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GSBS6060 Strategic Management
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GSBS6060 Strategic Management
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Course Code: GSBS6060
University: The University Of Newcastle
MyAssignmentHelp.com is not sponsored or endorsed by this college or university
Country: Australia
Question:
1. Identify the competitive strategy that Easy Jet Airlines have utilised in order to develop their current competitive position, giving examples of actions they have taken to accomplish this strategy.
2. Critically evaluate the competitive strategy that Easy Jet Airlines have utilised in the development of their competitive position. Your evaluation should recognise the advantages and limitations of this strategy in the current environment.
3. Make appropriate recommendations for ways forward for the organisation, based on your findings.
Answer:
Introduction:
Strategy is considered as one of the important aspect which is taken by the companies as it can help them to grow in the competitive market. Strategy is defined as a plan of action which is designed to attain the long term goals. Without strategy it will not be possible for the companies to achieve their goals and objectives, so every company focuses on considering proper strategies in the workplace.
Competitive strategy can also be defined as the long-term plan for specific organization and it is considered so that it is easy to attain the benefits over the competitors. The aim of this is to create defensive position in the workplace and also it generates the overall ROI. This is considered so that the company can outperform its competitors in the market and can achieve growth in the competitive market. Competitive strategy can be considered as one of aspect of various strategies which is prevailing in the market. So, in this paper the discussion will be made on the strategies which are considered by the Easy Jet Airlines and also various recommendations will be given which will highlight the overall growth.
Easy Jet Airlines
Easy Jet Airline is considered as one of the biggest company in the airline sector. It is also famous British company with the large market share. Easy Jet is the low-cost carrier airline companies and the company manages all its operations on the domestic and also on the international platform. It is analyzed that there are over 820 routes in more than 30 countries. It is seen that Easy Jet has enhanced its operations in relation to acquisitions and also the base opening fuelled by the overall demand of the customers at the low cost air travel.
The company is also linked with Easy Jet Europe and Easy Jet Switzerland which manages more than 200 aircraft. In 2014, the company focused on carrying more than 65 million passengers and also it is one of the second largest airlines in Europe in terms of the customer base behind Ryanair (Easy jet, 2018). It is stated that due to better services offered in the competitive market, the company attained large market share and also positive image is created in the mind of the customers in relation to the entire activities rendered by the management.
Pestle analysis
Political factor
In reference to the Easy Jet, there are various political change which impacted the overall activities of the company. In 2016, there are various airlines including the Easy Jet which managed their activities in the challenging political environment. It is important for the company
The regulations and laws are also considered by the company as it has been seen that UK government took decision last year to approve the third runaway at Heathrow can also one of the opportunity to enhance the market share in the competitive market. But it can also been seen that the company have no operations in the area but support is given by the company as it is easy to achieve the large market share. It has been analyzed that Brexit is the best example in which it has been stated that the entire activities of the company in the European countries will be impacted after the completing of Brexit. So, it has been seen that political has impacted the overall activities of the company (Dobni, Klassen and Sands, 2016).
Economic factor
Due to increase in the competition level it is seen that there is a huge pressure on the company as the overall cost of wages has been increased in relation to the countries. It is seen that as recession take place, there are business travellers who focuses on the overall expenses. Globalization also boost thee overall traffic in long term which has impacted the overall operations in the positive manner of the company (Iatrou and Oretti, 2016). For example : It can also be seen that modification made in the inflation and taxes rates after the completion of the Brexit can impact the overall cost of the company in the business world.
Socio cultural factor
To consider the overall demand of the society, the company focused on offering services at low price so that it is easy to attract the customers towards the company. Focus is also given on promotion so that large market share can be grabbed (Ford, Paparoidamis and Chumpitaz, 2015).
Technological factor
The company focused on latest technologies and software so that customer satisfaction can be enhanced. So, it is recommended that online booking is also one of the factors which boosted the overall sale of the company.
