Strategic Management Report: Analyzing EasyJet's Relocation Strategy

This report provides a strategic analysis of EasyJet's decision to relocate its headquarters, likely to Paris, examining the external and internal factors influencing this move. It utilizes PESTEL and Porter's Five Forces analyses to assess the political, economic, social, technological, environmental, and legal environments, as well as the competitive landscape. The report identifies EasyJet's core competencies and strengths, focusing on low-cost services, customer satisfaction, and market growth potential within the European Union. It also considers the challenges posed by competition, supplier power, and other market dynamics, while providing recommendations to achieve the company's objectives and ensure long-term growth. The analysis covers EasyJet's resources and capabilities, including low prices, safety measures, and punctuality, to determine the company's competitive nature and barriers to entry.

Strategic Management

Table of Contents
EXECUTIVE SUMMARY.............................................................................................................1
INTRODUCTION .......................................................................................................................2
TASK 1............................................................................................................................................2
TASK 2............................................................................................................................................5
TASK 3............................................................................................................................................7
TASK 4............................................................................................................................................8
CONCLUSION................................................................................................................................9
REFERENCES..............................................................................................................................11

EXECUTIVE SUMMARY
Easy jet is one of the best airlines which is operating and providing good services to the
customers. In order to attract more customers it uses various methods such as low cost facilities
are provided to the customers by which they will be interested in attracting more customers. In
this case it is considering the relocation of its headquarters to a new place. For this there will be
various factors that will be required to be taken into consideration. For this research is conducted
about the resources and the competencies that are present and can be utilised to gain the
advantage over other competitors. There will be a analysis of the internals and external factors
that is carried out with the help of PESTEL and SWOT.
For this purpose it is considering European union in which there are great scope of
growth as that will be location from where majority of the customers in that area can be attracted
and by this the revenue and the profitability of the airlines will be growing. The main focus that
will be provided in this report will be to the core competencies and the strengths of the company
that can be utilised so that all the weaknesses and threats that will be faced can be taken care off
in the most appropriate manner. Also the recommendations are provided by which the objectives
and the targets that are set will be achieved and growth will be ensured in the long run.
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INTRODUCTION
Strategic management is the process in which all the strategies and policies that are being
performed by the managers are identified (Freeman, 2010). These are those plans that are carried
out in order to achieve the objectives of the company and also the performance of the
organisation is improved by which competitive advantage will be achieved over the other
companies in the industry. In this report various aspects will be discussed in relation to Easy jet
which is looking towards diversification. In this various analysis such as SWOT, PESTLE and
porters five forces will be conducted by which its competitiveness and other external factors will
be determined and then the decision will be made according to that.
TASK 1
Easy Jet is relocating its headquarters and is thinking to establish it in Paris. In every
business when such decision is taken it is necessary that all the external factors that will be
affecting the business shall be taken into consideration (David, 2011). As it will be new in Paris
so it will have to face lot of competition and it will be required that analysis should be done for
that. Various aspects in relation to both external environment and competition will be described
and that will be done with the help of PESTLE analysis and porters five forces. Both of these are
described here under. There are various reasons due to which it is considering relocation and is
choosing Paris for that purpose. As Paris is the main tourist destination so there will lot of
chances for it to expand in that area. Also the infrastructure facilities that are present and their
and will be made available to the company will help it in establishing good facilities to the
visitors. There is a great scope of human resource development as in the past the number of
passengers that are availing the services are increasing so it will be required to increase its
employees limit so that the demands can be met with utmost care.
There are some other reasons also due to which it is choosing the place as new headquarter
which is its capability to satisfy its customers with full potential. As per the survey that has been
conducted around 80% of the customers are highly satisfied with its services. There are high
chances of growth in the European marker which is the main cause of this decision and choosing
the EU.
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Easy jet is known for its best services that are provided to customers at most affordable prices
and this will prove to be of great advantage for it in its expansion process. But there are various
factors that will have an impact and those are discussed below:
Political Factors: There is a challenging political environment in which Easy Jet is operating as
it is an airlines so there is a threat that tourist attacks may be made. Due to the Brexit the routes
between many countries will be lost and due to this the headquarter is required to be relocated
(Hitt, Ireland and Hoskisson, 2012). In the airlines industry there are regulation which favours
the passengers more and so it is needed that they are checked in relation to Paris. Passenger
safety and luxury is given the most focus so it will be ensured that such facilities should be
provided by which all the customers are satisfied.
Economic Factors: There are many economic factors that will be affecting the business which
will include increase in the cost of fuel as by this the cost will be affected by which the overall
profitability of the company will be reduced as together with this there will be high insurance
and security cost which will also be incurred. As the single currency will be adopted in Europe
so by this business of Easy jet will be more integrated. There will be market growth and with the
low interest rates and other factors it will be possible to achieve advantage of competition.
