easyjet strategic analysis
EU East enlargement may give access to viable, new markets. So Swissair was unable to object this charter service. The company aims to cut more carbon emissions and add more seats in the planes so that improving the quality of its service. If you are the copyright owner of this paper and no longer wish to have your work published on IvyPanda. Less disposable income in UK because of recession can affect the EasyJet profit badly. In July, easyjet started his first service from Geneva to nice, Amsterdam and Barcelona. Implementing any major strategic exercise requires insight and focus. Catastrophic loss can result in lesser air travel and loss of infrastructural support as it happened in volcanic Ash recently. Easyjet resolved this issue by flying first flight free then later on set up an inclusive tour company by the name “easyJet tours” which operate this service. The tables below illustrate the current state and future plans of the company. Highly sensitive to Taxes or charges imposed by government and airport authorities because of lower operating margins. Furthermore, a larger fleet will ensure that the airline has got an increase in seat capacity thus this will translate into increased revenue for the airline. To achieve this company will develop its people and establish lasting relationships with our suppliers. The EasyJet is paying to the Barclays for parking its aircraft on Luton airport. 1-CRV Index In all areas of the company from cabin crew to engineers, safety is their 1st priority. IvyPanda. EasyJet is a low cost airline. This ensures the customers are satisfied with the nature of operations which are in progress. When this industry began, the industry was monopolized by the state owned flag carriers (Cameron & Mike 2009). Furthermore creativity and innovation are crucial when it comes to maintaining an edge over the other companies. Now I would like to give you the competitive industry environment where easyJet is operating. In this case, easy Jet has been able to retain a class of leisure travellers which have ensured that it maintains a niche in the market. In future following are the key factors which should airline take into account and start its service to Asia and Africa. They should announce dividend first to keep the shareholder happy rather than concentrating on the fleet expansion. easyJet focuses on developing strong positions in Europe’s leading airports – flying between airports people want to travel to with optimised frequency. (easyJet.com). In spite of the threats and risks associated with airline travel, this company should strive to accomplish its set objectives which will ensure that it thrives even amidst hostile environments (Ballesteros 2007). However, this report focuses on the background of the company, financial analysis, competitive advantage, strategic decision-making, influential current and previous strategies, external … According to my point of view EasyJet board should operate with the existing aircraft for the next 3 to 4 years because European market is becoming more saturated day by day. So millions of people will be attracted to low fares. IvyPanda. ( EasyJet.com). External and internal environment : The company operating environment Airline industry is one of the industries which are characterized by challenges which are dynamic. The concept of this airline is based on the fact that the following the loosening of the restrictions regarding the airline industry, the demand for the short routes would be on the increase. Since the Air Miles Scheme is not thought as a taxable perk by the government so this... 2-Economic Factors. EasyJet Company’s Strategic Analysis and Marketing. You are free to use it for research and reference purposes in order to write your own paper; however, you must. In December, Hotelopia and EasyJet combined together to launch exclusive accommodation products and services as EasyJethotels. It is no-1 in air transport network and 4th largest airline in Europe. Boeing recently have announced about the 787 Dreamliner. Company: EasyJet CEO: Johan Lundgren Year founded: March 1995, London, United Kingdom Headquarter: Luton, United Kingdom Number of Employees (2018): 14,000 Public or Private: Public Ticker Symbol: EZJ Market Cap (March 2019): $ 7.409 B (Average) Annual Revenue (Dec 2018): £ 5.8 B Profit |Net income (Dec 2018): $ 460 M Easyjet overview and strategy analysis 1-Political Legal Factors. Since the capacity of air transport infrastructure is always limited, the greater environment that airlines operate within will function in a similar manner in the future, although capacity constraints at certain busy airports may further constrain the air space. SWOT analysis of easyJet. Stiloes invested about $5 million and later $500 million on aircraft.To set up an airline company needs a huge investment or needs a good credit history to lease the aircraft. These include the emerging technological trends in the market. There are no assigned seats, no meal, no movies and no first class travel on its flights. Analysis of Strategic Choices for the Company The strategic choices for EasyJet should be based on the current situation in the market, the company’s capabilities, mission, … These options