Business Strategy Report: A Strategic Analysis of EasyJet

This report provides a comprehensive analysis of EasyJet's business strategy, starting with an introduction to the company and its strategic context. It examines the macro environment using PESTLE analysis, covering political, economic, social, technological, legal, and environmental factors affecting EasyJet. The report also assesses the company's internal environment, applying the resource-based view to identify tangible and intangible resources. Furthermore, it utilizes analytical tools like Ansoff's growth vector matrix and SWOT analysis to evaluate EasyJet's strengths, weaknesses, opportunities, and threats. The report concludes by exploring strategic choices and directions for EasyJet, focusing on market penetration and diversification strategies, with references to support the analysis, highlighting EasyJet's strategic capabilities and competitive advantages within the airline industry.

Business strategy

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
Strategic context...........................................................................................................................1
Different strategic planning tools:...............................................................................................2
TASK 2............................................................................................................................................5
Organisational internal environment............................................................................................5
TASK 3............................................................................................................................................9
Analytical tools and models.........................................................................................................9
TASK 4..........................................................................................................................................14
Strategic choices and directions.................................................................................................14
CONCLUSION..............................................................................................................................17
REFERENCES..............................................................................................................................18

INTRODUCTION
Business strategy is a roadmap that takes the organisation to desired objectives. It is long
term action plan that an entity designs for achieving set of goals. In other words, it is
establishment of standards, operational planning, analysing manpower capabilities, arranging
resources and assigning roles to distinct department which enhances as well as encourages
current organisational approach for attaining all the objectives in predetermined manner
(Agarwal, 2014). Strategies plays important role at organisation as they are form for attracting
more customers, innovations, informing market about new products and ensuring growth with
survival in the surrounded business environment. For understanding aspects of business strategy,
EasyJet is chosen which is an airline company having headquarters at Luton, United Kingdom.
It is considered as low cost airline and operates domestic addition to international scheduled
services in more than 29 nations. The present report covers analysis of impacts as well as
influences that macro environment has on company addition to its strategies. It further access
internal environment along with capabilities of the organisation. Model of Porter's five force is
applied within market sector and various concepts along with models are also applied for
assisting understanding of strategic directions that are with the business.
TASK 1
Strategic context
Organisational overview: EasyJet is leading low cost airline entity headquartered at
Luton. UK. The company employs around 14000 people and since the establishment, it have
grown with combination of acquisitions (EasyJet. 2019.). The mission statement of EasyJet is to
deliver leading returns to various shareholders by maintaining leading network with primary
airports and emphasising towards making travelling affordable as well as easy for the customers.
The vision of EasyJet is to become Europe's most preferred and short-haul airline through
combining leading networks of its airport with friendly services addition to great fares.
Objectives of EasyJet are to make increments within customer equity, to become leader within
airline industry, to satisfy expectations of customers, to improve usage of internet based
technology and to sustain market position.
Strategy is defined as set of rules or actions which are formulated for attaining
organisational key objectives. It is knowledge of goals and blueprint of decisions which shows
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reduction of unnecessary activities and plans to achieve objectives. It majorly deals with
development for long term and takes account of probable customer behaviour as well as
competitors. Strategy plays most important role at EasyJet as to provide action plans, making
choices, allocating resources, coordinating tasks, establishing prioritises, defining
accountabilities, enhancing communication and providing ongoing decision making framework
so that all the staff members works to achieve objectives of the entity. Through strategies, all the
situations are carefully analysed that helps the company to attain fit between internal resources
and external threats with opportunities which shows achievement of strategic intent along with
framing distinct strategic directions.
Different strategic planning tools:
Macro environment: The major uncontrollable addition to external factors which
influences decision making, performance and strategies is said to macro environment. It includes
the conditions which have existence within whole economy and affects development efforts of
an entity in positive and negative ways (Burlton, 2015). Some of the strategic planning
techniques that Corporate strategy manager of EasyJet are as follows:
PESTLE analysis
It is one of important analysis that provides all the relevant information about macro
environmental factors through scanning the pertaining impacts of the outside environment. With
this analysis, corporate managers gains knowledge about factors residing in external environment
that influences addition to impacts the strategies and working of company. Application of
PESTLE analysis on EasyJet is underneath:
Political: Factors which emphasis on political stability, consumer laws, government
regulations and trade restrictions are political factors. The political environment of UK is
generally stable and fair which provides various opportunities to EasyJet to expand in different
nations that impacts positive on the company and its expansion strategies. At same time, the
incident of Brexit has resulted in imposition on various taxations, contributions and trade
restrictions which impacts negatively on the company and its strategies as major long term
policies needs modifications as per new impositions.
