The Kite Runner and its theme on Psychological Healing and Redemption Essay Example for Free

The Kite Runner and its theme on Psychological Healing and Redemption Essay Introduction It has been much known to many that wars and social differences among people in a certain society bring so many problems to many people in the world. Certainly, one may agree that because of the undoubted situation of the people who are directly affected by wars, there come to be several psychological issues that must be dealt with by people as individuals. Regarding wars, an article entitled â€Å"Why is there war?† comments this way: â€Å"Nationalism, prejudices, injustices and communication difficulties have been at the root of other conflicts. In all too many cases, armies have carried out the orders of leaders, such as Hitler, Napoleon and Alexander the Great, who have shown an excessive desire for personal glory and honor.† (Awake! 2000, 32) These comments notably support the idea that man, in many ways are the very elements that contribute to the worsening situation of the society regarding social inequality resulting to conflicts and worse, wars. In reaction to these social problems of inequality and conflicts, author Khaled Hosseini, an Afghan American novelist has come up with a fictionary story that shows the elemental sources as well as effects of social inequalities to people as individuals. The plot of the story was based upon two friends in Afghanistan who were merely separated by the social-class that they both belong to. One being the slave and one being the master, these two friends who turn out to be brothers as the story progresses, depict the differences of the people living in the society today. What are the themes that the story portrays and how do these themes reflect the ability and the ways by which an individual tries to regain himself from an emotional and psychological downfall? These and many more shall be discussed in the paragraphs that follow. An Overview of the Story The whole theme of the story of â€Å"The Kite Runner† revolved around the lives of two young children who were from different classes of the society. Social prejudice of the economic status of people has been the main reason why the problem of diversity in Afghanistan has risen as portrayed in the story. This factor indeed contributed so much to the story’s complication, which resulted to the guilt driven emotions of the main character Amir, when he was not able to come to the rescue of his friend Hassan. In this story, a clear display of the society’s major problem on prejudice and equality has been shown. Concentrating on the more personally based assessment of the situation as portrayed by Amir, the social problems depicted in the story makes it easier to understand why people take lesser courage in making a change in the present social situation, be guilty later on and then set goals in making a change in a less complex and fearful way. Yes, in a concise display of events, the author tried to help the reader’s picture out the most important events of the situation that would likely connect the story with the intense effect of social diversity to individuals in the society. The consequences are shown to be much dreadful enough to keep a person from moving on with his own life, because of the fact that the lack of courage that drives a person to ignore the things that are supposed to be done by him in the first place. Certainly, an inner healing is necessary for certain situations such as this. It is normal for a person to feel down from not being able to complete or live up to a certain self-expectation. However, inner healing is not that easy to find. As for the main character of the story, it could be noted that the healing of his conscience mainly came form the fact that he had to come back to Afghanistan to find his find with a plan of making it up to him in any way he could. Although he was not able to do the said task as he has expected things to come along, he was still able to help himself regain his clear conscience through helping the son of his friend Hassan to have a change of life under his care. An Analysis of the Story As it could be noted, the story was plotted to show the deeper individual effects of the social differences among men as well as the effects of war on relationships between people. The existence of such issues has made the characters reflect the actual situation of individuals in the society especially focusing on the Afghanistan society. (Howard, 2003, Internet) One more them of the story, which should be given attention, is the picture of reality portrayed by Amir. His lack of courage in doing things that they know should be done is a problem by many people today. Although they know that something within their power could change several situations in the society, their fear of several elements in the society keeps them from doing any courageous change. This was shown when Amir failed to save his friend Hassan from the hands of the bully, Assef. As a result, his conscience has not made him completely relieved from moving away from Afghanistan ever since. Instead, he was continuously haunted by the past and the things that he was supposed to do for his friend (Kirszner, 2001, 90). At the same picture, several people today find it difficult to forget the past especially the situations that involves them with the things that they were supposed to do and yet they did not have much of the courage that it takes for them to do it. As a way of relieving the pain brought about by the past, people tend to find ways in which they could still change what happened. As for the situation of Amir, he tried to return to Afghanistan to supposedly make it up with Hassan. As it could be noted from the overview of the story, although Amir was not able to make it up to his half brother Hassan, he was able to clear his conscience by taking care of the son of Hassan instead. In the same way, people today find a way to heal their aching hearts through returning back to what has happened in the past and later on try to change things for the people that they were supposed o help before. This way, their conscience is then cleared off from the shortcomings that they incurred against others before. From Getting Hurt to Getting Healed and Redeemed As mentioned earlier, people tend to get hurt from many things. Usually, their experiences of several different situations they have been involved with, brings them the discouragement that they ought to feel after not being able to do what they were supposed to. This then brings them several psychological disturbances that keep them from moving on freely with their lives. The fear of doing what they should have done before might have been governed by several factors in the society that kept them from being able to complete their supposed tasks before (Hill, 2000, Internet). Certainly, because of the said elements, doing what is right might not have been that easy. Aside from this, it is quite easier to understand that the situation is harder to deal with when it is happening at the actual time. The lack of time to think things over makes it harder for a person to realize what should be immediately done to solve some things (Coon, 2001, 54,55). This is naturally what happened to Amir upon seeing the bully beat his friend. Along with fear and panic, he was not able to come up with the possible solution that he was supposed to apply during the said situation. People tend to lack courage when they are faced with the actual crisis. However, after some time of thinking things over, they begin to realize that there could have been better results if they did have the courage to do their ethical responsibilities regarding the situation. What is meant by redemption and healing? Naturally, this means recovery from any possible scourge that has been experienced by one in the past. Being healed, means being able to cure what has been causing one the pain that is felt in an emotional state as for this matter (Coon, 20001, 56). Hence, healing does not only involve mere mind works. It has to involve actions that would help the individual free himself from the guilt that he is feeling from within his conscience. Basing from how the main character tried to resolve his personal issues regarding his past shortcomings against his friend, coming back to the origin of his guilt feelings has helped him realize the possibility for him to clear his conscience from the guilt that has mainly plagued his thoughts for a long time. As for the present situation of the society, to redeem themselves from the psychological and emotional disturbances brought about by the past, people opt to find ways by which they can still change things even though the change may not be done directly to the people they have once failed to help (Coon, 2001, 58). The changes that this certain courageous act by an individual that naturally results to betterment of many or even of a few would then help that individual to regain his clean conscience thus clearing him from all the guilt that has been keeping him from moving on with his life before. A Social Connection of the Story Several issues that divide it to several classes govern the society today. Aside from the race, economic status makes it harder for an individual to deal with the society in a fair way. Yes, today, the main reason why people tend to separate themselves from others is the existence of social prejudice. What is prejudice? According to the article entitled, â€Å"They found the solution to the problem of race†: â€Å"Education is the key to ending present condition of prejudice. When this key is missing, prejudice often results. Prejudice is a prejudgment, a judgment arrived at before persons have really examined the evidence regarding the matter involved. Then, because of their prejudice, they are inclined to discriminate against others. (Awake! 1999, 14) Certainly, the social division makes it harder for people to deal with each other in a fair way. In the same way, the governments and the non-government organizations, which are supposed to give answers to the said social issues, have a hard time finding ways by which they would be able solve the disturbances. As a result, they have to deal with the guilt that they gain from not being able to give answers to the most important issues in the human society. To be able to clear their guilt, they tend to solve the issues after several years when the pressure on the issue is already lessened and the attention of the society towards the issue has already been shifted to other problems (Coon, 2001, 60). Prejudice however remains to be the main reason why people are having a hard time dealing with a divided society. Facing the Roots of the Problem Basing from actual accounts in the society, prejudice is a major problem that makes it harder for people to find peace and security in their own communities. As it has been portrayed in the story of the â€Å"Kite Runner†, the divisive culture of people cannot be easily dealt with. As a result, more roots of social issues arise from the very said social illness.   It is a responsibility of everyone else in the society to face the challenge of acting against the effects of prejudice. By being completely free from the thoughts of being superior from others should help everyone realize that they have to stand for their fellowmen when they are faced with the oppression of prejudice like that of the situation between Hassan and Amir in the story. For this reason, it would be more possible for people to avoid the guilt of not being able to complete their responsibilities to their fellowmen. Conclusion The creation of the authored story of â€Å"The Kite Runner† gives a clear vision of the actual social situation of the people at present. The division that exists in the society makes it harder for the authorities to do what is supposed to be taken as an action to address the social injustices. As a result, guilt has to be dealt with by the authorities who are supposed to face the challenge. Rather than finding ways to heal one’s conscience from not being able to commit to the challenges of the society, one might as well find ways to face the issues even before they happen, in result, this process of facing the social issues would be easier to manage than to actually find ways to clear one’s conscience from being guilty. Healing and redemption is an essential part of the society’s recovery from the effects of social prejudice. Individuals who have been naturally involved in the deeper effects of the said social issues are the ones who are supposed to find ways by which they could be able to handle their inner distress brought about by social inequalities. Changing how the world views not everyone with differences in an unequal manner may be that easy to deal with, but a single person’s courage of taking the lead to make a change on how people deal with prejudice is a great step towards a fairer society that does not divide society based on several classes of differences. Work Cited Magazines and Journals Why is there war. (2000). Awake! Brooklyn New York. They found the solution to the problem of race. (1999). Awake! Brooklyn New York. Internet Sources: Hill, Amelia. The Observer. (Sunday September 7, 2003). An Afghan hounded by his past. http://books.guardian.co.uk/reviews/generalfiction/0,6121,1036891,00.html. (March 13, 2007). Howard, Edward. The Servant. (August 3, 2003). The New York Times. http://query.nytimes.com/gst/fullpage.html?res=9504E0DF123FF930A3575BC0A9659C8B63. (March 13, 2007). Books: Coon, Dennis. (2001).Introduction to Psychology: Gateways to mind and behavior. Thompson Learning Incorporated. Kirszner, Laurie G. (2001) Litterature: reading, reacting and writing. Harcourt College Publishers.

