The reason for this article is to judge the reduced budget, short-haul flight, easyJet. It will understand this company to point out the steps a multinational company will need to make a successful plan and how can incorporate invention. A intricate company such as easyJet, must compete in a very competitive market, so that it must use modern tools to try and stay before its rivals, which means this survey will also analyse what technology easyJet can employ and how do it impact on its current strategy and the create of the business.
The report will establish an understanding of easyJet's inside and external conditions so an accurate analysis is produced. This calls for considering how staff is operated and its own process, whilst exploring what impact easyJet has on competitors and what impact rivals have on easyJet.
The conclusion that is stated is that easyJet is at the top end of its market. It's been a pioneer in some areas of the market and has been developing rapidly within the last decade.
Emerging technology that is discussed involves recognition (ID) cards and how much of an effect this might have on easyJet's current strategy and how it will influence the responsibilities of the company's managers.
1. 0 - Introduction
The purpose of this survey is to critically evaluate the proper position of easyJet and propose how rising technology may impact on the near future position of the company. The company easyJet was chosen as it includes information which is accessible and I have a personal interest in the industry aviation industry. Personally i think that this statement will highlight the way the strategy and advancement of your multinational company can impact on its position within the marketplace it competes in.
2. 0 - Background
The air travel company, easyJet is a low-cost budget flight which works mainly within the Western aviation markets. Stelios Haji-Ioannou, a Cypriot entrepreneur, established easyJet General public Limited Company (PLC) in 1995 and has grown the company from operating plane tickets between London Luton to Glasgow and London Luton to Edinburgh, to what the company is currently. Stelios is the owner of the easy brand, known as easyGroup IP Licensing Small (Ltd), a private keeping company and licences many other companies, but also for the goal of this report, the evaluation will be carried out on easyJet rather than easyGroup.
EasyJet started out with renting two aircrafts because of its London to Scotland plane tickets. In 1996, easyJet wholly owned its first aeroplane, widening its routes to add London to Amsterdam, the first of which would be many over sea routes within the continent it manages in. At the end of the 1990s, easyJet noticed itself gain a website online even though it would have a further 2 yrs before online bookings could be produced by customers. EasyJet bought out a main competition in Go, which was British Airways obstacle to easyJet in the Low Cost Budget Flight sector. Out of this, they gained bases at three airports in Britain and expanded the number of routes in the European market. It gained industry reputation as it received prizes such as "Best LOW PRICED Airline 2009" and "one of the 100 great marketing moments of the 20th century" (Seatmaestro, 2009). Presently easyJet operates in 28 countries and has a fleet of over 128 aircrafts flying over 500 different routes.
Stelios has reduced his shareholdings, and now under his company easyGroup IP, he has a stake of 26% in easyJet while his family, own just over 10% well worth of shares. In May 2010, Stelios resigned from the panel of easyJet as a revolt against the strategy in which easyJet was taking. A row broke out between easyGroup and the panel of easyJet which concluded in October 2010 following a High Court circumstance. Stelios gained a share of easyJet's future cash flow but is capped at a maximum amount whilst at the same time is being paid a lump total over a period of time. During the circumstance, Stelios threatened to remove the right to use easyJet as a brand but withdrew this state (Telegraph, 2010). Following a pay out between both parties, easyGroup haven't any capacity to appoint directors or even appoint Stelios to his past position of Chairman (Guardian, 2010).
Over the years there have been major changes in general management at easyJet, leading to the business's strategy being modified substantially, so much so, that the creator has distanced himself from the company more in recent years.
http://www. telegraph. co. uk/finance/newsbysector/epic/ezj/8055369/Sir-Stelios-Haji-Ioannou-and-easyJet-resolve-long-running-brand-row-and-High-Court-case. html
http://www. bbc. co. uk/news/10117774
http://www. google. co. uk/search?q=easyjet+history&hl=en&sa=X&biw=1276&bih=817&tbs=tl:1, tll:1998, tlh:1999&ei=1Zq9TP_NDIvQjAe45o3AAg&ved=0CHUQyQEoBQ
http://www. euronews. net/2010/10/11/stelios-and-easyjet-settle-over-on-brand/
http://www. guardian. co. uk/business/2010/oct/11/easyjet-settles-stelios-court-case
http://media. cheapflights. co. uk/2007/06/easyjets-blueprint-for-the-ecojet-of-the-future/
http://www. guardian. co. uk/business/2008/sep/05/theairlineindustry. transport
3. 0 - Current Strategic Position of easyJet
In this section, three different areas will be analysed and by using proven proper indicators; they'll help to determine the current tactical position of easyJet.
