Strategic Analysis of EasyJet: SWOT, PESTEL, and Porter's Five Forces

This report provides a comprehensive strategic analysis of EasyJet, a prominent UK-based low-cost airline. It begins with an executive summary and an introduction to strategic management, followed by an overview of EasyJet's operations. The main body of the report delves into a detailed SWOT analysis, evaluating the airline's strengths (pricing, airport network) and weaknesses (brand image, seasonality), as well as its opportunities (market growth, strategic partnerships) and threats (high competition, increasing fuel costs). The report then explores the PESTEL analysis, examining the political, economic, social, technological, environmental, and legal factors influencing EasyJet's business. Furthermore, the report applies Porter's Five Forces model to assess the competitive landscape, including supplier power, buyer power, the threat of new entrants and substitutes, and rivalry among existing competitors. Finally, the report concludes with a discussion of Porter's generic strategic analysis and offers recommendations based on the findings. The report references relevant academic sources to support its analysis.

Strategic Management

EXECUTIVE SUMMARY
Present report will highlight the swot analysis of the chosen company. It will also do
pestle analysis and porter's five forces analysis of the chosen organization. It will also describe
the porter's generic strategic analysis of the chosen firm.

Table of Contents
EXECUTIVE SUMMARY.............................................................................................................2
INTRODUCTION...........................................................................................................................1
Overview of the chosen Company...............................................................................................1
MAIN BODY...................................................................................................................................1
SWOT Analysis...........................................................................................................................1
PESTEL Analysis of Organization..............................................................................................3
Porter's Five Force Model............................................................................................................5
Porter's Generic Strategic Analysis..............................................................................................6
CONCLUSION................................................................................................................................8
RECOMMENDATION...................................................................................................................9
REFERENCES..............................................................................................................................10

INTRODUCTION
Strategic management is an approach to management which involves the continuous
planning, implementing, evaluating, analysing, monitoring and controlling various strategies and
tactics which is planned and implemented by company in order to achieve the organizational
goals (Ansoff and et.al., 2018).
Overview of the chosen Company
Easy Jet Airline Company Limited which is also called as Easy Jet. It is the first largest
airline in the UK. It is a low cost airline company. Its headquarters is in England, United
Kingdom (UK). It was founded by Sir Stelios Haji-loannou in year 1995. This company operates
its business through domestic and international scheduled services in more than 30 countries. It
runs its business through 1000+ routes. It has given employment to around 14000+ employees
(Zhang, 2016).
MAIN BODY
SWOT Analysis
Swot analysis is a strategic management tools which is being used by company to
analysis its internal and external factors which may impact the company. It helps company to
identify its strengths, weaknesses, opportunities and threats. Strengths & weaknesses come from
internal factors and opportunities & threats come from external factors (Phadermrod, Crowder
and Wills, 2019).
SWOT Analysis of EasyJet Company are as follows -
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(Illustration 1: Swot Analysis
Source: SWOT Analysis: What It Is and When to
Use It, 2018)

Strengths -
It refers to all those factors which come from internal environment of company and positively
impact the business. Following points are strengths of Easy Jet Company which are mentioned
below -
Pricing – Company is using cost leadership strategy in which it offers its services to their
customers at low price. This strategy is considered to be the biggest strengths for the company.
Airport Network – Company is the largest airline in the UK by operating its business through
1000 routes more than 30 countries. Its fleet size are 328 and destinations are 156 which is
highest in the UK.
Weaknesses -
It refers to those internal factors which impact the company negatively. These factors are
from internal environment of company. Following are weaknesses of Easy Jet Company which
need to be address quickly for the betterment of business' operations -
Brand Image – Due to low pricing of its services, Customers' perception towards company is
harmful for the company's brand image. As customers think that low price mean poor quality
(Blockeel and et.al., 2016).
Seasonality – Company's earnings are season. In summer, Company's earning is high and on the
flip side, company's sales in winter is zero which lead company to go into loss.
Opportunities -
It refers to those external factors which can be beneficial for the company if they are able
to grab them on time and apply to their business. Some opportunities for the Easy Jet Company
are as follows -
Market Growth – Company can expand its business through enter into new market by opening
new airports and increase in its airline network.
Strategic Partnerships – Company can do strategic partnership with various local or national
aircraft companies in order to gain more customers and enhance its brand image.
