Environmental and Competitive Analysis of Easyjet Essay Essays

Environmental and Competitive Analysis of Easyjet Essay Essays Environmental and Competitive Analysis of Easyjet Essay Essay Environmental and Competitive Analysis of Easyjet Essay Essay Essay Topic: Easy This study has been written in order to supply an environmental and competitory analysis of the low-priced air hose industry sector from the place of Easyjet. It will give a brief history into Easyjet and the low-priced air hose industry. It will analyze the internal strengths and failings every bit good as the external menaces and chances. Rivals will be analysed through the usage of porters 5 forces theoretical account. Recommendations will be made for EasyJet’s selling schemes for the following three old ages. Corporate History Easyjet was founded in 1995 by Stelios Haji-Ioannou who based the house around the low-cost. no-frills theoretical account of the US flight operator ‘Southwest’ . The construct of Easyjet is based on the fact that short flights within Europe are monetary value elastic. intending the lower the monetary values the more people will go within Europe. The deregulating of the European air hose industry in 1992 authorised any European air hose to run. fly and land anyplace within Europe. This allowed air hoses to spread out paths and run within Europe with much higher preciseness. Easyjet was ab initio started from its ‘hanger’ central office at Luton airdrome with two Boeing 737-300’s offering flights from London Luton to Glasgow and Edinburgh at a monetary value of ?29 each manner. To day of the month easyJet has now expanded into offering 125 paths from 39 major European airdromes utilizing their fleet of 122 airplanes. EasyJet has besides expanded into holding big footing at non merely Luton airdrome but besides Liverpool. Geneva. and AmsterdamBack in 1999 easyJet gained free mass exposure to an audience of around 9 million viewing audiences through ITV’s ‘fly on the wall’ documental series ‘Airline’ . The launch of easyjet. com in 1997 has become an built-in portion of the concern theoretical account and has seen a immense alteration in the civilization of booking travel tickets. Presently easyJet. com provides around 90 % of engagements today and in 2001 hit ten million gross revenues doing it the 2nd busiest travel web site in the UK. Ryanair and easyJet are in ferocious competition with each other as they are the two largest low-priced air hoses runing within the UK. Since easyJet’s coup detat of the low-priced air hose â€Å"Go† in 2002 it has become Europe’s largest air hose in this sector but still faces ferocious competition. EasyJet Mission StatementA mission statement should be the ultimate end of a house and should filtrate down into every section of an administration. To supply our clients with safe. good value. point-to-point air services. To consequence and to offer a consistent and dependable merchandise and menus appealing to leisure and concern markets on a scope of European paths. To accomplish this we will develop our people and set up permanent relationships with our providers. ( hypertext transfer protocol: //easyjet. com/EN/About/index. hypertext markup language ) EasyJet’s environmental codification based on three pointsTo be environmentally efficient in the airTo be environmentally efficient on the groundTo lead in determining a greener hereafter for air power. for illustration: C offsetting- defining hereafter aircraft design- for illustration. the ecoJeteasyJet high efficiency = lower emanations = low faresSWOT AnalysisA SWOT analysis analyses the internal Strengths and Weaknesses of easyJet along with the external Threats and Opportunities. StrengthsWell known. respected and memorable trade name nameStrong and good known leading figure in Stelios: â€Å"No Bullshit† approachMotivated work force independently trained at the easyJet academyVery effectual advertisement schemes developed to reenforce the easyJet trade name along with mass exposure through ITV’s ‘Airport’Good cognition of the market and effectual responses to rivals trying to steal possible customersFly to a big figure of chief vacation destinationsLower C emanations due to utilizing newer fleet of aircraftCost decrease with the remotion of travel agentsHigh rider volumeLow runing costsDiversification into other markets. auto lease. cyberspace coffeehouse and hotelsFlat managerial hierarchy. therefore cut downing costsInnovator with respects to online engagement and ticket-less travelWeaknessesFly merely within Europe and no current purposes to spread out outside of the continentRely on computing machine engagements to such extent that concern would be unable to run with computing machine failure or virus onslaught. No client retention/relationship policy. No points strategy to honor frequent flyersAccess to