Business Review for EasyJet Airline Writing Assignment (Term Paper Sample)

Business Review for EasyJet
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Introduction and History
EasyJet is among the most popular and successful airline businesses in Britain. The company belongs to Stelios Haji-Ioannou who is also its founder in 1995. EasyJet airline is based in London Luton Airport but has several affiliate companies such as the EasyJet Switzerland, EasyJet Europe among others. It operates on a low-cost carrier model internationally and locally serving more than 820 routes in about 30 countries (Corporate.easyjet.com 2017).
This private limited company appears on the listed companies on the London Stock Exchange, constituting of the FTSE 100 Index. EasyJet thrives on the concept of price elasticity influencing the demand for short-haul air. This implies the more people are likely to fly upon reducing the cost of flights. The company has grabbed a significantly large market share in Europe and some of the customers is shifting from other bigger airline to EasyJet. The company invalidates the traditional airline concept, that reducing flight costs will limit the revenue. Instead, EasyJet is using the reverse of this concept as a competitive advantage in the European airline market.
The Mission Statement of EasyJet
EasyJet Airline Company aims at providing safe point-to-point good value services to their customers. They also target at standardizing and offering consistently reliable products and flight charges to leisure and business markets within Europe. By point-to-point services, it is clear that EasyJet is neither in the business of carrying people or food business. Rather, the company capitalizes on a cost-effective mass transportation business. Moreover, the major niche for this company falls to leisure and business markets. The company’s strategic approach to achieve this mission is through the provision of “safe, good value” services. However, the company’s mission is not quantifiable to the level of success she targets to reach in the future.
Competitive Analysis
In order to discern to in-depth the forces driving the airline industry, using the Porters five competitive forces the best approach.
The Threat of substitute
There prevails a decimal competition from other modes of transport such as trains and vehicles in Europe. The continent is the mother some of the world’s fastest and most luxurious cars such the BMW, Mercedes-Benz, Audi, Peugeot among other. This limits the local market for the airline venture. However, for time and reduced prices, EasyJet is able to overcome this cloud of competition both locally and internationally outweighing the fastest cars and swift trains. Otherwise, international routes are too long for cars since the roads are highly coiled and winding making gas charges very high for vehicle transport (Businessrevieweurope.eu. 2017).
The Threat of New Entrants
Airline industry requires very high capital investment, a factor that inhibits efforts of other potential entrants into the market. For instance, EasyJet commenced at a significantly low pace at with a loan of £5 million, having hired two aircrafts for a long-term service. In the following year of her establishment, the company experienced a necessity of £50million to undertake its expansions program of acquiring four more aircrafts. EasyJet reaps the benefits of dominance in the UK low-cost market in the UK. This is so because the company is the “biggest fish” in the comparatively mature UK low-cost mature, unlike other parts of Europe. However, TUI and other strong international airline companies are a hindrance to EasyJet’s expansion to the international market.
The power of Suppliers
Airline transport consumes huge amounts of fuel on daily basis. Aviation fuel cost is proportional to the costs of oil and neither EasyJet has the ability to alter this provision of the business macro environment. Another challenge is the rapidly advancing aircraft technology. Commercial airplane manufacturing companies such as the Airbus and Boeing are shifting to production of mass carriage plane and improving current plane features. To keep up with the safety and good value service mission, EasyJet is forced to keep on updating her plane inventory (Harrison 2011).
Acquiring new planes has a significant impact on the annual income the company generates from its operations. Similarly, these two commercial plane manufacturers are the major sources of plane parts, thus enjoy the monopoly benefits of setting high prices and this is not only a burden to EasyJet but also a risk factor. An expansion move by the company gives her more power over the suppliers (Harrison 2011).
The Power of buyers
Loyal customers are the base for the success of any business enterprises. EasyJet runs on a low-cost strategy in order to make its services affordable to her customers. The company markets herself to a wide market scope through aggressive internet sales. Price discrepancies can significantly manipulate the minds of the buyers, bearing in mind people like cheap responsive services that suit their budgets (Post 2010, p.292-299).
The operators in the airline business are limited to the Civil Aviation Authority (2010) that provides for various protection measures to diverse consumer levels. EasyJet is not an exception to these regulations and most of them require a huge investment to implement. For instance, provision of responsive facilities for disabled persons and people with reduced mobility cost the company over £5 to set up.
Rivalry among existing firms
EasyJet Company faces great competition from other companies such as Ryan air, BMIbaby, Buzz, and MyTravel Lite. Other potential competitors include Virgin Express, Air Berlin among others that have future expansion plans. Otherwise, rising tour operators such as TUI and Thomas Cook are other potential future competitors. However, on a small scale, Britain Airways affects the market share in the segments targeted by EasyJet (Fedosava 2016).
Marketing Mix
Price
Generally, the company brands herself to her customers using a low-cost strategic approach. EasyJet applies differential pricing such as peak-season price reduction to attract more customers. The company offers price incentives to customers who book in advance.
Product
EasyJet aims at providing “no-frill” products to her customers. In the company’s mission, providing point-to-point is the major objective towards gaining a competitive advantage.
Distribution or Place
EasyJet’s company records most of her flight booking from the online booking system. Online booking accounts for over 90 percent of the total annual bookings. Another means that her services reach the customers is through television reservation system.
Promotion
The company capitalizes highly on internet marketing using the easyGroup websites to reach the masses in Europe (Bader 2015).
SWOT Analysis
Internal Analysis
Strengths.
The company has an appealing corporate reputation over her pricing and brand in the market. Moreover, EasyJet Company has a strong financial base, backed by aggressive e-business.
Weaknesses.
The company lacks a p...