include the fact that since its launch in 1995, this airline has emerged to be among the leading low cost airlines in Europe (Mayer 2007; Jones 2005 ). EasyJet should start its service to Asia and Africa because its big market and it will give opportunity to expand worldwide. If the airline industry gets affected by bad weather or ice and no plane is flying so ultimately it will affect all other business like rent a car (Europe car), hotel, travel insurance. Low overheads due to flat organisational structure. This airline company was the brain child of Stelios Haji – Ioannou. table of contents. Strategic Analysis of Easyjet . From simple essay plans, through to full dissertations, you can guarantee we have a service perfectly matched to your needs. In addition, they also offer faster turnarounds as there are fewer air movements. The difference between Easjet and Ryanair is: Raynair used secondary airports which are very far from the cities while EasyJet target leisure and business customers so they use secondary airports which are relative very close to the main cities. The 330 seat 787 is considerably lighter and stronger than traditional aircraft and is made from composite materials which are in essence a high-tech plastic rather than metal. 1-fleet expansion Strategy: According to the Air Flight Intelligence news, The Company Board of Directors agreed to maintain the company growth rate at 7.5% per year. Low cost and low fares. The easyjet has announced that by keeping the growth at 7.5% will enable the company to increase its shares of the European short haul market from current 7% to around 10%. September 26, 2020. https://ivypanda.com/essays/easyjet-companys-strategic-analysis-and-marketing/. The company will continue to refine its winning proposition to a wide range of business and leisure customers. These include strategic analysis, strategy formulation and strategy implementation. Need a custom Essay sample written from scratch by Its principal competitors at these leading airports are the legacy airlines and charter carriers. In August airline signed a $1bn ten year contract airbus maintenance contract with SR Technics. He said “A mere look at the share price graph over the last 10 years, practically a ‘flat line’, and zero dividends are proof of that. As customer having to travel to the secondary airports which still cost them money. In addition, there is need to ensure that all the stakeholders in the airline are involved in the process (Barnes 2008). The main rivals of EasyJet are Ryanair, BMI Baby, MyTravelLite and Buzz in low fare segment in the UK. The key strategic approach which has made this airline to get to this point is the low cost fare structure. The “EasyJet desk top gadget” enables customers to personalise flight information and booking services using the Microsoft Vista technology. EasyJet’s serves airline travellers. In November, Airline 10th anniversary was celebrated by the company. In Oct, EasyJet purchased the entire share capital of GB Airways from Bland Group. EasyJet , no doubt, have their CSR strategy but I would suggest make it more clear and should done more publicity to win the hearts of local communities. We're here to answer any questions you have about our services. The table on financial analysis provides a reflection of past performances. In Nov, Stilios resigned as chairman and Sir Colin Chandler took over the position. The company increased its stake to 49% in EsyJet Switzerland. easyJet Airline Company Limited Registered in England with Registered number 3034606; subsidiary of easyJet plc Registered in England with registered number 3959649 Registered Office: Hangar 89, London Luton Airport, Luton, Bedfordshire LU2 9PF How can you buy 200 aircraft with shareholders’ money and create no wealth for shareholders? In England, this company is registered with the number 3959649. The company expanded massively to new markets outside the EU. Easyjet has decided to take 57 more airbus aircraft over the next 4 years: another 12 in this year, 25 in 2011, 18 in 2012 and two in 2013. Unfortunately, your browser is too old to work on this site. Implementation of environmental taxes could increase cost. These monopolies denied other interested stakeholders from actively taking part in the industry. Passengers have confidence in the airline’s security measures. In the light of recent events, this article asks how far cost reduction can go. Group Strategy Solutions Competition over price, new destinations (aimed at business travel) and contracts with local companies Staff development programs, increased market research and promotional events in desired destinations Repeat business with aircraft developer Airbus, and In prevailing circumstances we have seen so many companies have started loyalty card schemes to retain its customers like Tesco, M&S, Body Shop etc. In this case, this airline has got a strong management team which has been working towards ensuring that the airline has got a major share in Europe. Use of internet to reduce distribution cost: The Company sold its first seat on internet in April 1998.Now 95% of the company’s sale is through its website, making Easyjet one of the Europe biggest retailer. Easy jet strategy was to use secondary airports