European airdromes allowed by the deregulating of the industry. which may change in the futureOutsources many of its services to 3rd parties which may be damaging to its reputationSuccess of Easyjet makes it hard and expensive to develop staff rapidly plenty. OpportunitiesLower costs furtherIncrease faresIntroduction of more states into the European Union has increased possible clients and flight destinationsExpand into new paths. outside of Europe. and long haulDecrease bend around timesImprove aircraft utilisationVertical integrating to extinguish outsourced maps of easyJet’s procedureGain foremost mover advantage with respects to utilizing alternate ‘greener’ fuel cellsIntroduction of points strategy to honor and retain frequent flyersThreatsRising fuel monetary values Introduction of a C emanation revenue enhancement or other environmental regulationsNew emerging competitionCompetitors underselling monetary values or offering similar monetary values for a more efficient/better serviceAircraft care problemsTerrorism cut downing air travel numbersEmerging alternate manners of transportReputation lost in event of good publicised incidentDelaysPEST AnalysisA PEST analysis analyses the Political. Economic. Socio-Cultural and Technological factor act uponing the low-priced air hose industry. Political FactorsThreat of terrorist act upon airlinesGovernments using revenue enhancements upon C emissionsIntroduction of more states into the European unionEconomic FactorsIncreasing fuel costs and other environmental restrictionsEuropean Union regulationsProspect of higher security and insurance costs due to the increased hazard of terrorist act. Continuing growing of air travel through go oning globalisationIntroduction of the Euro individual currency is likely to incorporate Europe even moreSocio-Cultural FactorsTravel and vacations are going more and more typical for a big per centum of the UK populationContinuing growing of multi-national endeavors has caused concern travel to go more commonGaining clients from France and Germany may do jobs as these states are still really loath in utilizing recognition cards over the phone and on the internetTechnological FactorsAdvancements in e-commerce resulting in increased online competitionImprovements in engine engineering will let easyJet’s planes to run more expeditiously and cut down emissionsIncreases in fuel engineering offering easyJet alternate fuel beginnings Porter’s 5 forces theoretical account Porter’s 5 forces theoretical account looks at: the menace of replacements. the menace of new entrants. the power of providers. the power of purchasers and the competition among bing houses to analyze the fight within a certain industry. The menace of substitutesFairly low menace from other manners of conveyance as the cost and clip advantage clearly separates the low cost air hoses from the luxury and comfort offered from replacements such as high velocity train services. For illustration London to Glasgow takes 6 hours on a train and costs around ?80 whereas Easyjet offers the service in 1 hr merely bing ?29. Regarding travel into mainland Europe the distance is far excessively great for train. auto and ferry travel to be a realistic worthwhile replacement. For illustration if a client was to drive to the South of France for a short weekend break the travel would take excessively long for it to be realistic and practical trip. The menace of new entrantsLimited capacity at suited airdromes means any new air hose would happen it difficult to happen suited take off and set downing slots. Huge start up capital required for the purchase of aircraftNew entrants would be working as a ‘loss leader’ for a figure of old ages due to the big initial expensesThe low cost air hose industry within the UK is reasonably mature but as easyJet were one of the initial houses into this industry they hold a strong place. However within the remainder of Europe there are many vacation operators who are trying to come in the low cost air hose industry themselves. The power of providers The monetary value of fuel is straight related to the cost of oil which is of all time increasing. Easyjet rely on being able to obtain fuel but have no control over the monetary value. Aircraft industries are highly concentrated within the industry with Boeing and Airbus the two chief industries. The dependance of trim parts from a certain industries could present a hazard. The more Easyjet expands the more power it will keep over its providers through deriving ‘economies of scale’ . The power of buyersBuyer power within the air hose industry. particularly the low cost sector is particularly strong as clients frequently shop about and seek to happen the best monetary value. This factor has been extended through the debut of many on-line flight hunt engines such as travelsupermarket. com