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. Implications from the strategy chosen. This level of disruption and deterioration of the operation cannot continue," the email reads. It is not helpful to have a shareholder barking up managements neck the whole time, Morningstar analystKotze says. And hes moved aggressively to grab additional takeoff and landing slots in markets he sees as important. 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 also reduces the marginal cost of incremental growth; increasing scale brings valuable economies (Johnson, G., Scholes, K., Whittington, R., (2005). Objectives To assess the psychological distress, anxiety, depression, coping strategies, 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. In 2020, it transported a Cost advantages might be achieved because of EasyJets efficient use of airports. This has the highest risk, but It moved aircraft maintenance at three of its U.K. airports, which had been contracted out, back in-house. 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. ENVIRONMENTAL The energy sources used, namely oil has vast ecological/environmental implications. Webcomputing risks Let us look at five different types of risks and how they apply or vary by cloud deployment models. The airlines hopes for summer 2021, like those of almost all airlines, rest on vaccinations. Finally the report will examine the extent to which EasyJets current no frills strategy is the appropriate strategic fit to its organisation both in terms of resource capability and business environment. WebEasyJets first generic strategy is to achieve an overall cost leadership in the low cost airline industry. Focusing on improving the control and decision making across operations. Here you can choose which regional hub you wish to view, providing you with the most relevant information we have for your specific region. 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. Developing the range of ancillaries on offer such as the Inflight retail proposition. Potential threats of economic recession, since air travel is effectively a commodity product, it is recession prawn. Where normally there would be the roar of engines and the trundling rumble of buses and baggage carts, the whistling wind is often the only sound. The web-based questionnaire was distributed to Egyptian healthcare workers from the 20th of April 2020 to the 20th of May 2020. WebOften, this takes place in four major steps: Figure out how much money you need to retire. The EasyJet brand is established in the European market, but brand awareness is required outside the continent. Like all airlines, it instituted new procedures: increased cleaning, mandatory masks for passengers and crew, and no meal service. None would fly again until June 15. EasyJet also have a reputation for paying low wages in line with its low cost strategy. Table 1 shows that EasyJets sales has increase year on year since 1998, with profit and gross margins also experiencing a positive trends. In mid-May 2020, the company revealed it had been hacked. But flying to those primary airports in Western Europe is more expensive. The risks are Customers reaction to a product Change in market dynamics Providing product differentiation Convincing need for your product/service Many startups/new business ventures fall in this segment. A typical approach for risk identification is to map out and assess the value chains of all major products. The primary outcomes were anxiety (GAD-7), depression (PHQ-9), risk perception towards COVID-19, interprofessional teamwork attitude, and coping strategies during the Coronavirus disease-19 pandemic. Although mostly private now, many of these airlines were once state owned, and some still have not insignificant government stakeholdings. Haji-Ioannou insinuated that this was evidence of the corruption hed long alleged. Finally, the key to sustaining high levels of growth is the scalability of the operations. Appendices 1. 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. EasyJet also operates a flat management structure, which may lack a formal discipline that is needed as the organisation grows. When the pandemic struck, Haji-Ioannou decided to renew his pressure to convince the airline to abandon the purchaseultimately mounting a proxy campaign to remove directors from the board. EasyJets 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. 