Maksymilian Michalewski
BTEC Assignment
Learning aims:
C: Examine the environment in which business operates
D: Examine business markets
Assignment title:
The Effects of the Environment on a Business
Business overview:
EasyJet PLC is a United Kingdom based company which is operating low cost flights to
approximately 156 airports around 33 countries. The company was founded in 1995 by
Stelios Haji-Ioannou,(Greek-Cypriot entrepreneur) who is currently the largest shareholder
with a 29.998% stake (as of June 2020). At first it employed only 70 people, whereas now
the number has increased to 15,000. The company headquarters are based at Luton
airport in London. Since 2017 Swedish businessmen Johan Lundgren is the chief
executive officer of the company.
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,C.P4 Discuss the internal, external and competitive environment on a given
organisation.
Businesses do not operate in a single market, but rather in a huge environment that has a
direct influence on a business success, the way they operate and whether they will
achieve their objectives. The external environment is composed of different outside
organisations and forces that can be grouped into six sub environments.
These six factors include: political, economic, social, technological, legal and
environmental.In other word it is called PESTLE analysis. Businesses such as EasyJet will
need to look at all those factors as they will greatly influence their success. To compete
successfully with their competitors business owners must continuously study the
environment and adapt their business accordingly.
Political
In general political factors include elements such as tax policies, trade restrictions, tariffs
added on imported or exported goods services and stability of governments. EasyJet is
impacted by regulations and restrictions related to international trade, tax policy and
competition. Moreover it is impacted by factors like war, terrorism or spread of certain
disease-such as covid. All these issues are political, therefore they need government
intervention to avoid them. The political factor is the combination of factors, such as the
degree of politicisation of trade, the stability in the current government , government
policies, public attitude towards economy etc. Political factors can greatly influence the
actions of a business. For example increasing or decreasing rate of taxes can change the
opportunities where a business can expand. The tax rates are different in any other
country. Therefore in any other countries where airlines operate they will have to pay more
than in any anther country. As a the result of this the cost are stretched. However the tax
policies could sometimes be profitable to airline company, encouraging business and
profitability.
Economic
Economic factors are concerns with overall demand and overall supply of goods and
services in an entire economy not just one business or one market. Economic factors are
that have to do with what is happening in the markets that might affect possibly a market
share or consumer purchasing as well as interest rates. These factors greatly influence the
airline industry. Sometimes airlines were under pressure while fuel prices went up, these
factors made airline companies difficult to generate their profits. Moreover the recent
economic recession coupled with the covid restriction ( further down) made the travel
market see its lowest period. Airlines industries are also struggling with the increase of
labour demands for employees across the world. Most of these economic factors forced
some airline companies bankruptcies. Nowadays nobody is going on holidays, unless it is
within their country, therefore EasyJet is not happy with is demand.
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, Social
Social factors come from society and media which effect for example cultural factors or
consumer attitudes. Businesses are also directly affected by changes in population. The
structure of the population determines the way the supply and demand of goods and
services can change. So, the decline in birth rates would mean that the demand will
increase thereby indicating high level of competition as the total consumers goes down.
During last few years there has been a big change in lifestyle of people. People nowadays
travel more and more either for holidays or businesses. The appearance of the low cost
airlines and any of those business models have promoted changes within the tourism and
travel industry. The increase in travelling has a positive impact of EasyJet growth.
Moreover the cultural changes towards traveling industry will benefit the expansion of
EasyJet. The low cost carriers focus more on leisure travellers than business travellers,
however EasyJet has differentiated by adapting to all kind of people that are willing to fly
with them. Pressure groups are groups without political power, but which aim to influence
the political, or decision making process. According EasyJet pressure groups could
prevent them launching their aircrafts to smaller towns, in result to decrease the pollutions
that they are producing.
CSR requirements
Corporate social responsibility (CSR) is a type of international private business self-
regulation that aims to contribute to societal goals of a philanthropic, activist, or charitable
nature by engaging in or supporting volunteering or ethically-oriented practices. A good
firm that practice and supports for corporate social responsibility initiatives, particularly in
environmentally councils way, has a big chance in enhancing costumer retention rates and
creating positive reputation and relationship towards the business. As EasyJet has left a lot
significant environmental footprints over the years, they are are under a lot of pressure to
limit their harm to the environment and apply environments friendly technology.
Technological
Technological factors are related to application of science and technology to business and
commerce that means IT and the Internet, such as various other trends as well to think
about it, such as development of new materials and genetic engineering. Technology has
fundamentally changed the way we shop, communicate, learn, drive, travel read. The rapid
development of technology can have a significant effect on the growth and operations for a
business such as EasyJet. The use of the internet enabled the company to operate more
efficiently, moreover it also opened new ways of customers to compare various holiday
destinations. One of the examples of how EasyJet benefited from innovative technology is
their award winning mobile app which allows the customers to book, check in flights and
receive real time updates on flight status. Moreover the low cost carriers have the ability to
keep a high degree of customer focus by user-friendly websites with improved booking
processes. Such a websites have the ability to enable booking with
greater ease and utilising an ease to use price finder to obtain the cheapest fares. Another
good example is the self check in, without the modern technology EasyJet would have
never saved costumers and themselves so much time, moreover EasyJet wont need as
much employees now.
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