and lastminute. com. The Civil air power authorization ( CAA ) provides protection against ( 1 ) the effects of travel organizers failure for people who buy bundle vacations. charter flights and discounted scheduled air tickets and ( 2 ) licenses air hoses and ensures conformity with demands of European and UK statute law associating to fiscal resources. liability and insurance of air hoses. Customers experience no negative characteristic of exchanging provider so are happy to make so. Rivalry among bing firmsRyan Air. BMI babe. MyTravelite. Jet2 and Buzz are all rivals with the UK low cost air hose industry but Ryan Air is the lone one of these to hold succeeded and shown a continuously annual net income. British Airways and other traditional flight operators winging from the UK are rivals but on a much lower panic as they are aiming different market segmentsThere are over one hundred European based low cost air hoses. many of them are really little but still move as competition for easyJet. Different Types of competitorsSimilar specific – same merchandise. engineering and mark marketSimilar general – Same merchandise country but functioning different segmentsDifferent specific – Same need satisfied by really different meansDifferent general – Competing for discretional spend ( Brassington. pg 866 ) In relation to Easyjet the similar specific rivals are the other ‘no-frills’ low cost air hoses. runing within Europe. The largest house that fits this specification is Ryan Air therefore they are easyJet’s premier rival. Other ‘no-frills’ low cost air hoses runing within the UK include Jet2. bmibaby and Flybe. The similar general rivals are other air hoses that operate within Europe but which are aiming a different type of patronage. Within the UK the largest operators are British Airways and Virgin but both of these operators tend to concentrate on the more upper category expensive concern flights. They are besides non in direct competition with Easyjet as they offer flights all over the universe and are non restricted to merely within Europe. The different specific rivals are houses which offer travel into Europe by means other than air travel. This would be the channel tunnel operator Euro tunnel and the English channel ferry operators such as P A ; O. Brittany or Stena Line. These are non in direct competition as the chief distinction is that on both the channel tunnel and the ferry traversing people can take their autos onboard. It is besides a much longer procedure so unless sing the west seashore of France weekend interruptions would look instead pointless as the continuance of the ferry would be excessively long. Different general rivals could be houses offering vacations and trips within the UK where no air travel is needed at all. Different general rivals could besides be houses providing other luxury points that may be bought alternatively of a vacation. such as a new auto. Competitor analysisAs the scope of competition throughout these groups ( above ) . is at changing strengths the similar particular and similar general groups will be broken down into four sections for easiness of analysis. Competition will be analysed through a rival analysis. Who are our rivals? Segment 1Ryanair: Easyjet’s direct competitorsSegment 2Other UK based low-cost air hoses: Jet2. flybe. bmibaby. Segment 3Standard UK based air hoses: British Airways. Virgin Atlantic. KLM and BMISegment 4European based low-cost air hoses: There are over 100 European low cost air hoses such as: Condor. g’wings. SkyEurope and Blu Express. AssumptionsIt is inevitable that the uninterrupted growing in the low cost air hose industry will get down to decelerate down as the industry is becomes saturated. It is believed that the current mass of operators will be whittled down to a smattering of major air hoses. A big figure of the smaller low cost air hoses that will inescapably fight to vie will be involved in take-overs leting the bigger participants in the industry to go on to turn. What are our competitor’s strengths and failings? RyanAir StrengthsWell known and respected trade name nameLow costs due to low airdrome chargesHigh cyberspace booking ratioHigh aircraft utilisationUse individual type of aircraftFast bend around timesHigh place densityRyanAir WeaknessesRecent studies of hapless client serviceNegative pressAirports are frequently long distance from travelers end destinationUK based low cost air hose StrengthsAll have their ain web site for engagements and ticket-less travelSome have strong fiscal backingFast turnaround timeLow runing costsUK based low cost air hose WeaknessesRelatively little in comparing to easyJet and RyanAirLarge publicizing costsSmall web of routesCompeting in competitory industry ensuing in many amalgamations and take-oversRestricted to the usage of certain airportsStandard UK based