Business Strategy Report: Analyzing EasyJet Airline (Unit 32)

This report provides a comprehensive analysis of EasyJet's business strategy, examining its macro-environment through PESTLE and SWOT analyses, its internal environment using resource-based view, and its competitive forces via Porter's Five Forces. The report also explores strategic planning models, including the Ansoff matrix, to devise growth strategies for the airline. It discusses the impact of external factors like Brexit and the COVID-19 pandemic, as well as internal capabilities and resources. The analysis covers stakeholder management, market penetration, product development, market development, and diversification strategies. Overall, the report offers a detailed overview of EasyJet's strategic positioning and potential future directions, using various frameworks to assess its strengths, weaknesses, opportunities, and threats within the competitive airline industry. The report is a complete solution for a Unit 32 Business Strategy assignment.

Unit 32- Business
Strategy

Contents
INTRODUCTION.......................................................................................................................................3
PART 1.......................................................................................................................................................3
P1/ M1 Application of appropriate frameworks to analyze the impact and influence of macro
environment on the company and its strategies.......................................................................................3
P2/ M2 Analyze the internal environment and its capabilities of the company by using effective
frameworks..............................................................................................................................................8
P3/M3 Application of Porter’s five forces in order to evaluate the competitive force of company........10
PART 2......................................................................................................................................................11
P4/D1 Devise strategic planning for the company using range of model, concepts and theories...........11
M4 Strategic management plan.............................................................................................................13
CONCLUSION.........................................................................................................................................15
REFERENCES..........................................................................................................................................16

INTRODUCTION
The business strategy is referred to as the means by which the company sets out to
accomplish the desired objectives. It is generally called the long term business planning. It is
termed as the long term plan which is created for the company in order to reach the goals. It
includes the goals and objectives of the firm, the kind of offering it is dealing in for which the
plan is being made, the target customers and the market which is to e served with an aim to
generate profits. It acts as the guiding principles which help in generating the desired decision
making when the company adopts and communicate it. It mainly provides the framework with
which organization can make decisions and allocate its resources so that it can achieve its
objectives. It is a roadmap which defines the people’s action who are involved in business and
the things to which they must prioritize in order to achieve the business goals (Perez-Franco and
Phadnis, 2018). The organization chosen for this report is EasyJet airline, a low cost airline
which is headquartered in Luton, England. This report shall cover the impact and analysis of
macro environment, analysis of internal environment and the capabilities of organization. Further
it will cove Porter’s five forces and strategic planning for the company using theories and
concepts.
PART 1
P1/ M1 Application of appropriate frameworks to analyze the impact and influence of macro
environment on the company and its strategies.
PESTLE analysis
It is a framework which is used to identify the macro environment factors so that the
company can makes its decision efficient and effective (Filser and et. al., 2021). It consists of 6
external factors which are discussed below in relation to EasyJet airlines
 Political- This factor involves the political scenario of the state where the company is
operating. In relation to EasyJet airlines, the company is struggling due to the impact of
Brexit as its ownership has been transferred for from UK to European Union which has
affected its operations.

 Economic- This external factor includes the economic condition of the state such as
currency fluctuations, inflation rate etc. In relation to EasyJet airlines, the company is
facing many issues due to the impact of pandemic of COVID-19 as there has been
complete shutdown of the airline industry due to nationwide lockdown. This affected the
business of EasyJet airlines. Moreover any fluctuation in the fuel cost can also affect its
profitability and business.
 Social- It involves the socio- cultural factors such as demand, supply, purchasing power,
behaviour of consumer etc. In relation to EasyJet airlines, it may get affected by the
changing priorities of the customers in order to drive ancillary resources. Moreover the
EasyJet airlines have to make strategies to make the gender balance in the pilots so that it
can create a positive impression in the minds of customers.
 Technological- It involves the adaptation of technological advancements in the company.
The EasyJet airlines continuously involve new technologies in its business so that it can
provide efficient service to its customers. For instance, the organization has recently
introduced the Bag scanning feature in the iPhone for the users of mobile applications
and also there has been improvement in the digital interface such as new bagger size in
the EasyJet airlines mobile application.
 Legal- It is concerned with the compliance of legal requirements in the company so that
there's no charge for the non-compliance for the company. The EasyJet airlines have to
comply with many environmental regulations in order to prevent any legal consequence.
For instance, it operates in 3 European countries so it has to comply with the state’s laws.
Moreover there has been change in the European air space supply which is controlled by
air control traffic that brought many changes in the functioning of company.
 Environmental- It is concerned with the operations of companies which do not harm the
environment. The EasyJet airlines operate in zero carbon emission so that it can cause
minimum damage or harm to the environment. It makes sure that its operations do not
affect or cause any damage to the ecology (Browne and et. al., 2018).
SWOT Analysis
This tool is used to identify the internal and external factors of the company such as the
strength and opportunities which can be used to overcome the threats and weakness (Basheer and
et. al., 2021). In context to EasyJet airlines to SWOT analysis is illustrated below-

