EasyJet strategy: SWOT and PESTEL analysis

EasyJet strategy: SWOT and PESTEL analysis This report will provide a detailed analysis of EasyJet’s current corporate appraisal or SWOT analysis. This will identify its strength, weaknesses, opportunities and threats. This will help the companies decision makers understand where the organisation is now. A PESTEL analysis of the industry will examine the local, national and global influences of political, economic, social and technological factors to understand opportunities and threats well. This will provide an evaluation of the external business environment in which the company operates. This analysis will highlight the fundamental changes that the airline industry is undergoing, especially; in defence to the turbulent environment it faces from exogenous forces (terrorism, oil prices, SARS etc) and endogenous forces. Next we will use Porter’s Five Forces analysis of the industry and the increasing threat of other low-cost carriers (Ryanair, bmi baby etc) and also threats from the flag carriers (British Airways, Air France, KLM, Lufthansa etc). This will show how its critically important for EasyJet that strategic alliance, size and technological innovation have on its profitability. Overall the analysis will highlight the inherent threats and weaknesses suffered throughout the industry, and also the importance of innovation to maintain low cost advantage, alliances and size to success. Finally the report will examine the extent to which EasyJet’s current ‘no frills’ strategy is the appropriate strategic fit to its organisation both in terms of resource capability and business environment. An Internal and corporate analysis in terms of strength, weaknesses, opportunities and threats (SWOT) will assist in gaining an understanding of where EasyJet is currently in terms of strengths and where improvement is required within the business and what outside environmental threats it may face as well as what new opportunities are available to the company in the short and medium term. We will start by looking at strengths: EasyJet serves diverse ranges of European routes with principle activities in both Leisure and business markets, offering 60 key European routes. Its current cash flow position is also strong, with cash flow from operating activities increased by 61 percent between the six months ended 31st March 2003 to six months ended 31 March 2004. The business has also enjoyed an increase turnover and trading profits resulting in continuous substantial growth in underlying profitability over the last 7 years (see table 1). This has resulted in a strong Balance Sheet – the companies’ net assets reaching the record level of  £724 million (aided by retained profit mainly). EasyJet is also Europe’s leading low-cost airline having completed a merger deal with Go to create Europe’s number one low-cost airline. Brand Awareness is another strength that is attributable to the company – In November 1999, selected as a business super brand by the Super Brand Council, recognising EasyJet as an outstanding brand name. The company’s Online booking facility in October 1999 aided Internet sales to pass the one million mark. This has lead to EasyJet customers enjoying ‘ Ticketless travel’ – this reduces the cost of issuing, distribution, processing and reconciling tickets. EasyJet also enjoys internal strengths in its operations in terms of efficient use of airports – by reducing turnarounds to 30 minutes and below, EasyJet can achieve extra rotations on the high frequency routes. EasyJet appears to have internal strengths in terms of brand awareness, cash flows, and operational efficiencies. But what are the internal weaknesses suffered by EasyJet? The primary weakness is the perception of low quality – low cost can also be seen as low quality service than that offered by the established national airline i.e. British Airways. Also, suffers weakness in the area of hospitality in terms of on board offer of ‘Free Lunch’, the eliminating of free catering on board may result in loss of potential customers. The existing competition also have strong brand image globally, EasyJet is recognised nationally and within the European markets, however, national airlines like British Airways is recognised worldwide and has stronger brand awareness. EasyJet also operates a flat management structure, which may lack a formal discipline that is needed as the organisation grows. The idea of remote working can also result in co-ordination and control weaknesses. It is difficult to co-ordinate the individual employee because in principle they operate independently of each other. It’s also hard to monitor the performance of each individual. So having considered the internal strengths and opportunities above, what are the potential opportunities available to EasyJet and what are the threats faced by EasyJet both from within the Airline industry and as a result of the world economy itself. Weaknesses identified earlier could also offer potential opportunities in terms of development of brand awareness globally. The EasyJet brand is established in the European market, but brand awareness is required outside the continent. There are potential opportunities in terms of new routes and expansion of services offered, EasyJet has already launched a number of new European routes, how about expansion into the Asian Pacific? Undertaking market shift to globalisation expanding outside the European market will be key to continuous enhancement of business performance. Follow on from market expansion will