Macbeth :: essays research papers

The William Shakespeare play  ³Macbeth, ² depicted Macbeth as a loyal subject of King Duncan and his homeland of Scotland. Duncan was so pleased with Macbeth ¹s actions during the war that he was named the Thane of Cawdor, a title not far from king. Soon after, he wrote a letter to his wife that would make his future blood stained. Macbeth told her about the possibility of becoming king and in-turn hooked her on the idea. She then did everything in her power to give Macbeth the crown of Scotland.   Ã‚  Ã‚  Ã‚  Ã‚  Duncan ¹s gratitude for the deeds of Macbeth were displayed when Duncan announced,  ³Would thou hadst less deserved, that the proportion both of thanks and payment might have been mine! Only I have left to say, more is thy due than more than all can pay. (p.34) ² The last sentence of his quote said that he deserved more than everyone could have given him. Duncan ¹s thankfulness resulted in raising the title of Macbeth from Thane of Glamis to that of Cawdor. Only one title then separated him from being next in line to the throne, the Prince of Cumberland.   Ã‚  Ã‚  Ã‚  Ã‚  Macbeth could not help but notice how close he was to being king and hinted his ambition to have the title in his letter to Lady Macbeth. He wrote,  ³...came missives from the King, who all-hailed me Thane of Cawdor, by which title, before, these weyard sisters saluted me, and referred me to the coming on of time with Å’Hail, King that shalt be! ² Since the witches had predicted Macbeth gaining Thane of Cawdor, he believed they might be right about him replacing Duncan, as the letter continues,  ³This have I thought good to deliver thee, my dearest partner of greatness, that thou mightst not lose the dues of rejoicing by being ignorant of what greatness is promised thee. Lay it to heart, and farewell. (p.35-36) ² This passage also portrays Macbeth ¹s trust in his wife when he addresses her as,  ³...my dearest partner of greatness,... ² His trust in Lady Macbeth later allowed her to convince him to murder Duncan. Macbeth believed her when she said,  ³We fail? But screw your courage to the sticking place and we ¹ll not fail, (p. 42) ² which confirmed the deal.   Ã‚  Ã‚  Ã‚  Ã‚  Immediately after Lady Macbeth reads the letter from her husband, the idea of their royalty sets in. She says,  ³Glamis thou art, and Cawdor, and shalt be what thou art promised.

Berlucchi Market Analysis

————————————————- Berlucchi ————————————————- Marketing Plan 2012 Table of contents Executive Summary Introduction Guido Berlucchi & Co. SpA is one of Italy’s leading sparkling wine producers. After years of outstanding success, the company finds itself facing a stable market, with competition becoming even more intense, distribution more complex and consumers more sophisticated.The executive Committee is convinced that the strategy that drove the company’s development in its first 40 years needs to open up a new growth path, thus this marketing plan for the strategy for the upcoming three years. External Analysis Customer analysis Approximately 35% of the 313,000 million inhabitants of the U. S. drink wine at a per capita rate of 11. 5 liters. In te rms of demographics 69% are white, 14% Hispanic, and 11% African American, with the remainder 9% from other races.The average age of the American wine consumer is 49, with Millennials making up 26% of wine consumers,  generation X-ers aged 35-44 at 19%, ages 45 to 54 at 21%, and those over 55 at 34%. 24% of wine consumers in the U. S. have a college degree Segmentation by frequency Wine consumers are divided into two categories, core wine drinkers and marginal wine drinkers. The core group drinks wine once a week at least and represents 57% of wine consumers whereas the marginal group has a glass of wine in a time span ranging from once every 2 or 3 months to 2 or 3 times a month. 8% of all wine consumers have a glass of wine more than once a week and are considered to be the high frequency wine drinkers. Segmentation by age Thirty two percent of baby boomers (47 to 65) have a glass of wine compared to 17 percent in 2005. 62 percent of Generation X-ers (aged 35 to 46) are core win e drinkers, compared to only 43 percent in 2007. 6 percent of Millennials (aged 17 to 34) drink wine on a daily basis, 26 percent of them drink wine several times a week and 19 percent drinks once a week on average. This comprises the core wine drinking segment of Millennials, accounting for 63 percent of them compared to 37 percent in 2007.There is a significant difference between younger Millennials (17 – 25) and older Millennials (26 – 34). Older Millennials consume wine with greater frequency, consumed more glasses of wine per drinking occasion (2. 92 glasses on average) and were found to be highly experimental as 89% of older Millennials frequently purchase wine of an unfamiliar brand. Also interesting is that 60 percent of older Millennials found â€Å"fun and contemporary† looking labels of great importance when choosing wine to drink at home compared to just 31% of Baby Boomers.All Millennials and high end wine drinkers throughout the Generation X and ba by boomers often visit wine related web sites and Facebook pages or follow wine twitter accounts. The generational differences are also noticeable in the preference of domestically produced wines and imported wines. * 63% of Millennials, (70 million consumers), are reported to either â€Å"primarily drink imports† or â€Å"equally drink imports and domestics† * 43% of Generation X members (44 million consumers) report the same preferences * 32% of Baby Boomers (77 million consumers) report these preferences Segmentation by geographyWine consumption per person is lowest in the Midwest where 13% buys 4 or more bottles per month compared to 24% in the South, 25% of those in the North East and 29% in the West where 10% of the adult population even purchases 11 or more bottles per month. The top three states for Wine consumption are California, New York and Florida. The top three emerging markets, where the capita per wine consumption has grown the most over the past three years are Texas, Illinois and New Jersey Western states, especially those that produce wine locally such as California, Washington and Oregon, have proven more ikely to favor domestic wines while eastern states are more receptive to imports. Amongst others, New York, Florida, New Jersey and Washington DC all import more than 30% of the total wine consumption from outside the U. S. Competitive analysis Direct Competitors Listed below are the top 3 sparkling wines in the US at the current moment. They all fall in the range of our target customers in terms of their taste and their prices making them a direct threat and therefore a direct competitor. JCB by Jean-Charles Boisset No. 69 Burgundy, France ———————————————— Jean-Charles Boisset's JCB wines are made entirely from Pinot Noir grapes grown in the Burgundy region of France, this refreshing rose is light and crisp, offeri ng raspberry and red currant aromas. Many wine lovers associate this brand with romantic outings. It is currently listed as number one on the top sparkling wines in the US available at only 7 stores, and at a very affordably price it is sure to be serious competitor. Price: $20 ————————————————- Toso BrutMendoza, Argentina Toso has been producing sparkling wines in the Mendoza wine region of Argentina for 85 years. Their non-vintage brut is made entirely from Chardonnay grapes. Light and refreshing, it offers aromas of lemon and apple with buttery and toasty notes. It is very popular in the US with people looking for something inexpensive, well made, clean and bubbly especially for large events like weddings, receptions and birthday parties. ————————————————- Pri ce: $11 ————————————————-Taltarni Brut Tache Australia ————————————————- Made from Chardonnay, it is an established household name, known for producing extraordinarily high quality sparkling wines in Australia. They are known to be very environmental friendly because they recycle the vines and they refrain from using Diuron and Simazine on their property, thereby reducing the impact on ground water. One disadvantage however is that its prices compared to other wines has been progressively rising lately. Price: $25 Indirect competitorListed below is one of the top wines in the US at the current moment, although it does not fall under the category sparkling wines it is nonetheless a competitor in the total wine market especially now that it is making is mark on the US market making it worth the mention. Moscato’s Asti, Italy ————————————————- Moscato is currently one of the fastest-growing wine varietals in the U. S. Moscato wines tend to be sweeter and less alcoholic. Gallo, which holds 44 per cent of Moscato’s market share, saw sales of its own Gallo Family Vineyard Moscato increase by 124%in 2010, according to marketing research firm IRI.More than half of all Moscato consumers are under the age of 45, while nearly one-third are between the ages of 25 and 34. ————————————————- ————————————————- Moscato’s popularity with the younger generation could, perhaps, be due to hip hop influences. Ka nye West claimed  on MTV that he liked Moscato, while Lil’ Kim sang â€Å"Still over in Brazil/Sipping Moscato. † A more likely reason, however, is the low price tag that many Moscatos enjoy. ————————————————- ————————————————-Price: $5,99 – $16,79 Market analysis Overall size The U. S. wine industry has steadily increased in size and revenue over the past ten years and has grown into the fourth largest wine producing country in the world. In 2010 the U. S. became the leading wine consuming country, consuming as much as 330 million cases a year. This means Americans drink 3. 96 billion bottles of wine, surpassing France’s 3. 85 billion bottles and have spent more than $40 billion on wine in 2010. California is the largest wine produc ing and consuming state in the nation, currently it accounts for 61% volume share of the U.S. market. Projected growth Wine market is currently witnessing steady growth in both developed and emerging economies. Increasing disposable incomes, rising awareness about the medical benefits of wine, and the resultant consumer shift towards consumption of premium alcoholic beverages are driving the growth in the wine industry. US wine market is one of the fastest growing markets of the world, both in terms of production and consumption As per our findings, the US wine market is expected to hit a value of around US$ 33. Billion with 871 Million Gallons of wine sales by 2013. The market (in volume terms) will grow at an annual growth rate of over 3% during 2010-2013. The economic recession had impacted the US wine industry by consumers starting to enjoy low-priced bottles and wines by glasses. The millennial segment is the future of the US wine industry, and their numbers are increasing as y ounger members are attaining the drinking age. Moreover, rise in the number of female wine drinkers in marginal segment is also fueling the growth of the US wine industry.This trend, coupled with government’s initiatives, is playing a greater role in promoting reforms and competitiveness in the wine industry of the US. The market for sparkling wine in the USA has been growing rapidly in recent years according to some top findings from the Wine Market Council Report: Profitability Sparkling wine sales in the U. S. are estimated to have outperformed table wine brands for the third straight year in 2011, when American drinkers will have consumed the equivalent of 900 million glasses.More than 40 percent of those 15 million cases are sold during the holiday season. The overall wine market is projected to increase 1. 