Strength Weakness
 The major strength of EasyJet airlines
is that it has established its brand value
in such a way that it is the first choice
brand for all the customers with
increased consumer loyalty.
 Another strength of EasyJet airlines is
that it has a very strong operational
efficiency which helps it to maintain
the low cost model so that it can
generate more revenues and provide the
customer with the best service at a very
low cost.
 The EasyJet airline is one of the first
company in the airline sector which has
introduced the airplane with zero
carbon emission. This created positive
impression in the minds of customers
which helped them in building the loyal
customer base
 The biggest weakness of EasyJet airline
is that it operates in low cost model
which gives it low margin of profit.
 Another weakness of this company is
that there is a heavy competition in the
airline industry which may affect the
business and operations of the business.
 Another weakness of EasyJet airline is
that it does not offer adequate free food
service to its customers who board the
long flights which are mostly 2 hours
longer finds the customer difficult to
avail its services.
Opportunities Threats
 The EasyJet airlines may cover more
routes in the European countries so that
it can attract more customer segment in
the business which can help it in
increasing the market share (Basheer
and et. al., 2021).
 It can offer many travel packages with
the tours for the customers who are
looking for best travel experience so
that it can attract more of the travellers
 As EasyJet airline is a low cost
business so the increased airport fees
may affect its business due to very low
margin of profit..This may lead to
shutting down of many routes for the
airline.
 The market position of EasyJet airline
may be threatened by the competitors
as they are offering more flight routes
in low cost to the customers who may

in its operations.
 Another opportunity for EasyJet airline
can be to focus on business travellers so
that it can plan and cover such routes
which influence the business traveller
so that they can increase their business.
affect the business of this company.
 The internal factors are also the threat
for EasyJet airlines such as the
employees strike or labour union that
may pressurise the company to fulfil
their demand of more benefits and
money. This may affect the cost of the
company and thereby resulting in
increased price for the customers.
Stakeholder analysis
It is a technique or framework which is used to identify the key personnel of the
company. It is important to identify the key stakeholders so that the planning can be done in
accordance with it. In context to the EasyJet airlines, it is discussed below-
The power-interest grid is a tool which is used to prioritize the stakeholders on th basis of
their interest and power in the company (Dixit, 2017). This framework mainly divides the
stakeholders into four categories which are narrated below-
 High power- High interest- This comprises of those stakeholders who are the decision
makers and places more impact on the success of business. In EasyJet airlines, the top
management personnel and owners are on who are required to be managed closely as
they are the one who will take decisions in the organization.
 High power- Low interest- This consists of those stakeholders who are required to be
kept in loop and need to be satisfied even though their interest is low in the company. In
the EasyJet airlines, the employees are the one who are required to be kept satisfied as
they have the power in the company but has low interest in its profitability.
 Low power- High interest- It consists of those stakeholders who have less power in the
organization but have high interest so they are required to be informed about the working
of the company. In context to EasyJet airlines, the suppliers of the company comes under

this category as they have interest as to how company is functioning but has no power in
the organization.
 Low power- Low interest- It comprises of those personnel who have low interest and
power in the company. They just need to be monitored with minimum efforts and are not
required to be provided with excessive communication (Anwar, Azis and Ruma, 2019).
In relation to the EasyJet airlines, the customers are the one who has low power and
interest in the company as they are only concerned with availing the services and not with
how they are working.
Ans off matrix
This model involves four strategies which can be used by the company in order to make
planning for its strategy relating to future growth. The EasyJet airline can use any of the
following strategy in order to expand and grow its business. It is discussed below-
 Market penetration- It is mainly focused on increased number of sales of its existing
product in the same market in which it is already operating. EasyJet may adopt this
strategy on focus on its existing market and same services so that it can increase sales in
the same market.
 Product development- It involves introducing the new offering in the market in which the
company already operates. EasyJet can bring some new service and introduce it in the
same market so that it can attract more customers.
 Market development- It focuses in entering the new market but with same services and
product range. It is mainly focused on expansion. EasyJet can plan the expansion of its
services by entering new market with its existing services.
 Diversification- It is the most risky strategy as it involves new offering in new market.
EasyJet airline can introduce new service in the new market to capture different and new
customer segment (Park, Park and Hirachi, 2018).
P2/ M2 Analyze the internal environment and its capabilities of the company by using effective
frameworks.
It is essential for the company to analyze its internal environment so that it can make use
of its internal resources and capabilities in order to accomplish its goals and objectives. A
strategic capability is referred to as the process whereby an enhancement and improvement is