Threats -
It refers to those factors which are under the external environment of organization and
may badly impact the company and even become the cause behind the downfall of company.
Thus, company should focus on these factors and try to convert these factors into their
opportunities. There are some threats for the Easy Jet Company which are written down -
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High Competition – Company has to face a lot of competition from its competitors who are
offering customers better airline services. Company's competitors are Aer Lingus, Ryan Air and
IAG etc. (SWOT Analysis: What It Is and When to Use It, 2018).
Increasing Fuel Pricing – Cost of fuel is increasingly continuously day by day which create
threats for the airline companies especially for those companies who use cost leadership strategy.
Easy Jet company is one of those companies.
PESTEL Analysis of Organization
The different external factors can affect of influence the business of the organization.
These external factors are not in control of the organization. These macro factors of organization
are Political, Economical, Social, Technology, Environmental and Legal factors.
Political Factors -
Easy Jet is a air craft manufacturing company and the procedures of the organization are
decided by the company leaders but these procedures of organization are influenced by the
decision of government. In an aircraft manufacturing company many of part are imported from
different countries which can't be manufactured in local place (Ginter, Duncan and Swayne,
2018). The foreign policy and international business policy made by country government can
influence the production procedure of air craft. If the policies of government is supporting
importation of goods from other countries will improve the business of organization and in
negative condition the production line of Easy Jet can be affected.
Economic Factors -
The purpose of any private company is to generate profit by selling its products and
services to the consumer. Profit of organization is dependent on the current status of market. The
profit of company varies according to the different tax policies of government and economical
condition of nation. The tax policy on import and export directly influence the profit of
organization. Changes in import and export tax will force the organization to make changes in
their finance policy. If company have to pay high amount of tax to government will reduce the
profit of Easy Jet. The situation like economic crisis and recession also can cause a lot of
problems to company in profit generation.
Social Factors
The factors like population of country and education level of people also can affect the
business and profit of company less availability of labour can cause problem to the company to
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maintain the production line performance and continuity. The education level of local people
also can affect the profit of organization. For better profit the company need to improve its
performance and quality of product (Hitt and Duane Ireland, 2017). This can be achieved by
higher educated or skilled staff. High skilled employees can help the organization to introduce
innovation in company operation and product. The other social thing like average income and
local culture also can influence the business of Easy Jet.
Technological Factor
Technology is the main factor which is responsible for profit of the company. The current
technology used by the organization decides the quality and quantity of product. The quality of
product is depended on the technology advancement. If the other companies are using much
advance technology can reduce the business of Easy Jet. The efficiency of organization
production is based on efficiency of used technique (Trigeorgis and Reuer, 2017). Company can
improve their profit by implement new technology in operation. The Latest technology can
improve the profit of organization. Implementation of wrong technology or slower technology
can reduce the performance of Easy Jet.
Environmental Factors
The different environmental conditions can affect the profit and operation of the
organization. This environmental factors are consists of local climate, availability of natural
resources and geographical conditions. The availability of natural resources affect the production
line of the organization. If resources are not available at local location can increase the expenses
of Easy Jet. The weather of place where the organization is located can also influence company
working and procedure. Condition like heavy rain, high temperature and extreme cold condition
can reduce the performance of company employees (Lasserre, 2017). The geographical condition
like land availability and other thing can affect the working of Easy Jet company.
Legal Factors
Business laws are defined by the legal body of country. The laws are defined to govern
the contracts between different organizations and rules & regulations which are designed by the
government. These legal bodies keep the operation of organization with in limitations. This legal
laws help the government to protect personal rights of company employees. Laws like minimum
wages, right of equality and gender discrimination can force the organization to make changes in
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their policies. Some times these laws prevent certain actions companies. This can affect the profit
of Easy Jet.
Porter's Five Force Model
The porter's Five Force model is used to conduct the competitive analysis of
organization. This model analyse the impact of market competition, new entry in market, buyer
power, supplier power and substitute product in market. These factors are used to check the
market position of organization compared to the rival company in market. The impact of these
forces is used to keep power in hand of Easy Jet.