7 percent by year-end, to 313 million cases, its 18th consecutive annual gain. Sparkling wines account for a modest 5 percent, but growing, share of that volume. Entr y Barriers The wine industry in the U. S. has high barriers of entry because of high investments needed to buy land and machinery together with high costs of advertising and distribution. Because of the strict laws and high taxation of alcohol in the U. S. large economies of scale have the best chance of becoming and remaining profitable. Distribution System Throughout the U. S. the three tier system is enforced for the distribution of all alcoholic beverages. The system works as follows: * Non-U. S. Producer * 1st Tier – U. S. Producer / Importer * 2nd Tier – Distributor * 3rd Tier – On/Off Premise Trade (restaurants/ bars/ retailer) Non-U. S. producers are only allowed to sell directly to an importer, Importers and U. S. Producers are only allowed to sell to retailers, and only retailers are allowed to sell to consumers.Some states have partially or completely prohibited the distribution and/or the retailing tier and have these operated by the state government itself or contractors operating under its authority rather than by independent privateers. In any case taxes must be collected at all three tiers, even though in some states the importer and the distributor can be the same company, it must still pay taxes for both tiers. Trends A broadening of the consumer base, a greater range on offer, and an increasing desire among some consumers to make sparkling wine a regular rather than occasional treat are the main factors driving the trend.Americans still do not drink as much sparkling wine as consumers in other countries like Germany and the UK, but there is a strong long-term growth trend establishing for domestic and particularly mid-priced imported sparkling wines in the years ahead. At the moment Moscato has experienced a sharp increase in sales, up 73%, driven largely by younger drinkers. Cheaper and in wide range of flavored wines have become more popular as well due to restaurants adding less popular varietals to their glass pour l ist because the higher profit margin.This has resulted in wine consumers becoming more open-minded to seeking out unique varietals. Italy’s Macro Environment analysis: Demographic The Italian Population is currently approximately 61,261,254 but the growth rate of the population is gradually slowing, with most of the increase coming from immigration. Birth rates and death rates are virtually identical. However, the national figures conceal contrasting regional trends. In general, the birth rate and average family size are higher in the south of Italy than in the north, although populations in Molise, Basilicata, and Calabria are declining through continued emigration.For the country as a whole, life expectancy rose during the second half of the 20th century, reflecting higher nutritional, sanitary, and medical standards. At the beginning of the 21st century, the majority of the population was between 20 and 49 years old, with the largest group between ages 30 and 44. The age s tructure is built up as follows: 0-14 years:13. 8% male 4,315,292female 4,124,624. 15-64 years:65. 9% male 19,888,901female 20,330,495 65 years and over:  20. 3% male 5,248,418female 7,109,074 GDP Contribution by Economic Sector  and Top Industries: Agriculture:  3. 9%Industry:  28. 3% Services:  67. 8% (2011) Economic Italy  is currently the world's largest  wine  producer. However it has not been immune to the global economic downturn but it has been able to weather the financial storm. Wine is a key player in Italian trade with exports in 2011 valued at 3. 6 billion euros, compared to imports of 326 million euros. Sparkling wines account for 11% of exports. A sector report presented at the Vinitaly wine trade fair showed that the economic downturn was responsible for a 5. 1% decline in Italian wine exports in 2008 over the previous year.In this moment of economic crisis and uncertainty, people try to satisfy their desires. Italian cuisine is the most popular all o ver the world. In Italy the Docg sparkling wines do better than others, indicating that high quality standards and strong local identity, as much as the price, are central factors for the customers’ choices. Italian exports   rose 17 per cent in the first nine months of 2010, according to Coldiretti, the   Italian farmers   association. The growth had been even higher at 22% for the first six months of the year, primarily due to explosive demand from the US. Ecological (Natural)The future of wine grape supply depends on the availability of groundwater and high temperatures will decrease the availability of wine grapes. High water use by the industry, and in particular the treatment of wastewater, is likely to come under increasing public scrutiny. Over the five years through 2015-16, the level of capital intensity is likely to increase marginally due to investment in water treatment. Political The wine and grape industry in Italy is regulated by laws and decrees issued by the Ministry of Agriculture (Ministro Delle Risorse Agricole, Alimentari e Forestali).Italy is also a member of the European Union and shares the Common External Tariff regime. EU duties are charged by the Italian Customs Agency on the CIF (cost, insurance and freight) value of the product imported into Italy. Below are the 4 wine designations: * DOCG:  the highest classification for Italian wines, introduced in 1963. It denotes controlled production methods and guaranteed wine quality. There are strict rules governing the production of DOCG wines, most obviously the permitted grape varieties,  yield  limits, grape ripeness, winemaking procedures and ageing specifications.Every DOCG wine is subject to official tasting procedures. To prevent counterfeiting, the bottles have a numbered government seal across the neck. * DOC: a step below DOCG, the DOC classification accounts for the majority of wines produced in Italy. The quality control regulations are less stringent than t hose applied to DOCG wines. * IGT: The IGT classification was introduced in 1992, to allow a certain level of freedom to Italy's winemakers. Prior to 1992, many wines did not qualify for DOC or DOCG status not because they were of low quality, but because they were made from grape varieties (or blends) not sanctioned under DOC/G laws.The IGT classification focuses on the region of origin, rather than grape varieties or wine styles. * VDT:  VDT wines are typically of lesser quality than those labeled with IGT, DOC or DOCG, but not always; the ‘Super Tuscans' (see below) are often labeled as Vino da Tavola. U. S. Macro Environment analysis The following macro environmental factors have an indirect effect on Berlucchi’s success in the US market. The major forces of the macro environment should be highly regarded as the company is looking to enter unfamiliar territory while at the same time striving to acquire a competitive advantage.Demographics According to the Wine Int elligence USA Sparkling Report 2012, over 30 million Americans say they drink sparkling wine at least once a year. For the majority of this population their sparkling wine experience is confined to perhaps one or two glasses a year, on special occasions. However, what appears to be driving the growth in sparkling wine is the segment of consumer; estimated at around 9 million, and female-dominated, who say they like to drink the bubbly stuff at least once a week. Many of these people say that sparkling wine is their favorite drink, ahead of still wine.California| California accommodates 37,691,912 people, houses more people than any of the other states of America and has eight of the 50 most populous cities in the U. S.. Remarkable is that only 39. 7% of the people living in California are white non Hispanics and 38. 1% are Hispanic whites, only 6. 6% is black and 13. 6% of Asian ethnicity. The ethnic makeup is very different from the countries average. Of the persons aged 25 years o r older 80. 7% has graduated high school and 30. % has a bachelor’s degree or higher. The Median house hold income is $60. 883. Texas| Texas is the second most populous U. S. state, housing 25,674,681 people who are mostly located in the major cities of Houston, San Antonia and Dallas. Similar to California, Texas also houses a relatively large number of Hispanics. 38. 1% of the population is white of Hispanic decent and 44. 8% is non-Hispanic white. The division of other ethnic groups is quite similar to the nations average. 80% of adults 25 years or older have a high school degree and 25. 8% of them have a bachelor’s degree or higher. The median household income is $49,646 a year. |New York| New York is the third largest state after California and Texas with a population of 19,465,197 of which roughly 64% lives in the New York City metropolitan area. The percentage of the population that is of African American decent is slightly higher than the nations average, 17. 5 % as well as those with an asian heritage, 7. 8%. The median household income is $55,603, 84. 4% of the persons age 25+ are high school graduates and 32. 1% has a bachelor’s degree or higher. | Florida| Florida is the fourth most inhabited state in America, accommodating 19,057,542 people.Notable are that it contains the highest percentage of people over 65, 17. 6% and the 8th fewest people under 18, 21%, also its population is expected to double between 2000 and 2030. Florida’s ethnic makeup shows few differences from the countries average with the exception of persons of Hispanic or Latino origin which is 23% and growing faster than in any other state. 85. 3% of the adults 25 years of age or| Social-Cultural In the U. S. wineries have become more than just wine producers and sellers. They're often venues for gatherings as diverse as  weddings  and business meetings.Some wineries have onboard restaurants and gift shops and are also lively tourist attractions. That says something for the ingenuity of savvy wine producers, but it says even more about the changing American attitude toward wine. Recent consumption gains for sparkling wine have been driven by many factors over the last few years including the adoption of wine in early adulthood by the large Millennial generation, the availability of quality wine at all price levels, and the acceptance of moderate wine consumption as compatible with a healthy lifestyle. EconomicThe turbulent economy has had a moderately negative affect on the nation’s collective wine consumptions growth. Within the 2008–2011 period, stock market volatility had little effect on how much wine consumers were drinking. In 2008, 61% of respondents stated they hadn’t changed the amount of wine they consumed despite the poor economic conditions. The economy has had a direct effect on prices over the last 10 years, prices went down significantly during the recession, but as the economy has improved, t hey have bounced back very quickly and even surpassed previous highs.Fine wine prices dropped 19 percent from August 2008 to August 2009 and they increased 33 percent from August 2009 to August 2010, surpassing their previous pre-recession prices. Political Wine is regulated by the Alcohol, Tobacco, Firearms and Explosives division of the internal revenue service which makes it subjected to high levels of control and tax. Us wines are shaped by politics including which grapes grow where, what can be written on the label, which wines are exported or imported, which wines are available in local stores, and how much a wine costs.In the  United States, the wine laws are more flexible than European standards in regards to regulations on what viticultural and winemaking practices are allowed in each wine region. A sizable portion of American wine laws relate to  wine labelling  practices. The United States imported 932 million liters of wine in 2010. The majority of imports came fro m Italy ($1. 