Economic: Factors that are connected with business cycle, GDP of a nation, exchange
rates and bank rates results in positive and negative influences on business and its strategies.
UK's economic environment is based on free market economic system. The uncertainty that was
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followed by Brexit has put various economic impacts on airline industry of UK. As EasyJet
operates its key workings in UK's airline industry has faced situations of pound sterling's
depreciation that has impacted negatively on its performance and strategies. At same time,
EasyJet was benefited from interest rates addition to low fuel prices that impacted positively on
its growth in the competition that influenced its strategies on positive path.
Social: Factors like buying habits, customer service expectations, education level and
population analytics are some social factors that influences the workings of airline industry of
UK (Chang, 2016). Population of UK have demands for low prices and higher service quality.
For meeting such increasing demand, EasyJet have stabilised their prices for tickets which has
resulted in attracting more economically minded passengers and increased sales of the tickets
that impacted positively on the company and strategies. But in case with business class
passengers of UK, improved communication facilities and services resulted in reducing needs for
flying down meetings that impacted negatively on the entity.
Technological: Automation, research and development, technological advancement are
some factors that fosters technological environment of UK. Within the airline industry,
technological aspects are used heavily and the population of the same nation depends more on
accessing ticketing as well as check-in services with their hand held devices. Managers of
EasyJet has invested and adopted all the latest digital technological so to provide convenience
and easiness to customers while using the services that impacts positively on image of the entity.
Legal: This factors illustrates the ways a company operate addition to customers behave.
Within UK, various legislations are devised for safety addition to security of passengers and for
air traffic. Management team of EasyJet ensures compliance with all the stated legislations Air
Commerce Act, employment act, safety and security act that impacts positively to offer high
quality and safe travelling services to customers. In contrary, when there are frequent changes
within amendments or provisions of these laws by the government then it causes issues for the
selected entity to work with the old provisions and it impacts negatively of the strategies and
workings of the organisation.
Environmental: Factors like air traffic strikes, travelling chaos and adverse weather
impacts workings of airline industry. There are various changes within climatic environment of
UK due to which EasyJet has to make sudden changes in flights timings and most of the time
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flights are cancelled by the entity which affects passengers satisfactions and impacts negatively
on the revenues as well as additional cost of the entity.
Ansoff's growth vector matrix
The another strategic planning technique that is used to evaluate performance addition to
making changes within strategies or plans of the company so achieving objectives (Chen and
Jermias, 2014). As per this matrix, the entity analyses procedures of marketing and sales volume
of existing products and makes decisions for diversifying products into distinct categories. With
this matrix, corporate strategy manager of EasyJet analyses demands and needs of people that are
riding in external environment. The application of such framework in context to EasyJet is as
follows:
Market penetration: It is the first quadrant of the matrix that is adopted as strategy at the
time company has current commodities with known market as well as needs growth strategy in
the market. EasyJet managers could adopt the strategy so to emphasis on performing activities in
better ways so to increase its sales volume of tickets and revenue margins.
Market development: With this strategy, a company uses its current commodities to
target new market. EasyJet managers could emphasis on adopting this strategy when they have
plans to expand the brand in the new global market through proper research and development.
Product development: The strategy is used by institutions when they have good market
image in existing market and needs to launch new commodities for expansion. It is generally
required when firms have strong customer base as well as have knowledge about market for the
new commodity has reached saturation. In context to EasyJet, customer base of such entity is
strong and with this they could emphasis on developing new products and make their selling
within existing customer market.
Diversification: This strategy is adopted when a company wants to introduce a new
product in new marketplace. It is generally risky as the company has limited information about
needs and wants of new customer segment. By adopting diversification strategy, EasyJet could
focus on introducing a new concept in new market so promoting it in new ways.
From the above, currently EasyJet managers have adopted market penetration strategy in
which the entity uses secondary airports to deliver services to its existing customers at low cost.
With this, the company grabs opportunities to discourage competition and create goodwill.