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. The idea of remote working can also Haji-Ioannou said the result was rigged, arguing that the fund companies with Airbus pension business should have been ineligible to vote. Another benefit of Internet technology is lower transaction costs at multiple levels in value chain activities. Having considered the possible future opportunities what are the potential threats that EasyJet needs to bear in mind? Founded in 1995, low-cost carrier EasyJet established itself among the largest airline based in the United Kingdom by passenger numbers. This will help the companies decision makers understand where the organisation is now. But it was not the same as canceling its contract, and unsurprisingly, Haji-Ioannou was not satisfied. Feeling powerless is one of the worst feelings, not just in business.. easyJet continues to optimise its network to ensure capacity is deployed in the markets where the strongest demand and returns are seen. At the same time, it was wooing at least some business travelers by differentiating itself from no-frills rivals like Ryanair and Wizz, offering some perks and serving first-tier airports. But nothing has been normal for EasyJet since March 23, 2020. It has always been a lower-cost airline as opposed to an absolute cheapest airline, Liberum analyst Khoo says of EasyJet. quick order processing). The U.K. is doing well: It had approved two vaccinesone from Pfizer and one from AstraZenecain December and a third, from Moderna, in early January; by mid-May it had given 68% of the adult population at least one shot. Being low cost, driving efficiency and investing only where it matters most to our customers and our people. Firstly, threats in terms of new & existing competition. It is possibly not as good in terms of operations and its inbound logistics. Market Development. In the long term, this is concerned with the extent to which the organisation is operating profitably. Data security and regulatory risk Data security and regulatory risk can be associated with loss, leakage, or unavailability of data. Still, it wasnt spared from the industrys general carnage. EasyJet has cost advantages through company specific capabilities, which drive down costs throughout the value chain. on its competitive advantages - an unparalleled network and market positions, efficient low cost model, well-known brand and strong balance sheet - positioning easyJet to deliver sustainable and disciplined growth and returns for shareholders. Currently, around 12% of boarding passes issued by easyJet are mobile passes, although this can be as high as 50% for some flights. In 2019, excluding fuel and in constant currency, it cost EasyJet 4.45 European pennies per available seat kilometer, a key industry cost metric. It is here that EasyJets pilots practice and maintain their skills. Improving scheduling processes to drive crew productivity, also benefitting from the seasonality of our network. The U.K. requireseven those returning from green countriestake COVID-19 tests before boarding a plane to return to the U.K. as well as within two days of returning. The company benefits from being one of just four airlines globally thatcurrentlyhave an investment-gradecreditrating, according to Gerald Khoo,a transportation analystwith brokerage firm Liberum. EasyJets first generic strategy is to achieve an overall cost leadership in the low cost airline industry. At the end of January, EasyJet announced that it had secured another $1.9 billion through a five-year loan, secured against its aircraft. Haji-Ioannou founded EasyJet in 1995, eventually using it as a springboard to create of an Easy-branded empire that extended from car rentals and pizza delivery to a hemp business. 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. 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. Analysis of financial resources in order to understand the strategic capability of EasyJet will need examination of financial capability and performance. 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. To enjoy unlimited access to our journalism, subscribe today. Ryanair had even tried to capitalize on this connection between vaccinations and travel in its marketing, rolling out at jab and go advertising slogan in January, which it had to withdraw after objections from Britains Advertising Standards Authority that it was not promoting responsible behavior. They have focused on expanding into new markets in Eastern Europe. It is about a man who faces challenge after challenge but he keeps his mood and rises up again, Lundgren told the newspaper. The purchases rankled Haji-Ioannou, who had opposed EasyJets tie-up with Airbus ever since it had been signed in 2013. EasyJets powerless plight is typical of the entire industrys. Strategical moves like this have enabled it to reduce cost and improve the convenience for the customers. The company carries out Copyright 2003 - 2023 - UKEssays is a trading name of Business Bliss Consultants FZE, a company registered in United Arab Emirates. S&P Index data is the property of Chicago Mercantile Exchange Inc. and its licensors. Focus on seasonality improvements such as season contracts and bases. 