Legal factor
It is analyzed that there are various legal factors faced by the company. The London country court also judged for the breach of the contract in the overall compensation claim (Taneja, 2016). Therefore, it is recommended that safety policy of the customers can help in boosting the sales of the company.
EasyJet’s half yearly profit before tax (GBP, mill): 1H2005/06 to 2H2011/12
(Source: CAPA, 2013).
Environmental factor
The company also faced the issue related to change in the weather. Change in the weather has impacted the overall activities of the company. Also, the impact can be seen that on the overall fuel consumption which is linked with the carbon emissions. It is stated that Easy Jet is focusing on use the fuel effectively as it can help in minimizing the overall emissions. In this focus is given on engine taxiing and also in installation of the lightweight Recaro seats. This can also use the electronic devices in comparison to the papers as it can help in maintaining the overall operating process effectively (Goodall and Ashworth, 2013).
Porter five force model
Bargaining power of Buyers
Bargaining power of the buyer is strong as there are many competitors present in the market and company can easily avail the same services from them. It is seen that to achieve growth the companies can reduce the prices and at last it is the decision of the customers to avail the services or not (Kaplan and Sibley, 2010).
Bargaining power of suppliers
The suppliers are the aircraft manufacturers like Boeing and Airbus. In this sector, the aircraft companies to switch the suppliers and also by seeing the competition level the agreements are made on the long term basis. So, bargaining power is low of the suppliers (Malighetti, Paleari and Redondi, 2015).
Threat of new entrants
It is also low as the cost incurred to enter the market it high. It is not possible to enter into the market in an easy manner. Also, there should be strong customer base so that they can attain profits. So, in this sector the investment incurred is high, so there are fewer companies who focus on enhancing the market share as well in the competitive market. Also, it is important to have experience in the aircraft sector to open the business in the market. So, the threat can be low (Chandy and Cross, 2011).
Threat of substitutes
In this industry there is a medium risk level of substitution. There are many substitutes in the airline sector. It is seen that travellers can select the various modes of transportation like cars, buses, trains and also boats. So, the customers sometimes do not select the other methods of transportation just because of the cost.
Rivalry among the existing players
It is high as there are many competitors present in the market. To leave the industry in this sector is difficult just because of the long term agreements that are made by the companies to stay in the business.
Like Easy Jet is popular just because of the low cost services offered in the market. The market share can be equally distributed just because every firm in the market has its own part of the market and also the switching costs are low (Morlotti et al., 2017).
Bargaining power of Buyers
· power of the buyer is strong
· many competitors
Bargaining power of suppliers
· aircraft manufacturers like Boeing and Airbus
· bargaining power is low of the suppliers
Threat of new entrants
· cost incurred to enter the market it high
· experience in the aircraft sector
Threat of substitutes
· medium risk level of substitution
· customers sometimes do not select the other methods of transportation
Rivalry among the existing players
· high as there are many competitors present in the market
· low cost services
SWOT ANALYSIS
Strength
It is seen that one of the strength of the company is related with the brand image in the market. The company has a good image in the market which boosted the overall profits in the competitive market. Also, the single model of the aircraft can help in reducing the training, maintenance and also supervisory costs (Taneja, 2016).
Weakness
The weakness of the company is related with the high sensitivity in the overall charges of the tax which is imposed by the government just because of the low operating margins.
Opportunities
The company has the opportunity to enhance the market share and also the academy of the company can be considered as the source of the ancillary income. The leverage on the easy jet hotels can help to enhance the overall brand awareness in the competitive market. The new fleet can also be leased out at the time of travel recession seasons and it is easy to attain more profits in the competitive market (Elliott et al., 2015).
Threats
One of the threats related with the company is government policies and strict aviation regulations. It has been seen that the company has to face the issues related to the government rules and regulations. Also, there is high bargaining power of customers in the LCC segment and also there are players who are entering in the LCC segment.
