However within the rest of Europe there are many holiday operators who are attempting to enter the low cost airline industry themselves. For Easyjet, the following analysis for demand and competition seems relevant. The airline has seen an increase in customer loyalty in its core markets. Companies which use cost leadership strategy set goal to become low-cost manufacturer in the industry. However, in 2013 and 2014, EasyJet posted a 5. This way, customers are going to be loyal to the brand. The deregulation of the European airline industry in 1992 authorised any European airline to operate, fly and land anywhere within Europe.
The above are the some of the strategies used by the easyjet airways and also they used their resources to maximum extent like they operated Boeing flights for 11 hours per day compared to their rivals who used 6 hours per day. Employees are given responsibility to make decisions themselves. Firms who are cost leaders benefit from rivals which have prices lower or at the same level because they get extra profit for that and it opens the way for the barriers to enter the market Miller and Friesen, 1983. Summery and Recommendation 5 6. Generally, cost leadership strategy is set to be more appropriate for big companies which have more power and strength over operating expense costs and resources Salavou, 2015.
A look at the average collection period, days inventory held, days payable outstanding ratio show that payments mostly in cash should be expected in a fairly short period, and therefore there is no need for keeping a lot of resources in liquid form is not desirable. According to Porter 1980, p. Sorry, but copying text is forbidden on this website! Another significant competitor for easyJet is the German company Air Berlin; this is the second biggest airline in Germany and the number six in Europe. External Analysis Opportunities There is a Potential for future growth in subsequent years is priorities and business strategies are well implemented. A persistent commitment to quality service and cost control is as important as the discipline to establish a growth plan. Working Capital The working capital measures the dependency of the companys operations on its ability to raise revenues from the sale of inventories. Conclusion In conclusion easyJet have built a strong brand which has positioned them in an excellent spot within the low cost sector of the airline industry.
To these players, as indeed many other businesses in other industries, careful financial management is critical to success. Finally there will be a conclusion by giving recommendations along with a critique for future ways to enhance and develop their strategies, which in turn will increase their profits. There is a little chance of possible difficulty for Ryanair trying to broaden its strategy. This has clarified that Easy Jet emphasizes on being a low-cost carrier with no surplus in-flight services. 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. Despite an increase in operating costs in 2010, Easyjet has achieved a remarkable performance compare to 2009.
EasyJet commenced with a loan of £5 million and 2 chattered aircrafts, but needed a £50 million investment raised by debt and parity in year two to speed expansion and acquire 4 new aircrafts. This could be established by increasing their network routes or branching into un-targeted countries within Europe. Overview and History of easyJet: EasyJet is a public limited company which falls under an oligopolistic market structure and operates across the European continent with. Emphasis should also be placed on direct marketing i. As of 30 September 2016, the airline has 2,865 pilots and 6,516 cabin crew members easyJet, 2017.
The concept of Easyjet is based on the fact that short flights within Europe are price elastic, meaning the lower the prices the more people will travel within Europe. However, this may also show that the highly liquid state may be due to many payments being received by the companies. Gregory, 2000 Easyjet has been affected by the powers of suppliers. The brand names and other brand information used in the BrandGuide section are properties of their respective companies. Stelios Haji-Ioannou introduced a low head line price in order to grab the attention of consumers and then prices were raised according to consumer demand. Having placed their focal importance on cost reduction in every activity on the value chain, average profits above the capital invested into the business can be achieved. This airline has incorporated the advanced technology and this has enabled it to offer quality services to customers.
For example, most of their tickets are sold on a non-refundable basis which can be distasteful for some customers adding to the fact that they do not offer any regular flier programs. Its up dated website enables customers to book for their flights on line. If easyjet could able to optimize the network and flight frequency, seat allocation and use of global distribution systems and other business model, to cater high-yield. A violent growth strategy to govern the airline market seems apt until the market reaches maturation. Rising middle class all over the world is also another factor which makes the budget airline segment an attractive place because they can afford the air travel at such a low price there by increasing the volumes of air traffic and helps in increasing the profits of the airlines. Price divergences can easily be found and misused by the consumer.
Today, easyJet offers 289 routes from 77 airports in 21 countries and they are known to operate 137 aircraft. Summery and Recommendation 5 6. It flies to more than 30 countries and serves over 820 routes. Within 4 years of launching their website, the airline sold their 10 millionth online seat. This group of individuals also seek quality service and frequent flyer programmes, and are willing to pay a premium for these benefits. To achieve this we will develop our people and establish lasting relationships with our suppliers.