This assignment requires an analysis of EasyJet's marketing strategy. Students should examine the airline's low-cost business model, its target audience, and its use of digital marketing tools for competitive advantage. The analysis should be supported by relevant academic sources listed in the provided bibliography.
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Running Head: Strategic Management1 Strategic Analysis of EasyJet Airlines
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Strategic Management2 Contents Introduction......................................................................................................................................3 Main body........................................................................................................................................3 Background of Easy Jet................................................................................................................3 Strategic position of Easy Jet.......................................................................................................3 Internal analysis...........................................................................................................................4 Primary activities......................................................................................................................4 Supportive activities.................................................................................................................5 Product differentiation.................................................................................................................5 Human resource management......................................................................................................6 PESTEL analysis..........................................................................................................................6 Recommendations and conclusion..................................................................................................8 References........................................................................................................................................9
Strategic Management3 Introduction This report discusses an analytical research of EasyJet in order to understand the strategic position of the company in the airline industry. Airline EasyJet is famous among the travelers for its low cost services. In the past few years, the airlines have done many major changes in its management style. The airline has unique business strategy which is the reason of success in the airline industry(Pate & Beaumont, 2006). The objective of this report is to analyze the strategy and tactics used by the airline in order to stay competitive in the industry.The report focuses on the strategic analysis including PSTEL analysis, product differentiation and human resource management Background of Easy Jet EasyJet is a public listed company under the oligopolistic structure and operates across the European continent. The Airline has started has started its business operations in 1995 and now it is considered as the low-cost European airline in the industry (EasyJet Plc, 2018). As the ‘low-cost’ company, EasyJet is different from traditional airlines by having very low fares. The company is now providing the services of domestic and international carriers to the passengers at very low cost. Airline is seeking to keep the costs low by minimizing the unnecessary frills and costs. There is the need to reduce the costs as the strategy in order to reach many customers EasyJet is focusing on maintaining its effective strategic position in the airline industry (Johnson, 2010). Strategic position of Easy Jet EasyJet is the leading airline company in UKthat is providing low cost airline services to the travelers. The organization is known as the ‘No-frills’ airline in which the airlines provides the services at very low fares and eliminates all the unnecessary services (Wright & Quinn, 2014). Pricing-The generic strategy of EasyJet is the cost leadership strategy. The philosophy of the organization is to provide the low-cost services based on the market size in order to get profit. Based on such strategy, EasyJet is able to maintain cost advantage over the established airlines.
Strategic Management4 By the low-cost strategy, EasyJet is trying to maintain the perceived benefits from the product and services as compared to its competitors (Peñaloza et al, 2013). Organization focuses on two basic factors i.e. customers and prices in order to achieve the competitive advantage in the market. So, EasyJet has strong competitive and strategic position in the airline industry over its competitors. Marketing-For the effective marketing process, EasyJet is using effective tactics and slogans i.e. ‘come fly with us’. Along with this, organization is also providing electronic tickets to the passengers so that they do not need to print the ticket in physical form. Organization has introduced mobile application also in order to enhance the revenue and sales (Braun & Latham, 2014). HR-HR department is the most important part of the organization. EasyJet is focused on the welfare and development of its employees basically, organization hires young people. Now, there are more than 100 people employed in the business operations. Internal analysis EasyJet Airlines is a low cost airline that offers affordable services to the travelers at the low prices. The business operations of the airline include various activities in order to provide values to the customers. Airline is achieving competitive advantage as compared to other airlines in the industry and minimizing the risk of substitute. The activities of EasyJet are described below: Primary activities The key objective of any organization is to achieve the operational efficiency and in order to achieve this, primary activities of EasyJet is the major concern. The primary business activities of the airline are as follows: Inbound logistics- EasyJet is operating its business in more than 30 countries including over 600 routes. Organization is providing services to more than 65 million people (EasyJet plc, 2017). The organization has strong position in the industry by offering low cost services as compared to other airline companies. Along with this, the organization is involved in various environmental
