EasyJet's Business Operations: Macro and Micro Environmental Impacts

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The Impact of Macro and Micro Environment on EasyJet
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Table of Contents
Introduction......................................................................................................................................2
LO1 Explain the different types, size and scope of organisations...................................................2
LO2 Demonstrate the interrelationship of the various functions within an organisation and
how they link to organisational structure.........................................................................................2
LO3 Use contemporary examples to demonstrate both the positive and negative influence/impact
the macro environment has on business operations.........................................................................2
P4 Identify the positive and negative impacts the macro environment has upon business
operations, supported by specific examples................................................................................2
LO4. Determine the internal strengths and weaknesses of specific businesses and explain their
interrelationship with external macro factors..................................................................................7
P5 Conduct internal and external analysis of specific organizations in order to identify
strengths and weaknesses............................................................................................................7
P6 Explain how strengths and weaknesses interrelate with external macro factors....................9
Conclusion.......................................................................................................................................9
References......................................................................................................................................10
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Introduction
Easy Jet is an established airline organization having headquarters in the United Kingdom. It
operates in different regions of the world including Africa. It is evident from the study that the
organization has been flourished with revenue from both the micro and macro environment.
Additionally, the macro environmental factors have stabilized the company in the competitive
market for the long run. To gain full insight into the competitive advantages of the organization,
PESTLE Analysis is done for evaluating the macro environments of the company. Similarly,
SWOY Analysis is done so that proper information can be obtained regarding the
microenvironment or the internal and external environment of Easy Jet.
LO1 Explain the different types, size and scope of organisations
Refer to PPT
LO2 Demonstrate the interrelationship of the various functions within an organisation and
how they link to organisational structure
Refer to PPT
LO3 Use contemporary examples to demonstrate both the positive and negative
influence/impact the macro environment has on business operations
P4 Identify the positive and negative impacts the macro environment has upon business
operations, supported by specific examples.
In order to analyze the negative and positive impact of macro-environment on the business
regulations of Easy Jet, PESTLE analysis is done. This will help to provide a clear view of the
current market status of the country, which will help the organization to perform efficiently. The
figure below describes the key indicators of Easy Jet that help the organization to excel in the
competitive market.
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Figure 1: Performance indicator of Easy Jet
(Source- Ft.com, 2019)
PESTLE Analysis
Factors Analysis
Political The United Kingdom has upgraded its political
strength by introducing EU regulations into its
political matters. New members are included in
the legislative assembly. The laws are updated
so that people are provided with maximum
benefits from the political sphere. In this
scenario, the airline company Easy Jet is
getting facilities from the political system of
the UK to flourish its business in the market
(Zhang, 2016). The government is stable and is
active to deal with any conflict situation.
However, the company feared to face turmoil
in the Brexit era as the company was uncertain
about the political stability during that period.
Economic Euro and Sterling’s strength is making the
country’s economy stronger and thus, Easy Jet
is making rapid investment in to expand its
business further. Several challenges were faced
by the country in 2017 and prices of almost
every commodity rose significantly. Moreover,
the daily wages of the people didn’t rise and
the minimum wages were estimated to be
around 6.98 Euro per hour (Cattaneo et al.,
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2016). Thus, employees of Easy Jet faced
challenges related to remuneration and many
people left the job and opted for international
labor migration.
Social The social aspects poses a negative impact on
the organization and it is seen that the ever
increasing cost for aviation education is
restricting students to pursue this course. This
has affected Easy Jet company, as they are not
able to gain efficient and skilled employees for
their organization (Karwowski, 2016).
Moreover, increasing dependency ratio and
some social conflicts are posing significant
challenges for the employees of this airline
organization.
Technological There is an increased competition in the UK
market due to rapid technological
advancements. This has benefitted the
employees of Easy Jet to stay in the
organization as they are experiencing the latest
technologies investment made in the airlines
production. Moreover, the workforce is
accepting the offer to work in an organization
that provides high-tech opportunities to the
employees. Additionally, the passengers are
benefitted from this innovation and they prefer
to travel at any place with the airline company.
Legal The legal regulations of the country are strong
and always act in favor of the organization.
The Employment Act 1996 protects the right of
employees. This Act is adopted by Easy Jet to
provide equal rights to employees and thus,
employee retention is possible. Moreover, the
employees of the organization are provided
with numerous benefits like maternity leave,
holiday packages, sick leaves, insurance, etc.
These are protected by the Equality Act of
2010.