3 billion). Depending on the type of wine, U. S. tariffs on imported wine from nations with which the United States maintains normal trade relations range from 5. 3 cents per liter to 22. 4 cents per liter.Tax rate for natural wine imported to New York for example is $0. 30 per gallon Internal Analysis Current products Berlucchi’s current products: * Cuvee Imperiale Brut * Cuvee Imperiale Max Rose * Cuvee imperial Demi Sec * Cuvee imperial vintage * Cuvee Storica Franciacorta DOCG * Bianco imperiale * Cellarius Brut * Cellarius Rose * Cellarius Pas Dose * Berlucchi ’61 brut * Berlucchi ’61 Rose * Berlucchi ’61 Saten * Palazzo Lana Franciacorta Brut Millesimato * Palazzo Lana Franciacorta Saten millesimato * Palazzo Lana Franciacorta Extreme millesimato PricesThe sparkling wines of Berlucchi are between â‚ ¬15 and â‚ ¬28. The average price per line: * Berlucchi bianco imperiale: â‚ ¬10 * Berlucchi ’61: â‚ ¬15 * Cuvee imperia le: â‚ ¬20 * Cellarius: between â‚ ¬15 and â‚ ¬20 * Palazzo Lana: â‚ ¬28 Target Market Geographically speaking, Berlucchi is targeting Italy. Berlucchi won market leadership in its first few years because of its mission to ‘democratize the bubbles’. With their below average price for sparkling wine, and their distribution through grocery stores, Berlucchi sparkling wine was accessible for everyone. Distribution channels Grocery retailersIn 2006 70% of all Berlucchi sales went through the grocery retail distribution channel. Because of the company’s solid penetration of this channel, they established an undisputed leadership position. HoReCa and specialty stores Berlucchi produced a product especially made for this channel, which won considerable success and allowed the company to re-establish its reputation among connoisseurs and win over specialized dealers. Positioning By distributing through grocery retailers, Berlucchi positions itself in a totall y different range than most other Italian sparkling wine, which are available in specialty stores.The company’s solid penetration in this modern distribution channel anchored the positioning of the Berlucchi brand. But having a lower price does not mean they work with a bad quality, although some may look at Berlucchi as a cheap supermarket wine. The Berlucchi brand guarantees a high-quality, prestigious, accessible product. Competitive Advantage Berlucchi stands out because of their innovative spirit and desire to experiment with new products and market segments, but off course, still in an accessible and qualitatively good manner. The solid penetration in the modern distribution channel of grocery retailers is something no other ompany has accomplished. Marketing Mix The marketing strategy that has secured Berlucchi’s success over the last thirty years can be summed up in three key words: Italy, mass market, and corporate brand. In the 1960s, the company’s fou nders saw an opportunity to create a sparkling wine market in Italy using the champenoise method. This method meant educating both trade and final consumers through constant communication, the aim of which was to eliminate the image of Italian spumante as a sub-category of wine, or a lower-quality version of the more familiar French champagne.In just a few years’ time the company won a leadership position in the Italian market. They had a clear mission: â€Å"To make bubbly accessible to everyone†. The firm achieved this mission with an extensive distribution strategy. Berlucchi spumante wanted to create a festive atmosphere on any occasion. The best way to achieve this was to reach the consumer through the simplest distribution channel, for instance grocery retailers. Berlucchi has always implemented a push rather than a pull strategy, focusing communication and commercial investments on trade.Another marketing strategy of Berlucchi was based on avoiding product proli feration in the portfolio, in keeping with the need to educate Italian consumers on the traditional method. Berlucchi came up with a series of simple, distinctive brand visuals, which over time have come to be identified with the company. Financial Performance SWOT analysis Confrontation matrix * S1 x O4, because despite the challenging economic environment we are currently in, sparkling wines are set to gain share in the US alcohol market.Berlucchi has a below average price and that could be an opportunity for them to gain share in the US alcohol market. * S3 x O3, because Berlucchi has an innovative spirit and desire to experiment with new products and market segments. They could have an opportunity in the US alcohol market, because most Americans show an interest in broadening their horizons in terms of what kinds of wine they buy. * S3 x T3, because consumers in the wine market are constantly evolving. That could be an opportunity for Berlucchi, because they have an innovative s pirit and desire to experiment with new products and market segments.Corporate strategy Berlucchi grew in a few years after founding to be leader in its market thanks to a clear mission: ‘democratize the bubbles’. The founders were convinced they could produce an Italian sparkling wine of comparable quality to the current products on the market. The aim was to produce a high-quality, prestigious, accessible product for a below average price. The basic reason for their attitude was that they could not justify the substantial price difference between Berlucchi products marketed through large retailers and the same wines sold in specialized stores and wine bars.Eventually Berlucchi grew to be a market leader in the large grocery retailers and an important player in the HoReCa and wine shops, without ever letting go of the initial corporate mission. Segmentation The wine consumers in the U. S. can be segmented in to the following groups based on consumption and spending pat terns: Daily Musts | Variety Seekers| Personal Image| Savvy Buyers | Occasional Consumers | Represent 16. 4% of wine drinkers| Represents 14. 4% of wine drinkers|   Represents 14. 1% of wine drinkers| Represents 2. 6% of wine drinkers| Represents 34. % of wine drinkers| Spending share of 49. 3 % | Spending share of 34%| Spending share of 3. 1%| Spending share of 9. 7%| Spending share of 4%| Median age is 61| Median age is 50| Median age is 34| Median age is 48| Median age is 55| Annual income averages $62,000| Annual income averages $100,000| Annual income averages $62,000| Annual income averages $80,000| Annual income averages $63,000| | Target Market The segments most viable for targeting are the Daily Musts, the Variety Seekers and Personal Image consumers and through using a differentiated strategy all three can be targeted.Daily musts Although this segment is brand loyal, by applying low cost strategy and attractive packaging this segment can be entered, after which the focus should be customer retention and maintaining everyday low price offers in combination with a loyalty program to create loyalty to the berlucchi brand and maximize customer equity. Variety seekers Premium brand images and first-class packaging will strongly appeal to the Variety Seekers and expert ratings, premium pricing and event or celebrity sponsorships will truly entice this segment to try berlucchi brand wine.However because of their low brand loyalty a truly aggressive loyalty program is necessary to retain their business. Advertisement be should focused on wine magazines and internet media. Personal Image This segment shows the most potential profitability on the long term and should be engaged to ensure a significant market share in the next decade as this is the fastest growing segment. The focus has to be on moving them towards Variety Seeker of Daily Must habits. Innovation through products and packaging and leveraging social media would speak most to the Personal Image wine drinkers. PositioningDaily Musts and the Personal Image consumers can be catered to with one product in the area , the product’s should have a below average to average price level and focus on offering an accessible product of decent or higher quality. The product targeting the variety seekers should be higher priced to project a somewhat prestigious image and high quality. Below you can see the product value proposition for Berlucchi’s target customers. Objectives Market share Brand familiarity Revenue Timeframe: 3 years Marketing Mix Product As described in positioning, there are three target groups for which there are different product needs.To accustom all potential customers it is neccessary to introduce two different lines of products. Lines Cuvee Imperiale – Brut – Max Rose – Demi Sec – Vintage ‘For over half a century, Cuvee Imperiale has been synonymous with festiveness, joy, and raising a toast, and its consistently fine taste has made it the Italians’ favourite classic-method sparkler. Its four styles make it the perfect choice for both casual moments and the most special of occasions. ’ This line will serve the needs of the Daily Musts and Personal Image consumers, it has a below average price, it is accessible and has a high quality.Palazzo Lana – Brut – Saten – Extreme ‘The timeless elegance of the Palazzo Lana Berlucchi, the handsome mansion that inspired the first Franciacorta,   is present once again in these vintage-dated Franciacortas. Produced from free-run must, and rare both in quantity and quality, the three are bound together by a common thread of gracefulness, complexity, and avoidance of excess, each wine dedicated to those who enjoy them thoughtfully. ’ This line will serve the needs of the Variety Seekers consumers, it is above average prices, has a prestigious image and has a high quality. Packaging Daily mustsThe Daily Musts cons umers are flexible in their response to different packaging designs. Personal Image They consider wine consumption an extension of their personal images, however are more focused on store brands. Variety seekers This consumer group appreciates premium packaging. When lining together these consumer characteristics and the packaging of the chosen products, we can come to a conclusion of no necessity to change the packaging of the products, due to the already existing compatibility of consumer needs and the product packaging. Price Cuvee Imperiale The price for the Cuvee Imperiale line will be $15.Berlucchi will have to lower their price a little bit than they have in Italy, but this way they can compete with the competitors in the US, for instance the Toso Brut from Argentina. The Cuvee Imperiale will be a good competitor due to their below average price and good quality sparkling wine. Palazzo Lana The price for the Palazzo Lana line will be around the $30 in the US. One big competit or is the Taltarni Brut Tache, their price is around the $25. Berlucchi Palazzo Lana is more expensive, but Berlucchi will still be a good competitor since the prices of Taltarni have been progressively rising lately.It will also be a good competitor, because of its prestigious image and high quality. Place Locations Below is a table with 6 states located in the U. S. whom are known to have an extremely large wine drinking population, and therefor will be the best states in the US to introduce the Berlucchi’s wines. Type| California| Texas| Florida| New York| Illinois| New Jersey| Population| 38,053,956| 25,901,361| 19,057,542| 19,465,197| 12,869,257| 8,821,155| Binge drinkers| 14. 