offered in strategy so that a modified strategy can be built in order to take the competitive edge
in the market. The internal environment and capabilities analysis is illustrated below-
Resource based view
It is defined as the managerial tool that helps in utilizing the resources of the organization
so that sustainable advantage can be achieved. They insight of this framework is not to make
each resource of equal importance but to make it a source of the competitive advantage. The
resources are classified into two categories such as tangible which includes car, machinery,
building, etc. and intangible which includes the intellectual property rights. It is very necessary
that EasyJet airline to make optimum utilization of the resources which has minimum wastage
(Rivera, 2019).
VRIO Analysis
This model is a framework which helps in identifying the resources of the organization so
that it can be determined that whether these resources provide the sustainable competitive
advantage or not. In relation to EasyJet airlines, the VRIO analysis is narrated below-
 Valuable- There Are many resources in this category for EasyJet airline which include its
financial resources which helps the company in managing its low cost model so that the
customers are given best services in a very low price. Another valuable resource for the
organization is its distribution network which helps the airline to cover major market
share in order to generate more revenue.
 Rare- The employees are the rarest resource for EasyJet airline because they are highly
trained and skilled. The company spends a lot of funds in the training of its workforce so
that they can become efficient. It also offers the best working environment to them so that
they are retained in the organization. The patents are also regarded as its rare resource
which helps the company to function without any interference of the competitors.
 Inimitable- The financial resources of the EasyJet airline is very costly to imitate
because it is acquired from the prolonged profits of the company. Moreover the
employees are not so costly to imitate because training can be offered by any company to
make the workforce skilled and competent.

 Organized- Financial resources of the company are organized which helps it to maintain
the low cost model so that it can offer best service to the customer in very less price.
These are resources helps in grabbing the opportunities and combating the threats
(Syafarudin and Mulyana, 2019).
Mckinsey’s 7S
It is a tool which is used to identify the seven internal elements of the company which is
required to be aligned in order to become successful. This framework has divided the internal
element into hard and soft which are discussed below for EasyJet airline-
 Strategy- It is the plan of company to build and maintain the competitive advantage over
the competitors. The core strategy of EasyJet airline is to offer the competitive fare to the
customers in a market by making competition with the new and existing carriers.
 Structure- It involves as to how the company is organized. The EasyJet airlines follows
the complicated organizational structure as its CEO controls the managers of each
department together with outside vendors, subcontractors, etc.
 System- It comprises of the daily procedures and activities which employees use to get
their task one. The EasyJet has the management system with both technology and manual
factors. But however, it is fully equipped with the information and technological
facilities. Shared values- It consists of core values of company such as general work ethics or the
corporate culture. The EasyJet airlines comprise of three elements which includes
believes, values and culture. It has also organized many programs such as simulations
and workshops so that it can explain its mission and goals to the employees. Skills- It is concerned with the actual competencies and skills of the employees of the
company. The company EasyJet airlines works on developing the performance of
employees as it has arranged many training programs for the inexperienced and young
workforce (Ross, Beath and Sebastian, 2017).
 Style- It includes the leadership style which is adopted by the company. The leaders of
EasyJet airline follows charismatic leadership style who struggled to shape the business
but the owner of the company also follows autocratic style to implement its major
decisions.