Environmental Economic growth is witnessed to be affected
by the environmental regulations. Therefore,
the newspaper organizations, charities, local
councils, NGOs, etc. are trying hard to create
awareness among the public regarding the
adversities of environmental degradation. Easy
Jet uses numerous clean and eco-friendly
approaches so that environmental degradation
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is minimized. Thus, Easy Jet is popular among
the citizen because of it uses environment
friendly approaches in this operations (Sun and
Wandelt, 2018).
Table 1: PESTLE Analysis of the United Kingdom
(Source: created by the learner)
The macro-environment has a significant impact on the business operations of Easy Jet. The
social variable including the changing lifestyle and environment awareness are influencing the
accurate operation of the organization. The demand for short trips has increased enormously due
to the rise in work pressure in human life. This has caused the airline company to launch
strategic policies like low-flight prices and discount offers in different parts of Europe. Maertens
(2018) suggested that examination of Easy Jet’s website revealed that the company is expanding
its offers to Africa. Greenhouse gas emission is lowered by Easy Jet, as they are conscious about
the environmental adversities affecting the environment. The organization is using advanced
technology airplanes that consume less fuel and emit fewer amounts of carbon dioxide and
greenhouse gases. easyBus express developed by this airline company operates between Luton
airport and central London by motivating citizen to use public transports for their daily activities
(Rotondo et al., 2019). Technological advancements in the organization are thoroughly enjoyed
by the customers as they made online transactions in an easy manner. The organization
advertises Internet facilities as cost ineffective and a secured platform that can be easily used by
the customers to perform online transaction at any time. Cattaneo et al. (2018) opined that in
order to be competitive in the market, Easy Jet must watch their price and expenses. Easy Jet
although faced several political barriers has always maintained its stable position in the market.
Deregulation of the airline industry have led to closure of numerous airlines, however, it could
not affected the business operations of the Easy Jet.
Figure 2: Easy Jet operating aircrafts across numerous regions
(Source- Blueswandaily.com, 2019)
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LO4. Determine the internal strengths and weaknesses of specific businesses and explain
their interrelationship with external macro factors
P5 Conduct internal and external analysis of specific organizations in order to identify
strengths and weaknesses
Figure 3: SWOT of EasyJet
(Source: CAPA - Centre for Aviation, 2019)
SWOT Analysis
Strengths Weaknesses
- Pricing strategies
- Unit Cost
- Market Expansion
- Fleet
- Brand Reputation
- Financial Performance
- Role of Shareholders
- Base Expenditure
- Legacy Carriers
- Earnings during festive season
Opportunities Threats
- Growth of the market
- Cost curtailing
- Business Passengers
- Seating arrangement
- Rise in price
- Unrest of the labours
- Ascending the level of complexity
- Competitor’s growth capacity
- Extracurricular activities
- Price of fuel
- Economic stagnancy
- Air travel taxes
Table 2: SWOT Analysis
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(Source: Created by the learner)
Strengths: EasyJet has been built with the help of certain strengths that has helped the
organization to gain profitable results in the global market. EasyJet has the ability which portrays
a significant construction in the field of pricing strategies. EsasyJet have the access that provides
their passengers for a short trip lower than 50% (Ltd, 2019). It provides lower rates of ticket that
ranges from 20% to 40% to gain advantages than competitors. The organization comes up with
the unit cost that varies from the range of 88.7% based on the cost beneficial terms. It comes up
with an availability of point-to-point strategy those pensions in terms of employee retention. The
organization deals with the one of the 49th rank among the top 100 airlines in Europe. EasyJet has
initially 46 numbers of airports in the global market. It deals with high level of brand positing in
the market that gains loyal consumers via the means of loyalty car scheme (Dias, 2016). Airbus
provides beneficial outcomes to the organization in terms of better performance.
Weaknesses: EasyJet’s sedating cost is bit higher than average, which significantly is a weakness
in the organization. The organization’s ranges from higher than 50% that becomes a weakness to
it. On the other hand, EasyJet’s brand vale is popular in the global market but less than LLC
competitors. Thus, the brand plays the role of demerit that affects the legacy carriers of the
organization. The organization comes up with a probability that creates issues during the time of
re-ticketing, which is flexible only for the premium consumers. The organization has been
subjected to “frills” that creates the issues related to the products. It lacks the proper presentation
that tends to gain profitable results during the seasonal income (Madar, 2018). The organization
relies upon the month of April to September those losses the offers during winter from October
to March.