Social Factors: In social factors the most important are those which are out of control such as air
traffic in which strikes takes place which hinder the whole business as many flights are required
to be cancelled due to it (Hill, Jones and Schilling, 2014). The lifestyle of people will be
considered as by that it will be known that whether they will prefer plane facility or any other
means and by this the strategy of company will be affected. It will also be noticed that population
of the city is more or less as by this number of customers will be based that is if population is
more than number of passengers will also be more.
Technological Factors: Technology is developing at fast speed so it will be needed that new and
advanced system should be used. New market opportunities will be based on the research and
development that will be carried out as by that wastage will be reduced and time will also be
saved. Such technology should be used which will bring it an advantage over other companies so
best services such as online service should be provided.
Environmental Factors: It is required that all the material that will be used by the company
should be such which will not have any negative impact on environment. The regulations that are
made by government are required to be complied with as otherwise the customers will get a
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negative image of Easy jet. There is already a lot of competition and to deal with that better
facilities will be provided to customers.
Legal Factors: There are many international Laws that are set so company should have
knowledge regarding them in relation to France and they should be followed. With the shift in
the headquarters there will be lot of change that will be faced by Easy jet and so it should be
identified and plan should be made in respect of it so that the profits of the company will not
have any impact due to this.
All these factors will be considered so that customer satisfaction can be achieved by
providing proper facilities and also the competition can be used in positive manner. For this
porter's five forces will be carried out in following manner:
Supplier power: In the aviation business the main inputs that are required are labour, fuel and
aircraft and all of these are affected by external environment (Hodgkinson and Healey, 2011). In
the global market there is high competition and every one will try to get the best that is available.
So it will be required that all the suppliers should be categorised and the best that is present will
be selected. As there are already many competitors and by the relocation it will also be included
so best should be chosen to gain the additional advantage.
Buyers power: Buyers in the market have various options from which they can choose the one
that will be providing them best facilities at lowest rates. Now a days online booking system is
used in which the passengers will not have to be dependent upon the agents. Easy jet will be
required to promote the relocation so that customers can know about it and avail the services. It
should also be ensured that such location should be chosen for the airport which will not be far
from the city so that people will prefer it in place of other airlines.
Exit and entry barriers: In the aviation business there is a requirement of large amount of
capital in order to start the business. This will prove to be a barrier for those who wants to enter
the industry. Due to this it will be possible to curb the competition that is present as less number
of persons will be able to enter the market. But in addition to this there is a barrier on exit also
because there some regulation that have been specified by the government so whosoever wants
to exit will have to provide the valid reasons for the same. By both this it can be said that Easy
jet will have to face the competition from existing competitors but will have less threat from the
new entrants.
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Threats of complementaries and substitutes: In the competitive environment main threat is
from substitutes and complementaries. But in case of Easy jet it is not present as in airlines there
will be less chances that people will move to the substitutes of travel means (Keupp, Palmié and
Gassmann, 2012). This is because those who are travelling by plane will not move to train or
other means so this will an advantage for the company. Also the complementaries such as food
and other services that are provided in addition to the travel facilities are provided by airlines
also so this will also not prove to be a risk. Which means that there will be less competition that
will arise due to these factors.
Competitive rivalry: The aviation business is highly competitive as there are various factors
which will affect it are low cost carriers which will enter in the market and the regulation that are
made which sets the standard for the maintenance of safety of passengers which is a costly
process. In the competitors that are present in the market are considered who will provide the
low cost services and try to capture the market. But in this business the low cost carriers may not
succeed as those who are already using airlines service will not move to those carriers. So there
are chances that competition will have to be faced so strategies will be required to be formulate
in this respect.
TASK 2
In order to have additional advantage it is required that resources and capabilities that are
present in relation to the business should be identified. For this it will be needed that research
should be carried out so that the factors that will ensure success can be identified such as needs
of customers and the level of customers (Noland and Phillips, 2010). The main sources by which
demand can be increased by easy jet are its low prices, safety measures, punctuality. After the
identification of these competitive nature will be determined for which it should be checked that
barriers of entry are strong, resources should be standard.
There are various resources that are present with the company which include its financial
reserves. Which are easy to use for the company as it can also be used in order to get the project
done. This also has been seen that the business can't survive without taking financial resources
for expending the business. As, with the help of company's own capital, company can expand its
business without giving any interest and in return, the cited company make the business in a
more prosperous. The cited company have around 140 aircraft which are so advance and most
efficient. Stocking fuel a year in advance is the most market strategy for an airline industry. This
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kind of decisions helps the company to make it sound and keep the company away from the oil
fluctuation.
