Easyjet began operations in November of 1995. Although the organization spent a number of years struggling to establish itself, by 2000 stock for the organization was being offered on the London Stock Exchange. By 2004, Easyjet was named the top low-cost airline in Europe. Despite this prestigious honor, the organization continues to struggle with maintaining profit margins, poor labor relations and the threat of competition from other airlines. This investigation provides a review of the critical issues facing the organization and makes recommendations for change to improve the overall efficiency of the organization.
[...] Bargaining Power of Buyers As new entrants close in on the low-cost carrier market, Easyjet will have to work harder to garner a solid customer base. In this industry, the bargaining power of buyers is quite significant. Power of Suppliers Suppliers for this industry are aircraft carriers. Although prices of new aircraft will invariably rise, Easyjet has a significant leverage in negotiating for new aircraft. Threat of Substitute Products In this context, there are few organizations that could rival Easyjet in terms of technology. [...]
[...] Recommendations Synthesizing all of the information that has been presented in this investigation it becomes clear that if the organization is to be successful in the long term, it needs to devise a strategic plan for its development. Research demonstrates that the organization has not released a financial report on the organization since 2001. Although the organization may be tracking itself internally, it needs to consider the development of a strategic plan that includes public disclosure of information. In addition to creating a strategic plan, the organization should also consider the specific methods that it will utilize to ensure that the objectives of the strategic plan are met. [...]
[...] As such, the organization should attempt to pursue a solid working relationship with employees such that labor costs can be streamlined and further so that these costs do not have a negative impact on the organization in the long- term. While this could be implemented as part of a strategic plan, the pertinence of the issue warrants special attention on the part of management. Finally, if Easyjet is to remain a leader as a low-cost carrier, the organization needs to consider the development of a business model that clearly outlines the specific areas in which the organization can reduce costs. [...]
[...] In 1998 Easyjet bought a 40 percent stake in TEA Switzerland and renamed the organization Easyjet Switzerland. By 2000, the company's stock was being offered on the London stock exchange. In 2002, Easyjet acquired rival airline, Go Fly and in 2003 the organization opened a new hub in Berlin at Schonefeld Airport. By 2004, Easyjet was flying 11 routes from Berlin alone. “Easyjet's main shareholders include Stelios Haji-Ioannou ( 27.6 Polys Haji-Ioannou ( 15.5 and IcelandAir ( 10.1 It also holds a 49% stake in Easyjet Switzerland” (Easyjet, 2005). [...]
[...] According to Kroll (2004) in 2001—the last year that the organization made its financial statements public—the organization posted a net loss of $41 million. The organization made the statement that, has become obvious that the cost base of the company was unsustainably high relative to its revenue base” (p. 140). PEST Analysis Considering the current political issues impacting the development of the organization, it is clear that the European Union's recent decision to provide better compensation for bumped passengers is having a negative impact on the airline industry overall. [...]
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