EasyJet‘s principal activity is to offer international air transportation services on a low cost basis. The company is a subsidiary of easyGroup Holdings Ltd, which owns the “easy“ brand and licenses it to the airline and to other companies. The subsidiaries owned by easyGroup IP Ltd include: easyCar, easyHotel, easyCruise, easyMobile and others. EasyJet plc acquised Go Airlines Ltd. on 16 May, 2002 and GB Airways Ltd. on 25 October, 2007 to continue its expansion throughout Europe. (easyJet.co.uk, 2009)
The airline focuses on low cost, financial strengths and on high efficiency. EasyJet plc is present in 27 European and North African countries with 380 different routes, operates on 100 airports all over Europe and carried 51.9 million passengers in 2008. EasyJet plc made a profit of £ 2,3 million in the financial year of 2007/08 and is listed at the London Stock Exchange. (easyJet.co.uk, 2009)
Table of Contents
1. Company profile
2. EasyJet‘s legal form and its impact on the interaction with stakeholders
2.1 Legal form
2.1.1 Advantages and disadvantages of a plc
2.2 The shareholders
2.3 The memorandum and articles of association
2.4 Corporate personality
2.5 Corporate governance
3. General analysis
3.1 Profitability and efficiency
3.2 SWOT - analysis
3.3 Proposed strategy
4.1. Budgeting
4.2. The balanced scorecard
4.2.1 Application of the balanced scorecard
4.3 Organisational structures
Objectives & Core Topics
The objective of this assignment is to conduct a detailed business deconstruction of easyJet plc, analyzing its legal structure, financial performance, and strategic direction within the low-cost airline industry to determine its operational resilience and future market viability.
- Legal and corporate framework of easyJet plc
- Financial analysis of profitability, efficiency, and leverage
- Strategic assessment using SWOT and Ansoff matrix models
- Implementation of strategic management tools like budgeting and the Balanced Scorecard
Excerpt from the Book
2.4 Corporate personality
EasyJet is “a corporate body, an artificial person recognised by the law, with an identity separate from the members who compose it.“ (Ellison & Harrison, p. 158, 1999) The concept of corporate personality means that due to the status of being a legal entity and an artificial person, the organisation has some of the powers and responsibilities which a natural person has. This means that easyJet can sign contracts, buy, own and transfer property, conduct its business, sue and also be sued (Bové & Thrill, p. 95, 2005)
This concept of company law mainly emphasizes on the concept of limited liability and prevents the members of an organisation “from escaping liability by hiding behind the company.“ (Ellison & Harrison, p. 161, 1999)
Summary of Chapters
1. Company profile: This chapter introduces easyJet as a low-cost airline subsidiary of easyGroup, outlining its business model, recent acquisitions, and operational scale.
2. EasyJet‘s legal form and its impact on the interaction with stakeholders: This section details the implications of operating as a public limited company (plc), covering shareholder rights, constitutional documents, and corporate governance.
3. General analysis: An evaluation of financial health, identifying the impact of rising fuel costs on profitability and margins during the 2008 fiscal year.
3.1 Profitability and efficiency: An in-depth look at return on capital and leverage ratios, examining how economic downturns affect short-haul versus long-haul bookings.
3.2 SWOT - analysis: A strategic review of internal strengths and weaknesses alongside external opportunities and threats within the competitive European aviation market.
3.3 Proposed strategy: Utilizing the Ansoff matrix, this chapter explores strategies for market penetration and diversification to sustain growth.
4.1. Budgeting: Explains the necessity of financial planning and budgetary control to maintain solvency and growth resources.
4.2. The balanced scorecard: Introduces the framework for measuring performance across financial, customer, internal process, and learning perspectives.
4.2.1 Application of the balanced scorecard: Applies the scorecard framework to easyJet’s specific operational context to evaluate strategy execution.
4.3 Organisational structures: Discusses the transition from mechanistic to organic structures to better navigate unpredictable market environments.
Keywords
EasyJet, Low-cost carrier, Corporate Governance, PLC, Financial Analysis, SWOT, Ansoff Matrix, Strategy Implementation, Budgeting, Balanced Scorecard, Stakeholders, Aviation Industry, Market Penetration, Profitability, Organizational Structure.
Frequently Asked Questions
What is the primary focus of this business report?
The report provides a comprehensive deconstruction of easyJet plc, analyzing its legal structure, financial status, and strategic management approaches to assess how it maintains its competitive edge in the low-cost airline market.
What are the core themes explored in this document?
The core themes include legal liability and corporate personality, financial performance analysis, strategic planning using business models like SWOT and Ansoff, and the practical implementation of management systems such as the Balanced Scorecard.
What is the main objective of the analysis?
The objective is to understand how easyJet handles complex operational challenges, such as rising fuel costs and economic downturns, while maintaining its identity as a low-cost service provider.
Which scientific methods are applied in the report?
The author employs financial ratio analysis, SWOT analysis, the Ansoff Product-Market Matrix, and the Balanced Scorecard framework to evaluate the company's performance and strategic options.
What does the main body of the work cover?
The main body covers the legal framework of the organization, a detailed financial breakdown comparing 2007 and 2008 figures, strategic growth proposals, and specific implementation tools like budgeting and structural design.
How would you characterize this work using key terms?
This work is best characterized by terms such as strategic management, financial accounting, corporate governance, organizational structure, and low-cost business modeling.
How did rising fuel costs impact easyJet in 2008?
According to the financial analysis, rising fuel prices led to a significant increase in costs per seat, contributing to a 47.09% decline in operating profits and a major reduction in the profit margin compared to 2007.
Why is an organic organizational structure recommended for easyJet?
The report suggests an organic structure is more suitable for easyJet because it allows for greater flexibility in responding to the changing and unpredictable conditions of the international aviation market.
What is the significance of the "Balanced Scorecard" for easyJet?
The Balanced Scorecard is used to align the company’s vision with its operations, ensuring that performance is measured not just by financial results, but also by customer satisfaction and employee training quality.
What is the final conclusion regarding easyJet's market position?
The conclusion suggests that despite fierce competition and economic challenges, easyJet is well-positioned to maintain its status as a leading low-cost carrier by focusing on its core business model and continuing to offer competitive fares.
- Arbeit zitieren
- Sven Elmers (Autor:in), 2009, Assignment in Business Deconstructed - Financial analysis and proposing strategy, München, GRIN Verlag, https://www.hausarbeiten.de/document/181277