to keep the cost low. In Dec, the Company launch its unified sale channel after the merger of Go Fly Company. Furthermore, the profitability of this industry depends on the business strategies which will be laid out by airline companies such as the EasyJet. This will ensure that the airline has got more bargaining power in order to accomplish its objectives. The airline operates frequent services for business and leisure passengers and serves more than 500 routes between 28 countries with over 182 aircrafts. If you continue browsing the site, you agree to the use of cookies on this website. This has dented its ability to effectively compete in the European airline industry. IvyPanda, 26 Sept. 2020, ivypanda.com/essays/easyjet-companys-strategic-analysis-and-marketing/. These should include practices and policies which are in line with the company mission. Cummings, TG & Worley, CG 2008, Organization development & change, Cengage Learning, California. In October, Milan air base was set up which was 16th air base in Europe and 1st in Italy. We will write a custom Essay on EasyJet Company’s Strategic Analysis and Marketing specifically for you for only $16.05 $11/page. To effect and to offer a consistent and reliable product and fares appealing to leisure and business markets on a range of European routes. 4- To maintain the cost leadership strategy can be difficult in the dynamic market. Now a day’s companies have slogan “we pay back to local communities” then “we care about our environment” etc. Financial KPI: According to Financial report of 31 March 2010, total revenue in 2010 was £1170 million which is 13.3% increased (2009; £1032 million). It early marketing strategy was making flying possible as affordable as pair of jeans- £29 one way and The Company urged traveller to cut the middle man (travel agent).EsyJet base on London-Luton was using low rent Luton airport. EasyJet’s ability to offer point to point travel means that it does not have to worry about onward connections for passengers and their baggage, further simplifying its operations. It is a constituent of the FTSE 250 Index. It is important to note that the economy is gradually stabilizing in Europe which implies that the number of short distance is likely to increase. Suppose if The Company would have train business from London to France. European Countries Collaboration and good relationship making EU politically stable. Where there is no hope for success and great chances of damages and the failure of a product or service. This enables the airline to be in a position of financing the projects that it may be having. As an airline, EasyJet has skilled and motivated workforce which ensure that the travellers are able to enjoy quality services. We will write a custom Essay on EasyJet Company’s Strategic Analysis and Marketing specifically for you for only $16.05 $11/page. The threat which faces this airline is the availability of substitutes. In addition, the airline should consider having community programs which demonstrate to all other companies how a business can directly affect the people and communities in the many cities which it serves through outreach services and community building activities. EasyJet is growing dramatically since its existence which is good but there is a risk that the Company may lose control over its operations because of high growth rate. If Company would have invested in other business then there was possibility that company would incur its losses from other business. Public is generally quite friendly to the prospect of cheap flights although they feel begrudge where they see promotions saying flight is for £10 only to find that the actual cost is much higher for the particular time or day they wish to fly on. Info: 5003 words (20 pages) Essay As EasyJet operates in so many countries across Europe so the companies is keep on trying with local governments to reduce the tax so that they can keep its fare low. If any organization doesn’t conduct SWOT analysis then it means the organisation is working in darkness, where nothing is sure. Big Companies are perusing this strategy now a days and easyJet should carefully consider theses option and should take such steps which reduce the risk of decrease in shareholders wealth. This has managed to ensure that the presence of this airline in Europe is felt. EasyJet Company's Strategic Analysis and Marketing. Lastly, the paperless operations which have been embraced by this company have ensured that the travellers have an easy time when it comes of preparation for travel as well as when it comes to the management of any eventualities which might arise (Ballesteros 2007). Aspects such as uncertain fuel prices as well as insecurity are major areas of concern. EasyJet airlines cuts costs through value pricing. Currently, the company operates in over 27 European. The Easyjet Plc VRIO Analysis also mentions at each stage whether these resources could be improved to provide a greater competitive advantage. Some of the risks associated with this plans are associated with the prevailing business legal and political environment. ( Average age if plane is 3.4 years). PESTEL stands for - Political, Economic, Social, Technological, Environmental & Legal factors