Opportunities: In termers of opportunities, EasyJet has an enlargement in the market. EasyJet is
an active member that tries to participate in every event, which will help the organization to gain
further growth in the global market. The organization gains better opportunities with an
alignment of its partnership. The organization has an access that varies from cost curtailing merit
based on the verification of cost subsidiaries. EasyJet comes up with an advantage that has the
opportunity to step forward in the global market. The organization has gained the title marked
by the loyal consumers that appreciate the pricing strategy as per the requirement. The
organization gains probability that deals with loyal passengers which has helped the organization
to gain profitable outcome from the global market. The organization comes up with an objective
to ascend the amount of passengers from 20% to 24% each year (Acar and Karabulak, 2015).
EasyJet tries to follow the seating arrangement as per the consumer’s requirement. It shed lights
on the collaboration of each staff that help the organization to maintain its decorum served to the
consumers with good performances.
Threats: Due to the presence of huge rise in pricing of the tickets, the organization gains
vulnerability, which suggests that it need to streamline its cost. On the other hand, presence of
labour unrest, it becomes difficult to maintain good relationships with the labour that increases
the level of threats in the internal labour of the organization (Marques, 2017). The seating
arrangements that are made of frills have ascended the level of complexity as compared to
competitors. Participation in the external affairs leads to major accidents which is vulnerable due
to geopolitical matters. Ryanair is one of the strong rivals of EasyJet.
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P6 Explain how strengths and weaknesses interrelate with external macro factors
Figure 3: EasyJet’s competition
(Source: CAPA - Centre for Aviation, 2019)
It has been observed that, during the time of de-regulation of European Airlines there was many
other airlines organization which was forced to be closed in the3 global economy except EasyJet.
An involvement of external macro environment has helped the organization to gain profitable
results from the global market. Due to the parsec of political stability in Europe, EasyJet has
gained market expansion (Roque, 2016). Socially, it provides benefits with seasonal offers and
discounts in terms of increasing consumers and even provides pensions to retain staffs.
Economic factor has helped the organization to gain strength via economic stability. Technical
factor too has helped the organization to avail with advanced use of technologies that creates
opportunities to gain beneficial outcome. Thus, it can be stated that collaboration of external
macro factors has helped the organization to gain profit and expansion in market. Therefore, the
organization has gained 49th rank among the top airlines.
Conclusion
From the above stated discussion, it can be concluded that the assignment has put emphasis on
the role and involvement of external macro and internal micro environment, which has helped to
the organization, EasyJet to gain sustainability in the global market. The assignment ahs used the
model of PESTEL Analysis and SWOT Analysis in terms of presenting the effect of the
organization. Through the help of PESTEL analysis, it has been perceived that EasyJet ahs gain
beneficial results backed by various factors. On the other hand, role of external macro
environment has helped to reflect strength and weaknesses of EasyJet.
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References
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cost carriers in Turkish Airline market. Procedia-Social and Behavioral Sciences, 207, pp.642-
651.
Blueswandaily.com. (2019). easyJet looks to larger jets as half-year losses rise – Blue Swan
Daily. [online] Available at: https://blueswandaily.com/easyjet-looks-to-larger-jets-as-half-year-
losses-rise/ [Accessed 7 Jun. 2019].
CAPA - Centre for Aviation. (2019). easyJet SWOT analysis - Is Sir Stelios strength, weakness,
opportunity and threat all in one?. [online] Available at:
https://centreforaviation.com/analysis/reports/easyjet-swot-analysis---is-stelios-strength-
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Cattaneo, M., Malighetti, P., Morlotti, C. and Redondi, R., 2016. Quantity price discrimination in
the air transport industry: The easyJet case. Journal of Air Transport Management, 54, pp.1-8.
Cattaneo, M., Malighetti, P., Redondi, R. and Salanti, A., 2018. Changes in frequencies and price
variations on point-to-point routes: The case of easyJet. Transportation Research Part A: Policy
and Practice, 112, pp.60-70.
Dias, A.S.L.M., 2016. Pricing Management no transporte aéreo: estudo de caso TAP Portugal vs.
Easyjet (Doctoral dissertation).
Ft.com. (2019). Stocks to watch: EasyJet, WPP, Circassia, Royal Mail, Publicis | Financial
Times. [online] Available at: https://www.ft.com/content/7921ce88-545b-11e9-91f9-
b6515a54c5b1 [Accessed 7 Jun. 2019].
Karwowski, M., 2016. The risk in using financial reports in the study of airline business
models. Journal of Air Transport Management, 55, pp.185-192.
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[online] Businessteacher.org.uk. Available at: https://businessteacher.org.uk/swot/easyjet.php
[Accessed 7 Jun. 2019].
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Sun, X. and Wandelt, S., 2018. Complementary strengths of airlines under network
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Zhang, Y., 2016, May. Financial Analysis Report of Easyjet Airline Co., Ltd vs. US Airways
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Atlantis Press.
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