Intangible assets: The easy-jet make the sale almost 98% form the internet (Priem, Li and Carr,
2012). Their website is technologically advanced and upgrade continuously by consumers an
easy way of offering tickets. The IPRs helps the company to build the brand in a most
appropriate manner. This will also helps the company to recognise it position globally and that
attracts the more consumers that will also turn out to gain the most profits in order to get the
competitive advantage. The other resources which are held by it are its suppliers which provide it
all the thing on time and are very reliable and also its partnership with some of the It companies
also help it to work in better manner.
Human professional and knowledge: Easy-jet have a sound management team form its
incorporation. The management of the company use its skills and knowledge in a most effective
manner so that the company could gain the competitive advantage form it rivals. The company's
human resource uses other resources in a best possible manner in order to operate the work in
most optimum manner. In the whole team of Easy jet there are 133 agents who are looking after
the reservations then it has 45 persons who are hired for the management and administration
purpose and is also having in total 90 pilots in its crew which are all highly experienced and
qualified. The structure that is maintained by it in the management is very simple and by this all
the waste that is carried out in this respect is avoided and hence it proves as an additional
advantage for it. It focus on taking youth into its team so that they can work with full potential
and bring innovative and new ideas into its business.
Communication: The communication of the company's department plays a very important role
for communicating the business in a most effective manner so that the various department assist
the managers in order to make the business so effective and profitable. Innovative programs,
workshop and performance rating systems were being started by the organisation which are
contributed to effective working connection ship with other subcontractors and suppliers. The
business can attain the core competencies by inventing something new which are not yet used by
its rivals (Greco, Cricelli and Grimaldi, 2013). With the help of core competencies, the cited firm
can gain the business in a tremendous manner so that the firm can gain the profits.
Technology: In the competitive world it is important that the technology that is used by the
airlines should be highly advanced as then only it will be able to take the additional advantage
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over its other competitor airlines. There is rapid change that takes place in case of technology so
it will be required that proper system should be established by which it can be identified and then
implemented. By this all the online services will be provided to the passengers which will make
it easier for them to avail its services.
With the use of new technology and other facilities the cost of the company is increasing but
together with it the revenue and the profit that is earned by it is also increasing. It market share
has increased from 6.5 to 7.9% which is a remarkable growth in this sector. The cash flow of
Easy jet has also grown at rapid speed which has risen from 283 million to 1358 millions.
TASK 3
EasyJet comes with the sound and clear culture for everyone is proud to. The company
frame out to do it in their way. The cited company also make their vision, mission statements in a
unique way rather than comparing others (Molina-Azorin, 2012). This all start with the flat
hierarchy, which avoids unessential layers of management and provides a human touch that can
be feel around the organisation.
Vision is the founder's dream. This is what company believes for its community; that is, how
things will see if the issue imperative to the company that were perfectly addressed. This might
be a community in which whole members are treated equals.
There are some specified characteristics that many vision statements have in common. In
general, vision statements should be:
 Assess and shared by the associate members of the community
 Expand enough to cover a various variety of regional perspectives
 motivating and upgrading to everyone covered in company's efforts.
 Easy to communicate
With the relocation of incorporated office, there are some changes which are required to
be attain in order to frame the strategies in a new way so that the cited company's vision, mission
can be attained. If the company relocate its incorporate office due to the Brexit, then the vision
and mission statements of the company also changes (Bryson, Berry and Yang, 2010). But, if
company wants to keep the existing vision and mission statements then this requires to use the
available resources in an optimum manner that will assist the firm to attain the vision and
mission.
The vision and mission statement of the Easy Jet are as follows:
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The mission statement helps the firm to ground company's vision in the reality. The
vision statement of the Easy Jet motivate people to dream and the mission statements helps to
attain the dream. Here, are some of the guiding principles about mission statements which are
concise, result oriented, and inclusive.
The Easy jet vision and mission statements are:
Vision: Company's vision is quite normal- to be preferred Europe short term airline, delivering
good market returns, and make the travel so reasonable and affordable to all. It's a vision which
Easy-Jet and its employees are working towards everyday. The future holds tremendous potential
and the firm could be a part of it.
TASK 4
SWOT analysis assist to give the overview of the EasyJet company. In the recent time,
the low cost airline model is emerged (Souitaris and Maestro, 2010). Everyone is looking
forward to take the services from the cited company. Easy Jet is looking forward to gain the
market share from the legacy airlines throughout the UK and Europe, dynamic market conditions
in the airline industry are powerful signal which EasyJet should consider its strengths,
weaknesses, opportunities and threats so that it can reduce its strategies going forward and
maintain its position.
