This report illustrates an in-depth look of easyJet and will also discuss an analytic research that was made to demonstrate aspects of the history of the airline, along with the marketing strategy and brand strategy used and implemented by the low-budget airline.
The strengths, weaknesses, opportunities and threats, known as SWOT analysis, will also be illustrated along with the external environment better known as PEST analysis which consists of the political, environmental, social/cultural and technology factors of easyJet.In addition an analysis of the competitive market environment of easyJet will be shown, which includes an overview of easyJet’s main competitors and the nature of business in which they operate by illustrating it through the Porters-Five Force model. The advantages and risks associated with their low-price strategies will also be discussed with an illustration of how easyJet achieved success using these low-price strategies. 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.
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 the vision of turning Europe orange. Their mission statement is “To provide our customers with safe, good value, point-to-point air services. To effect and to offer a consistent and reliable product and fares appealing to leisure and business markets on a range of European routes. To achieve this we will develop our people and establish lasting relationships with our suppliers. (Rae, 2001).
They are also a no-frill airline operating mainly in Europe, with their headquarters based in Luton, the UK and it employs around 6,107 employees (Datamonitor, 2009). EasyJet was founded and launched in 1994 by the son of a Greek shipping tycoon named Stelios Haji-Ioannou. The intention of easyJet was to be a low cost carrier, hoping to challenge regular airlines such as British Airways, among others. The airline has also surfaced to be one of the most flourishing low budget airlines in all of Europe.EasyJets’ target market consists of people who pay to travel from their own income rather than their companies; they also target individuals visiting their relatives, managers and entrepreneurs of small business and leisure travelers making short trips. In 1997 easyJet.
com was launched providing seat prices and booking information. Within 4 years of launching their website, the airline sold their 10 millionth online seat. In 2004, easyJet became the first low-budget airline that took advantage of the newly formed European Union and created flights to Slovenia and Hungary.By 2006, their strategy of speedy boarding was introduced, allowing passengers to have better choices when it came to their seating arrangements.
In 2009, they had18 bases operating throughout Europe, four in France, one in Switzerland, one in Italy and eleven in the UK. In 2010 easyJet was flying to 125 European, Turkish and North African airports in 29 different countries. (easyJet plc. , 2010). By the end of 2010, easyJet re-announced their strategy of turning Europe orange.
Even though easyJet’s success could be placed exclusively on Haji-Ioannou’s vision and adaptableness, what contributed to the success of the company were the market which it operates in and the business model that they have decided to follow. EasyJet’s key marketing strategy is based on a fairly simple structure. (Sull, 1999). Marketing Strategy: EasyJets’ key element of success was through their approach to pricing. 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.The marketing strategy of easyJet consists of the costs which are estimated in one way with a single and fixed price that is set for all the seats on a certain flight at any given point in time with no set restrictions.
The prices of these seats however tend to change in accordance with the days that the bookings of these flights are made available till the date of departure (Koenigsberg, Muller and Vicassim, 2008). All bookings for easyJet are made straight from either telephones or the internet; this made it very easy to incorporate the web into its central booking system.By achieving this, there were no possible channel conflicts with other intermediaries, for example with travel agents Easyjet’s website illustrates their pricing policy as being “based on supply and demand, and prices usually increase as seats are sold on every flight. Basically the sooner a person books, the cheaper the flight ticket would be”. The web also states that the low cost scheme of easyJet is not tickets, no ties to other networks, no travel agents and no on-flight meals. (easyJet plc.
, 2010).A pin code is also given for each customer’s booking that is done on the website which is given to travellers upon arrival at the airport. Brand Strategy: To gain a competitive advantage, most companies tend to implement a brand strategy. What makes easyJet stand out amongst its competitors is their image of a low-budget airline and no-frills services; this brand strategy is simple but strong.
EasyJets’ whole company is recognised by their unique orange logo, this color also forms part of the uniform worn by their staff, which in turn is a strong recognised tool by the consumers.It also tends to characterise consumers’ value for money. EasyJets main form of advertising is through its’ website, which usually displays highlighted promotions to attract consumers and is displayed in 18 different languages. In 2008 easyJet launched a form of credit card by forming a partnership with Citibank allowing consumers to gain easyJet air miles.
(Euromonitor, 2011). External and Internal Environment: The existence of easyJet is based on the balance of both external and internal environments. The external environment consists of the political, economic, social/cultural and technological factors (PEST analysis).Meanwhile the internal environment consists of the organisation’s internal factors which contribute to the performance and success of the organisation which could be distinguished from the strengths and weaknesses of the swot analysis. Therefore the PEST analysis factors should be taken into account when marketing plans are formulated for easyJet.
Political Factors: A few of the political factors that could affect easyJet include threats of war in the Middle-East, this can affect the business of easyJet through rising fuel costs.Terrorism would also cause insurance cost to increase and safety problems for all travellers and the airline industry as a whole. Another political factor would be that the passenger numbers of easyJet increases due to a European Union east-enlargement which provides access to practical new markets. Within the airline industry, the scheme of air miles are not considered to be taxable by the government the way company cars are, if this change occurs it would allow easyJet to compete equally with other competitors. (Geiger, Schlottke and Schrade, n. .
). Economical Factors: Some of the economical factors that may affect easyJet consist of an increase in fuel costs, other environmental factors that contribute to the economy such as natural disasters would result in easyJet not being able to operate for a certain period of time. Another factor that can have an effect on easyJet is the recession, research has indicated that this recession is likely to last longer than expected, which results in less business travellers travelling due to an attempt to decrease the amount of spending.Globalisation may be seen as another factor, as it continues to enhance air traffic in the long-term. (Geiger et al.
, n. d. ). Social/Cultural Factors: The social and cultural factors that might affect the operation of easyJet are that French and German customers are unwilling to use their credit cards over the internet or phones or via the internet, this caused a problem for easyJet since they only sell tickets via the internet and phones.Another simple but affective factor that contributes to their operation is that the people are generally willing and not hesitant to pay for cheaper flights. (Geirger et al.
, n. d. ). Technological Factors: The key technological factors that contribute to easyJets’ operations is the technological advancements which they try to integrate into their own systems such an example would be Galileo and Amadeus, which in turn makes online bookings more efficient and effective. Bing, 2007). The use of internet on distribution and cost synergies from combined industries may help in counteracting costs and prices.
Due to the technological environment that keeps on changing at a fast pace, easyJet should try and stay up to date on technological developments in regards to the e-commerce along with aircraft manufacturing, so that they may gain and maintain a competitive advantage. (Geiger et al. , n. d. ).