also create opportunities for new facilities or services ‘Free Lunch’ – offer on board catering facilities to compete with mainstream airlines. The increase growth of world tourism will offer opportunities in terms of undertaking joint venture with local/foreign travel companies; hence, Going places and Thomas Cooke are already providing such services to growing number of holidaymakers each year. Finally, opportunities may also exist in the area of innovation and alliances, how about a joint venture scheme with Ryanair to maintain and enforce the low cost competitive advantage. Figure1: EasyJet SWOT Analysis Having considered the possible future opportunities what are the potential threats that EasyJet needs to bear in mind? Firstly, threats in terms of new existing competition. Ryanair continues to lower costs, which enables it to persist lowering fares aggressively. Also, mainstream airlines are now lowering fares to engage in price competition. Another major industry wide threat is the volatility in price of fuel Oil price record high of $53 a barrel. this was the headline in the business pages of all the newspapers last November. EasyJet also faces potential threats in terms of unprecedented tragic events like September 11th. Potential threats in terms of changing social trends like holidays outside Europe (many now want to experience the eastern cultures and travel to holiday destinations like China and Japan) and also travelling via the EuroStar to Paris etc. Potential threats of economic recession, since air travel is effectively a commodity product, it is recession prawn. And, finally threats of any takeover bids from national airlines. Figure 2: Five Forces Model ACCA Paper 3.5 (2001) Porter explains that there are five forces inherent in a market, which will jointly determine the intensity of competition and profitability of EasyJet and the airline industry. The first is the threat posed by new entrants, as with the European deregulation of commercial aviation and the emergent of low cost carriers. The second is the threats from substitutes, rail travel v air travel, the growing demand in Eurostar and cruses. The third force is the threats from the bargaining power of buyers, is this strong for both EasyJet and the entire airline industry with a large number of alternative suppliers, hence, the aggressive pricing strategy. This results in a very strong competitive rivalry in the industry. This is intensified as a result of little or no differentiation in the service offered. Finally the threats from the suppliers bargaining power, this is very strong in the airline industry for two reasons, one is highly skilled labour can command a very favourable terms and seco nd is the price of oil. All of those (political, economic, social, technical, legal and environmental) factors will to some extent apply to the airline industry. POLITICAL – Following the European deregulation of commercial aviation, a fleet of low cost carriers are reshaping the local airline landscape. Ryanair uncompromisingly fought its way into the market with an aggressive pricing strategy. ECONOMIC the travel industry is vary recession prawn and also very sensitive to changes in oil prices. Since the events of September 11th the airline industry suffered heavily, stocks plummeted and ticket prices are at all time lows. The world economy is however, now on the up post September 11th. Consumers are optimistic and the travel and tourism industry are now booming again. SOCIAL – changes in consumer taste and lifestyle represent both opportunities and threats for the industry. Opportunities in terms of worldwide destinations are now popular with holidaymakers and also the growing trend in international business ventures, e.g. major banks and insurance companies’ relocation call centres in Asia. The threats are in terms of alternative holidays Disneyland Paris via Eurostar (Euro tunnel) and PO cruise. TECHNICAL – Changes in retailing methods as such ticket sales via the Internet is now a common place in air travel, passengers receive an email containing their travel details and booking reference when they book online. Paperless operation, the management and administration of the company are undertaken on IT systems, which are accessed through secure servers; provide flexibility in the running of the airline. The development of the next generation aircraft will also lead to technological opportunities in term of fuel efficiencies. LEGAL – The European deregulation of the commercial aviation provided both major strategic threats and opportunities, the national mainstream airlines faced severe price competition from discount carriers. Threats are also in terms of legislative environmental laws regarding pollution and use of more environmentally friendly fuel, which are at premium prices. ENVIRONMENTAL – The energy sources used, namely oil has vast ecological/environmental implications. The threats are in terms of fines and rise in cost of raw materials. A ‘no frills’ strategy is often associated with low cost airline companies like EasyJet. This form of strategy combines a low price, low perceived service benefits (no free lunch) and a focus on a price-sensitive highly competitive market segment. This strategy is focused on keeping costs down and EasyJet’s policy of ‘no free lunch’ and efficient use of airports by limiting turnaround to 30 minutes. Back in 1995 when EasyJet was lunched it was tipped by most to fail with its ‘no frills’ strategy. However, by year 2000 it has not only managed to survive but also increased its