Understanding Business Organisations: Case Analysis of EasyJet Airlines Case Study

Introduction - Key Points and Insights

Since its founding in 1995, EasyJet has grown to become a significant low-cost carrier in Europe. After being a British Airways subsidiary at first, it became independent and quickly grew its route network. EasyJet is a low-cost airline that specialises in short-haul travel. It offers simple, low-cost rates and services. To cut expenses, the airline has adopted a point-to-point approach. EasyJet is facing difficulties in the present environment due to competition in the business, changes in the economy, and external shocks like as the COVID-19 epidemic. Its importance in the ever-changing aviation industry is shown by its operational resilience and strategic solutions to such problems (easyJet Plc Company Profile - easyJet Plc Overview,2023).

Figure 1: Company Logo

The purpose of this case study is to examine EasyJet's organisational structure, operations, and culture. It will shed light on how the airline oversees personnel and operations to create a climate that supports its strategic objectives. The research will also examine the external and internal variables affecting EasyJet's operations, with an emphasis on newly developing circumstances like crises—such as war, pandemics, and geopolitical events like Brexit. SWOT and PESTLE environmental analysis methods will be used in the case study to evaluate the company's strategic position in the ever-changing aviation sector. These instruments will assist in identifying EasyJet's internal and external strengths and weaknesses as well as opportunities and challenges resulting from the larger macroenvironment.

The study will assess EasyJet's capacity to overcome obstacles brought about by unanticipated occurrences as part of the study, demonstrating the organisational structure and culture's adaptability and resilience. We want to learn more about the airline's strategic management and readiness for unforeseen events by analysing its crisis response. This case study offers a thorough examination of EasyJet, illuminating its development, intricate operational details, and calculated reactions to the dynamic business environment.

Business Organisational purposes

• Mission: EasyJet is to provide inexpensive and accessible air travel to a wide range of clients. The airline wants to democratise air travel by offering affordable, practical, and effective travel choices. This dedication to accessibility is consistent with its beginnings as an industry disruptor in the aviation sector, when it challenged conventional wisdom and promoted an innovative culture.
• Vision: The primary goal of EasyJet is to continue being the top low-cost carrier in Europe. The company's mission is to link people and places in a sustainable way by prioritising ease of use, effectiveness, and customer satisfaction. EasyJet aims to maintain its commitment to provide affordable travel alternatives while continuing to develop by embracing technological improvements and operational excellence.

Key Aspects of Purpose

The organisational goal of EasyJet includes a number of important elements:

• Accessibility and affordability: The main goals are to make air travel accessible to a wide variety of clients so they may enjoy the advantages of flying.
• Efficiency and Innovation: The business aspires to be at the forefront of innovation, utilising operational efficiency and technology to optimise services and cut costs.
• Customer-Centric Approach: EasyJet prioritises satisfying the demands of its customers by providing simple booking procedures, on-time departures, and enjoyable travel experiences in general.

Major Objectives

In pursuing its vision and purpose, EasyJet lists the following key goals:

• Market Leadership: Reaching and preserving a dominant position in the European low-cost airline industry through steady route network and customer growth.
• Operational Excellence: Operational excellence is maintaining the airline's reputation for timeliness while reducing costs and improving customer happiness via dependable and efficient operations.
• Sustainability: Resolving environmental issues by the integration of eco-friendly practises and technologies into its operations, in line with the industry's general transition to more environmentally friendly flying.
• Financial Viability: Financial viability is the capacity to attain and maintain financial health through cost control, revenue stream optimisation, and industry-specific adaptation to changes in the economy and obstacles.

Organisational Structure

Organizational Structure of EasyJet

EasyJet functions inside a well-functioning organisational framework that is distinguished by a distinct hierarchy and job division. This building, which combines aspects of both classic and modern organisational forms, is sometimes referred to as a hybrid of tall and flat structures. There are clear degrees of power and responsibility within EasyJet's organisation. The CEO and executive team, who are in charge of several divisions including operations, marketing, finance, and human resources, sit at the top (Koenigsberg, Muller and Vilcassim, 2008). After that, each department is split up into more specialised divisions to guarantee a targeted approach to various company facets. By encouraging a distinct division of labour and enabling staff to specialise in certain tasks, the functional structure improves departmental efficiency and competence. All members of the airline's workforce, including pilots, cabin crew, maintenance people, and ground operations staff, have specific tasks and responsibilities that they fulfil to ensure the seamless running of the airline (Landel, 2009).