3. 1 - Inner Environment Analysis
The mission declaration of easyJet will be looked at in order to fully understand what the internal environment analysis methods to the business. The mission set by easy plane is 'to provide our customers with safe, value, point-to-point air services. To impact and to give a consistent and reliable product and fares appealing to leisure and business market segments on a variety of European routes. To achieve this we will develop our people and build lasting relationships with our suppliers'.
The mission statement clearly states that it holds an emotional value for the customer; it implies that easyJet places basic safety as a high value for the business. It wants to give the client 'good value'; the business realises the needs of customers. They recognize that a happy customer could be a repeated customer. The communal values of easyJet targets the business's suppliers as it is designed to 'establish lasting associations' and create strong band of staff by pressing those to be the best of their talents. How these prices are generated can be seen by employing easyJet into Porter's value chain.
Infrastructure of easyJet
Human Source of information Management Margin
I. T. Development
Marketing Service
Inbound Businesses Outbound and Margin
Logistics Logistics Sales
A tactical success is a strategy on how the whole company behaves and how people and processes integrate along to bring a competitive product. The amount of competitiveness arises from the differentiation the business has over its rivals whether that be down to staff or the procedure methods used within the business. The primary areas easyJet target is the efficiency it includes over other airlines such as British Airways, the ideal locations it offers unlike Ryanair and the simple fact it includes low cost flights and flies to where customers want to go.
The value string highlights what sort of company reaches reach its margin as well as for easyJet it could relate with the prices for the customer. The primary activities require the inbound logistics, functions, outbound logistics, market and sales, and service. These activities added mutually can help create value but with no support activities of infrastructure, IT development and human resources; this might not be possible.
The central competencies of easyJet are efficiency and effectiveness and the business is bettering on customer service but advancements still have to be made. The clients are a key factor to the success of easyJet, so much so, that it's their safe practices that the company thinks of first. With quick turnarounds at international airports, easyJet can get multiple plane tickets on same routes in a single day while at the same time, not jeopardising the security of passengers. Economical profit is a key margin for the company but this is maybe gained after attaining the trust from customers. If it manages the customer with good mental and social beliefs then the economics should follow without easyJet forcing it to be the forefront of their mission.
As easyJet provide a good value for the money product, customers are improbable to be irritated when they need to carry out procedures themselves. For instance, customers who book online can now print their airfare ticket. This minimizes the expense of a sales representative selling seat tickets over calling, having to print the tickets and then have them delivered to the customer's dwelling. This means that seat tickets do not go missing and customers do not have any problems before soaring about not acquiring tickets promptly. Whilst at the same time easyJet is conserving itself money by refining its workload and passing it onto the customer, this can be known as Low fat process.
Customers will be happy when they are treated in the correct manner which is only going to happen with a sufficient team of personnel within the company. As it says on the easyJet website, their eye-sight states, 'to be the best low fares airline in the world'. This clearly indicates that regardless of what changes happen or what strategy is being used, the business always perceives itself with the same results. This can only be achieved by effort put in from easyJet personnel meaning easyJet must keep its personnel up to date in how it'll go forward as a corporation. Whether that be through unions or direct to the individuals themselves, it's important that the personnel feel a part of a company community. EasyJet succeeds in limited scheduling which is down to well trained personnel that can function alongside one another perfectly.
By analysing Mendelow's stakeholders matrix in (below) it points out what interest communities have on easyJet and exactly how much influence they have on the strategy of the company.
From the matrix, it could be seen that the main ability holders of easyJet will be the company's professionals and the key controller is Carolyn McCall (CEO, CEO) who finally has the final say on concerns pertaining to easyJet. In (below) McCall and her executive team is seen.
Carolyn McCall
,
Warwick Brady
Cath Lynn
Mike Campbell
Dana Dunne
Chris Kennedy
The professional team will consider viewpoints from other areas of the business prior to making key decisions. Thus giving a feel that there isn't a dictatorship within the business and folks have a purpose. The power framework in (above) helps create the ethnical web for easyJet. The ethnic web is six key areas that help to create the culture within which easyJet operates.