market shares and assets of aircrafts to 74 and servicing 105 routes and carrying over 20 million passengers a year. So the strategy has been very successful for EasyJet and appears to have been the correct strategic decision. Beneath the surface of EasyJet’s cosmetic cost savings of not offering free in-flight refreshments or different first, business and economy classes, was a philosophy of cost saving that permeated through the entire organisation. The 2002/03 annual report reconfirmed this business model of the airline: Dense point-to-point network to allow linking of major airports with large catchments areas with high level of frequency, as this will be attractive to business and leisure travellers. A strong and visible brand to create a high level of awareness with consumers. Supported by innovative and effective advertising. Dynamic fares with a simple structure and also ensuring that it are the cheapest fare on the route. Therefore, demand led with proprietary yield management system. 100 per cent direct selling of fares; over 90 per cent of sales are online. This eliminates the need to any commissions to external sales agency. Highly utilised fleet of aircrafts that are large, modern, efficient and relatively environmentally friendly. This results in high levels of asset utilisation and reduced unit costs. Finally, the key to sustaining high levels of growth is the scalability of the operations. This also reduces the marginal cost of incremental growth; increasing scale brings valuable economies (Johnson, G., Scholes, K., Whittington, R., (2005). Another price-based strategy is the hybrid strategy this seeks to achieve an element of differentiation and a price lower than that of competitors. Implementing this strategy successfully depends on EasyJet’s ability to deliver enhanced benefits to customers over its competitors together with low prices. However, if EasyJet could significantly differentiate its service over its competitors then it could obtain higher prices. Therefore, the low cost strategy is the ideal strategic fit to its environment. Combining perceived low price with perceived added value can be a highly successful strategy but one that requires innovative thinking. EasyJet’s competitive advantages via low prices are sustained in a number of ways. EasyJet in its pursuing of low-price strategies may be prepared to accept the reduced margin either because it can sell more fares than competitors. EasyJet may be prepared and has to a large extend engaged in price war with competitors via its lower cost structure (economies of scales due to its larger operations) and also has the financial resource capability to fund short to medium-term losses with the aim of driving out competitors in the longer terms. A prime example of this was the subsequent takeover of Go by EasyJet. Price wars are becoming more prevalent as traveller use the Internet to compare prices and ‘shop around’. EasyJet has cost advantages through company specific capabilities, which drive down costs throughout the value chain. Porter comments on cost leadership as ‘the low-cost producer in its industry†¦ must find and exploit all sources of cost advantage’ (Porter M.E (1980)). We will consider the value chain for EasyJet in more detail later in our discussion. Cost advantages might be achieved because of EasyJet’s efficient use of airports. This will require a mindset where innovation (in cost reduction) is regarded as essential to survival. EasyJet is an international example, The introduction of Airbus A319 aircraft, combined with the retirement of ‘old generation’ Boeing 737 aircraft, will result in a two-type ‘new technology’ fleet, which will commonality and lessen complexity and deliver high level of asset utilisation and reduce unit costs. Finally, EasyJet has sustained its price-based advantage by focusing on market segments where low fares are critical and valued by customers. EasyJet’s first generic strategy is to achieve an overall cost leadership in the low cost airline industry. Therefore, it is vital for EasyJet to have a thorough comprehension of their costs and cost drivers. EasyJet is forever trying to attain a cost level that is low relative to its competitors. EasyJet cost efficiency is achieved in a variety of way as shown in the following diagram: The success of low-fare (cost) strategy is primarily dependent on the maintenance of a low cost base. This is critical for EasyJet having analysed the competitive rivalry position in the industry. With Ryanair maintaining high margins despite reducing yields through strict cost management. Lower costs are the only competitive advantage in the short-haul economy sector as air travel is effectively a commodity product. It is also anticipated that Ryanair will continue to lower costs, which will allow it to continue to engage in a price war, by lowering fares aggressively. Managing for value involves managing both value activities and cost drivers. This involves EasyJet retaining funds from operations; hence, a healthy Balance sheet in terms of retained profits. Significant investment in assets and managing financing costs. Funding strategies developments is clearly important in that the nature of funding must be appropriate and compliments the low cost strategy of EasyJet, by ensuring that interest costs are low. Strategies are largely determined by the extent to which they deliver best value to both customers in terms of being competitiveness in the marketplace (leading low cost airline) and also to provide value to shareholders. EasyJet’s no