SWOT analysis:
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This is a technique which is defines as an objective assurance, consulting and
independent activity that is basically used for adding valuables as well as improving operations
of the company (Chen, Eshleman and Soileau, 2016). With this technique, the manager of
EasyJet identifies its strength, weaknesses, threats and opportunities. The SWOT analysis of
EasyJet is as follows:
Strength Weaknesses
 EasyJet offers on time travelling as well
as reliable services with additional
features like ticketless travel, travel
services and online booking.
 The company added more routes for
serving large customer segment and
offers huge flight times.
 EasyJet fails to offer various services
suck as free food service to customers
using longer flights.
 The entity do not respond to needs of
wide demographic addition to older
travellers.
Opportunities Threats
 EasyJet can grab the opportunity of
expanding route system into new
regional areas across Europe as well as
cater to wide customer segment (Davies,
2016).
 The institution could focus on strategic
partnerships with many airports so to
offer wide travelling options to
customers.
 Increased airport fees is one of the
threat to EasyJet that reduces its
margin and expansion of routes.
 The competitors offers huge frills,
route options as well as flights while
maintain their costs at low that
threaten position of the selected entity.
TASK 2
Organisational internal environment.
Strategic capabilities are said to the abilities of entity to harness skills, resources
together with capabilities for gaining advantages and surviving in the competition so to increase
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their values with time. The key components of strategic capabilities are named as analysis tools,
strategic purpose, values, vision, goals and planning its actions.
Resource based view strategy
Resource based view is one of the strategy which perceives resources as key for attaining
superior performances (Resource based view strategy. 2019). With the adoption of such strategy,
managers of EasyJet combines all their resources in such manner that helps in exploiting external
opportunities for getting competitive benefits. In context to EasyJet, resource based view strategy
is as mentioned:
Illustration 1: Resource based view strategy. 2019
(Source: Resource based view strategy. 2019)
Tangible resources: These are physical things that are seen and touched. Organisation
such as EasyJet have tangible resources in form of machinery, modern warehouses, land and
building, financial resources and manpower which are responsible to perform all functions
smoothly.
Intangible resources: The resources that are valuable and only can be felt but not
touched or seen are characterised under intangible resources. The intangible resources of EasyJet
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are technology, relationships, training programs, organisational culture and skills that helps the
brand to gain differentiation advantages within the market. These resources stays within entity
and are considered as main sources for achieving sustainable competitive advantages.
Heterogeneous resources: The resources which have similarities with other and have
some differences too. Heterogeneous resources of EasyJet are named as skills, capabilities and
many more that are bundle with other resources having similarity in nature so that more
advantageous outcomes can be attained to sustain for longer duration in the market.
Immobile resources: Resources that cannot be moved from one location to another and
are not mobile are said to immobile resources. With the immobility, Easyjet cannot replicate
competitors resources addition to implement same strategies. In context to the selected
organisation, immobile resources are procedures, intellectual property, brand equity and
knowledge that helps in gaining competitive advantages.
McKinsey model:
McKinsey 7s model is one of management tool that shows linkage among seven distinct
elements that are properly aligned to achieve objectives (Higgins, Omer and Phillips, 2015). It is
an useful framework that assist in reviewing capabilities of the company in distinct viewpoints.
The elements of the model in context to EasyJet are as follows:
Shared values: The values, standards and ethical forms of the company are shared
values. It states beliefs along with core values that the entity shares to achieve the vision. Easyjet
managers focuses on enhancement of sophisticated leadership techniques to greater standards
that makes this element strong which creates sense on camaraderie among people.
System: It depicts the aspects in which workings are accomplished. It assist in keeping
the company operating along with moving forward. Corporate strategy manager of EasyJet focus
on marketing systems, workplace system, managing people system and operational system for
acquiring growth.
Strategy: it is the method that strengths enterprise performance and states the ways in
which activities of the company are conducted for achieving goals. EasyJet managers applies
various strategies such as product development strategy and balanced scorecard method.
Structure: With this element, all the operations are efficaciously handled and
responsibilities are delegated to different people at different hierarchical positions so to manage
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all the workings smoothly. At EasyJet, hierarchical structure is adopted by the management that
facilitates proper communication and responsible relationships to accomplish work.
Skills: Skills are considered as strong competence of the company as they define
potentiality of a person to execute operations in distinct ways. By the managers of Easyjet, more
focus are made on communication skills, interpersonal skills, technological skills and
promotional skills for achieving competitive benefits.