7%| 15. 6%| 12,40%| 15. 2%| 17. 5%| 14. 4%| Casual drinkers| 56. 2%| 51. %| 56,3| 59. 1%| 58%| 59. 7%| Heavy drinkers| 5. 9%| 5. 2%| 5,3| 4. 3%| 4. 7%| 4. 5%| Retailers: Within each one of these 6 states the wines will be available in two types of store retailers: * Specialty stores: A small retail outlet that focuses on selling a particular product range and associated items. Most specialty store business operators will maintain considerable debt in the type of product that they specialize in selling, usually at premium prices, in addition to providing higher service quality and expert guidance to shoppers. Superstores: A very large retail store that stocks highly diversified merchandise, such as groceries, toys, and camera equipment, or a wide variety of merchandise in a specific product line, such as computers or sporting goods. Specialty stores: Berlucchi’s wines will be available in the best of the best wine shops in each state. They will be placed in these shops according to the stores location and popularity. State| Specialty Wine Stores[1| California| 867| New York| 533| New jersey| 265| Florida| 252| Illinois| 211| Texas| 181| Superstores:More than a third of all wines sold in America are purchased at Superstores. Wall-Mart 2011 USA Retail Sales ($000): $307,7 36,000 Extending its lead, it is making solid progress on improving its merchanides through different new projects. The company’s grocery business accounted for more than half of its 2011 sales. Wall-Mart constantly hires wine scouts to research new wines in order to further broaden their inventory. Wines located in a Wall-Mart store Kroger 2011 USA Retail Sales ($000): $78,326,000 America’s largest traditional grocer is food focused and price led.It includes a wide variety of all sorts of wines. In 2012 Kroger hired wine stewards for a few of its Texas stores. The political push to sell wine in grocery stores is now in different Kroger stores. Wines located in a Kroger store Target 2011 USA Retail Sales ($000): $65,815,000 Target will try to become more beverage focused and currently has strong store innovations and loyalty programs. They combine grocery store bargains with wine shop-level service and expertise. Wines located in a Target store Restaurants:In addition to these retail stores, the wines will also be available in a variety of restaurants in each state. These restaurants will include non-fast food restaurants that have an ideal location for different types of customers to reach. Below is an example of one of the restaurants that look real promising in terms of boosting Berlucchi’s brand image. Since 1979 Antonello Ristorante located in California has captured the essence of Old World authenticity with a new Italian. Antonello's award-winning wine list boasts more than 700 foreign and domestic labels.For special occasions or business meetings, there are eight Promotion The goal is to become the first thing that comes to mind for a person from one of our targeted segments when in the market for wine. According to professor Jacob’s Creek of the University of South Australia’s Wine Marketing Research Group, it is not the brand but the wine regions that influences consumers choice the most. The promotional strategy us ed to differentiate the Berlucchi wines from others is to sell the idea of living the southern European care free, want for nothing life style using the campaign slogan: ‘A taste of the Italian life’.This should invoke an emotional response to advertisement as consumers in the Daily must segment, who are older and often retired or near retirement age can relate to the care free living. The variety seekers can relate to the ‘want for nothing’ aspect and high end allure of Milan or Rome and the younger personal image consumers can indulge in the American romanticized cultural image of Europe. Promoting the Brand As Americans are not yet aware of how many wines are actually Italian and no wine markets itself distinctively as such, the Berlucchi products can be analyzed as a new product.To start the introduction phase a launch event will be held in Los Angeles, California to which columnists/writers for different lifestyle and food magazines, influential taster s and VIPs’ will attend to experience the different wines by Berlucchi that will be launched in the U. S. which will result in features in magazines such as ‘food and wine’, Decanter, WineEnthusiast and Fine. During the introduction phase a print ad and a broadcast media advertisement featuring Robert Deniro will run.Because of his Italian heritage and wine expertise as he owns his own vineyard, on the other hand because of his long and outstanding acting career he is recognizable and idolized by people across generations. The broadcast ad, which will run for thirteen weeks, will be shown during lifestyle television shows and cooking shows such as ‘Master chef’ and ‘come dine with me’ and can even be featured on the shows. The print ad will run for a total of 30 weeks, appearing once to 10 times throughout that period in different magazines and as banners on different online magazines.To promote the brand directly to the target group, Be rlucchi nights will be organized during which selected restaurants will serve free glasses of Berlucchi wine that go well with the dish ordered. The before mentioned strategies will be very effective for the Daily must and Variety seeker segments, but to ensure the involvement of the personal image segment a social media campaign needs to be launched. Each bottle of Berlucchi wine will have a code and instructions printed on the back side of the label.After purchasing a bottle a consumer can befriend Berlucchi on Facebook or follow them on twitter, after which the phrase â€Å"Having a taste of the Italian life #Berlucchi #;code;† should be posted online. In response a code will be send back to the consumer which entitles him or her to a 61% discount on their next purchase of a bottle of Berlucchi Cuvee Imperiale and they enter a lottery for a set of 3 Berlucchi Franciacorta ’61 bottles. The low price and exciting price will attract the segment and by posting they imme diately communicate the existence of Berlucchi to their friends. Loyalty program – – – Budget ; Control – – Recommendation – – – Appendix Figure 1a Figure 1b Figure 2 Figure 3 Figure 4 Figure 5 Top 3 states in wine consumption Figure 6 Top 3 states in emerging wine markets Figure 7 Figure 8a Figure 8b Figure 9 Daily Musts| Variety Seekers | Personal Image | Savvy Buyers | Occasional Consumers| * Represent 16. 4% of wine drinkers * Accountable for 49. 3 % of all wine sales. * Median age is 61 * Annual income averages $62,000. Daily Musts are the heaviest wine consumers and consumers and drink on a daily basis. They are brand loyal and flexible in their response to different packaging designs and tend to buy based on low prices. * Represents 14. 4% of wine drinkers * Spending share of 34% * Median age is 50. * Annual income averages $100,000. They tend to spend more per capita than the Daily Musts, appreciate premium packaging, q uality wine and variety. They often view higher price as a sign of higher quality. The Variety seeker is most likely to use the internet to secure information before purchases and look at wine as an extension of their personal image and tend not to be brand loyal. | * Represents 14. 1% of wine drinkers * Spending share of 3. 1% * Median age is 34 * Annual income averages $62,000.This group will grow in consumption as their ages and incomes increase. The Personal image drinker’s habits are in development, and they tend to turn to social media and the Internet for information. They consider wine consumption an extension of their personal images, however are more focused on store brands. | * Represents 2. 6% of wine drinkers * Spending share of 9. 7% * Median age is 48 * Annual income averages $80,000This group enjoys trying a variety of wines and tends to buy on value, however not necessarily focused on low price since they only consume moderate to small amounts. * Represents 3 4. 5% of wine drinkers * Spending share of 4% * Median age is 55 * Annual income averages $63,000| Figure 10 Segmentation by lifestyle Figure 11 ——————————————– [ 1 ]. SVB, 2012 [ 2 ]. See Appendix figure 2 [ 3 ]. See Appendix figure 3 [ 4 ]. See Appendix figure 4 [ 5 ]. See Appendix figure 5 [ 6 ]. See Appendix figure 6 [ 7 ]. http://www. gayot. com/wine/top10american-sparkling-wines/main. html [ 8 ]. Wine Institute, 2011 [ 9 ]. Press Democrat, 2011 [ 10 ]. See Appendix figure 7 [ 11 ]. With the exception of the state of Washington [ 12 ]. https://www. cia. ov/library/publications/the-world-factbook/geos/it. html [ 13 ]. http://en. wikipedia. org/wiki/List_of_wine-producing_countries [ 14 ]. http://quickfacts. census. gov/qfd/states/06000. html . S. Census Bureau: State and County QuickFacts [ 15 ]. http://www. tax. ny. gov/bus/bev/abt_tax_information_individuals. htm [ 16 ]. Be rlucchi Case page 15 table 2 [ 17 ]. http://www. berlucchi. it/we-do/ [ 18 ]. See Appendix Figure 1a [ 19 ]. See Appendix Figure 1b [ 20 ]. http://www. wine-searcher. com/wine-197764-0001-berlucchi-palazzo-lana-brut-franciacorta-docg-italy [ 21 ]. Berlucchi Case page 5 [ 22 ]. Berlucchi Case page 5 [ 23 ].Berlucchi Case page 5 [ 24 ]. Berlucchi Case page 5 [ 25 ]. Berlucchi Case page 11 [ 26 ]. Berlucchi Case page 21 table 23, 24 [ 27 ]. See Appendix figure 10 for more info. [ 28 ]. See Appendix figure 11 [ 29 ]. http://www. berlucchi. it/we-do/#cuvee [ 30 ]. http://www. berlucchi. it/we-do/#palazzo-lana [ 31 ]. See Appendix Figure 10 [ 32 ]. See Appendix Figure 1a [ 33 ]. http://www. statemaster. com/graph/hea_alc_con_cas_dri-health-alcohol-consumption-casual-drinkers [ 35 ]. http://www. wkrn. com/story/19808909/kroger-begins-focused-push-for-wine-in-grocery-stores [ 36 ]. Based on research findings of SymphonyIRI group, INC

Financial Decision Making In The Workplace - Free Essay Example

