics. 29(4). pp.415-434.
Beck, T. and Demirguc-Kunt, A., 2006. Small and medium-size enterprises: Access to finance as
a growth constraint. Journal of Banking & Finance. 30(11). pp.2931-2943.
Bitzenis, A. and Nito, E., 2005. Obstacles to entrepreneurship in a transition business
environment: the case of Albania. Journal of Small Business and Enterprise
Development. 12(4). pp.564-578.
Blocher, E., Chen, K. H. and Lin, T. W., 2008. Cost management: A strategic emphasis.
McGraw-Hill/Irwin.
Bradfield, R. and et.al., 2005. The origins and evolution of scenario techniques in long range
business planning. Futures. 37(8). pp.795-812.
Chi, T., Kilduff, P. P. and Gargeya, V. B., 2009. Alignment between business environment
characteristics, competitive priorities, supply chain structures, and firm business
performance. International Journal of productivity and performance management. 58(7).
pp.645-669.
Chow, A. T. and et.al., 2012. U.S. Patent No. 8,155,155. Washington, DC: U.S. Patent and
Trademark Office.
Craig, T. and Campbell, D., 2012. Organisations and the business environment. Routledge.
Czinkota, M. R. and et.al., 2009. International business (Vol. 4). Dryden Press.
Czinkota, M. R. and et.al., 2009. International business (Vol. 4). Dryden Press.
Dong, M., Wu, C. and Hou, F., 2009. Shortest path based simulated annealing algorithm for
dynamic facility layout problem under dynamic business environment. Expert Systems
with Applications. 36(8). pp.11221-11232.
Hajkova, D. and et.al., 2006. Taxation, business environment and FDI location in OECD
countries.
Honig, B., 2004. Entrepreneurship education: Toward a model of contingency-based business
planning. Academy of Management Learning & Education.3(3). pp.258-273.
11

Iskanius, P., Page, T. and Anbuudayasankar, S. P., 2010. The traditional industry sector in the
changing business environment-a case study of the Finnish steel product
industry. International Journal of Electronic Customer Relationship Management. 4(4).
pp.395-414.
Kotler, P., Bowen, J. T. and Makens, J. C., 2006. Marketing for hospitality and tourism (Vol.
893). Upper Saddle River, NJ: Prentice hall.
Kovacic, A., 2004. Business renovation: business rules (still) the missing link.Business process
management journal. 10(2). pp.158-170.
Lambsdorff, J. G., 2007. The institutional economics of corruption and reform: theory, evidence
and policy. Cambridge University Press.
Tayur, S., Ganeshan, R. and Magazine, M., 2012. Quantitative models for supply chain
management (Vol. 17). Springer Science & Business Media.
Teece, D. J., 2010. Business models, business strategy and innovation. Long range
planning. 43(2). pp.172-194.
Welford, R., 2013. Hijacking environmentalism: Corporate responses to sustainable
development. Routledge.
Wiklund, J. and Shepherd, D., 2005. Entrepreneurial orientation and small business performance:
a configurational approach. Journal of business venturing, 20(1). pp.71-91.
Online
Our Environment. 2015. [Online]. Avaliable through:<http://corporate.easyjet.com/corporate-
responsibility/our-environment.aspx?sc_lang=en>. [Accessed on 5th December, 2015]
12