Figure 2: Organizational structure of easyjet

Benefits of Functional Structure for EasyJet

• Specialisation and knowledge: Employees may become experts in their fields because to the functional framework, which fosters efficiency and knowledge. Pilots concentrate on flying, mechanics on maintaining aircraft, and cabin personnel on providing passenger service.
• Clarity of Roles: Workers are more productive and less confused since they are aware of their precise responsibilities within the well-defined framework. In the quick-paced and safety-sensitive aviation sector, this clarity is essential.
• Effective Resource Allocation: Because every department functions autonomously, decision-making procedures and resource utilisation are expedited. As a result, resources are distributed effectively (Clawson and Pitts, 2006).

Drawbacks of Functional Structure for EasyJet

• Communication Issues: When collaboration between many departments is needed, the strict hierarchy may cause communication issues. Decision-making processes may become more sluggish as a result.
• Lack of flexibility: As an organisation expands or encounters new obstacles, its functional structure may become less adaptable. Within a stiff framework, quick adaptability to changes in the external environment might be difficult.
• Possibility of Silos: Because of the obvious division of labour, departments may act independently, which would hinder cross-functional cooperation. This may impede creativity and a comprehensive method of problem-solving.

In summary, EasyJet's organisational structure strikes a mix between efficiency and specialisation, but it may face communication and flexibility issues as it works through the complexity of the aviation sector (Maciejczyk, 2016).

Organisational functions

Definition of Organizational Functions

The many tasks or procedures that go into making a business run smoothly are referred to as organisational functions. These jobs are usually divided into many departments or divisions, each of which is in charge of carrying out particular duties that help the organisation as a whole accomplish its objectives (Hillmann and Guenther, 2020).

• Three Core Functions at EasyJet

1. Operations: The success of EasyJet is largely dependent on its operations department. It entails coordinating a number of tasks linked to maintenance, ground services, and flight operations. The main goals are to make sure that flights are economical, safe, and timely. This entails scheduling, controlling aircraft turnaround times, and upholding strict safety regulations. Operations and other functions are tightly related. For example, in order to match flight schedules with market demand, communication with the marketing department is essential. Budgeting and cost control need close coordination with the finance department to ensure operational effectiveness without sacrificing quality or safety (Wittmer and Bieger, 2021).
2. Marketing and Sales: EasyJet's marketing and sales department is essential to bringing in business, generating income, and preserving its competitive advantage in the aviation sector. To increase brand awareness and loyalty, this entails smart pricing, marketing initiatives, and customer relationship management. Operations and marketing are tightly related. Flight schedules and capacity planning must be in line with the marketing team's assessment of market demand. In order to establish pricing plans that strike a balance between profitability and competitiveness and guarantee a sustainable business model, cooperation with finance is also crucial (Huettinger, 2006).
3. Finance: EasyJet's finance department oversees financial reporting, strategic financial planning, and budgeting. It guarantees that the company's resources are distributed effectively, meeting both immediate operating requirements and long-term expansion goals. Maintaining operations and fleet and technology investments requires financial stability.
   Marketing and Operations are Linked with Finance. It works in tandem with operations to control capital spending, expedite budgeting for aircraft maintenance, and maximise costs. Strong linkages to marketing also facilitate the synchronisation of pricing and revenue generating initiatives with finance plans (Martins, 2020).

Interrelation of the Three Functions

EasyJet's smooth operation is a clear indication of how these processes interact. For example:

• Finance and Operational Efficiency: The financial performance is directly impacted by the effective management of flight operations. The company's financial health is improved by cost savings that result from punctuality and efficient operations (Morrell, 2021).
• Marketing's Influence on Operations: Promotional campaigns for certain routes or destinations have an effect on operational planning. Successful marketing efforts have increased demand, which calls for modifications to aircraft schedules and capacity (Feroz, Khan and Sponder,2023)
• Financial Factors in Decision-Making: Financial factors have a role in both marketing and operational choices. These crucial decisions are driven by financial considerations, whether they include increasing routes, purchasing new equipment, or changing pricing schemes (Kumar, Ramachandran and Kumar, 2021).

Organisational culture

Culture Definition and Culture Development

The common values, attitudes, customs, and behaviours that influence how people behave and interact inside an organisation are referred to as organisational culture.

Shared experiences, leadership impact, and organisational ideals all play a part in the long-term development of organisational culture. It is influenced by the history of the organisation, the leadership style, the dynamics of the industry, and the attitudes of its members as a whole (Birukou et al., 2013).