RITUALS
AND
ROUTINES
CONTROL
SYSTEMS
ORGANISATIONAL
STRUCTURES
POWER
STRUCTURES
SYMBOLS
STORIES
THE
PARADIGM
Stories: A recent survey by Which? unveiled that easyJet conquer its main rival, Ryanair, by over 10% for client satisfaction. Although this is a sensibly big space, easyJet only scored 57% which is low in comparison with other European no-frill airlines Germanwings and Wizz Air who obtained 79% and 69% respectively. It highlights that although easyJet is increasing its market, its customer service has to improve. A rep of the easyJet pilots stated that, ' The boardroom struggle with founder Sir Stelios did harm'. During this challenge, pilot recruitment stopped which means this put added pressure on current pilots. This strike the morale of easyJet pilots which the company had to handle.
http://www. 50connect. co. uk/travel/around_the_uk/travel_news/easyjet_beats_ryanair_for_customer_satisfaction
http://www. balpa. org/News-and-campaigns/News/PILOTS-CALL-FOR-FRESH-START-TO-BOOST-AIRLINE. aspx
Symbols:
Power Composition: As recently stated at (Above shape), Carolyn McCall has ultimate ability in easyJet but is backed by an professional team who are affected by the areas of the company.
Organisational Structure: EasyJet follows a hierarchal structure with Carolyn McCall at the very top, and filtering all the way down to ground personnel and cabin team. In effect, this can be a continuation of number (above), but including the whole company.
Control Systems: A significant system that easyJet instils within its staff is Trim process. This eradicates any misuse, whether that be time or finically, to provide a more efficient service whilst improving turnover.
Rituals and Regimens: Staff expect to have a plan of what plane tickets they will be working on, on a regular basis unless it is check-in personnel, who expect levels of consistency daily with their workload. There is an annual general meeting (AGM) held by easyJet to permit for an instant of realisation of what the business has achieved currently and what's the program for the near future.
Concluding this examination, the inner environment of easyJet can be observed to be very securely structured and not much room for change as it is an extremely demanding market. Due to unstable conditions such as weather or union strikes (home or abroad) then the company must be able to control its personnel and fleet. EasyJet will have strategies set up for when plane tickets do not set you back schedule, for a period of time. When flights are terminated for an extended period of time, it is hard for the business to get back to normality. When a company like easyJet has a big working staff then it is likely to have stringent management that ensures flights run to plan as long as it is at their control. Working in a requiring market like the main one easyJet is at, can put pressure on the company as inability to satisfy the client could see the company lose these to competitors.
EasyJet's internal environment has been looked at, but its exterior environment must be considered so an correct judgement can be made on the business's proper position.
3. 2 - External Environment Analysis
There are lots of methods to determine the consequences the exterior environment is wearing a company's strategic position. Within this section, two of the methods will be utilized to benefit knowledge of easyJet's strategic position.
One method which is often used is Porter's Five Causes analysis which can be seen below.
Substitutes
Buyers
Suppliers
Rivalry
New Entrants
Suppliers: Airports will be the evident controllers to air traffic, and despite having rules, airlines such as easyJet have obtained higher charges from the airports they use. EasyJet have very little control over their fuel prices but can actually do more to minimise their maximum consumption by refining the process at international airports and in plane tickets (easyJet, 2009).
Substitutes: Traveling by aeroplane is one function of travel which is quick but on land there is the likelihood of high swiftness rail which can interlink between countries and continents. Airlines have emerged as a major cause of global warming so it is understandable that the governments worldwide desire to be seen to aid other ways of travelling such as high speed rail. Short flights, such as London to Manchester, are being challenged by rail companies as the travel times are lessening and the frequency of the trains on these routes increase (easyJet, 2009).
New Entrants: Because of the global financial downturn just lately, it's very hard to access funds to begin up businesses, especially in such a hard market like the low cost budget air travel. Because of this there is no risk from any appearing opponents for the near future (easyJet, 2009).
Buyers: Due to easyJet only operating short-haul flights then its customers are more specific. It has promoted itself to business passengers as easyJet flies to major places throughout Europe and are frequent. Weaker airlines and head to operators are minimizing their capacities and these are a raise to easyJet and give them a bargaining position with consumers (easyJet, 2009).