Supplier Power
The meaning of supplier power is, if the supplier of the raw material in the organization
are rare and expensive then they will have higher power and they can influence the decision of
company. This condition occurs due to less number of raw material suppliers. And company is
too much dependent on the limited suppliers. This problem can be reduced by increasing the
number of suppliers of company to reduce their power. This will help Easy Jet company to keep
power on company hand. For example if the aluminium supplier of company are in small number
and aluminium is major component of company (Morden, 2016). Inn this condition supplier can
increase the cost of raw metal. The company can reduce their power by start importing
aluminium from other supplier. This will reduce the risk of supplier threat of moving on to the
other organization.
Buyer power
The power of buyer is also known as the power of customers. The consumers are the
source of profit for the company and they have higher power to force company to change or
decrease the cost of company product. All the customers of organization are important for
company. In market place the consumer can threat the organization by selecting product of other
company. This bargaining power of the organization can be controlled by improve the quality of
company product and increase the rarity of company product. This will force the customer to buy
product on price decided by company. This will reduce the bargaining power of customer.
Threat of Newcomer
It is very difficult to enter a new market and gain market share to generate revenue. After
entering a new market it is difficult for to generate good profit where competitors are already
exists and having huge market share (Morschett, Schramm-Klein and Zentes, 2015). If Easy Jet
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is trying to enter a new market may face different kind of troubles. There are different threats in
entering new market which are-
1. Company need high capital to start a new business and enter a new market.
2. Existing companies will work against the organization.
3. Customers are not loyal to new companies.
4. The products of all performer are same and in this case it is difficult to attract new
customer to buy company product.
Threat of Substitute
The new organization with the same product is bigger threat to the organization. To enter
new market and occupy new customer this newcomer are capable of offering different attractive
proposal to the consumers. In this case the power is in hand of consumer and new company. By
this attractive offers new company can reduce the market share of organization. This can cause
bad or negative competition. This will provide more option to the customer to buy substitute
product (Frynas and Mellahi, 2015). This can reduce the business of the organization. The new
aircraft manufactures in market place will be consider as threat to the Easy Jet.
Rivalry with Existing Competitors
The existing competitors are also threats to the organization. Inn the competitive industry
it is not easy to generate profit with performing competition in the market place. The different
threats in this force are-
1. Larger number of employee will increase the competition.
2. To exit the business will be costly for the organization.
3. The substitute of product can be easily copied.
4. The customer loyalty is very low in higher number of employees.
Porter's Generic Strategic Analysis
Porter's generic strategic analysis is also known as Porter marketing techniques which is
being used by various companies in order to gain access to market and after that sustain its
business for the longer time through gaining competitive advantages over its competitors in the
market (Porter's Generic Competitive Strategies (ways of competing), 2016). Porter suggested 4
types of strategies which are as follows -
Porter's generic strategic analysis of EasyJet Company -
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Cost Leadership Strategy
Company who choose this strategy has the objective to become low cost producer or
seller in the industry in order to earn more profits, win its customers trust and gain economies of
scale. In this strategy, company do pricing of their products and services either at average
industry price or below the average industry price for a given quality of products and services.
Advantage – Company who uses this strategy gains customers trust and customer base due to
providing good quality of products and services at those prices which is lower than compared to
another company related to the same industry.
Disadvantage – customers' perception towards company can get affected and they might assume
that low price means low quality. This also impact the goodwill of company.
In case of EasyJet company, This company has adopted cost leadership strategy and it
became successful for the company's growth.
Differentiation Strategy
Company who choose this strategy has the objective to gain competitive advantages
through the differentiation of products and services. In this strategy, company create differentiate
between its products and services and another companies' products and services by adding
superior quality or features or benefits in their products which can create some value for its
customers as well as company too. In this strategy, company charge premium pricing for their
products and services (Pulaj, Kume and Cipi, 2015).
Advantage – Company who uses this strategy are generally known for innovation and qualitative
products which make company stand out from its another companies in same industry. It also
helps company to create brand image easily through the customers' perception towards the firm.
Disadvantage – Company uses premium pricing strategy which restrict so many customers not to
pay such high price for the products and service being offered.
Cost Focus Strategy
Company who choose this strategy has the objective to become low cost producer or
seller in the industry in order to earn more profits by targeting and focusing on a niche market in
which mainly focus in on low costs of particular product which is highly perceived and
demanded by the customers of specific targeted market. It also depends upon the resources and
capabilities of the company too.
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Advantage – Due to this strategy, company is becoming experts in producing particular products
and services which lead improves the pricing structure of the company and helps organization to
gain loyal customers.