that impact the macro environment of Easyjet Plc. Furthermore, since it is considered as the leading low fare airline, the airline commands a great deal of influence in the short routes within Europe (Mayer 2007). (http://www.cbc.ca), Copyright 2009 The Independent – London. This is IvyPanda's free database of academic paper samples. Secondly, the airline is not in a position of controlling the cost of fuel in the industry (French 1986). Easyjet used low rent Luton air port to keep its cost low. easyJet is perusing cost leadership strategy in the aviation industry. (http://www.independent.co.uk), Sir Stilios opposed the Boards strategy which badly affects the repute of the company in the market. Secondly promotions of easyjet through websites and on air TV shows attract customers strongly. EasyJet is no1 in air travel network in Europe and 4th largest airline in Europe. That is the ability to produce and deliver services at a considerably lower cost as compared to other airlines (Barnes 2008). Flexibility can comprise four aspects. We've received widespread press coverage since 2003, Your UKEssays purchase is secure and we're rated 4.4/5 on reviews.co.uk. This has in turn led to an increase in the customer base and subsequently many passengers have resorted to this airline. Copyright © 2003 - 2021 - UKEssays is a trading name of All Answers Ltd, a company registered in England and Wales. In June, Gatwick become the biggest base with arrival of new airbus and it started offering flights to 29 destinations. It was founded by entrepreneur Greek Cypriot Stelios Haji-Ioannou, but it is now a plc listed on the London Stock Exchange and easy Group owns only a small minority stake. Increasing completion and saturation in the industry could be big threat for easyJet. SWOT analysis is a vital strategic planning tool that can be used by Easyjet Plc managers to do a situational analysis of the organization. The company vision is to be the best low fares airline in the world. This is the main reason we are observing that almost all the big companies are mentioning CSR in their annual reports and the company charter and agenda’s. Sir Stilios refused to sign the company accounts because of issue on board strategy. Consistent and reliable. The Brexit has impact Easyjet as it declines their sales and approx half losses. This model focuses on five forces that shape competition within an industry; these include; the risk of entry by potential competitors, the intensity off rivalry among established companies within an industry, the bargaining power of buyers, the bargaining power of the suppliers and the closeness of substitutes to an industry’s products. In 2001, a strategic analysis was carried out which brought forth the following findings; minimal impacts of the September 11, 2001 effects (Bartholomew 2009). How many pages (words) do you need? Eichenberger, JA 1996, General Aviation Law, 2nd edn, McGraw-Hill Professional, New York. Taxes and landing charges which are imposed by national government. Since the Air Miles Scheme is not thought as a taxable perk by the government so this advantage may allow Easy jet to compete on more parallel grounds with the likes of BA. 1-Easyjet has limited departure airports and most of them are away from the cities. EasyJet and Go Fly completed merger deal and easyJet become the number one low cost airline of Europe. In October, First Airbus A319 went into service from Geneva and in November, a new base was announced at Berlin and the company expanded its network dramatically with the addition of 11 new routes. Many of the parts of the plane are made in Britain, such as the massive Roll-Royce engines, while many other parts are also produced in other parts of the world. There is very much possibility of rising fuel costs, congestion and other environmental... 3-Socio-Cultural Factors. The strategic analysis of EasyJet and Easy Group Essay Sample. It is worth noting that the airline’s mission statement is to provide the travellers with safe, good value, point – to – point air services (Ballesteros 2007). 1. EasyJet analysis for Marketing Module Slideshare uses cookies to improve functionality and performance, and to provide you with relevant advertising. Diversification will open up new opportunities for the company. (2020, September 26). Numerator is obtained after meeting dues of all claimants of contractual dues. Now I would like to analyse company macro and completive environment. No plagiarism, guaranteed! Two “Airline” series was transmitted on itv1which help in publicity. It also provides a reflection of what is anticipated to be achieved in the future, that is by the year 2013. Barnes, D 2008, Operations Management: An International Perspective, illustrated edn, Cengage Learning EMEA, California. This has been done by the company by number of ways, online booking to reduce distribution cost, travel without paper tickets (just send emails), and no free lunch, efficient use of airports and aircrafts, paperless operations. The company announces new London Gatwick Barcelona Route and at the end of the year EasyJet established it 5th base at Gatwick and become the second largest scheduled airline at the airport. In this case, EasyJet is a company which has demonstrated