Strategic Management Report: EasyJet HQ Relocation in EU Post-Brexit

This report addresses the strategic challenges faced by EasyJet following the Brexit vote, specifically focusing on the relocation of its headquarters to an EU member state. The analysis begins with a critical examination of the external environment and industry competition in the chosen EU country, considering both the existing competitive landscape and the implications of EasyJet's relocation. The report then utilizes relevant frameworks to evaluate EasyJet's resources and competencies, emphasizing how these can be leveraged to gain a competitive advantage in the new location. Furthermore, the report assesses the suitability of EasyJet's current vision and mission statements in the context of the strategic change, proposing refinements if necessary. Finally, a comprehensive SWOT analysis is constructed based on the preceding analyses, leading to recommendations for adjustments to EasyJet's business-level strategy, with justifications provided for any proposed changes or for maintaining the current strategy. The report also includes an Employability Skills Self-Assessment Survey and adheres to Harvard referencing guidelines.

Strategic Management
Background
The global airline industry continues to grow rapidly, but consistent and
robust profitability is elusive. Measured by revenue, the industry has
doubled over the past decade, from £284 billion in 2004 to an
estimated £575 billion in 2014, according to the International Air
Transport Association (IATA).
Much of that growth has been driven by low-cost carriers (LCCs),
which now control some 25 percent of the worldwide market and which
have been expanding rapidly in emerging markets; growth also came
from continued gains by carriers in developed markets, the IATA
reported. Yet profit margins are razor thin, less than 3 percent overall.
LCCs such as Ryanair and EasyJet capitalised on the creation of a
single EU aviation market in the 1990s that allows airlines to operate
services on any route within the bloc.
However, Britain’s exit from the EU has cast doubt over whether UKbased
carriers will remain part of this arrangement, and throws up
complications for overseas airlines that fly into British airports.
Underlining investor concerns, stocks in the sector took a hammering
after the referendum result.
EU chiefs have warned airlines including EasyJet and Ryanair that
they will need to relocate their headquarters or sell off shares to
European nationals if they want to continue flying routes within
continental Europe after Brexit.
Executives at major carriers have been reminded during recent private
meetings with officials that to continue to operate on routes across the
continent – for instance, from Milan to Paris – they must have a

significant base on EU territory and that a majority of their capital
shares must be EU-owned.
Assignment Questions
Scenario
In a statement to the London Stock Exchange in the aftermath of the
Brexit vote, EasyJet said the company had been preparing for this
eventuality in the lead up to the referendum vote and has been working
on a number of options that will allow it to continue flying in all of its
markets. As such the company has opened talks with EU member
states' aviation regulators about relocating its headquarters from the
UK. This prospect of moving its legal HQ reinforces the fact that
leaving the EU will have an impact on its corporate structure.
EasyJet employs roughly 1,000 people at its Luton base, in functions
such as finance, IT and marketing - separate to the staffs who work on
its operations at the Bedfordshire airport.
The airline is now expected to review all 27 of the remaining member
states before holding further discussions with a number of them about
the possible terms of an Air Operator Certificates (AOC) with a view to
making a decision later this year.
You have been hired by EasyJet as a consultant to develop a business
level strategic plan for relocating its headquarters from the UK into an
EU member state (Choose a country and city). You are expected to
write a report to summarise your research findings on the given tasks
below:
Tasks (100%)

1. Critically analyse the external environment and industry
competition in the new EU member state you are recommending.
This should include competition within the new EU member state
as well as competition resulting from relocating to the new EU
member state. (35 marks)
2. Using relevant frameworks, critically discuss EasyJet’s resources
and competencies as well as how they can be utilised in gaining
competitive advantage upon relocation to the new EU member
state. (20 marks)
3. Critically evaluate whether EasyJet can continue with its current
vision and mission statements in the new EU member state.
Reframe the vision statement and the mission statement of
EasyJet for the new strategic change if required. (10 marks)
4. In light of the analysis conducted in Task 1, 2 and 3, construct a
SWOT analysis of EasyJet and recommend changes (providing
justifications) to its current business-level strategy
changes are not required, provide justifications for retaining the
current strategy. (20 marks)
5. As a part of the assessment, all students should answer the
Employability Skills Self-Assessment Survey in Week 1 and 10.
(5 marks)
6. Referencing (Harvard) (10 marks)
End of Assignment Brief