Disadvantage – Company who use this strategy has the limit on its future growth due to focus on
specific products and services and specific market.
Differentiation Focus Strategy
Company who choose this strategy has the objective to gain competitive advantages
through the differentiation of products and services by targeting and focusing on a niche market
in which mainly focus on the creation of differentiate for products and services which is highly
perceived and demanded by the customers of specific targeted market. In this strategy, company
is using those products and services which fulfill the needs of the target customers and in that
products and services, company add another features or benefits or improve the quality of
products and services which can make products and services different from its competitors'
products and services.
Advantage – Due to differentiate products and services, company can gain loyal customers
which strengthen the customer base for the business (Min and Joo, 2016).
Disadvantage – It is not necessary that the customers of target market will like or perceive extra
features because they are using their products and services for their needs, not for another
purpose like comfort or showoff etc.
CONCLUSION
From the above study, it has been summarized that Strategic management is a branch of
management which basically deals with the strategies being adopted by companies and
procedures which is use by company to prepare and implement these strategies. There are
various factors which impact the successful or failure of the company and its strategies. Study of
these impact also comes under the strategic management. There are various strategic tools and
techniques which help company to analysis its internal and external factors which impact the
operations of business. These tools and techniques are swot analysis, pestle analysis and porter's
5 forces analysis etc. there are various companies who want to expand their business and want to
gain competitive advantages and for that company are using various strategies which comes
under the strategy management. One of the famous strategy being used by companies are Porter's
4 generic strategic analysis.
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RECOMMENDATION
It can be suggested that the company performance can be improved by implementing
different innovation in company procedure. The continuous development require high level of
dedication in work. The influence of external and internal factor can be minimized by using
different kind of operation strategies. These strategies can help the organization to gain
competitive advantages. The security and quality of product will attract more customer to buy
product from Easy Jet. The chances of failure can be reduced by better planning and better
implementation of plan. The different kind of new technology can be used by Easy Jet to
improve the capability of production. By using sustainable and responsible work company can
increase its productivity. In the market competition company can gain competitive advantage by
performing market research and make strategy accordingly. Better execution of management
policy can help the organization to operate with greater efficiency.
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REFERENCES
Books and Journals
Ansoff, H.I., and et.al., 2018. Implanting strategic management. Springer.
Blockeel, C., and et.al., 2016. A fresh look at the freeze-all protocol: a SWOT analysis. Human
reproduction. 31(3). pp.491-497.
Frynas, J.G. and Mellahi, K., 2015. Global strategic management. Oxford University Press,
USA.
Ginter, P.M., Duncan, W.J. and Swayne, L.E., 2018. The strategic management of health care
organizations. John Wiley & Sons.
Hitt, M. and Duane Ireland, R., 2017. The intersection of entrepreneurship and strategic
management research. The Blackwell handbook of entrepreneurship, pp.45-63.
Lasserre, P., 2017. Global strategic management. Macmillan International Higher Education.
Min, H. and Joo, S.J., 2016. A comparative performance analysis of airline strategic alliances
using data envelopment analysis. Journal of Air Transport Management. 52. pp.99-110.
Morden, T., 2016. Principles of strategic management. Routledge.
Morschett, D., Schramm-Klein, H. and Zentes, J., 2015. Strategic international management (pp.
978-3658078836). Springer.
Phadermrod, B., Crowder, R.M. and Wills, G.B., 2019. Importance-performance analysis based
SWOT analysis. International Journal of Information Management. 44. pp.194-203.
Pulaj, E., Kume, V. and Cipi, A., 2015. The impact of generic competitive strategies on
organizational performance. The evidence from Albanian context. European Scientific
Journal, ESJ. 11(28).
Trigeorgis, L. and Reuer, J.J., 2017. Real options theory in strategic management. Strategic
Management Journal. 38(1). pp.42-63.
Zhang, Y., 2016, May. Financial Analysis Report of Easyjet Airline Co., Ltd vs. US Airways
Group. In 2016 International Conference on Economy, Management and Education
Technology. Atlantis Press.
Online
Porter's Generic Competitive Strategies (ways of competing). 2016. [ONLINE]. Available
through : <https://www.ifm.eng.cam.ac.uk/research/dstools/porters-generic-
competitive-strategies/>
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SWOT Analysis: What It Is and When to Use It. 2018. Available through :
<https://www.businessnewsdaily.com/4245-swot-analysis.html>
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