By this technique, the firms current performance or the present periods accounting year is assumed to be the base, after which incremental costs are added to the new period of budgeting. Incremental budgeting is easily understandable, cheap, allows the companys management to focus on other strategic issues, and is particularly best suited for projects whose outputs are difficult to quantify, such as EasyJets new investments.
The expansion in airline passenger numbers is already evident. It commences with the company deciding on what it should term as committed expenditure, followed by marginal adjustments to reflect expenditures that cannot be avoided Northern Ireland Assembly, This is the purest form of operating budgets that assumes the firm is beginning afresh.
It is clear that EasyJet already recognizes advantage. While EasyJet appears to struggle relative to Ryanair, in terms of liquidity and profitability, the performance for both these companies is acceptably good, and they should use it to achieve even better results.
Carnegie Mellon University Type of paper: However, this method results in considerable time wastages, requires that EasyJets operational managers have the required financial skills to facilitate the budgeting process.
Oftentimes, EasyJet will be forced to make budgets in uncertain circumstances, in which case, it will have to use rolling budgets, contingency budgets, flexible budgets, and activity-based budgets, among others Northern Ireland Assembly, Retrieved Jan 5,from http: EasyJet and Ryanair are two of the leading players in this industry, and thus the positive outlook for the industry should translate into faster growth, increased profitability, and potentially better solvency.
Essay This essay has been submitted by a student. Many airlines in Europe are hampered by the lack of geographical diversification, and while EasyJet is easily one of the most diversified airlines in terms of destinations, possible borrowing to add on the existing routes by acquiring or leasing more aircraft should enhance its competitiveness in the face of the expected expansion of the industry.
EasyJet will have to consider all expenses and alternative ways of reducing costs, before deciding on the best option for the company. However, the backward-looking nature of incremental budgeting means that there is a low emphasis on future operational issues and needs.
The airline industry struggles with mounting costs due to regulations and airport fees, and for low cost carriers, the focus on passenger volumes means that they incur more costs compared to premium carriers. In fact, the success of any airline across the world is dependent on their ability to deal with severe changes in demand, cost, and other adverse changes in the operational environment.
EasyJet, for instance, operates up to three times the routes than Ryanair, despite them having almost the same fleet and full time employee size.
Half of UK start-ups fail within five years. Unfortunately, EasyJets relatively poor liquidity and profitability ratios may haunt it.
The higher costs would mean that increased volume of operations comes at a higher cost, and EasyJet would suffer more of the two aircrafts MarketLine, b. Further, performance measures will be set. The process is straightforward.
He proposed project will see Easy Sleep expand its operations across other airports in the UK, to capitalize on the increasing potential for the air travel and tourism industry in the country BDO, Statistics for Management and Economics, Abbreviated Edition. However, there are even more urgent issues that could be addressed by EasyJet as well as Ryanair to bolster their competitiveness.
The traditional budgeting technique that could be employed by EasyJet and Ryanair is incremental budgeting. Other budgeting techniques that could be used by the company include flexed budgeting, priority-based budgeting, decision-conferencing, planning programming budgeting system, performance-based budgeting, participatory budgeting, and resource-restricted budgeting.
United Nations World Tourism Organization.
Currently, the UK imposes a tax of 13 per passenger and similar taxes exist in nearly all the major markets, besides increasing airport access fees and aircraft storage charges.
Retrieved Jan 11,from http:We will write a custom essay sample on Strategic Analysis of Easyjet specifically for you for only $ • The committed airport slots at main airports are a significant quality and another form of competitive advantage for easyJet. • Stocking fuel a year in advance is a great market strategy for an airline industry.
We will write a. Competitive Advantage of EasyJet and Ryanair. Published: Back to list. words.
This essay has been submitted by a student. This is not an example of the work written by our professional essay writers. Competitive advantage. The UK/European tourism and airline industries are expected to expand, mainly in response to.
Impacts of Tourism and Travel, Transport and Logistics EasyJet TABLE OF CONTENTS Introduction 3 Background 3 External Impacts 5 Political and Legal impacts 5 Economical impacts 6 Sociocultural impacts 7 Technological impacts 8 Environmental impacts 9 Other impacts 10 Staffing and recruiting 10 Branding 11 Competitors and competitive advantage.
Easy jet which is having Mission statement as to provide our customers the safe journey,good worth,point to point air service. The main objective is to study EasyJet's successful e-marketing campaigns. differentiation strategy and market segmentation strategy. But in EasyJet's case, only two basic of competitive advantage was used: cost leadership and differentiation.
Marketing Essay Writing Service Essays More Marketing Essays. We can help with your essay. In Depth Look At Easyjet Tourism Essay. Porter which models an industry that is influenced by these five forces, therefore in order to gain and maintain the competitive advantage over rivals; Easyjet uses this model to understand the situation and framework of the industry in .Download