Strategic Management Report: Easyjet's Response to Brexit Challenges

This report provides a comprehensive strategic management analysis of Easyjet, a British low-cost airline, focusing on the impact of Brexit. It begins with an executive summary and introduction, followed by an examination of Brexit's effects on Easyjet, including declining sales and financial losses. The report then delves into external analysis using Porter's Five Forces and PESTEL frameworks, assessing the competitive landscape and macro-environmental factors. Internal analysis, including a SWOT analysis, identifies Easyjet's strengths, weaknesses, opportunities, and threats. The report also covers the airline's competition and strategic choices, including the adoption of unique services and intellectual property rights to mitigate Brexit's effects. Finally, it includes a strategic evaluation and conclusion, summarizing key findings and recommendations. The report highlights the importance of strategic management in navigating challenges and achieving organizational objectives in the UK airline industry.

Strategic Management

EXECUTIVE SUMMARY
In UK Airline industry, the strategic management is essential as this is helpful for finding,
monitoring, examining as well as evaluating the whole company in order to meet the
organisational objectives. The Brexit has impact Easyjet as it declines their sales and approx half
losses. External analysis is helpful for knowing its competitors as well as macro factors.
Moreover, internal analysis aids in identifying strengths, weakness, opportunities and threats.
The strategies that they used is to bring unique services or products and protect them with the
intellectual property rights. These strategies will help them to overcome from the effects of
Brexit effectively and efficiently.

Table of Contents
EXECUTIVE SUMMARY.............................................................................................................2
INTRODUCTION...........................................................................................................................1
Impact of Brexit......................................................................................................................1
External analysis.....................................................................................................................1
Internal analysis......................................................................................................................4
Competition............................................................................................................................7
Strategic Choice:....................................................................................................................7
Strategic Evaluation:..............................................................................................................7
CONCLUSION................................................................................................................................7
REFERENCES................................................................................................................................9

INTRODUCTION
Strategic management is defined as the continuous planning, observing, analysing as
well as evaluating of overall which is essential for firm for meeting their objective in effective
and efficient manner (Bettis, R. and et. al., 2014). As per the scenario, the chosen company for
this report is Easyjet which is a British low cost airline industry. Its headquarters at London
Luton Airport. The purpose of this report is to understand the impact of Brexit upon UK airline
industry and evaluation of respective sector with the help of external analysis. Moreover, the
internal analysis, competition, strategic choice and strategy evaluation is also discussed in this
report.
Impact of Brexit
Brexit generally means that exit form EU. Due to Brexit uncertainties the Easyjet warns
of slow summer sales as the budget of airlines is developed effectively but profitability gets
impacted. Moreover, the airlines as well as Holiday company minimises the cost due to UK's
prolonged and uncertain withdrawal from EU. In addition to this, their revenue reduced by
7.4% and also expected the half losses of around £ 275m.
External analysis
Thomas Cook is the leading British international travel group. It was developed in 19
June, 2007 through merger of Thomas Cook AG and My Travel Group. It was listed on both
London stock exchange as well as Frankfurt stock Exchange. Its headquarters is in Manchester,
England.
Within all over the world, it has about 21,000 staff out of which 9000 are within UK as
well as they have around 600,000 consumers approx 150,000 are from UK. In year 2016, this
particular airline are operated whole Airbus fleet that operating Airbus A321 and A330 (About
Thomas Cook. 2019).
External analysis is considered as analysing the industry environment of firm which
involves factors like competitive position, structure, history, dynamic and others (David and
David, 2013). The aim of this is to ascertain the opportunities as well as threats within sector
and any segment which will leads towards growth, profitability and volatility.
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Porters five force model:
This is considered as the tool which is utilised for examining the business competition. It
is essential techniques to know about the forces which shape competition into an industry.
Moreover, this help THOMAS COOK to adjust their strategy which suit its competitive
surroundings as well as develop their potential profitability.
Threats of new entrants: This is low in airline industry and economies of scale is quite
tough in which the Thomas Cook operates. Moreover, this is simple for those who are
generating huge capacities to have cost advantage as this develop production expensive for
new entrants.
Bargaining power of suppliers: In airline industry, the bargaining power of suppliers is
high as there is large number in comparison to buyers so the firm such as Thomas cook has not
more control over the prices.
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Illustration 1: Porter's five force model
(Source: Porter's five force model, 2019)