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Strategic Management5 friendly activities by being fuel efficient. Organization has used Nano-technology paintings in order to reduce the weight of aircrafts (Lamb, Hair & McDaniel, 2010). Operations- There are various operations of EasyJet including ticket counter operations, aircraft operator, ticket officer etc. EasyJet is operating around 500 flights each day along with 4500 crew to assist the customers. The E-tickets can be downloaded from the website of EasyJet. The operations of EasyJet are famous for its punctuality and services (Ritson, 2011). Outbound logistics- EasyJet is providing the rental car services that are helpful the travelers to reach from airport to their proper destinations. Along with this, it also provides facilities in booking hotels, apartments and resorts. Based on the customers’ requirements, organization offers various prices to them. Further, it also provides effective baggage system (Griffin, 2008). Supportive activities There are various supportive activities of EasyJet in order to achieve the competitive advantage in the operating market. Supportive activities of the company are described below: Infrastructure- EasyJet has adopted low cost model and that is the reason organization has strong brand awareness in the operating market. So, company has spent lots of money in order to sustain the infrastructure and customer base in the market. Technology- EasyJet is using modern technology and IT model that is helpful for the organization is delivering quality services. Along with this, EasyJet is using online services and effective marketing channels to target the customers. Organization is focusing on the feedbacks and responses of the consumers after providing services (Dess& Lumpkin, 2009). Procurement-
Strategic Management6 In the procurement process, EasyJet is using proper inventory management process, warehousing, maintenance and e-procurement. Product differentiation According to Porter’s theory, two basic type of competitive advantage i.e. lower cost and differentiation.EasyJethasachievedcompetitiveadvantagebyadoptingcostleadership approach and providing low-cost advantage to the customers in the form of low cost. EasyJet has done many attempts in order to make the product stand in-front of low cost airline competitors. The factor of product differentiation acts as the competitive advantage in the business. It is observed that EasyJet is ‘trend setter’ for the product differentiation in the market (Hospodka & Fedorco, 2013). Further, EasyJet has recently relaxed hand luggage restrictions which are40% bigger than present allowance. No weight restriction of EasyJet for flexible ticket and cabin baggage scheme is helpful in creating innovation for the customers. This is the attractive prospect for the business class travelers and differentiates EasyJetfrom the other low cost airlines. Along with this, in order to minimize disruption,EasyJet has implemented 100% self-check in the plans. EasyJethas also differentiated itself from the pricing methods i.e. inclusive pricing that excludes taxes and booking charges. The organization has come with the low fare strategy in order to attract a large customer base (Fifield, 2012). Human resource management Human resource management has crucial role in managing various activities within the organization. It is observed that there are various functions performed by the department of HR in EasyJet. There are three key functions carried out by the human resource management i.e. managerial function, operative function and advisory function. Further, motivation, development, compensation, industrial relations and employment are some crucial components of human resource functions. In EasyJet, managerial functions includes organizing, planning, directing, and coordinating of human resources and advisory functions of HRM includes advices to various departments and higher management of the organization. For EasyJet, it is observed that human resource carries out all these functions in various departments and achieves the organizational objectives in the efficient manner (Ghuman, 2010).