• Four Types of Organizational Culture:

1. Clan Culture: Clan cultures place a strong emphasis on harmony, cooperation, and a familial environment. Workers have a strong feeling of community, and managers frequently serve as mentors. Cohesion and personnel development are given top priority.
2. Adhocracy Culture: Adhocracy cultures are vibrant and enterprising, promoting creativity, daring, and flexibility. Proactive problem-solving and innovation are valued in this society.
3. Market Culture: Market cultures prioritise accomplishment, competitiveness, and hitting goals. They are results-driven. These companies prioritise market success and competition from outside sources.
4. Hierarchy Culture: Cultures of hierarchy are typified by control, stability, and a well-defined structure. This culture is defined by well-defined roles, norms, and procedures, which promote efficiency and order (Pietersen, 2017).

Organizational Culture at EasyJet and Its Impact

Considering the airline sector requires flexibility, innovation, and a focus on market rivalry, EasyJet's organisational culture strongly correlates with both the adhocracy and market culture.

• Innovation and flexibility: EasyJet's embrace of technical innovations, such as digital services and online booking platforms, is a clear example of its adhocracy. This is indicative of a culture that emphasises innovation and flexibility in reaction to changes in the industry.
• Market Orientation: EasyJet's emphasis on gaining a competitive edge through effective operations, calculated pricing, and a customer-centric strategy is a reflection of the market culture. The airline exhibits a results-driven and market-driven culture by continuously modifying its offerings to satisfy consumer requests (Rao, 2012).
• Impact on Organizational Success: EasyJet's success is greatly influenced by its culture. By embracing new technology and business strategies, the airline is able to maintain its competitiveness thanks to its concentration on innovation. A sharp emphasis on client demands is ensured by the market-oriented strategy, which increases customer happiness and loyalty.
  EasyJet must, however, strike a balance with these cultural characteristics. Although market culture and adhocracy encourage creativity and competitiveness, placing too much focus on these elements may compromise long-term viability or cause problems with employee well-being. Thus, cultivating a well-balanced culture that incorporates aspects of teamwork and employee assistance with creativity and a focus on the market is essential for long-term success. At EasyJet, a carefully cultivated and aligned organisational culture is a contributing factor to customer happiness, staff engagement, and overall organisational effectiveness (Rae, 2001).

SWOT Analysis

Definition of SWOT

A strategic planning technique called a SWOT analysis evaluates the opportunities, threats, and internal and external strengths and weaknesses of an organisation. It offers a thorough comprehension of the existing circumstances, facilitating efficient strategic planning and decision-making (Leigh, 2009).

EasyJet SWOT Analysis

• Strengths: EasyJet has a diverse route network, an established brand as a top low-cost airline, and a reputation for efficient operations. The airline's strong online booking system and economical operations became assets during rising crises like the Covid-19 epidemic, enabling it to swiftly adjust to shifting conditions. EasyJet demonstrated its resiliency by implementing safety measures and carefully adjusting its flight timetables (Li, 2023).
• Weaknesses: As demonstrated by the Covid-19 issue, EasyJet's vulnerabilities include reliance on short-haul routes and vulnerability to outside shocks. Reduced demand and travel restrictions presented problems for the airline. Furthermore, although cost-effective, its reliance on a point-to-point network may restrict connection in comparison to certain competitors' hub-and-spoke schemes (Admin,2023).
• Opportunities: EasyJet has the opportunity to capitalise on the rising trend of eco-friendly travel by investing in sustainable aviation technology, which will appeal to tourists who care about the environment. Furthermore, when the travel sector bounces back from COVID-19, EasyJet has a chance to take market share as demand for travel rises. Additional potential opportunities include developing digital services and broadening access to emerging countries.
• Threats: As with political instability, geopolitical uncertainties that affect routes and regulations are among the external concerns facing EasyJet. The cost-effectiveness of the airline can be impacted by economic variables like inflation that raise operating expenses.

EasyJet's operations are also threatened by the low-cost airline industry's competitive pressures and possible disruptions like strikes or unanticipated incidents(Admin,2023).
With its brand, operating efficiency, and flexibility, EasyJet is well-positioned to handle changing circumstances thanks to its strengths and prospects. To ensure long-term success, however, vulnerabilities like reliance on certain routes and external threats like geopolitical uncertainties highlight the necessity of strategic planning and risk reduction.