Strength
· brand image
· boosted the overall profits
Weakness
· high sensitivity in the overall charges of the tax
· low operating margins
Opportunities
· academy of the company
· leverage on the easy jet hotels
Threats
· government policies and strict aviation regulations
· high bargaining power of customers
VRIO framework and Strategic capabilities
Tangible resources
Financial resources
It has been seen that company has a strong financial base and it is one of the key resources. The revenue of the company has been enhanced by 8.1% in 2017. The good financial base of the company assists in investing and managing the overall low cost business model. This has assisted to attain the part of Air Berlin which will help the company to maintain its capital.
Intangible resources
Human resources
The company has good relation with the customers who maintain the overall loyalty and also enhance the revenue. Due to customer satisfaction, the company is achieving growth in the competitive market.
Strong relation with the stakeholders
The company has generated good relations with the stakeholders including the customers and suppliers. It has boosted the revenue and also customer relation which resulted in maintaining the low cost business model (O’Connell and Williams, 2016).
Strong brand name
The airline is considered as one of the largest second UK airline and in the world it is on the 8th rank. Easy jet focuses on maintaining the largest airline in German capital after the acquisition of the Berlin Air. It has been analyzed that on the 18 positions in the market the company has a set of seats which has created the good brand image in the market (Goodall and Ashworth, 2013).
Technology
The company has been awarded one of the best airline core competency awards and also it enables the overall revenue of the company and its customer satisfaction. The services are offered on the online platform which boosted the overall image of the company in the market. So, this is also one of the advantages which boosted the overall brand in the market and helped to attain the desired goals and objectives in the competitive market (Hill, Jones and Schilling, 2014).
Recommended strategy for Easy Jet airlines
Strategy A
E marketing strategy
The mission of the company is to provide proper services to the customers. Also the main aim is to develop good relationship with the customers in the market. So, it can only be done when focus is given on the core competencies related to technology. It is important for the company to make the booking system easy as it can help in enhancing the overall demand of the services in the competitive market. If easy booking system is used then it is simple for the company to boost the overall profits of the company as there are many uneducated people to book a flight.
The online check in system is also one of the essential parts of the market strategy and it saves the time of the customers. Through this it can be easy for the customers to resolve the queries of the customers in relation to the services offered by the company in the competitive market. Also, through this entire process it is easy to boost the overall customer satisfaction in the competitive market. So, this is one of the strategies that should be considered by the company in the competitive market (Shaked and Sutton, 2011).
Strategy B
Training
The mission of the company is to maintain the overall quality of the services and it is done if there is proper training given to the human resources of the organization. Training should be given to the employees as it can help in boosting the overall knowledge and skills of the employees in the competitive market. If proper training is given to the employees then it is simple to attain the overall goals and objectives in the competitive market. Training given to the employees also enhances the overall confidence level of the employees towards the working pattern of the company and also they work with dedication and honesty towards the entire objective of the company.
So, it is important for the company to emphasize more on training as it can help in attaining the positive outcome and can also boost the morale of the employees in the workplace. Training can also be the source that can help to retain the employees in the competitive market and also it boost the culture of the company. By giving training, the management to create positive culture in the workplace which can be the outcome of enhanced motivation (Kew and Stredwick, 2017).
SAF strategy
So, it is important for the company to focus on the SAF analysis. Suitability is one of the factors to maintain the brand image in the competitive market as it can help to boost the profits.
In reference to the acceptability factor it is important to focus on measuring the returns and risks of the stakeholders. It can help to maintain the overall analysis taking place in the competitive market.
The last strategy is feasibility in which it has been seen that manpower and material are considered so that it is easy to attain the positive outcome in the competitive market (Pearson, Pitfield and Ryley, 2015).
Acceptability factor
· returns and risks of the stakeholders.
· competitive market.