Strategic Management7 PESTEL analysis Political- Being a low-cost airline, safety rules and regulations are imposed on the airline. So, EasyJethastomeetvariousinternationalconventionsEuropeannational,protocolsand agreements. Air transports are basically governed by the international conventions. There are variousfactorsinthecountrythatimpactonthebusinessoperationsofEasyJeti.e. environmental law, taxing policies and foreign trade regulations (Mason and Alamdari, 2007). Economic- There are some factors that impact on the growth and development of any company. Those factors include GDP of nation, economic growth of the country, inflation rate, purchasing power of people, rise in the oil prices and unemployment in the country. all these factors are helpful in getting new opportunities for Airline as well as managing the business at the global business the country. That is the reason EasyJet has various opportunity in order to grow and develop the business in the market. Social- This factor basically includes population, age distribution, and income distribution of the population in the country. The cultural aspect includes the changes in the culture and changes and life changes. These factors have strong impact on the business operations in various countries. EasyJet focuses on the socio-cultural factors of the country that motivates the travelers to choose EasyJet for their traveling (Marcer, 2012). Technological- In the airline industry of low-cost airline, technological development is not a priority. EasyJet has low-cost business model that is helpful in minimizing the cost in the business and making the services effective for the customers (McDonald, 2015). UK provides opportunity in order to create new technologies with the research and development institutions. So, EasyJet is creating new technologies to grow the business (Schilling, 2010). Ecological-
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Strategic Management8 EasyJet has to follow the rules and regulations related to environmental protections in the operating country. In order to deal with the environmental factors Airlined has introduced a program named Carbon offsetting. EasyJet does not provide any kind of food during the flights but travelers have option to buy the food in the flight during their journey. Customers get healthy food and company use recycling method in order to use the material again i.e. plastic glasses, folks and knifes etc. Legal- This factor includes various laws and regulations imposed by the government of the country. Those laws include international laws, employment laws etc. Government of the country set laws and standards that impact on the business of airlines. There are international laws international trade, air space, agreements and international trades that impact on the business of Airline companies. Recommendations and conclusion It is observed from the above analysis that EasyJet is doing well in its business operations in UK. Company has effective strategic position in the industry but still, there is the scope of improvement. So, it is recommended that company should focus on the effective promotional activities and to make its presence among the customers by using social media platforms. Along with this, company should also use of available resources in order to develop the infrastructure and various supporting activities like technology and human resources. It is also recommended that EasyJet should cooperate with other businesses like cab business which can be helpful for the travelers to reach airport from the destination transport. Along with this, EasyJet can maintain better relationships with the transatlantic operation in order to create more routes. By adopting these recommendations, EasyJet will be able to maintain its strong position in the market.
Strategic Management9 References Braun, M. & Latham, S. (2014)Mastering Strategy. Santa Barbara: ABC-CLIO. Dess, G. & Lumpkin, G. (2009)Strategic Management: Creating Competitive Advantages. (6th). London: McGraw-Hill Education. EasyJetplc,(2017)PURPOSEFULANDDISCIPLINEDGROWTH.Availableat http://www.zonebourse.com/EASYJET-34541461/pdf/804564/easyJet_Rapport-annuel.pdf (Accessed: 27/1/2018) EasyJet Plc, (2018) Our journey. Available athttp://corporate.easyjet.com/about/our-journey (Accessed: 27/1/2018) Fifield, P., (2012)Marketing strategy.(2nd). Berlin: Reed educational & publishing Pvt Ltd Ghuman, K., (2010)Management: Concepts, Practice & Cases.USA: Tata McGraw-Hill Education Griffin, R.W. (2008)Fundamentals of Management. USA: Houghton Mifflin Company. 67 Hospodka, J. &Fedorco, L., (2013)AIRLINE PRICING STRATEGIES IN EUROPEAN AIRLINE MARKET.8(2) Johnson,B.,(2010)EasyJetunveilsstrategyandstrongresults.Availableat https://www.marketingweek.com/2010/11/16/easyjet-unveils-strategy-and-strong-results/ (Accessed: 27/1/2018) Lamb, C.W., Hair, J.F. & McDaniel, C.D., (2010)Essentials of Marketing. Cengage Learning.
Strategic Management10 Marcer, D., (2012)Marketing strategy: the challenge of the external environment. (5th). London: Sage Publications. Mason, K., J., and Alamdari, F., (2007)EU network carriers, low cost carriers and consumer behavior: A Delphi study of future trends: Journal of Air Transport Management. 13. pp. 299- 310 McDonald, C., (2015)How easyJet uses digital to drive competitive advantage, Available at http://www.computerweekly.com/news/4500255119/How-Easyjet-uses-digital-to-drive- competitive-advantage(Accessed: 27/1/2018) Pate, J. & Beaumont, P. (2006)The European low-cost airline industry: the interplay of business strategy and human resources: European Management Journal. 24(5).322-329 Peñaloza, L., Toulouse, N., & Visconti, L. M., (2013)Marketing management: A cultural perspective. USA: Routledge Ritson,N.,(2011)StrategicManagement,Availableat http://www.kau.edu.sa/Files/0057862/Subjects/Strategic%20Management%20Book.pdf (Accessed: 27/1/2018) Schilling, M. A., (2010)Strategic Management of Technological Innovation. New York: McGraw-Hill Irwin Wright, B., & Quinn, J., (2014)EasyJet maintains low-cost model despite business and frequent flier focus,Available athttp://www.telegraph.co.uk/finance/newsbysector/transport/11237378/ easyJet-maintains-low-cost-model-despite-business-and-frequent-flier-focus.html(Accessed: 27/1/2018)
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