 Staff- It includes the workforce of the company and its general capabilities. The EasyJet
airlines have currently around 14000 employees who works for the company. The
company aced little problem in retaining them.
P3/M3 Application of Porter’s five forces in order to evaluate the competitive force of company.
It is a strategic frame work which helps in identifying the industry analysis of the company.
It helps in making the strategic decision by analyzing the competitive environment of the market
(Hadaya and Gagnon, 2017). In relation to EasyJet airlines, Porter's 5 forces model is discussed
below
 Competitive rivalry- It is concerned with number of competitors and their strength which
makes the competitive environment very stronger. In context to the EasyJet airlines, the
power of this force high because there are end number of competitors in the market who
tries to offer its services at low cost which threatens the competitive position of EasyJet
airlines. This competition may affect the long term profitability of the airline.
 Threat of new entrants- It is concerned by the easiness of the new entries to enter the
market. The power of this force for EasyJet airlines is moderate because it may take up
heavy costs for any company to enter the airline industry but once the organization has
entered, it takes innovation and attractive pricing strategy to affect the competitive
position of the existing company. The EasyJet airlines must plan its strategies in such a
manner that it can overcome the barriers of new entrant.
 Bargaining power of customers- It is concerned with number of consumers who have the
ability to drive the price is low. The power of this force for the EasyJet airlines is
moderate because nowadays customers have a mind-set that they avail the services of
that airline which offers minimum price. So in order to retain its customers, the company
has to identify different offers and discounts so that it can retain the loyal customer base.
 Bargaining power of suppliers- It is mainly concerned with the ability of suppliers to
drive the prices. In relation to EasyJet airlines, the power of this force is high because the
airline industry is mainly dependent on the suppliers for their raw materials so they have
the dominant position in the market which may pressurise the company to drive its prices.
This directly affects the profitability of the company.

 Threat of substitute product or service- It involves the number of alternate choices for
the customers to avail the services from other competitors of the company. In relation to
EasyJet airlines, the power of this force is high because there is end number of
competitors in the market who offers similar services to the consumers which may
threaten the market position of the company.
PART 2
P4/D1 Devise strategic planning for the company using range of model, concepts and theories.
Porter’s Generic strategy
As per this tool, the relative position of the industry is determines whether the company’s
profitability is below or above the industry average. It offers three alternative methods which can
be used by organization to position the company (Bhimavarapu, Kim and Xiong, 2019).
Different strategies which may be used by EasyJet Airlines is discussed below-
 Cost leadership- In this, the company sets out to become the low cost producer in the
industry. It helps the organization to become the leader in terms of cost so that it can
attract the retain the potential customers. EasyJet uses this strategy at present and become
efficient in this offering competitive pricing so that it can average profit margin on one
side and on other, it can become the low cost leader.
 Differentiation- in this strategy, the company is aimed to become the unique in the
industry. It selects the attributes which the purchasers perceive as important an position
itself uniquely in order to meet the needs of the customers. The EasyJet Airlines may use
this strategy by introducing the innovative service to the passenger so that it can look
unique in the market.
 Focus- This strategy rests on choice of the narrow competitive scope in the industry. The
company selects the group of segment and make such strategy which is tailored with the
chosen segment. It comprises of two variants which includes firstly the cost focus
wherein the company seeks to take the cost advantage in the target market and second is
differentiation focus wherein the company takes differentiation in the target segment.
EasyJet airlines can focus on introducing the new techniques with which the consumers
can consume the service of the airline.

Bowman Strategic clock
It is that framework which helps in getting the right position for the company in terms of
its strategies so that it can effectively position itself in market with an aim to take the edge over
the competitors (Wang and et. al., 2020). In relation to the EasyJet airlines, the different
strategies are illustrated below that may be used by the firm-
 Low value and low price added- This strategy is aimed to enhance the sales number. In
this, the firm offers the product or service which has low value as well as the price. In
context to EasyJet airlines, the company can offer the services at very low cost with less
or little valued services.
 Low price- This strategy involves offering low price to the customers. EasyJet airlines is
already using the low cost model in order to attract and retain customers.
 Hybrid- This strategy is the combination of differentiation and low price. In this, it is
ensured that the price offered is competitive with low price and it promotes the added
value factors of the offering. EasyJet can make use of this strategy in order to increase its
sales volume.
 Differentiation- It involves making the differentiation in the offering from that of the
customers through addition of the high perceived value. It just involves bringing
something new in to the product or service. EasyJet can focus on bringing innovative
services for its customers so that it can attract more of the customers.
 Focused differentiation- This strategy focuses on providing the high value to the
consumers at high cost. When the implementation is done of this strategy, the EasyJet
may get the opportunity to earn high profits but this strategy is difficult to maintain in the
long run for the company.
 Risky high margins- This strategy involves offering services at high price without
addition of any high perceived value. The EasyJet airline can offer its existing services at
high price to the customer. This is a very risky strategy.
 Monopoly pricing- Under this, the single company has the control over the price of the
offering.
 Loss of market share- This strategy is used by the company when it is at worst position
that suggests that company is taking exit from market. This may be opted by EasyJet