Sample details Pages: 19 Words: 5561 Downloads: 1 Date added: 2017/06/26 Category Finance Essay Type Analytical essay Did you like this example? The purpose of this report is to prepare an analysis of the financial performance and position of Easyjet plc in comparison with that of Ryanair plc. The CORE model approach was used in preparing a review of each airlines annual accounts with selected ratios applied to evaluate compare, contrast their financial performance. An analysis of Easyjet plc performance and position against Ryanair plc confirms the following key findings. Don’t waste time! Our writers will create an original "Financial Decision Making In The Workplace" essay for you Create order The principal finding from this report is that the current finance strategy for Ryanair plc is not sustainable in the long term. Easyjet plc diversification into ancillary activities has incurred costs which will be recouped over a period of time and reflect a positive investment strategy during and after the economic downturn. Furthermore, Easyjet will achieve additional savings if an optimum hedging policy is implemented during the current economic downturn. Introduction An appreciation of the European airline industry was considered in relation to Easyjet plc current financial positioning and brand recognition as the preferred low cost airline provider. The financial performance and position of Easyjet plc was appraised against Ryanair plc through application of the CORE (Context, Overview, Ratio, Evaluation) model. Context establishes the market share and European airline environment from an internal and external perspective that the two plcs operate and compete within. Overview is an appraisal of the financial performance between the two Plcs in relation to similar operational activities and qualifying their accounts and strategic approach during the current economic downturn. Ratio analysis establishes the relationship between stated totals within the Balance Sheet, Cash Flow Statement and Income Statement to establish the base of Evaluation for financial performance between Easyjet plc (Easyjet) and Ryanair plc (Ryanair). Evaluatio n of the two accounts is an integrative component of the CORE approach based upon the three previous stages to assist with identifying an overall conclusion from the analysis. The overall conclusion may then be drawn as to the degree of success of the organisation in terms of the implementation of the corporate strategy for customer, competitors and suppliers according to the specific focus of the analysis (Moon Bates, 1993). Context (Internal): Each airline as their primary activity provides international and regional low cost airline fares within the European airline industry. Both airlines are recognised within the market and operationally focussed towards a low-fare strategy. Sustainability and success of providing low cost airline fares is critically dependent upon retaining a low cost base especially during the current economic downturn to protect long-term viability. The global duopoly of Boeing and Airbus within the European airline industry influences the high fixed costs relative to variable costs that is inherent to airline pricing and generates the operational focus towards retaining a low cost base. Reducing operational costs provides each airline with flexibility to offer lower ticket fares, issue dividend shares or retain earnings for future investment as part of their competitive advantage over a rival (Brassinton Pettit, 1997). From a media perspective and operational approach, Ryanair has successfu l introduced a low cost base through staff optimisation and promoting www.ryanair.com for online ticket sales. Application of the airlines website can provide an integrated marketing communications strategy as well as introducing an effective management information system to co-ordinate revenue activities. Ryanair is reputed to have achieved  £22 million pounds in reduced sales and distribution costs through application of their web-based management information system (Done, 2008). Additional operational savings to establish a low cost base have been generated through Ryanairs standardisation of their airline fleet to Boeing 737s. Standardisation provides lower staff training and maintenance costs due to familiarity and inventory considerations. Both airlines target the European short-haul city break market segment and utilise a system termed yield management to allow seats to be priced according to supply and demand (Ryanair Plc, 2008). Ryanair and Easyjet focus upon an opt imum turnaround time at each due to empty planes being non-revenue generating. To maximise profits, fixed and variable costs are regularly challenged to introduce further savings which establishes the rationale as a low cost airline provider not to be forthcoming with compensation to passengers for flight cancellations. It is therefore an operational priority to ensure service delivery with minimal lost baggage claims and flight reliability exceeds the industry standard in relation to key performance indicators. Dependent upon the size of the aircraft purchased or leased from Boeing and Airbus, economies of scale can be achieved to increase the operating profit margin of the airline. Establishing a sustainable low cost base can increase the projected operating profit, increasing the airlines purchasing power to negotiate preferential commercial arrangements with suppliers. Furthermore financial success in one industry sector provides opportunity to develop activities in another s ector using ancillary partners. In relation to each airline generating ancillary revenue, Easyjet activities have diversified into various market segments and achieved higher revenue returns beyond that of Ryanair, as detailed within each airlines Income Statement. Both the airlines have expanded their ancillary activities with Easyjet achieving a 115% improvement for ancillary services including Car rentals, Hotels, apartments, Travel Insurance and Airport Parking as recorded within their respective company accounts.Ultimately, Easyjet is expanding the portfolio of activities during the economic downturn to develop the brand and establish complimentary ancillary services to mitigate against revenue loss in a specific sector such as Passenger flights. In contrast, Ryanair has generated a 23% improvement in their ancillary services with passenger service the primary focus to achieve revenue (Easyjet Plc, 2008). As a short term strategy, this has possibly generated the concern t hat Ryanair performance has improved over Easyjet, yet as a long term approach the approach is not sustainable. This is due to all operational activities having a specific cost threshold and in a fare war contest it may become necessary to subsidise activities from other more profitable ancillary activities. The current approach by Ryanair in the economic downturn is therefore considered prejudicial against their long-term viability. Each airline primary assets are detailed within the Income statement that reflects the substantial capital outlays in relation to the purchase of aircraft fleet for both providers. In the long term this approach can be beneficial due to reduced future costs associated with leasing as well as minimising interference from external financing companies concerning pricing tactics with possible withdrawal of finance due to perceived negative publicity of the airline. Ownership of aircraft establishes a tangible asset and brand platform that can be appli ed to increase shareholders and investors confidence. The accumulation of assets establishes a long-term investment strategy that requires operational maintenance and management depreciation consideration. Ownership of the asset ultimately provides each airline with the opportunity to select without constraint their service partners for maintenance, cleaning and insurance coverage. As previously mentioned both airlines target the short-haul city break markets and utilise the yield management system to allow seats to be priced according to supply and demand therefore exercising full control of their marketing mix to the consumer (Airlines, 2006). Recorded revenues of  £2,171 million was achieved by Ryanair during the financial year ended on March 2008, representing an increase of 21.3% over 2007 and generating 37.6% of the total revenues in 2008(Ryanair, 2008) in comparison recorded revenue was  £2,362.8 million in September 2008 generating an increase of 31.5% compared to the ir performance in 2007 and reflective of a sustainable corporate strategy to protect the viability of Easyjet during the economic downturn(Easyjet Plc, 2008). Easyjet completed the acquisition of GB Airways in January 2008 with Ryanair attempting a similar corporate acquisition that was rejected by Aer Lingus. Currently no progress has been achieved from the Aer Lingus rejection of the offer yet the collapse of buget airlines Sky Europe in 2009 with previous budget airlines also going into administration does not provide the consumer with confidence in low cost fare providers (PIGNAL, 2008). Context (External) According to Datamonitor (2008) by 2011 the airline industry is forecast to have a value of  £89 billion with 773.5 million passengers anticipated to use airline travel on an annual basis. Competition amongst the two airline providers is increasingly focused towards cost and brand marketing. Various management cost reduction initiatives with provision of only one class of service have developed each airlines reputation as a no-fill providers due to costs being charged for all non-essentials. To assess the external profile of Easyjet in comparison to Ryanair a SPECTACLES approach is applied with consideration towards the various categories as well as applying Porters five forces model (1980). Social considerations include recognition of both airlines as market leaders with strong brand identification for low cost fares. Furthermore, both airlines have developed a reputation for reliability through punctuality of flight times, minimal flight cancellations and reduced lost lug gage claims. Political considerations include all regulatory constraints that may apply to both providers such as airport charges which are generally levied through regulation rather than commercial negotiation. Economic considerations include the economic downturn, reduced disposable income and expenditure of customers together with increasing fuel costs due to global conflict and fear of terrorism attacks. In addition, global events have increased insurance provisions and requirements within the airline industry. Cultural considerations include the perception that low cost airlines provide an inferior service in comparison to traditional flag carrier and charter airlines that concentrate upon a differentiation competitive advantage. Technological considerations include the recognition that safety is a main consideration and cost aspect with all aircraft parts have a defined life-span before replacement is required. The replacement of prop aircraft to jet engines as par t of fleet modernising as well as increasing safety requirements requires airlines to a continual review of their projected capital and maintenance allowances. Aesthetic considerations include the preference for one airline over another with Easyjet achieving a global focus due to broader activities in comparison to Ryanair. Both airlines provide the same class of service on all flights with emphasis upon low costs. Customer considerations include ease of on-line booking together with ticket costs combined with reliability of each airline operating the prescribed flights and minimal loss baggage claims. Against Easyjet, Ryanair has achieved significant short-term success in this category at the expense of generating a love/hate relationship with the public. Legal considerations include the regulatory constraints for passenger safety, security provisions, noise reduction, and environmental issues. In addition, to employment and aviation law, there is competition and liabilit y legislation that restricts the operating activities of each airline. Environmental considerations include all regulatory constraints that may apply such as noise reduction, emissions and fuel efficiency, reduced energy, water and material consumption and air traffic congestion. Sectoral considerations include review of competitors and future regulatory considerations to enable a competitive advantage to be developed over rival airlines. In many respects review and implementation of Porters (1980) competitive forces provides the sector framework for analysing the intensity of competition to the profitability and attractiveness within an industry. The below five forces diagram illustrates the relationship between the different competitive forces (Porter, 1980). Adapted from Porter (1980) Five Forces Model Threat of new entrants low The preference for lower air fares generated the business opportunity for Easyjet and Ryanair to compete against traditional flag carrier and charter airlines. A high capital investment and legislation requirement combined with competition for