Assignment Sample on FINM010 Strategic Appraisal Group Report
Question 2: Resource and capabilities audit for EasyJetand analysis of the strategic importance of the resources and capabilities identified
The internal business environment includes those forces within the company that influence its operations’ approach and success. Unlike the external business environment, the company owns a specific control over the internal factors. Two primary strategic analytical tools can be adopted to conduct the EasyJet organization’s internal environment analysis and conduct a resource and capability audit. These two strategic frameworks effectively assess the selected airline company’s central resources, competencies, and capabilities (Kathuria et. al. 2018). These models are SWOT analysis and the VRIO framework.
SWOT analysis for EasyJet
Strengths:
EasyJet is a well-recognized British airline company that is headquartered in London. Considering the company’s strength, it has been evaluated that it has a highly-skilled workforce. The company highly invests in training and learning programs to motivate the employees (Bílková et. al. 2018). Furthermore, from the annual report and accounts 2020 of EasyJet, it has been identified that the company’s significant strategic capabilities and strengths are its low-cost model, customer loyalty, satisfaction, and value by efficiency. From the annual report, it has been revealed that the company is reducing its fuel consumption and emission due to new generation aircraft. Also, it has been ranked as the Number one airline brand in France, Switzerland and UK. The customer satisfaction score is 75% as of 2020 (EasyJet plc, 2020). Moreover, it is worth stating that the company maintains a strong balance sheet due to its low-cost model.
Weakness:
Other than the strengths, there are also some weaknesses in the operations of EasyJet.For example, the services of the airline company are not available to serve in several destinations. In addition to this, due to the aviation company’s lower operating margins, EasyJet is highly sensitive to the additional charges and taxes levied by the government.
Opportunities:
In the context of the opportunities, it has been revealed from the annual report that the company has the chance to improve its cost position in the industry. Moreover, EasyJet can expand over Europe to gain better visibility to the brand, and it will also enhance the business revenue. Other than this, the company has a scope to improve its operating framework and deliver more efficient services to its customers (Prieto‐Sandoval et. al. 2019).
Threats:
Following some threats, it has been recognized that the continuously changing government policies and complex aviation rules and regulations adversely influence business revenue. The major players within the airline industry are posing a severe threat to EasyJet operations (Mousavi and Bossink, 2017). Apart from this, the changing value in the market also needs to be considered as it can be a threat to generating income.
VRIO analysis for EasyJet
The VRIO analysis of the airline company will assess the internal resources and capabilities to examine whether these deliver a competitive advantage.
| Valuable | Rare | Inimitable | Organized |
| The valuable resource of EasyJet, as assessed from the annual report, is its financial resources. This is the most important resource as it helps invest in various external opportunities that arise. Apart from this, human resources are also considered a valuable resource for the entity. The company’s human resources are highly trained, resulting in more productive output. | Further, the airline company’s rare resources and capabilities are the distribution network and its international presence. The company’s global presence helps build an expanded customer base and earn more revenue. In addition to this, the strong distribution network is the critical capability that ensures more significant revenue. | The unique resources help the company add value in the competitive benefit and long term sustainability (Gikonyo, 2018). Customer experience and marketing communication are vital inimitable resources. Marketing communication enables EasyJet to manage the long term competitive benefits. The customer experience that provides EasyJet is also incomparable, as revealed from the annual report. | These are the competencies uniquely developed by the company. Technological advancement and integration is vital resource. With the adoption of the latest technologies, the airline company can stay ahead in the competition. The organizational culture of EasyJet is supportive as well as innovative. |
From the identified resources and capabilities of EasyJet, it can be said that these help the company gain a competitive advantage; EasyJet can perform efficiently in the market with these competencies. According to Morlottiet. al. (2017), the resources of the business organization are the critical source of competitive benefit and primary source of profitability and revenue generation for the firm. Further, Cattaneo et. al. (2016) added that these resources empower the company to drive the business and face competition. EasyJet airlines’ identified capabilities, competencies, and resources are strategically essential in gaining a competitive profile within the aviation industry and delivering a superior customer experience.
These are significant for the company as it provides affordable and sustainable experience for the customers to travel. This helps in driving growth and generating returns for the shareholders. The significant resources of the company are its financial capital, aircraft, human resources, suppliers, brand name, data, and Technology (Morlotti et. al. 2017). With these all capabilities, the company is efficiently operating its business activities. For example, the annual report 2020 discloses that with the capabilities, the company served 48 million passengers in 2020 with safety, sustainability, choice, affordability, and ease of booking (EasyJet plc, 2020). Furthermore, the company has over 40,000 employees who are provided with fair pay and benefits, career opportunities and safe working conditions.
References
Bílková, M., Greco, G., Palmigiano, A., Tzimoulis, A. and Wijnberg, N., (2018). The logic of resources and capabilities. The Review of Symbolic Logic, 11(2), pp.371-410.
Cattaneo, M., Malighetti, P., Morlotti, C. and Redondi, R., (2016). Quantity price discrimination in the air transport industry: The easyJet case. Journal of Air Transport Management, 54, pp.1-8.
EasyJet plc, (2020). Annual reports and accounts 2020. [Online]. Accessed through: <https://corporate.easyjet.com/~/media/Files/E/Easyjet/pdf/investors/agm/agm-dec-2020/annual-report-2020.pdf>. Accessed on: 16th December, 2021.
Gikonyo, G.P., (2018). Organisational Resources And Sustainable Competitive Advantage Amongst Selected Firms In The Aviation Industry In Kenya (Doctoral dissertation, Thesis, Kenyatta University).
Kathuria, A., Mann, A., Khuntia, J., Saldanha, T.J. and Kauffman, R.J., (2018). A strategic value appropriation path for cloud computing. Journal of management information systems, 35(3), pp.740-775.
Morlotti, C., Cattaneo, M., Malighetti, P. and Redondi, R., (2017). Multi-dimensional price elasticity for leisure and business destinations in the low-cost air transport market: Evidence from easyJet. Tourism Management, 61, pp.23-34.
Mousavi, S. and Bossink, B.A., (2017). Firms’ capabilities for sustainable innovation: The case of biofuel for aviation. Journal of Cleaner Production, 167, pp.1263-1275.
Prieto‐Sandoval, V., Jaca, C., Santos, J., Baumgartner, R.J. and Ormazabal, M., (2019). Key strategies, resources, and capabilities for implementing circular economy in industrial small and medium enterprises. Corporate Social Responsibility and Environmental Management, 26(6), pp.1473-1484.
