Easyjet analysis, competitive advantage and plan Essay

Easyjet is one of the victorious European no frills blood linelines. The skyway was founded in 1995 by a Greek man c eithered Stelios Haji-loannou. A concept that pose him found the Airline was based on the fact that nodes demand for short-haul air transport is price elastic. This grass be translated to mean that when line of achievement constitute argon reduced, many a nonher(prenominal) people fly due to the affordability of the flight prices.Easyjet has been successful because it has been able to liberate itself from traditional flight path concepts. These concepts were based on the premise that the low-spiritedering of flight costs could only lead to decrease in the economy. The traditional concepts made many respiratory tracts believe that airline traffic grows in line with the economy. Easyjet benefited from the introduction of the no-nonsense concept and its deregulation in 1992, to the European merchandiseplace. (Gregory, 2000).The company has been able to woo customers from other airlines due to the low militant prices it offers for its services. This has made the company expand and increase the size of the grocery it can access. As of now, the airline company provides 125 routes from 39 European airports with Geneva, Amsterdam, Luton and Liverpool direct as its base airports. As of November 2003, the company was operating seventy cardinal aircrafts. The pattern now has tripled as the airline has continu solelyy increased in size.Easyjet has established goals that the company hopes will be able to attract and oppose its customers. The companys strongest desire is to develop long lasting consanguinitys with its customers. These goals fuck off been incorporated into the alliances Mission statement. These goals include To provide customers with safe, cracking value, point-to-point air services. To effect, and provide a consistent and reliable product and f bes, challenge to leisure and business foodstuffs on a range of Europe routes. (Collett, 1999) doormans five competitive forces develop been used to effectively hit the books the airline industriousness comprehensively.These competitive forces comprise The threat of substitutes, the threat of raw(a) entrants, the power of suppliers, the power of buyers, and finally, the rivalry among brisk firms. The airline industry experiences negligible threats from other substitute modes of transport. For example, transport modes like train and car are not speed conscious. For a journey that could take an hour when apply Easyjet plane, a train takes approximately 6 hours. It is also cheaper to t disentangle on an Easyjet plane than it would cost when buy the farming via train.Thus, the time and cost advantage of locomoteling by the low-cost carriers far outweighs the increased flexibility and comforts of trains. Trains and cars cannot deal out long distance international routes. Therefore the only substitute is to ravel by plane and this is where Easy jet enjoys the competitive advantage it has oer its substitutes. (Porter, 1985) Easyjet was founded using a large sum of money. It was established with a loan of 5 one million million million dollars. This being not enough, it still required 50 million dollars for blowup to meet the needs and demands of customers.The airline sector demands of new entrants to have graduate(prenominal) capital in order to start a stable business. curb finance has been a barrier for many businesses which consider entering the industry. new entrants in the airline sector are discouraged by the curb take-offs and landing slots which make it difficult for them to find suitable airports. The low cost airline market in U. K is truly mature as compared to the rest of Europe. Easyjet has been in the market for preferably long till it has acquired the form of address of being the biggest operator in the market. This is a very comfortable limit for it as it considers itself as a leader in the field.Th is is not all advantageous to the airlines as entering new markets in Europe whitethorn become a big problem for it. Any entrant in the low-cost market has to be ready to make a hardly a(prenominal) losses before establishing itself. Hence, Easyjet has not really considered the threats of new entrants as a big problem. (Gregory, 2000) Easyjet has been affected by the powers of suppliers. Easyjet has realized that depending on one supplier or manufacture for spare could pose a risk. Boeing and Airbus are the major manufactures in the industry providing majority of commercial planes.Easyjet needs to expand more than in order for it to have more powers over its manufactures and suppliers. The cost of oil color and the price of aviation oil have a direct relationship and it is not in the power of Easyjet to alter this. The power of buyers within the airline industry is very strong. Airline operators have the duty of checking on prices to block being exploited by the consumers. Cons umers are in a place to detect price discrepancies which they exploit. Due to the low switching costs experienced within the airline industry, the customers need to be loyal.The Civil Aviation representation (CAA) has ensured that the airline customers are well treated and protected. Some of the ways in which CAA sides with the consumers is by, protecting customers against the consequences of travel organizer failure for people who buy share holidays. It also ensures that airlines are licensed and comply with the requirements of UK and European liability, financial, and resources legislation. Easyjet experiences rivalry from existing firms. In the UK, Easyjet has My TravelLite, Ryan air, Buzz, and BMIbaby, as its major competitors. Ryan air is Easy jets greatest competitor as it has shown continuous yearly profit.Future blowup plans may increase its competitors to include the everlasting(a) Express, Hapag Lloyd Express and Air Berlin, nigh of which are already competing with t he airline. The other competitor that Easyjet has is the British Airways but it competes at a lower scale as it fall guys different market segments. (Porter, 1985) SWOT-Analysis of the Easyjet Company which reveals its intensivenesss, weaknesses, opportunities and Threats has been carried out. (Anthony, 1998). Internal analysis of the Company depict the fact that there are numerous strengths that it has enabling it to have a competitive edge over Companies in the industry.Easyjet has a strong e-business. This airline has incorporated the advanced applied science and this has enabled it to offer fictional character services to customers. The other strength that Easyjet has is its ability to pay a wide scope of customers. This is due to many branches that exist all over the terra firma. Research shows that this airline is expanding globally and will soon be able to have branches in all parts of the world. One perspective that is important to airlines is safety. This airline is grittyly reputed for safety and this has enabled customers watch loyal to it. Its up dated website enables customers to book for their flights on line.The comfort in travelling by Easyjet planes is exceptional. The airline also has got qualified personnel like the cabin crew, fudge assistants, flight attendants, customer care, pilots and stewards. Another strength that is found in Easyjet is its flexibility in adapting to new technology in the future. This airline is not tie to single technology. The airline has been financially successful and is part of the consortium that has been awarded to ravel UKs air traffic control system (NATS). (Anthony, 1998) One of the worlds largest industries is the Air travel which in 2001 generated over $ 300 trillion in revenues.In the past, business people dominated air travel but then this changed when living standards of people improved so that many people could afford air travel for leisure activities. The deregulation of the airline indust ry has served to increase the frequency of air travels. Easyjet contracts everything from pilots to check-in staff. The airline avoids travel agents high commissions by selling sit down over a squall reservation system. To ensure it grows in future, the airline invested 6. 