frills strategy does not only mean a cut in Cabin crew and â€Å"denial of food†, but also allows for a faster pre-flight preparation, thereby reducing the time grounded as well maintaining fare. As funding from operations are clearly a major contributor to value creation. In the long term, this is concerned with the extent to which the organisation is operating profitably. Table below provides an analysis of EasyJet’s sales revenue and profitability ratio since 1998. Investments in assets are also key consideration in value creation in that consideration of the extent to which assets and working capital are being utilised. EasyJet appears to have developed competences in supporting much higher levels of business from the same asset base than other rival airlines. This affects value creation as follows: The cost of capital investment The management of the element of working capital Table 1: Sales and Trading Profit of EasyJet Most theories argue that strategic success and improved wealth generation stem from two strategies. The first is to reduce the ‘bottom line’ costs of operation (low cost strategy) and the second is to increase the value of the organisation and its reputation to customers, so that they will demand more or pay more for what they receive (differentiation strategy) (ACCA Paper 3.5 (2001)). Porter through the use of the value chain illustrates how resources should be utilised to enhance least-cost production or differentiation strategies (the generic strategies suggested by Porter). The value chain analysis will show the total value added by the airline industry and EasyJet. All airline companies within the industry will have similar value chain, which will include activities such as obtaining fuel, designing fare structures, airport facilities, developing co-operative agreements, and providing customer service. Value chain analysis can provide important insights into what ma nagement need to focus on strategically. In terms of analysis, EasyJet’s distribution activities are important in terms of e-commerce, as EasyJet like to consider itself as the ‘webs favourite airline’. Standardisation in its activities as an airline leads to both economies of scale and a simpler product, which is cheaper and easier to distribute. The price of EasyJet’s tickets various as a function of the number of seats remaining, the time until the flight, and historical trends. This is done in order to maximise the yield from a flight, as many of the costs associated with running a flight are fixed relative to the number of passenger on board. Yield management is a form of risk management and therefore, adds value. The sales process is efficient, as EasyJet sells directly to customers, instead of using external sales teams. It has been streamlines by using e-commerce, firstly by telesales and now through the Internet. Marketing and sales will involve making customers aware of EasyJet’s services are price information and also selling. This will involve retention of best salespeople supported by HR management, engineering support in terms of maintenance of the web page supported by technology development to ensure that web site has the latest prices and route and flight information. This needs to be updated constantly as this will be a live system. EasyJet manages its sales process extremely efficiently, its sells its tickets directly. Previously it used telesales and now sales are through e-commerce web site. As Internet transactions have a lower cost associated with it EasyJet encourages its customers to book on-line by offering them a discount for on-line ticket reservations. Savings made from e-commerce is another source of value creation. In terms of competitive advantage, the internet offers overall cost leaders new abilities to reduce costs in primary activities such as marketing (i.e. e-commerce) and support activities such as fir infrastructure (e.g. quick order processing). EasyJet through its use of an overall cost leadership strategy can use internet-based technologies to reduce value chain costs in a variety of ways: On-line bidding and order processing to eliminate the need for sales calls and decrease sales force expense. Another benefit of Internet technology is lower transaction costs at multiple levels in value chain activities. Such lower costs benefit EasyJet initially as innovation is rewarded. However the sustainability of competitive advantages may be problematic: as rivals copy successful strategies, EasyJet will loose its initial advantages. And finally, service, activities that ensure that customers enjoy their flight by providing friendly on board service and assisting traveller with any special needs requirements. In terms of support activities, EasyJet takes advantage of technological developments in order to reduce costs. EasyJet also have a reputation for paying low wages in line with its low cost strategy. Procurement and firm infrastructure as a support activity does not add much extra value. In terms of strategy, many factors are outside the control of the company, such as use of high quality components and low defect rates for its aircrafts. This analysis outlines for EasyJet’s management how individual activities may be altered to reduce costs of operation or improve the value offered to customers. Those changes will ensure that EasyJet sustains its current market share and position and also increase margin. EasyJet may be especially good at outbound logistics lined to its marketing and sales operations and supported by its technology development. It is possibly not as