Strengths:
 Easy Jet has emerged a brand for the most reasonable flights in the UK and Europe, that
are specially among adolescent travellers and some business people.
 They offer a most trusted, on-time travel service with the value added features which
covers online booking, and travel services.
 The company has taken most of the updated planes for ensuring safety, credibility and for
emission reduction.
 Easyjet website is easy to use and enables users to access tickets.
Weaknesses:
 Due to the high competition in the aviation business, there are often price wars which
makes it difficult to maintain the cost level.
 It will have to deal with the competition that already exist in the EU.
 It will be difficult for it to comply with the new regulations that will be present in the
market.
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Opportunities:
 It can expand its business by starting new routes in the new market.
 For the purpose of attracting more passengers it can provide some additional facilities
with the travel package.
 In order to become more competitive it can offer some perks and for that it will be
required to make its operating system more and more efficient.
 To meet the cost challenges it can consider the option of consolidation with the other
airlines. It can also consider the expansion by vertical or horizontal way.
Threats:
 The major threat is that margin will be reduced as the airport fees that is required to be
paid by it is increasing and it is not possible that the cost that are incurred can be
controlled.
 Due to the high competition in the market it will be threat that cost will not be possible to
be managed.
 Environmental expectations, fuel price increase are some of the external market forces
that will create a pressure and this will prove to be a big threat.
 It will be difficult for Easy jet to maintain itself in the new market as there will be lot of
changes that will be required to be made according to the environment and it is a threat.
On the basis of this analysis there are few recommendations that can be made for its future
growth such as improving the customers loyalty by providing them with the higher level of
services. It can offer some extra services with the travel such as car facility that will drop them
till their location or the hotel services can be provided.
CONCLUSION
From the above mentioned report it can be concluded that management of the strategies is
the main aspect that should be considered by every business as by that only it can be ensured that
success will be achieved. Easy jet is relocating its headquarters and in this relation various
external and internal factors are present that will affect and all those are required to be
considered in advance.
REFERENCES
Books and Journal
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Freeman, R. E., 2010. Strategic management: A stakeholder approach. Cambridge university
press.
David, F. R., 2011. Strategic management: Concepts and cases. Peaeson/Prentice Hall.
Hitt, M. A., Ireland, R. D and Hoskisson, R.E., 2012. Strategic management cases:
competitiveness and globalization. Cengage Learning.
Hill, C. W., Jones, G. R and Schilling, M. A., 2014. Strategic management: theory: an
integrated approach. Cengage Learning.
Hodgkinson, G. P and Healey, M. P., 2011. Psychological foundations of dynamic capabilities:
reflexion and reflection in strategic management. Strategic Management Journal.
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Keupp, M. M., Palmié, M and Gassmann, O., 2012. The strategic management of innovation: A
systematic review and paths for future research. International Journal of Management
Reviews. 14(4). pp.367-390.
Noland, J and Phillips, R., 2010. Stakeholder engagement, discourse ethics and strategic
management. International Journal of Management Reviews. 12(1). pp.39-49.
Priem, R. L., Li, S and Carr, J. C., 2012. Insights and new directions from demand-side
approaches to technology innovation, entrepreneurship, and strategic management
research. Journal of management. 38(1). pp.346-374.
Molina-Azorin, J. F., 2012. Mixed methods research in strategic management: Impact and
applications. Organizational Research Methods. 15(1). pp.33-56.
Bryson, J. M., Berry, F. S and Yang, K., 2010. The state of public strategic management
research: A selective literature review and set of future directions. The American Review
of Public Administration. 40(5). pp.495-521.
Souitaris, V and Maestro, B. M., 2010. Polychronicity in top management teams: The impact on
strategic decision processes and performance of new technology ventures. Strategic
Management Journal. 31(6). pp.652-678.
Cinquini, L and Tenucci, A., 2010. Strategic management accounting and business strategy: a
loose coupling?. Journal of Accounting & organizational change. 6(2). pp.228-259.
Greco, M., Cricelli, L and Grimaldi, M., 2013. A strategic management framework of tangible
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Online
LEVEL 7 IN STRATEGIC MANAGEMENT AND LEADERSHIP. 2017. [Online]. Available
through: <http://www.managers.org.uk/education-providers/qualification-resource-
library/level-7-in-strategic-management-and-leadership> . [Accessed on 1st July 2017] .
STRATEGIC MANAGEMENT. 2017. [Online]. Available through:
<http://www.babson.edu/Academics/undergraduate/concentrations/Pages/strategic-
management.aspx> . [Accessed on 1st July 2017] .
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