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 denied this dinner took place. The airline couldnt simply abandon it without jeopardizing any chance of a quick recovery when the crisis ended.Lundgren also thought the contract made long-term strategic sense. It has been streamlines by using e-commerce, firstly by telesales and now through the Internet. POLITICAL Following the European deregulation of commercial aviation, a fleet of low cost carriers are reshaping the local airline landscape. Web Evaluate EasyJets operations strategy against Hayes et al. s criteria of consistency and contribution to competitive advantage. The threats are in terms of fines and rise in cost of raw materials. Its not clear what role Haji-Ioannous pressure played in this decision. A prime example of this was the subsequent takeover of Go by EasyJet. We are seeing significant benefits already from operational resilience processes and predictive maintenance. Due to varying update cycles, statistics can display more up-to-date This is intensified as a result of little or no differentiation in the service offered. Upgauging the fleet enables easyJet to improve competitiveness on costs. After listing the risks and putting them in a risk matrix, the report will then aim to explain how the risk will affect easyJet and justify the position of it in the risk map. The risks associated with a differentiation strategy include imitation by competitors and changes in customer tastes. All office-based employees are encouraged to dress casually. The linkages with the value chains of channels and customers which are the essence of EasyJets capability and which can protect its market leadership and maintain cost leadership competitive advantage from competitors. But the strategy also burdens EasyJet with higher costs as it tries to recover from the pandemic. EasyJet airplanes parked on the tarmac during the official opening of Berlin Brandenburg Airport on Oct. 31, 2020. In an interview with LondonsEvening Standard newspaper in January, Lundgren sounded down, admitting he missed frequent trips to the Spanish island of Majorca, where he owns a house and where he and a friend also own a recording studio. This will require a mindset where innovation (in cost reduction) is regarded as essential to survival. Potential negative outcomes include bad publicity and a As both employees and customers are put under increased stresses, the potential for heated exchanges becomes a risk. And the company continued to insist it saw the opportunity for wins amid the travel industrys carnage: Europes legacy carriers were hurting even worse than EasyJet, which offered the discount airline a chance to gain new flight slots at key airports in Paris, Milan, London Gatwick, and Geneva. data than referenced in the text. Pandemics, lockdowns, trade disputes, financial crises and more can depress travel demand and threaten the bottom lines of industry players. We will consider the value chain for EasyJet in more detail later in our discussion. This time, he succeeded in scheduling a showdown vote for May 22, 2020. 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. 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? In terms of support activities, EasyJet takes advantage of technological developments in order to reduce costs. Whats more, it included maintenance and avionics support for EasyJets existing fleet. Therefore, capability is strongly related to the way that resources are used and controlled. Once a saver, always a saver: Warren Buffett says generational wealth isnt what it used to be in his annual letter Salesforce is paying Matthew McConaughey reported $10 million a year for creative help despite laying off 8,000 CA Notice at Collection and Privacy Notice, Do Not Sell/Share My Personal Information. 6. At a budget carrier, you need to be aggressive and ruthless and abrasive, says Joachim Kotze, an airline industry analyst for financial research firm Morningstar. The company has also grown in terms of its acquisitions of GO and also increase in purchases of its own aircrafts. This eliminates the need to any commissions to external sales agency. WebSome compliance risks are specific to an industry or organizationfor example, worker safety regulations for manufacturers or rules governing the behavior of sales representatives in the pharmaceutical industry. This will show how its critically important for EasyJet that strategic alliance, size and technological innovation have on its profitability. All work is written to order. He said he had discovered a secret meeting in Switzerland, arranged by Airbus, between top EasyJet executives and a lawyer who, according to documents revealed in the Panama Papers leak, may have helped clients evade international sanctions through offshore shell companies. Our mission to make business better is fueled by readers like you. The CEO told theFinancial Timesthat Haji-Ioannous campaign was highly undesirable, unhelpful, and a distraction. EasyJet pointed out that the contract contained noforce majeureclause. Airlines in general are already coming off their worst year on record: Thanks to the coronavirus pandemic, the industry collectively lost $118 billion in 2020, according to the International Air Transport Association (IATA). Directly accessible data for 170 industries from 50 countries and over 1 million facts: Get quick analyses with our professional research service. Also, only one type of aircraft is used, in order to minimise maintenance costs. These large airline groups are so big and so important for so many economies that the national governments will do whatever they can to keep them alive, saysDirk-Maarten Molenaar, atravel and tourismindustry consultant at Boston Consulting Group. Savings made from e-commerce is another source of value creation. 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