Styles: Styles are termed to the ways performances are influenced, tasks are managed and
actions are taken to lead the enterprise. Corporate strategy manager of EasyJet adopts democratic
leadership style while directing, supervising and leading people so that they implement strategic
decisions.
Staff: These are the human resources that are employed at institution either on salary or
on wages. It is also linked to the mechanisms used by managers of the company to hire, train,
compensate and motivate people. The company such as EasyJet has around 14000 productive
staff that contributes their efforts for organisational development.
VRIO Analysis:
The another framework that entities uses to analyses strength and weakness of their
resources and capabilities (Hockerts, 2015). It is combination of four dimensions which are
valuable, rare, imitable and organised. The VRIO analysis for EasyJet is as applied:
Resource and
capabilities
Valuable Rare Imitable Organized
Route network
attractiveness
✔ X X X
Human resource ✔ ✔ X X
Patent ✔ ✔ ✔ X
Financial
resources
✔ ✔ ✔ ✔
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Valuable: According to the above table, the valuable resources of EasyJet are route
network attractiveness, human resources, financial resources and patent. The route network
attractiveness are valuable as they the company have various routes with diverse airports in
multiple countries. In context to financial resources, these are valuable as with effective funds,
company makes investment to grab opportunities. The human resources of the company are
valuable as they are highly trained as well as leads in producing more output for the entity. The
patents are valuable as they allow the company to sell tickets and other commodities without
competitive interference.
Rare: The resources of EasyJet that are rare to be found among other are human
resources, patent and financial resources. Patent are rare to be found as EasyJet have made huge
investment so to get patent rights for its services and intellectual property. Human resources of
the company are unique from other company that characterised them under rare dimension. In
context to financial resources, the company gains income from diverse sources that are rare
among competitors.
Imitable: Capabilities that are part of imitable dimension of EasyJet are patent as well as
financial resources. Patent are difficult to imitate as other companies are not legally allowed for
imitating the product that are patented. Financial resources of selected organisation are also
costly to imitate as these are gained through prolonged profits.
Organised: from the all resources, financial resources falls under organised dimension.
Various plans are formulated for using funds in distinct ways such as investments, combatting
threats and making opportunities. Hence, financial resources is one of capability that sustains
competitive advantage of EasyJet.
TASK 3
Analytical tools and models
Balance score card:
A balance score card is a strategic management tool which is utilised by organisation to
evaluate performance, recognise and improve different internal business function and get result
regarding external activities (Lee and Smith, 2018). Balance score card mainly utilise to
measure and offer feedback to businesses. Through particular approach analysis the performance
of employees who are working in effective manner. The reason of applied this approach such as:
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 Learning and growth: Through the training and learning procedure identify the
knowledge of the employees in effective manner and handle all the information in
appropriate manner. Customer perspective: To gather all the information that helps to provide satisfaction to
all customers and fulfil all the requirements.
Porter's five forces model:
It is a business analysis model that use to describe different industries which are able to
continue at various levels of profitability. Porters five forces model can be utilised by the
different organisation in order to operate business activities easily and measure the competition,
attractiveness and profitability regarding to company at the market place. The manager of Easy
jet Plc can use this model and understand how these model influence for profitability and help to
get competitive advantages. Threat of new entrants: In the airline industry, it is not possible to enter easily because
there is required high capital investment because set up new business require high
expenditure. The scale of economy is difficult to achieve in the airline industry because it
makes products costly for new entrants. The government rules and regulation is strict for
the new entrants so they are not easily enter in the airline industry. So it making the
threats for the new entrants as weak force. Bargaining power of suppliers: In this industry no of suppliers is a lot for Easy jet plc is
compare with buyers (Laudon and Traver, 2016). So bargaining power of buyers is weak
where less control on the prices and provide fairly exchangeable. These suppliers is not
provided believable threat for forward and related within industry where a;l activities
conduct by Easy jet plc. Bargaining power of Buyer: As there are many people prefer to travelling by flight to
save time which are operating by Easy jet plc where bargaining power is high. As a result
it shows adverse impact on the company position as well as profitability. The product
differentiation is high that means buyers are not able search different options from firm to
its customers. Due to low income level income level so they have pressure to purchase
low rate tickets that make more sensitive to buyers. Threat from substitute products: When one product can be used on the place of another
so it is known as substitute. Such as Easy Jet threat of such items new services by other
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