good in terms of operations and its inbound logistics. This will assist management to decide as to what EasyJet should be concentrating on and what requires de-emphasising or even outsourcing. EasyJet’s overall cost leadership strategy uses low costs at each point in the value chain to lower costs. The customers of EasyJet have been using the Internet for making bookings. In addition to that, EasyJet has been offering no in-flight meals, no in flight movies. Also, only one type of aircraft is used, in order to minimise maintenance costs. The concept of the value chain is particularly useful in understanding an organisation’s strategic capability since its concentrates on value activities and the linkages between activities rather ran just resources. Therefore, capability is strongly related to the way that resources are used and controlled. The linkages with the value chains of channels and customers which are the essence of EasyJet’s capability and which can protect its market leadership and maintain cost leadership competitive advantage from competitors. This section we will investigate EasyJet’s resources as a means of assessing the organisation’s strategic capability. Analysis of financial resources in order to understand the strategic capability of EasyJet will need examination of financial capability and performance. Table 1 shows that EasyJet’s sales has increase year on year since 1998, with profit and gross margins also experiencing a positive trends. The company has also grown in terms of its acquisitions of GO and also increase in purchases of its own aircrafts. EasyJet also has a strong cash flow position primarily from its policy to retain profits and reinvest it back to the business. A Balanced scorecard approach is need to effectively conclude a balanced perspective on EasyJet’s resource capability in order to ensure that the low cost strategy is supported and is Cohabitation: The end of Marriage Cohabitation: The end of Marriage Introduction The following essay is aimed at discovering whether cohabitation has literally displaced marriage. It will focus on the processes of cohabiting as well as marriage, briefly touching on their historical backgrounds as well as the trends for each of the processes in different countries. Immediately after the war, marriage became practically universal phenomena but apparently, its popularity has declined towards the end of the twentieth century. Bumpass and Lu (2000) and Teachman, Tedrow and Crowder (2000) explain that patterns of family formation and also dissolution are changing in the United States. She clearly cites an increase in divorce, cohabitation and non marital children which clearly shows a shift from traditional marriage. According to Murphy and Young, (1999), marriage has been in steady decline since the early 70s in the United Kingdom. A McRae (1999) point out that marriage in 1995, which was 322,000, is thought to be the lowest on record since 1926. As the marriage rate dropped, so did the remarriage rate resulting in a steady rise of cohabiting. (Morgan 2000) Cohabiting according to Marshall (1998) refers to an arrangement whereby couples who are not legally married live together as husband and wife. In view of the above definition, the term, not legally married brings in another dimension as to the authenticity of cohabitation. This leads to the idea of common law marriage. There seems to be a huge misconception of the idea of common law marriage, with some authorities and according to Fairbain, (2009) there is no specific legal status for what many refer to as common law marriage. She also points out that many cohabiting couples are unaware of this fact. On the other hand, marriage, as defined by Horton and Hunt defined marriage as the approved social pattern whereby two or more persons establish a family. Majumdar takes it further by defining marriage as a socially sanctioned union of male and female or as a secondary institution devised by society to sanction the union and mating of male and female for purposesof establishing a househ old, entering into sex relations, procreating and providing care for the offspring There appears to be a clear distinction between marriage and cohabiting, judging from the definitions above which helps me conclude that they are not one and the same thing. The question which I will attempt to answer is whether on is displacing or replacing the other. Shaw and Haskey, (1999) seem to concur with the idea of a clear dichotomy as they point out that there has been a major trend towards a decline in marriage and a rise in cohabitation. Hasky, (1999) also points out that marriages popularity rose throughout the 1950s and the 1960s but notes that towards the end of the century, it fell, giving rise to cohabitation. It appears there was a shift in family formation from the traditional marriage to cohabitation. To further support the prevalence of cohabitation, Bramlett and Mosher, (2002) confirm that the increase of cohabitation is well documented showing that the majority of newly weds have cohabited before their first marriage. Levidon (1990) also argued that consensual unions, (cohabitation) appeared to constitute a new type of union. However, he mentions that the process was transitory, which points to the fact that marriage still was seen to be the end goal. A major development however was that there was more recognition of informal unions and as a social institution. (Haskey 1999)Kiernan, and Estaugh (1993), came up with the idea of nubile cohabitation which involved young people living together