Feasibility
· manpower and material
· positive outcome
Suitability
· brand image
· boost profits
Key findings
By analyzing the paper it is seen that company should consider the strategy related to e marketing. Also, proper training should be given to the people so that it can be easy to boost the overall morale of the employees. The company can also leverage the overall financial resouyrces of the company so that expansion can take place in the new market and also it will boost the growth of the aviation sector in the business world.
Conclusion:
So, the concluded states that it is important for the company to consider the strategic concepts related to Porter five force models and Swot analysis as it can help to consider the right actions or the decisions. These concepts can helps to manage the overall activities of the company and can also focus on attaining positive outcome in the competitive market. Also, proper strategies should be considered so that it can be easy to attain positive outcome in the market.
References:
CAPA. (2013). easyJet SWOT analysis – Is Sir Stelios strength, weakness, opportunity and threat all in one?. [Online] Available at: https://centreforaviation.com/analysis/reports/easyjet-swot-analysis—is-stelios-strength-weakness-opportunity-and-threat-all-in-one-96290 [Accessed 05/12/2018].
Chandy, P.R. and Cross, M.,2011. Large losses, risk management and stock returns in the airline industry. The Journal of Risk and Insurance, 54(1), pp.162-172.
Dobni, C.B., Klassen, M. and Sands, D., 2016. Getting to clarity: new ways to think about strategy. Journal of Business Strategy, 37(5), pp.12-21.
Easy jet. 2018. About us. [Online] Available from: https://www.easyjet.com/en [Accessed on 13th November 2018].
Elliott, R.H., Rosenbaum-Elliott, R., Percy, L. and Pervan, S., 2015. Strategic brand management. Oxford University Press, USA.
Ford, J.B., Paparoidamis, N. and Chumpitaz, R., 2015. Service quality, customer satisfaction, value and loyalty: An empirical investigation of the airline services industry. In The Sustainable Global Marketplace (pp. 187-187). Springer, Cham.
Goodall, B. and Ashworth, G. eds., 2013. Marketing in the Tourism Industry (RLE Tourism): The Promotion of Destination Regions. Routledge.
Hill, C.W., Jones, G.R. and Schilling, M.A., 2014. Strategic management: theory: an integrated approach. Cengage Learning.
Iatrou, K. and Oretti, M., 2016. Airline choices for the future: from alliances to mergers. Routledge.
Kaplan, D.P. and Sibley, D.S.,2010. Efficiency and competition in the airline industry. The Bell Journal of Economics, pp.118-138.
Kew, J. and Stredwick, J., 2017. Business environment: managing in a strategic context. Kogan Page Publishers.
Malighetti, P., Paleari, S. and Redondi, R., 2015. EasyJet pricing strategy: determinants and developments. Transportmetrica A: Transport Science, 11(8), pp.686-701.
Morlotti, C., Cattaneo, M., Malighetti, P. and Redondi, R., 2017. Multi-dimensional price elasticity for leisure and business destinations in the low-cost air transport market: Evidence from easyJet. Tourism Management, 61(9), pp.23-34.
O’Connell, J.F. and Williams, G., 2016. Airline Strategy: Keeping the Legacy Carrier Competitive. How Can Mature Airlines Stay Ahead in the Low-fare Airline Era?. In Air Transport in the 21st Century (pp. 179-194). Routledge.
Pearson, J., Pitfield, D. and Ryley, T., 2015. Intangible resources of competitive advantage: Analysis of 49 Asian airlines across three business models. Journal of Air Transport Management, 47(8), pp.179-189.
Shaked, A. and Sutton, J.,2011. Relaxing price competition through product differentiation. The review of economic studies, pp.3-13.
Taneja, N.K., 2016. Adaptation Strategies by Airports. In Airline Industry (pp. 149-166). Routledge.
Taneja, N.K., 2016. Closing Thoughts: Innovating in the Air Travel Space. In Airline Industry (pp. 217-223). Routledge.-0-/*
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