Strategic Management of EasyJet Airlines: A Comprehensive Analysis

This report analyzes the strategic management of EasyJet Airlines, a major European low-cost carrier. It examines the company's response to Brexit and its decision to shift operations to Germany. The report includes a detailed PESTLE analysis, evaluating political, economic, social, technological, legal, and environmental factors. It also applies Porter's Five Forces to assess the competitive landscape and conducts a SWOT analysis to identify strengths, weaknesses, opportunities, and threats. Furthermore, the report assesses EasyJet's physical, financial, and human resources, along with its core and threshold competencies. It reviews the company's vision and mission statements and concludes with strategic recommendations. The report provides a comprehensive overview of EasyJet's strategic positioning and challenges within the airline industry.

Running head: STRATEGIC MANAGEMENT
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Module name- Strategic Management PM 303
Module Code- PM 303
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Executive Summary
The main aims of the following report are to analyze the strategic management of Easy Jet
Airlines Company. The mentioned company is one of the largest low cost carriers of Europe
based in Luton, England. Because of the pullout of Great Britain from European Union the
company is in a crisis as the EU has warned that the companies based in England will not enjoy
the advantages that they enjoy in the European zone. The management of the company has taken
the decision to shift its base in Germany. The report has discussed in detail about the micro and
macro environment of the company.

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Table of Contents
Task 1...............................................................................................................................................5
PESTLE ANALYSIS......................................................................................................................5
Figure 1- PESTEL Analysis............................................................................................................5
Porter’s five forces analysis.............................................................................................................7
Figure No 2 – Porter’s Five Forces Analysis...................................................................................8
SWOT ANALYSIS.........................................................................................................................9
Figure No 3 –SWOT......................................................................................................................10
Table No 1- SWOT Table..............................................................................................................10
TASK 2..........................................................................................................................................12
Physical Resources........................................................................................................................12
Financial Resources.......................................................................................................................13
Human Resources..........................................................................................................................13
Competencies Analysis of the company........................................................................................14
Core Competencies........................................................................................................................14
Threshold competencies................................................................................................................14
Task 3.............................................................................................................................................15
Current Strategic Statements of the Company...............................................................................15
Vision Statement............................................................................................................................15

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Figure No 4 – Vision Statement....................................................................................................15
Figure No 5– Vision Statement.....................................................................................................16
Mission Statement.........................................................................................................................17
Figure No 6– Mission Statement...................................................................................................17
Recommendations..........................................................................................................................17
Conclusion.....................................................................................................................................18
References......................................................................................................................................19

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Task 1
PESTLE ANALYSIS
Figure 1- PESTEL Analysis
Source- (Cattaneo et al. 2016)
Political aspects- The Government of Germany is parliamentary and the country has a
democratic constitution. The chancellor is the one who heads the executive branch of the Federal
government. The well designed political structure of the country enables smooth business
operations. The presence of an independent Judiciary system protects the fundamental rights of
the people and the business (Cattaneo et al. 2016). Overall it can be said that Germany is a
politically stable country. The sophisticated business sector and a proper infrastructure help the
country to innovate and stay competitive. Easyjet will find it easy to carry on its plans for
expansion as because Germany is gradually increasing its presence within the European Union

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and NATO. However there are also some problems in the political structure of the country as tax
regulations and tax rates in Germany is one of the main hurdles for Easyjet to carry on its
business.
Economic factors- Germany is the fifth largest economy of the world in terms of PPP and is the
largest economic power of Europe. The presence of a large number of manufacturing and
innovative industries which are technological advanced helps the country to be one of the leading
exporters of different items live machinery, Chemicals and vehicles. Financing for different
companies are also very cheap due to very low interest rates. The gross domestic production of
the country is one of the highest in the world indicating the purchasing power parity of the
citizens.
Social Factors- Germany ranks 9th in the world in terms of human capital Development. As
mentioned earlier the technology of the country is of world class. A considerable amount of
budget is allocated for health care and education (Malighetti et al. 2015). The labor productivity
is very much high since the year 2011. There are also some problems that exist in the German
society (Cumming and Zahra 2016). There is a lack of Higher Education and Training in the
country the growing social divide is also a cause of concern while the ethical discrimination is
still followed out largely in the country.
Technological factors- Germany is famous for its most innovative and technologically
advanced manufacturing companies especially cars. Local competition is very high in the market
which paves the way for the companies to innovate new and challenging products. Government
policies support the use of large scale Technology to gain an unprecedented advantage over the
other products in global market. However Germany has been facing shortfall of skilled labor for

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the last few years which will be a cause of concern for aviation companies like Easyjet. The
growing ICT sector in Germany is another technological advantage for new business entities.
Legal factors- The Judiciary system is independent with a branch of courts at state and central
levels. Apart from German laws the legal structure of the country is influenced by European
Union and international laws. Freedom of trade helps the foreign companies to invest freely.
Easyjet has to comply by all the strict rules policies and procedures of German government to
start its operations from Germany (Moreno et al. 2015).
Environmental factors- Study have revealed a decrease in greenhouse gas emissions in the
country in the year 2008. According to (Dobruszkes 2013) the country has stressed on the
importance of renewable energy sources and has incorporated some strict environmental laws
and regulations. Easyjet has to comply by the rules of the host country so that it can easily start
its operations.
Porter’s five forces analysis

