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Easyjet Pestle Analysis

Essay by   •  November 6, 2011  •  Case Study  •  1,042 Words (5 Pages)  •  11,380 Views

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Easyjet Pestle Analysis

The Corporate Social Responsibility shows that the company goes beyond just running a business to make profit. Examples of this are employee benefits, charitable donations to organisations, hospitals and schools.

The business environment is a set of political, economic, social, technological, environmental and legal factors otherwise know as PESTLE analysis. These factors are not controlled by the business. Which means that businesses must adapt quickly as the environment changes. These macro factors have a positive or negative impact on the business.

The political factor can be affected through tax policies as Easyjet are charged with landing in different countries, employment laws, environment regulations, trade restrictions, tariffs and the government. The economic factor is forever changing with prices constantly fluctuating. For example oil prices increasing affects overall profits for the company which in return affects how much money Easyjet can invest on improving the airline or giving back to the communities. Baines, Phil and Page (2008a) explain firms are effected by environmental issues such as wage inflation, price inflation, gross domestic product and income sales and corporation taxes.

From the social aspect this looks highly on safety of the airline and its staff and passengers. Which then attracts passengers to fly again after being ensured of safe and secure flights. To keep up in technology Easyjet must be internet dependant as flights are booked and checked via the internet. Therefore customers need to be satisfied with a quick and simple service. Easyjet also have a great career attitude which commits staff to be up to a excellent standard of service.

Technology plays a huge factor within Easyjet as it has to rely hugely on the reliance of technology. Also as things improve technology becomes cheaper which means barriers to entry could be lower for competitors to join which could affect the profit of Easyjet. "Barriers to entry are designed to block potential entrants from entering a market profitably. They seek to protect the monopoly power of existing firms in an industry and therefore maintain supernormal profits in the long run. Barriers to entry have the effect of making a market less contestable". (Tutor2u n.d) To prevent this research and development expenditure can act as an obstruction to potential entrants to industry. In return creating existing firms more competitive and giving an advantage against another company. This could also come under the legal factor as companies must have copyright design or patents which gives legal protection on a product or idea for a certain amount of time.

The main environmental factor which is hugely effecting Easyjet is Carbon offsetting. Easyjet are under huge pressure to reduce their carbon emitted through each flight. This will affect Easyjet if they do not react and reduce there pollution by customers deciding not to fly with Easyjet if their carbon offset is not reduced. Therefore Easyjets reputation would become damaged from becoming unaware of not caring about the environment damage. Preventing this would show that Easyjet are ethical and consider that their company does damage the environment and they are doing everything they can to reduce that. Worthington

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