Rivalry: EasyJet's major rival is Ryanair as both these businesses are Europe's leading budget airlines in the short-haul sector while the long-haul sector is principally played between three major companies; Air France-KLM, Lufthansa and English Airways. As companies go bust or become weaker, easyJet and Ryanair gain their talk about of the market. Transatlantic jobs between Celebrity and Skyteam alliance associates give the way for a reduction of inner rivalry as some companies synergy to work together.
http://2009annualreport. easyjet. com/documents/pdf/easyJet_AR09. pdf (page 19)
Using these details, it helps to understand why easyJet is expanding the way it is currently. This part looks more at the rivals easyJet has and what impact they have on its tactical position. Another method that can be discussed is the thought of PEST (Political, Economical, Sociocultural and Technological) evaluation.
Political: The federal government has considered a great involvement in flights over recent years as it points to this sector for being a primary reason of global warming. With this in mind, focuses on have been set to cut emissions and airlines will be performed accountable if they do do well with these goals. While this view is highly held, the federal government sees this function of transfer as a link to global markets so has plans in place to increase air-port capacities throughout the united states allowing companies like easyJet to increase its business.
http://www. guardian. co. uk/world/2010/apr/21/airlines-laws-costs-stranded-passengers
Economical: As easyJet is low cost flight with short-haul flights, it can pass savings onto the customers which allows for large numbers using the business. EasyJet tends to soar to low costing airports whilst at same time, are near major towns. It uses the same kind of airplane so less variety of maintenance has to be carried out. It generally does not offer free dishes in journey, it sells drink and food products instead. Because of the recession that the UK has experienced more folks flying with budget airlines as they cannot spend the money for luxury of flying with an increase of expensive airlines (Guardian, 2008). This is a major increase for famous brands easyJet as they expected a apparent decrease in passengers but they managed to capture people who had been willing to improve their airline style.
Sociocultural: EasyJet were the first airline company to start out using the internet to advertise the business and allowed customers to acquire tickets online. This provided them a mind start in the market as others followed suit. A large portion of solution sales are now made online, allowing for less staff to be needed to sell seat tickets and less dependence on travel companies. Many passengers like to carry suitcases onto the flight with them as an acceptable weight allowance is defined by easyJet. Less pressure is put on at check-ins now as less baggage is inspected in and more folks check in online. This is a change in behaviour in the past decade which is likely to continue, for short-haul plane tickets at least. Most of the process for looking at in can be automated and less human controlled.
Technological: The primary fear for people currently is security and tighter security checks are already in place at UK (UK) airports. An idea of small security could start to see the current passport reserve being replaced by way of a card with a chip onto it which keeps some personal details and would be hard to reproduce a citizen's exact details so harder for scam to be completed. Another technology which could change is the aircraft itself, as emission focuses on should be attained and easyJet has designs set up for an eco-friendly aeroplane but no model has been built to date.
3. 3 - SWOT Analysis
The areas that contain been discussed in this section have given a sign that easyJet uses one of its main competencies to remain at the high end of the marketplace and this is the efficiency of the business. It issues its rivals by giving cheap plane tickets whilst traveling to main airports using a fleet of plane that is young, average years of fleet is 2. 3years (easyJet, 2010). A main value of the business is safety, and it is one of the reason why that customers replicate their business with easyJet. A weakness in easyJet is that it's a limited market which it operates within. It is part of the short-haul, low quality airline market in European countries and there is a limitation as to how far the business can expand. Another weakness for easyJet could it be is concerned more with quick turnarounds at airports than ensuring passengers make flights. EasyJet acquired a documentary cleaning soap programme on ITV for many years which highlighted situations of poor customer support. Although the programme was a good marketing move for the company it have also allow for poor areas to be observed by the viewing potential customers. Alternatively, it allowed the company to see its problems and make amendments, that could in turn gain easyJet over time. A positive word for easyJet is that customers have not caused a fuss about online scheduling and the idea that people are prepared to limit their baggage now for plane tickets means they can take it onboard the plane thus less staff and time needed for easyJet to go luggage surrounding the airports.
The developments easyJet can make are two ways. One being, carrying on the road it is on and gain as much of the marketplace it are able to. The company at the moment handles 7% of the marketplace, but has a target placed at 15%. Within the near future it hopes to capture 10% (BBC, 2010).