6 million dollars for maturation a safe, reliable and efficient air traffic system.This was meant to ensure that it has comfortable capacity in the air and on the ground. Easyjet acquired British Airways low-cost subordinate GO which played a huge part in its expansion. Easyjet stands for chromatic culture which means being up for it, passionate and sharp. Easyjet has low operable costs because all bookings are done via phone and it has slight cabin crew due to the absence of the business class. Easyjet has been able to recognize that logical argument class reduces seats from 149 to 109. (Matthias, 2005) Some of the other players in the airline industry include the Virgin Atlantic, Ryan air and British ai rline.These airlines pose a salubrious competition to Easyjet which it has to measure up to improve on its slip in the market. These airlines have a strong brand name which makes them to have a competitive advantage over Easyjet. The name Virgin Atlantic is quite unique and it attracts many customers to use the airline. Research shows that virgin atlantics airline provider is global in nature. It operates its services to Barbados, Lagos, Johannesburg, Hong Kong and London Hub. This is a great strength for this airline. (Branson, 2006). One aspect that is important to airlines is safety.This airline is highly reputed for safety and this has enabled customers remain loyal to it. The airline also has got qualified personnel like the cabin crew, control assistants, flight attendants, customer care, pilots and stewards. (Branson, 2006). The British and Ryan airlines have efficient customer service and effective policies that positively affect the overall running of the airlines. These airlines have a competitive edge over the Easyjet and Virgin Atlantic in terms of the many operation routes they have. The British airline has a high technological advancement which has greatly increased its customer base.The Virgin Atlantic has some weaknesses which affects its smooth operation in the airline industry. One of them is very evident in its prices. Virgin Atlantic airline flight charges are slightly higher than the other airlines. This makes most people who are oculus class not to afford their services. Another weakness in Virgin Atlantic airline is in its departure control systems which are not really updated to the current technology. Ryan airline which is the major Easyjet competitor in the market has continually expanded and made lots of profits over the years. Thus, the airline has enough resources to cater for its consumers.It has a stable base and enjoys the comfortable position it holds in the market. Easyjet offers affordable flight prices attracting many cus tomers to use its services. The Ryan airline and British airlines have very high practicable costs. This is because they contract the services of customer agents who charge them exorbitant prices. Similarly, because they have a business class, the numbers of seats are reduced and the airline is also forced to increase the number of cabin crew it has to cater for passengers in the business class. The low flight charges of Easyjet plane are what attract customers to its services.The key element of the brand is the low price. The management uses differential set systems. (Michael, 1985). The cost of flight is directly cerebrate to the time one wishes to travel. Off-peak travelling and advance ticket booking is less expensive. Easyjet encourages its customers to book tickets online by giving discounts to tickets booked online. The airline company has skinny promotion strategies that catch the charge of many potential customers. Some of the attention catching lines that the airline uses include size matters, and the webs preferred airline.Most of its advertising campaigns are humorous, attention-catching and unforgettable. (Hilltop, 1994) For Easyjet to do well in future, it has to consider how it is leaving to handle new entrants in the market. It should decide whether it is overtaking to create niche segments in the market for the new entrants or if it is going to compete aggressively on price, routes and services to drive the entrants out of the market. Easyjet should make strategic decisions market research on the size of different combinations of pricing and service if it intends to increase its market share over the next threesome years.It has to know the amount of power the competitor has over it. (Massingham, 1988). For example, the competitors service costs, competitors capacity for the various airline routes. Easyjet should target leisure travellers this is because business travellers usually seek very high quality service, frequent flights to a wide range of destinations which could translate to high operational costs and low profits. The airlines need to develop an accurate and realistic judgment of the market-niche it wants to serve.The market shares of Easyjet could increase in the next three years if it adopts CRM (Cause related Marketing) scheme which involves selling shares in forest help programmes over its websites and bread and butter charity by collecting foreign currency on flights. The airline should also establish a growth plan that would see it expanding over the next three years. (Matthias, 2005) Experts have predicted that Easyjet airline is well positioned in the market and that it has excellent growth opportunities for the low-cost sector. Competition is likely to intensify because the UK market is really saturated.Therefore, marketing is very important if Easyjet wants to attract new customers as well as maintain those that it already has. Since the UK market provides very teensy-weensy growth opportu nity, more airlines are likely to invade the continental market with new bases being established at Berlin as well as Eastern Europe. (Collett, 1999). Marketing should play a role in convincing customers that flying is the safest mode of transport. Before formulating a market plan for the airline, the political, legal, Technological, Socio-cultural, and sparing factors should be taken in to consideration. (Massingham, 1988)