PESTLE Analysis

Definition of PESTLE

A strategic management method called PESTLE analysis looks at the external macroenvironmental elements that have an impact on an organisation (Siddiqui, 2021).

EasyJet Pestle Analysis

• Political Factors: These include stability, rules, and policies of the government. Open skies accord that promote international services are among the favourable political reasons for EasyJet. Political unrest in some areas that affects route planning and regulatory changes that have an influence on aviation operations are examples of unfavourable variables. On the other hand, governmental backing for the aviation sector in times of crisis might be advantageous (Momin, 2023).
• Economic Factors: These include things like growth in the economy, exchange rates, and inflation. Strong consumer purchasing power is one of the favourable economic variables fuelling demand for air travel. Unfavourable elements, including inflation or economic downturns, might affect consumer affordability and have an impact on travel choices. Economic stability is a critical factor because of EasyJet's susceptibility to changes in the economy (Admin,2023).
• Social Factors: These include societal ideals, cultural influences, and demographic trends. EasyJet benefits from favourable societal circumstances, such as the increasing trend of business and leisure travel. Disadvantageous elements might encompass social attitudes towards environmental issues, impacting the decisions made by consumers. Fulfilling client expectations requires adjusting to shifting travel tastes and cultural factors(Admin,2023).
• Technological Aspects: Innovations and developments that have an impact on the industry are considered technological aspects. Digitalization is one of the favourable technical elements for EasyJet since it improves online booking and consumer experiences. Potential technology interruptions, such as cybersecurity risks or malfunctions that affect aircraft operations, might be considered unfavourable circumstances.
• Legal Aspects: Laws and regulations that have an impact on the sector are considered legal considerations. EasyJet benefits legally by adhering to safety norms and laws. Unfavourable elements might include labour dispute-related legal obstacles, changes to regulations, or problems with international laws that affect cross-border activities.
• Environmental Factors: Sustainability and ecological effect are two aspects of environmental factors to take into account. EasyJet is benefiting from factors such as growing attention on environmentally friendly aircraft practises. Stricter environmental laws that raise operating expenses are examples of unfavourable influences. EasyJet's dedication to environmental sustainability is in line with growing consumer attitudes towards eco-consciousness.

In summary, the PESTLE study indicates that EasyJet's performance is subject to several external influences. Strategic decision-making necessitates adapting to shifting political landscapes, economic conditions, social preferences, technology developments, regulatory environments, and environmental concerns. Maintaining a robust and sustainable position in the cutthroat aviation sector requires navigating both favourable and unfavourable forces within each dimension.

Conclusion

To sum up, EasyJet has been thoroughly examined using SWOT and PESTLE analyses, which have yielded insightful information on the organization's internal strengths and weaknesses as well as external possibilities and threats within the larger macroenvironment.

EasyJet's strengths—its well-known brand, its operational effectiveness, and its wide range of routes—have come in handy when handling difficult circumstances like the Covid-19 outbreak. The airline demonstrated resilience and strategic brilliance by being able to swiftly change while maintaining cost-effectiveness. However, vulnerabilities were evident, highlighting the need for strategic mitigation. These vulnerabilities included reliance on short-haul routes and sensitivity to external shocks. Potential for growth through sustainable practises, market recovery following COVID-19, and strategic expansion into developing markets are among the opportunities seen in the external environment. Risks include economic and geopolitical unpredictability’s, which highlight the significance of strategic planning and risk management to mitigate external challenges.

EasyJet is impacted by a number of political, economic, social, technical, legal, and environmental variables, all of which were highlighted by the PESTLE research. While political instability and regulatory changes presented problems, political stability and regulatory support were found to be advantageous. Opportunities included a robust customer base and economic stability; risks included inflation and economic downturns. Social trends that supported business and leisure travel were seen favourably, while environmental concerns created difficulties. Digitalization in particular has allowed for chances to improve client experiences through technological developments. Although possible legal challenges and regulatory changes were dangers, legal compliance with safety requirements was a strength. The dedication to environmental sustainability complemented growing patterns in environmentally conscious consumer behaviour.

In summary, EasyJet's performance is closely linked to its capacity to take use of advantages and strengths while resolving drawbacks and averting dangers. The airline is well-positioned for future expansion due to its operational efficiency, flexibility, and well-known brand. Sustained success in the cutthroat aviation sector will depend on strategic considerations including managing dynamic external forces and striking a balance between short-haul supremacy and long-haul growth.