either as a prel ude to or as an alternative to marriage. This was further elaborated on by Bumpass, Sweet and Cherlin (2001); Smock, Huang, Bergstrom and Manning (2005) who cited one of the key reasons why cohabitation was on the rise, as a way of testing out a relationship and determine compatibility. Research however found out that there is a positive correlation between cohabitation and marital dissolution. (DeMaris and Rao 1992, Teachman and Polonko 1990 and Schoen 1992 cited in Smock (2000). They also found out that the link between cohabitation and marriage failure is complex, with other factors like, race, sexual history and ethnicity playing a significant influence. (Phillips and Sweeney 2005). According to Casper and Sayer (2000) and Brown and Booth (1996), cohabiters, are distinguished by factors like plans to marry It is noted that most of the cohabiters eventually plan to marry but not all cohabiters enter into cohabitation with marriage plans. (Manning and Smock 2005). In this way, cohabiters treated their cohabiting as an initial stage of the marriage process which clarifies that they did not see it as an alternative to marriage and likewise, those without marriage plans also viewed cohabitation as part of courtship or single hood. According to Brown (2004), cohabiters with marriage plans view cohabitation as a semi marriage and as a matter of fact, they share the same relationship quality as the married couples. Another factor that needs to be looked at is the individuals cohabitation history which researchers say in very significant. It was proven that women who cohabited only once with the same partner, being intimate, had the same relationship stability as those w ho never cohabited, (Teachman 2003). On the contrary, young adults who had multiple cohabiting partners are likely to encounter marital instability, (Teachman and Polonko 1990), (DeMaris and McDonald 1993). It is worth pointing out though that they concede that individuals who had multiple cohabitation before marriage could possibly have enough experience to enable them to make better marriage choices. Duncan et al (2005) states that cohabitation is often equated with do it yourselfand is no longer restricted to particular social groups. In line with this notion, Manning, Smock and Majumdar (2004) and Phillips and Sweeney (2005) maintain that race, and ethnic differences in cohabitation are likely to have an impact on cohabitation. It was noted that cohabitation had a negative effect on Whites marital stability but none on Blacks. This is likely so because of the view each ethnic group has on cohabiting. It was further observed that amongst cohabiting couples, Blacks had weaker marriage plans than Whites. (Manning and Smock 2002) Brown (2000) also argued that Blacks were less likely to go through to the actual marriage even with marriage plans. Between 1986 and 1990, there was a dramatic rise in cohabitation in Britain. 29% of unmarried females under 60 were cohabiting in 2001 and 2002. This was a three fold increase. As cohabitation rose, children being born to cohabiting couples were estimated to be over 25% by the beginning of the twenty first century. The fall decline of and delay in marriages, have all given rise to the phenomenon of cohabitation. Marriage does not stand out as the only means of commitment for life since some couples choose to cohabit, citing reasons like less commitment and the ease of opting out if things do not work well. (Kieman 2004). According to Duncan et al (2005) the shift from marriage to cohabitation suggests that individuals have found an option which meets their personal needs and has less or no hassles in terminating. Having looked at the history and trends of the two processes, marriage and cohabitation, this paper will focus on the individualisation theory. According to Beck, (1992) and Giddens (1992), we have entered a late modern era of de-traditionalisation and individualisation. Financial stability, education and provision through the welfare state tend to give individuals the latitude to move away from traditional customs. According to Lewis (2001), the pursuit of self fulfilment and individual happiness and freedom has brought up changes on the view of family. While the traditional institutions are still valued, there is less emphasis on marriage vows or private commitments and more emphasis on self projects. The project of self, places an emphasis on individual self-fulfilment and personal development, comes to replace relational, social aims. (Duncan and Smith 2006) The prevalence, historically, of economic and legal inequality, and the belief of there being accepted patterns of behaviou r is now getting weaker. (Lewis, 2001, p3) According to Lewis (2001), individualisation is thought to be a formulation of freedom of choice and personal preferences which competes with social structural traditions. However, in the eyes of the traditionalists, this may be viewed as a counter cultural revolution Beck (1992( suggests that social structures of gender, class, family and religion are gradually weakening due to individuals becoming more reflexive in making own choices, resulting in the creation of their own biographies. As a result, relationships now focus on individual fulfilment and consensual love, with sexual and emotional equality, substituting formal unions which have been historically prescribed within set gender roles. (Bauman, 2003, Duncan and Smith 2006). With reference to Majumdars definition of marriage, there is particular mention of it being a union of male