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Figure No 2 – Porter’s Five Forces Analysis
Source- (Malighetti et al. 2015)
Bargaining power of suppliers- The airline industry is supplied with Essential elements by the
employee airport staff, Oil Companies and the manufacturers of the aircraft. The absence of
control over rising prices of the aviation fuel affects the aviation industry badly. Presence of
strong Union is a main threat to the airline business. Safety and environmental regulations is one
of the main concerns of the German airline industry (Stevenson 2015). Easyjet has to comply
with all the safety regulations of Germany. Switching from one supplier to another is not allowed
in this country as because it will change the structure of the costs involved. The absence of
airline and engine suppliers apart from Boeing and airbus is a cause of concern for the aviation
companies. The presence of strong labor laws in Germany constitutes 40% of the airlines total
tax (Hill et al. 2014).
Competitive rivalry within the industry- Rivalry among existing aviation companies is high
because the industry growth is stagnant. The service users can easily switch from one user to
another user because of the low cost of transition (Escobar and Carvajal 2014). The presence of
companies like Lufthansa and Ryanair has ensured intense rivalry in the market. Market share is
more or less equally distributed. The presence of low cost airline Ryanair will pose a serious
threat to Easyjet’s survival in Germany as because it is one of the best and most preferred low
cost Airlines in the mentioned country (Williams 2017).
Bargaining power of buyers- The buyers are segmented into budget traveler’s business travelers
and pleasure travelers as mentioned earlier service users can easily switch from one airline to
other Airlines because of the presence of a large number of Aviation companies offering services

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in the same routes. Providing customers with complimentary meals and on what facilities can be
an added advantage for easy jet. Apart from being a low cost carrier Ryanair also provides
discount to its flyers. Therefore offering additional discounts on ticket prices can be another
strategic option of Easy jet (De Neufville 2016).
Threat of substitutes- Road and rail Infrastructures across Europe is quite good do users can also
prefer private cars, intercity buses and Marine transport to travel from one area to another area.
High speed trains are also available for long distance travel (Garg 2016). However Airlines
remain the only option to travel to International destinations to save time.
Threat of New Entrants-The presence of brands like Lufthansa and air Berlin decreases the
chance of new airlines company to sustain in the market. Easy jet will find it tough to prepare
strategic operations in Germany has all the routes from Germany have a high amount of traffic.
The regularization and opening market to foreign investors and companies have helped the
country to attract large scale Investments.
SWOT ANALYSIS

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Figure No 3 –SWOT
Source- (Stevenson 2015)
Strengths Weakness
 Reputation for cheap flights
 Popular among young travelers
 Customer Loyalty
 Corporate Social Responsibility
 New routes
 Friendly Customer Service
 No frills airlines
 Huge Competition
 Legacy airlines are reducing the price
of air travel
 Absence of complimentary meals in
long flights
 Absence of Expansion outside Europe
Opportunities Threats
 Offering New Routes
 Exclusive Discounts
 Strategic Tie ups
 Brexit is a cause of concern
 Legacy Airlines are a threat to the
survival
 Rising cost of fuel and environmental
concerns
Table No 1- SWOT Table
Source-(Stevenson 2015)

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Strengths
 Easy jet has developed a brand reputation for operating own of the cheapest flights in UK
and Europe.
 It is quite popular among young people and the people who travel for business purposes.
 The mentioned airline company has been adding new plans to ensure safety and reduce
carbon emissions.
 Customer loyalty is one of the greatest strengths of Easy jet.
 The mentioned airlines company as a clear corporate social responsibility the rails to
achieve its environmental targets.
 The airlines company has started operating in new routes throughout Europe.
 The mentioned airlines company is known for friendly customer service.
 It is a no frills airline.
Weakness
 Presence of a large number of local and international brands leads to huge competition.
 Old carriers which offered high costs have now changed the Strategies and offering low
cost air services.
 Absence of no food service in longer flights is one of the most important weaknesses of
the mentioned airline company.
 Absence of expansion ideas outside Europe is a main weakness of the mentioned Airlines
Company.
Opportunities

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 The airline can expand into new routes both regional and international.
 Easy jet can also offer exclusive travel packages that can attract travelers who want new
kinds of travel experience.
 The mentioned airlines company can tie up with different other companies to expand its
routes. Easy jet can also create a new niche markets and focus on particular customers.
Threats
 Exit of Britain from European Union is considered to be the present threat of the airlines
company. Increase the secondary fees to Easy jet as airline is struggling to offer lower
prices to the customers for air services.
 As mentioned earlier Legacy Airlines are becoming a greater competitive Force for Easy
jet to carry on its operations smoothly.
 Rising cost of oil and environmental concerns are a threat to the airlines company.
TASK 2
Physical Resources
The physical resources of the company include the different aircrafts, installations, office space
and many more such tangible assets. As of 2016 the Aircraft Company has a fleet strength of 254
aircrafts and operates in 124 destinations (Fageda et al. 2015). The large number of computer
networks also forms a main physical asset of the mentioned aviation company. The computer
network helps the company to operate the ticketing facilities and the boarding facilities easily.
The company has its headquarters in Luton Airport where its main office is termed as Hanger 89.