additional airport slots/positions creates physical and financial barriers for new operators within the airline industry. Bargaining power of customers increasing Availability of constant information through the World Wide Web provides information of which airline has the cheaper fare and within an economic depression, the preference of the customer is generally towards the cheaper service provider. Bargaining power of suppliers strong but limited The price of aviation fuel is directly related to the cost of oil, as an individual company Easyjet and Ryanair does not have the power to alter this. The impact of the supplier depends on the availability of alternative suppliers and product substitutes (Dibb Simpkin, 2001). The more these airlines expands the more power it will possess over its suppliers Threat of the substitute products or services low There are no tenable threats from other modes of transport as distances are too great except from London to Paris, which can be reached by Euro Star. Current competitors Easyjet and Ryanair sustain a cost leadership advantage over all other operators including traditional flag carrier and charter airlines that utilise a differentiation rather than a low cost base. Overview: Both Ryanair and Easyjet have membership of the European Low Fares Airline Association (ELFAA) to assist with their equal representation within the airline industry. According to ELFAA (2009) statistics Ryanair provides 1,200 daily flights in contrast to the 1,000 daily flights provided by Easyjet. As a consequence of providing a higher volume of daily flights than Easyjet, the passenger load factor for Ryanair is lower at 81.4% according to the June 2009 ELFAA statistics. The passenger load factor of 85.2% for Easyjet identifies on average their passenger occupancy per flight which can be compared to the break-even point to identify the profitability of a specific flight (ELFAA, 2009). The below table provides an insight of each organisation in relation to their operations and company profile. RYANAIR EASYJET ESTABLISHED 1985 1995 ANNUAL TURNOVER 2171 million 2,362 million OWNERSHIP STRUCTURE Ryanair Holdings Plc Easyjet Plc NO OF AIRCRAFT 220 165 MAJOR FLEET TYPE BOEING A320 ;BOEING MAIN HUB LONDON, STANSTED LONDON, LUTON AIRPORT H/Q DUBLIN, IRELAND LONDON, UNITED KINGDOM NO OF ROUTES COVERED 950 400 NO OF COUNTRIES COVERED 147 COUNTRIES 28 COUNTRIES EMPLOYEES 5920 6107 PASSENGER VOLUME 60 MILLION 43 million PASSENGERS 5.12 million 3.53 million PUNCTUALITY FLIGHTS ON TIME 88% 80% ACQUISITION MERGERS FAILED TO ATTEMPT AER LINGUS ACQUIRED GB AIRWAYS EXTERNAL AUDITORS KPMG PRICEWATER COOPERS AIRLINE PASSENGERS PER EMPLYOEE 9679 6772 Source : Easyjet plc 2009 Ryanair plc 2009. Both the airlines follow the going concern basis in preparing their financial statements which have been certified by independent respective external auditor as being a true and fair status of the companys financial overview. The financial statements are prepared in accordance with the International Financial Reporting standards (IFRS) as adopted by European Union (EU) and effective from March 2008; as applied in accordance with the prevailing Companies Act legislation. Both airlines amended their accounting policy in 2005 from UK GAAP to International Financial Reporting Standard (Ryanair Plc, 2008 Easyjet Plc, 2008). Both airlines are successful in strategising for revenue generation with Ryanair maximising its profit through effective control of operating expenses in comparison to Easyjet. An example is Ryanairs effective fuel hedging policy which allows the airline to allocate fixed fuel costs without surcharge to the customer whereas Easyjet varies their fuel surcharge to the customer. The turnover for Easyjet is  £2,362 million (2008) from  £1,797 million (2007) which is a 20% increase in the turnover. Unfortunately due to the increased administration expenses incurred profit margins have not been maximised due to staff, marketing and fuel costs. These costs cumulatively represent a total cost increase of 28% in 2008. The final outcome was a decrease in profit margin from 11.23% from 4.66%, which trails far behind Ryanairs profit margin (Easyjet plc, 2008). Ryanair in comparison to Easyjet has increased its turnover to  £2,171 million (2008) from  £1,789 million (2007) which is a 13% increase whereas their administration costs increased by 13% from last year. This has led to Ryanair capitalising on the increase in turnover to profit (Ryanair plc, 2008). Airline passenger per employee for Ryanair is greater in comparison to Easyjet and reflects an optimum utilisation of resources. Ryanairs punctuality of flights on time is 88% when compared to 80% of Easyjet which demonstrates the operational efficiency of staff. The customer base has increased for both airlines with Ryanair achieving greater customer retention through market domination of the short haul flights. The addition of 16 more aircrafts through Easyjets acquisition of GB airways to 165 aircrafts am ounted to a capital expenditure of  £118 million (Easyjet plc, 2008). Ryanair took the delivery of 30 new aircrafts bringing its total to fleet of 220 aircraft which amounted to  £97.1 million towards capital expenditure incurred for the year. Both the airline has an expansion plan which clearly shows in their adding of more aircrafts to their existing fleet. Ryanair has raised finance through the mortgage of their aircraft, with a book value of  £3,061.5 million as collateral security for finance generated through loans for purchase of next generation 737-800 Boeing aircrafts (Ryanair plc, 2008). Ratios The calculated ratio analysis establishes the relationship between stated totals within the Balance Sheet, Cash Flow Statement and Income Statement to establish the base of Evaluation for financial performance between Easyjet plc (Easyjet) and Ryanair plc (Ryanair). The three main areas of Strategic analysis include Profitability, Liquidity and Efficiency as well as Gear ing and Investment. Consideration of the ratios reflects the performance of Easyjet in achieving strategic goals in comparison to Ryanair and other rivals. The ratios are in the table format and the implications are discusses below (Moon Bates, 1993). Ratios RYANAIR EASYJET 2008 2007 2008 2007 Profitability ROCE 9.20% 9.86% 5.78% 12.08% Net Profit Margin 16.17% 20.16% 4.66% 11.23% Goss profit margin 19.79% 21.09% 3.85% 9.57% ROSF 15.61% 17.15% 6.51% 13.22% Liquidity Current Ratio 1.53 Times 2.02 Times 1.56 Times 1.88 Times Acid Test Ratio 1.53 Times 2.02 Times 1.56 Times 1.88 Times Gearing Ratio 47.55% 44.47% 41.53% 39.19% Interest Cover Ratio 5.53 Times 5.09 Times 3.36 Times 6.70 Times Efficiency Ratio Earnings per share 20.67 22.56 19.84 36.61 Wage Cost (%) 10.51% 10.13% 11.14% 11.36% Other ratios Debtors Collection days 4.6 days 3.82 days 21.55 days 34.2 days Creditors Payment days 17.39 days 8.94 days 11.97 days 8.04 days Source: Easyjet Plc.2008 Ryanair Plc, 2008. The financial ratios provide a quick and relatively simple means of assessing the financial health of the organisation (Atrill Eddie, 2006). Evaluation: To complete the CORE model an evaluation of the two airlines has been prepared with a succinct summary of the main findings of the report including key recommendations identified. Both airlines have reduced profit margins with Easyjets profit margin gap is significant in compared to Ryanair. The decline in the profit is mainly due to an increase in administration cost as previously reported. The main contributing factor is 66% increase in the fuel cost when compared to 2007 whereas Ryanair had only 14% in increase in fuel cost due to its effective (73%) hedging policy on fuel charges. Neither airline released dividend payments for 2008. To reduce short-term earnings volatility Easyjet has put the following fuel and currency hedging positions in place: 66% of anticipated 2009 funding requirement is hedged at  £1.96/ £,an additional 5% of requirement are hedged with collars with average floors of  £1.73/ £ (of what Shinde per sq metre); 56% of 2009 capital expendi ture relating to aircraft deliveries hedged at  £1.97/ £; 81% of anticipated 2009 euro surplus hedged at ÃÆ' ¢Ãƒ ¢Ã¢â€š ¬Ã… ¡Ãƒâ€šÃ‚ ¬1.24/ £. (Easyjet plc, 2008). Easyjet has also achieved a positive trend through reduced wage costs in comparison to Ryanair, which is a consistent consideration to maintain during an economic downturn to ensure competiveness with Ryanair. The operating profits for Easyjet were lower due to incurred advertising costs which were high in comparison to minimal advertising costs incurred by Ryanair and recorded as zero within the Income Statement. Online booking for Ryanair is greater than 90% which results in a small operating expense towards marketing. In contrast to Ryanair, Easyjet is applying a long term strategic approach to maximise revenue through advertising in the media and other channels to inform customers of their service value with competitive low fares. The acquisition costs for integrating GB Airways costed at  £12.9 million in 2008 which is going to reflect as an expense on next years income statement will assist Easyjet to increase profit margins. Easyjet has also increased ancillary revenue which will assist the company to mitigate its corporate risks through diversification of activities. Both airlines use the straight line method for calculating depreciation due to which Easyjet is showing 33% increase in its depreciation cost versus Ryanair 22% increase in depreciation. In relation to Easyjet the depreciation cost is high due to the acquisition of GB Airways with additional assets to be depreciated. The interest cover ratio, which is used to determine how easily either airline can pay interest on outstanding debt, was calculated by dividing each airlines revenue before interest and taxes with ratio. The interest cover ratio has declined dramatically for Easyjet by 3.34 times when compared to Ryanair which increased by 0.44 times. Thus the decline in Easyjets interest cover ratio can be explained through an increase in borrowing and combined with a dramatic decline in profitability in 2008. The lower the level of operating profit coverage, the greater the risk to lenders that interest payments will not be met, and the greater the risk to the shareholders that the lenders will take action against the business to recover the interest rate. Whilst Ryanair has its maintained a preferable interest cover ratio in comparison to Easyjet due to the profit  £429,664 achieved despite high borrowings. Easyjets Interest cover ratio was not as favourable due to their profit margins of  £910,000 despite achieving a preferred gearing ratio in comparison to Ryanair. The gearing ratio refers to the relationship between the amount of fixed interest capital and the amount of equity within each airline. Ryanair has increased from 44% (2007) to 47% (2008) primarily due to an increase of long term debts at 13% in 2008. When the value of debt capital is more than the value o f equity as in Ryanairs situation the organisation is highly geared due to significant borrowings of  £1,814.57 increasing the risk of becoming insolvent in the medium to long term particularly if the economic downturn continues. Ryanair is raising finance for operational activities at the expense of an increased gearing ratio from 9.32% in 2007 compared to 39.96% in 2008 due to a decrease in profit margins (Ryanair Plc, 2008). Whilst, the gearing ratio for Easyjet increased to 41.53 % (2008) from 39.19 % (2007) this is primarily attributed to the acquisition of GB Airways. The future gearing