and female or as a secondary institution devised by society to sanction the union and mating of male and female for purposesof establishing a household, entering into sex relations, procreating and providing care for the offspring. However, with reference to individualisation, the prescript nature of the marriage institution is challenged resulting in sexuality being largely freed from institutional, normative and patriarchal control as well as from reproduction. (Duncan and Smith 2006). This notion has led to the acceptance and rise of same sex relationships as confirmed by The Civil Partnership Act 2004 which was passed and came into effect in December 2005 created civil partnerships which gave same-sex couples who entered into them the same rights and responsibilities of marriage. From a feminist perspective, Lewis (2001) would argue that historically, marriage has reinforced the limiting of the self development of women. Marriage was seen as a restrictive union and could dictate emotions, feelings and behaviour. Cohabitation, from a different perspective could then be argued to be a form of liberation for women. (Morgan 2000). Marriage was viewed as being restrictive and confining, thereby limiting independence and autonomy. Morgan argues that marriage is an unencumbered life without binding commitments. This then presents the idea of cohabitation as a viable alternative which affords people choice to determine their own conditions for the establishment and dissolution of a relationship, Morgan (2000). The emergence of this contemporary family has been viewed positively and negatively. According to Giddens, (1992) and Weeks, (2001), the greater diversity of lifestyles and the opening up of choice leads to democracy in personal relations, and liberation from oppressive institutions. On the contrary, the work of Zygmunt Bauman (2003) and Francis Fukuyama (1999), stresses that the breakdown of traditional ties leads to a disintegration of families and the moralities once maintained by them; this demoralisation leads to individual alienation and social breakdown. Maslow (1954) maintains that people who engage in self actualisation were concurrently individualistic and altruistic. In order to meet their needs, individuals moving towards self actualisation, became higher selves and according to Maslow, this is healthy selfishness (p.156). In this process, the healthy self focuses more on the self Kilpatrick (1975) According to the pioneers of the individualisation theory, Becks and Gersheim (2002), society has shifted away from traditional structures where, people no longer have pre-given life worlds and life trajectories. (Heath, et al 2007). Generally, individuals are no longer expected by society to follow a set family pattern. According to Beck, (1992) this notion has altered the previous accepted family structures resulting in the dissolution of the social foundations of the nuclear family as more emphasis is placed on the family of choice Fukuyama (1999) argues that the institution of marriage has previously been viewed as the bedrock of society but due to the emergence of the family change and freedom of choice, traditional ties have weakened and as a result, there has been family degeneration. Gender roles have also shifted since from the categorization of men as breadwinners and women as house makers. The major change appears to be women emancipation advocated for by the womens moveme nts and this has altered societal and demographic values. Active participation by women on the labour market has significantly changed the notion of a family unit by bringing in more choice and autonomy women did not have in the past. The Legal Position of Cohabitation in Britain Heterosexual cohabitation has been socially and universally accepted as an alternative to marriage in the UK for over two decades but very little has been finalised as regards legal rights of the cohabitants is debatable. (Duncan et al 2001) The issue with cohabiting is that while it can be registered as a Civil marriage, it does not attract the same legal rights and privileges of a marriage. Traditionally, marriage has been regarded as Bauman, Z (2003) Liquid Love: on the Frailty of Human Bonds. Oxford, Polity. Beck, U. (1992) Risk Society: Towards a New Modernity, London, Sage. Bumpass, L., Lu, H. (2000). Trends in cohabitation and implications for childrens family contexts in the United States. Population Studies, 54, 29-41. Duncan, S. and Smith, D. (2002) Geographies of family formations: spatial differences and gender cultures in Britain Transactions Institute of British Geographers, 27, 4, 471-493. Fukuyama, F. (1999) The Great Disruption: Human nature and the Reconstitution of Social Order, New York, Free Press. Giddens, A. (1992) The Transformation of Intimacy: Sexuality, Love and Eroticism in Modern Societies. Cambridge, Polity Press. Horton, P. B. and Hunt, C.L. (1984) Sociology. 6th ed. Singapore: McGraw Hill Book Companies Kiernan, K. and Estaugh, V. (1993) Cohabitation Extra-marital Childbearing and Social Policy,Joseph Rowntree Foundation/Family Policy Studies Centre. Lewis, J. (2001) The End of Marriage? Individualism and Intimate Relationships, Cheltenham: Edward Elgar. Marshall, G, (1998) A Dictionary of Sociology cited on http://www.encyclopedia.com Accessed 20/11/2009. Weeks, J. (2001) Same Sex Intimacies: Families of Choice and Other Life Experiments. London, Routledge. Teachman, J. Tedrow, L and Crowder. K. 2000. The Changing Demography of Americas Families. Journal of Marriage and the Family 62:1234-1246.