References

Admin, 2023. EasyJet PESTEL Analysis - The Strategy Story. [online] The Strategy Story - Simplifying Business Strategies. Available at: <https://thestrategystory.com/blog/easyjet-pestel-analysis/>.

Admin, 2023. Easyjet SWOT Analysis - The Strategy Story. [online] The Strategy Story - Simplifying Business Strategies. Available at: <https://thestrategystory.com/blog/easyjet-swot-analysis/>.

Anon n.d. easyJet Plc Company Profile - easyJet Plc Overview. [online] GlobalData. Available at: <https://www.globaldata.com/company-profile/easyjet-plc/>.

Birukou, A., Blanzieri, E., Giorgini, P. and Giunchiglia, F., 2013. A Formal Definition of Culture. Models for Intercultural Collaboration and Negotiation, [online] pp.1–26. https://doi.org/10.1007/978-94-007-5574-1_1.

Clawson, J.G. and Pitts, T., 2006. Organizational Structure. SSRN Electronic Journal. [online] https://doi.org/10.2139/ssrn.910385.

Feroz, A.K., Khan, G.F. and Sponder, M., 2023. Digital Analytics for Marketing. Taylor & Francis.

Hillmann, J. and Guenther, E., 2020. Organizational Resilience: A Valuable Construct for Management Research? International Journal of Management Reviews, [online] 23(1), pp.7–44. https://doi.org/10.1111/ijmr.12239.

Huettinger, M., 2006. Air Baltic and SAS – a case study in the European airline industry. Baltic Journal of Management, [online] 1(2), pp.227–244. https://doi.org/10.1108/17465260610663917.

Koenigsberg, O., Muller, E. and Vilcassim, N.J., 2008. easyJet® pricing strategy: Should low-fare airlines offer last-minute deals? Quantitative Marketing and Economics, [online] 6(3), pp.279–297. https://doi.org/10.1007/s11129-007-9036-2.

Kumar, V., Ramachandran, D. and Kumar, B., 2021. Influence of new-age technologies on marketing: A research agenda. Journal of Business Research, [online] 125, pp.864–877. https://doi.org/10.1016/j.jbusres.2020.01.007.

Landel, R., 2009. Operations Strategy Module: Competing Through Operations. SSRN Electronic Journal. [online] https://doi.org/10.2139/ssrn.1422339.

Leigh, D., 2009. SWOT Analysis. Handbook of Improving Performance in the Workplace: Volumes 1‐3, [online] pp.115–140. https://doi.org/10.1002/9780470592663.ch24.

Li, T., 2023. Ryanair V.S. Easyjet: Strategy Analysis and Competition during COVID-19 Pandemic. BCP Business & Management, [online] 38, pp.2357–2367. https://doi.org/10.54691/bcpbm.v38i.4106.

Maciejczyk, A., 2016. Challenges of control in functional organization structures:Example of outsourcing sector. Journal of Economics and Management, [online] 25, pp.48–62. https://doi.org/10.22367/jem.2016.25.04.

Martins, J.C.T., 2020. Equity valuation of the EasyJet Company. [online] Available at: <https://repositorio.ucp.pt/handle/10400.14/31325>.

Momin, A., 2023. EasyJet PESTLE Analysis 2021: Lots of Hits and Misses. [online] PESTLE Analysis. Available at: <https://pestleanalysis.com/easyjet-pestle-analysis/>.

Morrell, P.S., 2021. Airline Finance. Routledge.

Pietersen, C., 2017. Organizational culture: a foundational perspective. African Journal of Economic and Management Studies, [online] 8(3), pp.262–273. https://doi.org/10.1108/ajems-06-2016-0085.

Rae, D., 2001. EasyJet: a case of entrepreneurial management? Strategic Change, [online] 10(6), pp.325–336. https://doi.org/10.1002/jsc.549.

Rao, M., 2012. Knowledge Management Tools and Techniques. Routledge.

Siddiqui, A.A., 2021. The Use of Pestel Analysis Tool of Quality Management in the Health Care Business and its Advantages. American Journal of Biomedical Science & Research, [online] 14(6), pp.507–512. https://doi.org/10.34297/ajbsr.2021.14.002046.

Wittmer, A. and Bieger, T., 2021. Fundamentals and Structure of Aviation Systems. Classroom Companion: Business, [online] pp.39–78. https://doi.org/10.1007/978-3-030-79549-8_2.