The company is ambitious and expects to be always a leader on the market. Its success is undoubted, however now it is now rivalling in a much fiercer market. To defeat major hurdles, easyJet could combine with a large, long-haul air travel such as Virgin where with the ability to engage in a fresh fresh market. EasyJet could be a interconnection for Virgin on the European air area that could save Virgin money and help easyJet gain more customers.
3. 4 - Strategic Position
EasyJet confirms itself in a position that it is at the top end of the market it competes in which is down to its innovative ideas, key competencies, worth and a clear vision. It had been the first airline company to go online, it is at a process of producing an eco-friendly aircraft and its priority is safety. The company is a great success tale and for the past fifteen years, has been a major competition in commercial aviation. If it runs within its rigid management and adhere to its core beliefs then easyJet will be a leader in this market for the near future.
4. 0 - Appearing Technology
4. 1 - ID Cards
http://www. travelweekly. co. uk/Articles/2007/08/02/24792/air-travellers-blame-check-in-queues-for-airport-chaos-02-aug. html
The chairman of Travel Counsellors, David Speakman expresses, "Check-in is creating delays and airlines should addresses that. The whole airport experience is bad. " This shows that in the 21st century, airports are still battling to give customers a good experience at the start with their trip. Whether for leisure or business, all customers would like to like a stress leisure time at the airport terminal, and that can only just be performed with the airlines getting engaged and helping the actual companies who own international airports. It can't be solely left to a single company, it will take the involvement of at least two who are prepared to collaborate and create a remedy to problems seen within the international airport. Among the major problems is at the check-in workplace where it's quite common to see long queues, leading to frustration for passengers. It is also not uncommon to discover a passenger has ignored their passport, only realising when they have reached the check-in workplace. Addititionally there is the opportunity of human mistake within the check-in process. Either the passenger does not have information (passport or seat tickets) or the flight could get into inaccurate flight details. Id (Identification) Credit cards could get rid of the problems that occur.
Under the proposed system, the ID card would just store information as on a current passport whilst the chip that is on the card holds the passengers flight details. No invasion of other private information is employed within the process.
With this in mind, this may be an emerging technology of the future. It is unlikely to be employed by any United Kingdom (UK) airlines/airports due to the bad publicity Identification cards previously had with the prior UK federal (Labour Get together). After the public have forgotten the thought of ID cards being associated with an over vigilant federal, maybe then could airlines/international airports discuss this concept.
4. 2 - Implementing ID Cards
ID Cards could be earned by having individual airline check-points throughout the air-port to enforce the business's travellers to swipe their Identification card so security and the airline themselves know where passengers are and remove any opportunity of passengers lacking flights. From a traveler perspective, this would eliminate long queues as in this card, it might store the air travel ticket whilst at the same time, is officially accepted as recognition document, thus exchanging passports. EasyJet might have to pay an enormous initial cost to own these set up and have them looked after but could possibly attract even more people to fly. The business may possibly have to worker staff to keep track of passengers and have a back-up team in place, in case the machine fails.
As stated previously, easyJet could not implement this technique on their own; it could have to see them partnering an international airport company like BAA, to permit both parties to take part in applying this technology to the airport terminal.
EasyJet might well have an IT hub either at the air port or out with the airport terminal environment to run these checkpoint systems so all plane tickets are organised through automated system processes. It is not the duty of easyJet to obtain airport security checked but they can help with passenger control as it is at their control.
4. 3 - Impact of ID Cards
The idea of these cards could see more people flying which is an chance of easyJet to increase its passenger statistics and increase earnings. Queues could be created at checkpoints, especially if some fail. So long as the international airport and airlines have sufficient regress to something easier plans in place then the discomfort for customers should be limited. Companies such as easyJet might take years to see a return for the original cost of putting into action this idea but if the company has a good strategy with this notion a key part of the company's development then easyJet should visit a profit.
The management team within easyJet would be damaged quite significantly. Along with individuals staff, they will have to be in control of machines carrying out processes. This may remember to adjust but it would bring a solution to the situation of queues in the beginning of outings at airports, which involves the international airports and the airlines, easyJet for example, working alongside one another.
5. 0 - Conclusion
This record has critically evaluated the strategic position of easyJet whilst at the same time viewed the impact emerging technology may have upon this position. While concluding this purpose, a better knowledge of strategy and invention is achieved for this reason evaluation.