several strengths which have made it to stand out. (http://www.areco.org/pollute.htm). Currently, the airline industry faces certain threats. EasyJet has various opportunities which are emerging. Paperless operation: Since its launch easyJet has simplified its working practices by embracing the concept of the paperless office. However, given the nature of the market and the shortage of other options in Europe, competition is likely to intensify. In addition, this company operates on 100 airports all over Europe and carried 51.9 million passengers in 2008. (http://www.heraldscotland.com). Government guidance and assistance available to travel and tourism businesses. (The Independent (London, England) Article date: November 21, 2007), Easy jet started new routes from Bristol to Barcelona, Gatwick to Istanbul. It is more eco friendly and emit 20% less CO2 than recent planes. (http://www.telegraph.co.uk). Main issue will be the extent to which technological advancements -such as the use of the internet on distribution and cost synergies from industry consolidation-can offset upward pressures on prices and costs. Ferrell, OC, Hirt, GA & Linda, F 2006, Business:a changing world, 5th edn, McGraw Hill/Irwin, California. Furthermore, it is important to note the fact that the management team should work out a plan to ensure that the cost estimates are within the range of the company operations. In April, New online booking policy was introduced so that seats booked more than two months before the departure of the flight could be purchased online. When the company is able to create a massive following, then it should be able to separate itself from its competition in a variety of ways which will ensure that the strategic objectives of the company are maintained. In essence, it gives a reflection of the confidence that the customers have in this company. EasyJet does not have any customer retention scheme at the moment. Mayer, F 2007, A Case Study of EasyJet and the Airline Industry, GRIN Verlag, New York. Ahlstrom, D & Garry, DB 2009, International Management:Strategy and Culture in the Emerging World, Cengage Learning, California. As Europe aviation industry is becoming saturated day by day. (http://www.forbes.com/2007/10/25). Some of the services and packages which are being offered by this airline are competitive. (European management Journal; issue 1, 1999), In April 1998, EasyJet sold it first seat online through its website easyjet.com. The EasyJet was first low cost airline which launch flight arrivals information on its website. SWOT Analysis is a proven management framework which enables a brand like EasyJet to benchmark its business & performance as compared to the competitors and industry. (easyjet.com), EasyJet decided to buy two new air craft that is why signed a $500 million contract with Boeing in July 1997 and bought 12 brands new 737s .The Company was awarded its own Air Certificate which means EasyJet was recognised financially viable. In this case, we are going to be looking at the environment of the EasyJet airlines (Ahlstrom & Garry 2009). (Hashir, K. 2004), Organizations use SWOT analysis for their product and/or service to determine internal and external forcing affecting them. It operates from 27 bases across the UK and Europe. This implies that the company was able to launch into 644 destinations within that span or period of time (Jones 2005 ). Lowest average age of the fleet which result in increased safety and higher fuel efficiency and low carbon emission. The plans are underway to increase the fleet of this airline. Kourdi, J 2009, Business Strategy: A Guide to Taking Your Business Forward, 2nd edn, John Wiley & Sons, New York. ( http://www.holidayextras.co.uk), In Mar, EasyJet selected Carolyn McCall, currently chief executive of the publisher of The Guardian and The Observer newspapers, as its new CEO. There three major suppliers in the airline industry, aircraft supplier, Petrol supplier and airport parking contractors, The power of aircraft supplier is quite high because they are few in numbers. Furthermore, the strategy which has been employed by this company has ensured that it is able to operate and bring forth profits and dividends to the investors (Burrow, Kenneth & Brad 2007 ). Schneiders Food Company and Tyson Foods Inc. Operations and Process Management of EasyJet, EasyJet Company: Strategic Management and Business Policy, Ryanair vs. Easyjet: Corporate and Competitive Strategy Analysis, Different Approaches in Apple Corporation Strategy, Starbucks vs. Costa Coffee and Caribou Coffee, Etihad Airways' Business Environment and Strategy, Solar Panels Station in Jenin: Feasibility Study, Alibaba Company's External and Internal Analysis, CARVE Electronics Company's Dilemma Identification. Other strategic innovations which have made this airline to stand out have included ticketless travel and lower fares (Jones 2005 ). In the recent past, the airline has been carrying out an evaluation regarding its fleet. Strategic Analysis of Easyjet The strategic analysis of EasyJet and Easy Group --the analysis of organisational assets and Growth-share Matrix... Strategic Interactions Ryanair & Easyjet Don’t Be Blinded by the Price, Sunglasses to See the Whole Picture.