air hoses StrengthsRespected and good known trade name names Worldwide serviceStrong fiscal backingRespected criterion of serviceStandard UK based air hoses WeaknessesLow aircraft use ( compared to easyJet ) High costsHigh pricesEuropean low-priced air hose StrengthsUse of individual currency ( Euro ) can cut down costsCloser to emerging markets ( Eastern Europe ) Low costsWell know trade name names. in their respected place countriesEuropean low-priced air hose WeaknessesRelatively little compared to easyJet and RyanAirVirtually unknown in the UKCompeting in fierce industryRestricted usage of certain airportsWhat are our competitor’s aims? RyanAir – â€Å"RyanAir’s aim is to firmly set up itself as Europe’s taking low-fares scheduled rider air hose through continued betterments and expanded offerings of its low-fares service. RyanAir purposes to offer low menus that generate increased rider traffic while keeping a uninterrupted focal point on cost-containment and operating efficiencies. † ( Ryanair. com ) UK based low cost air hoses – Initially the UK based low cost air hoses aims are to last in the industry by increasing their market portion. The inevitable impregnation of the market will do many of the smaller low cost air hoses to be merged or taken over by the larger participants. In order to avoid this smaller low cost air hoses need to distinguish themselves from the crowd or derive a alone merchandising point through lower costs. first-class client services or working new paths. Standard UK based air hoses – Aim to go on their laterality of flights in and out of the UK by underscoring the quality of the service they provide. They besides plan to cut down monetary values in order to shorten the spread between themselves and the low cost air hoses. European bases low cost air hoses – European low cost air hoses need to last in the market by increasing their market portion. This could be established by increasing their web paths or ramifying into un-targeted states within Europe. It is besides plausible that amalgamations will happen within this sector to cut down the hazard of failure. RecommendationsEasyJet can non avoid the increasing oil and gasoline monetary values which is bound to consequence the industry sooner instead than subsequently. It may be recommended that easyJet start looking into utilizing alternate renewable fuel beginnings. If easyJet can acquire clasp of the engineering to run their fleet of planes on a ‘greener’ fuel they may derive first mover advantage and gaining control big sums of the competitions clients. Over the following three old ages it would be recommended that easyJet focal point on ‘joining the dots’ of their European web instead than trying long haul flights as this would be hard and would transport a big initial hazard. If easyJet could ‘join the dots’ in their European web it would contend off the competition from the emerging low cost air hoses trying to turn within the industry. Decision In decision easyJet have built a strong trade name which has positioned them in an first-class topographic point within the low cost sector of the air hose industry. With this sector of the industry predicted to turn. competition is likely to escalate even more but as easyJet has already built a strong trade name and client base it is improbable they will be forced out of the market. EasyJet need to go on its advertisement schemes. reenforcing its image and trade name name to go on as one of the industries taking air hoses. As the UK market is saturated and offers little or no growing chance. it would be logical for easyJet to concentrate on the enlargement of their path webs within Eastern Europe. EasyJet should carry through this through supplying the paths themselves or unifying with a rival that already does. Reference List Bird’s oculus position. SWOT analysis of low cost bearer industry ( April 2007 ) hypertext transfer protocol: //www. air-scoop. com/downloads/SWOT_Low-Cost-Carriers_Air-Scoop. pdf [ 7-12-2007 ] Blythe. J ( 2006 ) Principles and Practice of Marketing. Thompson Learning. Bedford Row. LondonBrassington. F. Petit. S. ( 2003 ) Principles of Marketing. page Pearson Education. Harlow. EssexChannel 4 intelligence. How green is easyJet? ( May 2007 ) hypertext transfer protocol: //www. channel4. com/news/articles/society/environment/factcheck+how+green+is+easyjet/509642 [ 20-11-2007 ] Crawford. C. Easyjet SWOT Analysis ( 2004 ) hypertext transfer protocol: //www. marketingprofs. com/ea/qst_question. asp? qstID=3412 [ 25-11-2007 ] Hoffmann. J. Ryan Air – Environmental Analysis. Discussion of nucleus competences and Strategy Proposal ( 2004 ) hypertext transfer protocol: //www. smile. com/en/preview/39017. html [ 25-11-2007 ] Manzoor. M. Easyjet ( 2005 ) hypertext transfer protocol : //www. marketingprofs. com/ea/qst_question. asp? qstID=9339