Bargaining power of buyers: The bargaining power of buyer within Airline industry is
low as the product differentiation within respective sector is high which means that the
customers are notable to identify the alternative company for facilitating similar products or
services. So, it is tough for them to switch so the bargaining power is low.
Threats of substitutes products or services: In UK Airlines industry, the substitutes of
product or service is very low as it has some substitutes which are available and are also
generated through low profit earning industries. So, the Thomas Cook do not have more
threats from substitutes services.
Rivalry among existing firm: Within Airlines industry, this force is low as there are very
few competitors within respective sectors. Moreover, there are some rivals who are having
large market share. It means that it will involve into competitive actions for gaining position as
well as became the market leaders. So, the Thomas Cook have to differentiate its services so
the competitors action will have less impact upon their clients which looks for their innovative
services or products.
PESTEL:
This is considered as the tools which is utilised through marketers for examining as well
as monitoring the external environment factors which has an effect upon firm (Ginter, Duncan
and Swayne, 2018). This aids THOMAS COOK to identify the crucial changes into political,
economic, social, technological, environmental and legal factors. Moreover, helpful to
performing strategic planning for expanding its business effectively.
Political factors: The airline industry in UK have faced various problems due to the
changes regulations. So, Thomas Cook have to comply that policies which affected their
operations and enhances its cost effectively and efficiently.
Economic factors: Weak economies over Europe have weakened international airlines
impacting clients, disposable income. The fluctuating currency rates and enhancing
unemployment rate have negative effects upon Thomas Cook. So, if unemployment enhances
then less people prefer to travel which impact its profit and business.
Social factors: As the needs and demands of society changes so the requirements for
services provided through Thomas Cook generally enhances as various people expected to
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travel for redevelopment. It is dependent on income of disposal that maximises its
expenditures as well as socialisation.
Technological factors: The usages of internet have promoted the freedom by which
individuals can able to formulate its decision. It can be attained through utilising advanced as
well as changes technologies as the expectation of Thomas Cook have to stay among the top
notch online services facilitator be a constant challenge.
Environmental factors: The environment protection is the sensitive aspects today. The
huge concern for sector is greenhouse gas emission and others. As respective sector generates
at least 2 percent of emission. The way they are performing upon this issues is through rolling
out new plans which has fuel effective engines that means low carbon emissions.
Legal factors: The rules and regulations established through UK government for the
airline industry such as discrimination law, health and safety and other that has to comply by
the Thomas cook in effective and efficient manner for the beneficial of its staff as well as
business. This impact their operation and performance positively as its employees perform
effectively for attaining organisational objectives.
Internal analysis
This is defined as the exploration of firm competency, position of cost as well as
competitive viability within market area (Greco, Cricelli and Grimaldi, 2013). The purpose of this
analysis is to facilitate essential information regarding the strengths, weaknesses, opportunities
and threats of company.
SWOT
This is defined as the strategic planning techniques that is utilised through firm to know
about their strengths, weaknesses, opportunities and threats associated to project planning or
competition of business.
Strengths:
Low budget: Easyjet is providing their services at lower budget as well as the low frill air
travel servicing into various growing city within UK and in all over Europe, involving Berlin,
Pragues, Amsterdam and others.
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User friendly website: It has user friendly websites that totally discloses the price break
down of passengers planned travel. As it provides a full breakdown of price plan that prevents
the hidden charges when clients confirm its booking.
Fast service: It provides as fast and effective services with an average time of approx 30
minutes of less.
High distinctive livery: Easyjet has highly distinctive livery upon its aircraft fleet which
make them to recognise as well as distinguish it from its rivals in easily manner.
High quality services: It provides high quality of services at competitive price as well as
facilitates various features involving internet booking, assisted travel services and ticket less
travel.
Weaknesses
Free food service: The main weakness of this is that they do not provide free food
services for more than 2 hours flights.
Large number of competitors: It has various competitors such as Ryan air, Jet2, BMI baby
and others which provide same services due to which they have to change their pricing policy.
Low operating margins: As it has low operating cost due to which high or additional
charges or tax are imposed by government on Easyjet.
Dependency upon two suppliers: AS they are dependent upon only 2 suppliers so it will