for Easyjet will reduce due to consolidation of activities whereas Ryanair increased gearing is attributed to the intended acquisition of Aer Lingus, purchase of market shares and investment within operational activities. It would therefore appear that Ryanair have exhausted the potential to achieve future funding due to their current gearing ratio whereas Easyjet focus is towards conso lidation of activities with an increase in profit margins anticipated in 2009/10. Easyjet have increased current liabilities in terms of aircraft maintenance cost and derivative financial instruments (hedging losses) that have generated a reduction in the current ratio combined with the acquisition of GB Airways. Whilst Easyjet can access significant cash and liquid investments to mitigate the risk of business disruption events of approximately  £863 million as at 30 September 2008 this excludes restricted cash of  £66 million for short-term liabilities. Whereas the cash balance for Ryanair has improved it is only through analysis of the ratios that a downward trend is developing due to an increase in current liabilities within derivative financial instruments. Ryanair utilises derivative financial instruments to hedge against losses by anticipation of future price increases concerning predicted variability in cash flows of an asset, liability or a highly probable forecast ed transaction. A significant contribution for an increase in the current ratio for Ryanair is the increase in maturity of debts. Both Ryanair and Easyjet have a similar acid ratio due to absence of stock or inventories within their published balance sheets. The sales revenue per employee ratio identifies how each airline is utilizing their employee productivity with an increase generally reflective of efficiency with management establishing additional key performance indicators for staff to achieve. As previously detailed on the ratio comparison table, Ryanair has increased sales revenue per employee. Return on capital employed identifies the relationship between the operating profit and average long term capital invested and is significantly reduced for Easyjet due to long term liabilities yet this is recognised as a temporary phase following the GB Airways acquisition as well as undertaking airline operations within a competitive market. Achieving a profit within an economi c downturn combined with adjustment of the hedge reserve will enable Easyjet to improve their effectiveness in 2009/10. In contrast, the capital redemption reserve for Ryanair has increased due to purchasing previously released equity shares as well as increasing long term liabilities with various financial institutions and established primarily on the basis of guarantees granted by Export-Import Bank of the United States to finance the acquisition of 107 Boeing 737-800 as a next generation aircraft. Whilst having less favourable ratios than Easyjet the funding provided by the Export-Import Bank of the United States for Ryanair is attributed to the bank emphasis to support the financing of U.S. goods and services (Trade Finance, 2004). It could also be suggested that the purchase of previously released shares by Ryanair was implemented to prevent another airline purchasing Ryanair shares due to their perceived vulnerability since the continued reduction of operational costs is not a sustainable activity. The Debtors Ratio identifies the effectiveness of a debt collection routine and within the competitive low fare airline industry, efficient ratios would be anticipated especially when the focus is towards cost reduction measures and borrowing finance is a chargeable activity. Ryanair has an excellent debtor collection policy with a minimal increase 0.78 days in 2008. This could also be reflective of the absence of available liquid reserves within a business to increase the availability of working capital and reduce finance borrowings. In contrast, Easyjet debtor ratio can be optimised from 12.65 days in 2008 to improve the availability of working capital within the business and limit borrowings. In comparison of the two airlines, Easyjet could improve their debtor ratio to seven days for efficiency purposes whereas Ryanair requires a constant focus on their debtor ratio analysis due to availability of working cash and requirement to minimal all non-es sential costs. The Creditors Ratio provides an alternative perspective on how the two airlines consider their debt considerations. Ryanair creditor payment period is 8.45 days and therefore due to the volume of activities there is the availability of finance for other activities for an average of 8.45 days until payment/settlement is issued. Through utilising the credit payment period as a temporary borrowing option there is the perceived high risk that funds for payment could become committed and rather than generating revenue growth, funds are being juggled. In contrast the creditor payment period for Easyjet is 3.93 days restricting the availability of working capital to be paid to creditors rather than using it for day to day operations. In summary of the ratios selected for comparison the creditor and debtor ratios is reflective in general of how each airline is approaching their activities. Ryanair is quick to require settlement from debtors due to their restricted borro wing availability and uses a period of 8.45 days as an opportunity to generate additional revenue prior to settlement. Depending upon the volume of finance available within this period, Ryanair is anticipating the generation of additional revenue through hedging activities and received interest returns. In contrast, Easyjet is quick to make settlement as a creditor and less efficient in seeking settlement from debtors. This is similar to the Easyjet approach to strengthen their brand image and also diversify into other activities. Succinct summary of the main findings of the report including key recommendations identified. The Profit and Loss statement for Easyjet appears robust as confirmed through review of the selected ratios in comparison to Ryanair. In addition, whilst the purchase of GB Airways by Easyjet on January 31st of 2008 could disguise discrepancies within their accounts, it is worthy of note that despite this acquisition their accounts still remain favourable in comparison to Ryanair. Easyjet in comparison to Ryanair is expanding and diversifying their activities as well as strengthening their brand recognition. The Easyjet brand has a separate value to the airline through selective marketing enabling the separate sale of the brand through an acquisition or management buyout; in contrast Ryanair brand has become devalued and linked to cost cutting initiatives. The 2008 accounts for Easyjet includes the  £12.9 million integration of GB Airways as an integration cost specific to this year and in future years should generate profit to recoup the initial expenditure. The profit for Easyjets financial performance in 2008 has declined by 6.57% when compared to 2007 although it retains strong liquidity with cash and money market deposits of  £863 million. (Easyjet Plc, 2008). The ancillary revenue generated by Easyjet is increasing as evident from the cash flow statement. Through diversification a wider market segment is being target ed in comparison to Ryanair. The overall Easy brand has a high level of recognition and customer advocacy in all selected key markets as confirmed by the Family Brands Poll in 2009; in contrast Ryanair is recognised, as the least preferred family brand (Telegraph, 2009). The credit and debt collection ratios for Easyjet though not a necessity can be improved whereas Ryanair is maximising their efficiency to facilitate the availability of working capital having mortgaged their airline fleet to raise finance. Both airlines have distributed their risk against rising fuel prices and dollar fluctuation through adoption of hedging initiatives. Ryanair in their attempt to purchase Aer Lingus have generated an impairment loss of  £51 million. In attempting to purchase Aer Lingus, Ryanair is potentially vulnerable to a reverse acquisition challenge, furthermore the value of Aer Lingus shares is predicted to reduce further generating an additional reduction on the 2009/10 profit margi ns (Ryanair Plc, 2008). The concentration of passenger service revenue by Ryanair as their primary operation is subject to industry fluctuations, whereas Easyjet have ancillary revenue and a marketable brand value to hedge against industry fluctuations. The policy of Ryanair to absorb the fuel surcharge to permit a low fare offering to the customer is not sustainable in the long term airfare due to predicted fuel increase costs. The corporate culture of the two airlines is evident through Ryanair Chief Executive Michael OLeary decree that there is no point in continuing to grow rapidly in a declining yield environment, where our main aircraft partner is unwilling to play its part in our cost reduction program by passing on some of the enormous savings which Boeing have enjoyed both from suppliers and more efficient manufacturing (Ruddick,2009).This is also reflective of the possibility that Ryanair will not be able to generate additional finance to enable expansion followin g recognition and review of the selected ratios. In summary of the evaluation between the two airlines it would appear that Ryanair could be assumed to be the market leader for the uninformed due to their current activities for 2008 only. The strategic planning within Easyjet has developed a special brand with opportunity to use available finances as well as capacity for increased borrowings to enter into a price war with Ryanair. Conclusion It is highly probable that with the acquisition of GB Airways in 2008, predicted consolidation of activities in 2009 and possible creation of a price war with Ryanair in 2010, Easyjet will establish recognition as the market leader instead of a rival low cost airline operator to Ryanair. The current economic downturn has increased the competitiveness between airlines with a requirement to establish a low cost base to ensure survival. Ryanair has already implemented this with their current activities due to high gearing not considered sustainable. Easyjet has the availability to introduce additional savings, generate additional finance and introduce further brand diversification during the economic downturn. The availability to undertake additional acquisitions during the economic downturn whilst other organisations suffer reduced market values will increase the future profit margins for Easyjet after consolidation of the new assets. The financial operations within Ryanair res trict the availability to generate additional financing during the economic downturn whereas Easyjet has opportunity to raise finance if considering the acquisition for Aer Lingus in 2011. Although it may be preferable not to enter into a determined bidding war with Ryanair intended purchase of Aer Lingus that should be challenged only to increase the acquisition costs applicable for Ryanair. This approach will financially exhaust Ryanair if the market value of Aer Lingus is contested. It is probable that Easyjet will be in a position to purchase Ryanair or Aer Lingus from 2011 onwards, if the projected profit margins of Easyjet remain consistent. -The End- References (1) Atrill.P Eddie.M., (2006).Accounting and Finance for Non-Specialists.5Th ed: Essex: Pearson Education Limited. (2) Brassington.F. Pettitt.S.(2007) Essentials of Marketing.2nd ed: Essex :Pearson Education Limited. 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