be risky in case the suppliers faces any issues then they cannot able to provide effective
services to its clients.
Opportunities
Providing free refreshment: They can provide free refreshments on its flights with a time
of more than two and half hours’ travel.
Updated version: They can use the upgraded version of fly upon wall documentaries as it
facilitates their brands more publicity.
Alternative routes openings: The possibilities of alternatives routes openings to huge
cities in Europe. For example: key route can be from Dublin to UK as it has huge potential for
travellers. Moreover, it open new relation within corporate flyers to and from the United
Kingdom.
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Releasing new fleet: During the time of travel recession seasons, they can have released
out the new fleet.
Attract customer: They can rise brand awareness and attract large number of customers
by leveraging on their products or services.
Threats
External market forces: It has crucial effects upon the business of EasyJet such as the
increasing oil cost has essential impact upon operating cost putting pressure upon profit of less
famous routes as well as time slots.
Competitors: It is the major threats of this as they fly in similar routes compete very
competitively upon pressure of price forcing on margin.
Unions and staff relation committees pressure: This can affect their regular operations with
strikes as well as prove to be expensive for firm's reputation.
Economic Downturn: This can drive towards reduce n casual flyers as well as corporate
travel as firm seek to curtail what is its views as unessential cost and instead of this develop less
business trips.
Government policies: It is threats as in airlines industry there are strict regulations which
Easyjet has to comply (SWOT, 2019).
Competition
Easyjet have various competitors such as RyanAir, Air France and other. Ryan Air is a
global airlines firm whose USP is lowest price,. It is known as the stronger players within UK
market place as well as have over 160 destinations and also have highest flight frequency.
Air France is also a leading Global airliner company whose tag line is France in Air etc. it
is serving in approx. more than 270 destinations and having 250 or more fleet size. It merged
with KLM which develop as a powerful force within airline sectors.
Strategic Choice:
This is considered as the decision that ascertained the future strategy of organisation. As
due to Brexit, it has to face huge losses. So the key direction available for further growth of
Easyjet are they have to adapt a sensible approach to planning that will include an effective
analysis of appropriate risk as well as opportunities which are emerging for its firm before,
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during or after the Brexit take place (Lasserre, 2017). Moreover, they can undertake a range of
various aspects such as operational strategies, corporate governance and others.
Strategic Evaluation:
This is considered as the procedures of ascertaining the efficiency of provided strategy
in attaining the objective as well as taking corrective action where is needed. The strategies
which is effective for Easyjet to move forward in future are they have to outsource the
secondary activities as it enhance the expenditure. Moreover, they have to brining unique
services or products and protect them with the intellectual property rights. These strategies will
help them to overcome from the effects of Brexit effectively and efficiently (Morschett,
Schramm-Klein and Zentes, 2015).
CONCLUSION
From the above report, it has been concluded that strategic management is important
for the airline industry as it help them to identify, monitor, examine and evaluate the whole
appropriately. Moreover, porter five force model is used to analysis the competition so it have
been identified that in airlines industry the rivals are not more. Through PESTEL analysis, firm
can known about their external factors which effects the business environment positively and
negatively. In addition to this, SWOT analysis is utilised by airline organisation to know about
the strengths, weaknesses, opportunities and threats so that they can able to overcome form
their weaknesses and deal with threats effectively and efficiently.
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REFERENCES
Books and Journals
Bettis, R. & et. al., (2014). Quantitative empirical analysis in strategic management. Strategic
Management Journal. 35(7). 949-953.
David, F. R. & David, F. R. (2013). Strategic management: Concepts and cases: A competitive
advantage approach. Pearson.
Ginter, P. M., Duncan, W. J. & Swayne, L. E. (2018). The strategic management of health care
organizations. John Wiley & Sons.
Greco, M., Cricelli, L. & Grimaldi, M. (2013). A strategic management framework of tangible and
intangible assets. European Management Journal. 31(1). 55-66.
Lasserre, P. (2017). Global strategic management. Macmillan International Higher Education.
Morschett, D., Schramm-Klein, H. & Zentes, J. (2015). Strategic international management (pp.
978-3658078836). Springer.
Rothaermel, F. T. (2013). Strategic management: concepts. New York, NY: McGraw-Hill Irwin.
Steiss, A. W. (2019). Strategic management for public and nonprofit organizations. Routledge.
Online
SWOT. 2019. [Online]. Available
Through:<https://www.essay.uk.com/guides/swot-analyses/easyjet-swot-analysis.php,
>
About Thomas Cook. 2019. [Online]. Available Through:<https://www.thomascook.com/>
Porter's five force model. 2019. [Online]. Available Through:<https://medium.com/product-
gyaan/porters-five-forces-analysis-868945aa5846>
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