FORTUNE may receive compensation for some links to products and services on this website. Overall the analysis will highlight the inherent threats and weaknesses suffered throughout the industry, and also the importance of innovation to maintain low cost advantage, alliances and size to success. This involves EasyJet retaining funds from operations; hence, a healthy Balance sheet in terms of retained profits. This analysis outlines for EasyJets management how individual activities may be altered to reduce costs of operation or improve the value offered to customers. So the strategy has been very successful for EasyJet and appears to have been the correct strategic decision. Standardisation in its activities as an airline leads to both economies of scale and a simpler product, which is cheaper and easier to distribute. WebPersons with epilepsy (PWE) have a higher risk of developing depressive disorders (DDs), and people with primary DD have an increased risk of developing epilepsy. EasyJets powerless plight is typical of the entire industrys. The next quarter was not much better: A U.K.-wide national lockdown was imposed in November and, after a brief easing of restrictions in the run-up to Christmas, again in late December. The price of EasyJets tickets various as a function of the number of seats remaining, the time until the flight, and historical trends. None would fly again until June 15. Although mostly private now, many of these airlines were once state owned, and some still have not insignificant government stakeholdings. Appendices 1. These risks may include: Shifts in consumer demand and preferences. Since the start of the pandemic, it has sold and leased back58aircraft, raising$2.1 billion. EasyJet also operates a flat management structure, which may lack a formal discipline that is needed as the organisation grows. What happens to EasyJet, which had been one of the strongest players in the airline industry before COVID-19, could presage the entire sectors fate: If EasyJet cant come back strong, what airline can? Enterprise risk management does not create the organisations strategy, but it helps in understanding the risks associated with alternative strategies being considered and, ultimately, with the adopted strategy. The management of the element of working capital. At the same time, it was wooing at least some business travelers by differentiating itself from no-frills rivals like Ryanair and Wizz, offering some perks and serving first-tier airports. Enabling risk management through a The sales process is efficient, as EasyJet sells directly to customers, instead of using external sales teams. Ties are banned except for pilots! Finally, opportunities may also exist in the area of innovation and alliances, how about a joint venture scheme with Ryanair to maintain and enforce the low cost competitive advantage. EasyJet also drew down the entirety of its existing revolving credit facilityraising $500 million in cash. Potential negative outcomes include bad publicity and a quick order processing). The increase growth of world tourism will offer opportunities in terms of undertaking joint venture with local/foreign travel companies; hence, Going places and Thomas Cooke are already providing such services to growing number of holidaymakers each year. With Ryanair maintaining high margins despite reducing yields through strict cost management. Advantages: A bigger market share New target market The barriers to enter are higher Predatory pricing Strategic Issues facing the airline Industry 8.2. easyJets future 9. Out on the tarmac, a short distance from the simulators, almost a dozen real EasyJet A320s sit idle. However the sustainability of competitive advantages may be problematic: as rivals copy successful strategies, EasyJet will loose its initial advantages. Each node of the supply chainsuppliers, plants, warehouses, and transport routesis then assessed in detail (Exhibit 1). In the May showdown vote, the disgruntled founders effort was roundly defeated, with 99% of the shares not held by the entrepreneur and his family casting ballots against removingthe directors. The threats are in terms of fines and rise in cost of raw materials. Kotze compared Lundgren to his rival CEO, Michael OLeary, who runs Ryanair and has a reputation for being merciless at containing expenses and being generally combative. And at least one key holiday localeTurkeywound up on the red list, meaning those traveling there would have to quarantine in a hotel for 10 days. Risk 2: Geopolitical instability. Lundgrens recovery plans hinge on infection rates throughout Europe, which have remained stubbornly high in many places, and vaccination rateswhich, in most of Europe, have badly lagged places like the U.S., U.K., and Israel. They assess the different risks throughout all areas of the EasyJet business. Healthcare workers were exposed to this highly infectious virus during the pandemic and suffered several social and psychological consequences, such as anxiety, psychological distress, and burnout. This results in a very strong competitive rivalry in the industry. Facebook: quarterly number of MAU (monthly active users) worldwide 2008-2022, Quarterly smartphone market share worldwide by vendor 2009-2022, Number of apps available in leading app stores Q3 2022. The federal government recently made cloud-adoption a central tenet of its IT modernization strategy.An organization that adopts cloud technologies and/or chooses cloud service providers (CSP)s and services or applications without Decisions must be made on the trade-offs inherent in development of a strategy. Previously it used telesales and now sales are through e-commerce web site. As funding from operations are clearly a major contributor to value creation. This results in high levels of asset utilisation and reduced unit costs. Furthermore, a lifetime history of D )Compared to some of its low-cost rivals, EasyJet also owned more of its planes outright. Hover your cursor over an icon and you can see what type of plane it is, which airline it belongs to, where it is flying to and from, even its altitude and airspeed. In addition to that, EasyJet has been offering no in-flight meals, no in flight movies. And, finally threats of any takeover bids from national airlines. Do you have a 2:1 degree or higher? Here you can choose which regional hub you wish to view, providing you with the most relevant information we have for your specific region. Get the best reports to understand your industry. The UKs second-largest union has slammed easyJet flight cancellations in a scathing email obtained by Euronews. LEGAL The European deregulation of the commercial aviation provided both major strategic threats and opportunities, the national mainstream airlines faced severe price competition from discount carriers. It has been streamlines by using e-commerce, firstly by telesales and now through the Internet. That delay exposed EasyJet to greater risk of both hefty fines from Britains chief data protection regulator and class-action lawsuits from customers. These are set out below: easyJet has a strong network of leading number one and number two positions in primary airports, which has proven to be amongst the highest yielding in the market. Healthcare workers were exposed to this highly infectious virus during the pandemic and suffered several social and psychological consequences, such as anxiety, psychological distress, and burnout. on its competitive advantages - an unparalleled network and market positions, efficient low cost model, well-known brand and strong balance sheet - positioning easyJet to deliver sustainable and disciplined growth and returns for shareholders. Table 1 shows that EasyJets sales has increase year on year since 1998, with profit and gross margins also experiencing a positive trends. easyJet has a cost advantage over its major competitors on the primary network that it operates. In a vast hangar on the outskirts of Gatwick Airport, one of EasyJets big hubs, sit a row of five space-age pods, painted in EasyJets trademark orange-and-white colors. Technological Factors. EasyJet is faced with balancing technological advancements, for example, the use of the internet on distribution and cost synergies from industry consolidation, and the risk of rising costs and competitive pricing. Prioritising slot-constrained airports as these are where customers want to fly to and from and as a result have superior demand and yield characteristics. The business has also enjoyed an increase turnover and trading profits resulting in continuous substantial growth in underlying profitability over the last 7 years (see table 1). Paperless operation, the management and administration of the company are undertaken on IT systems, which are accessed through secure servers; provide flexibility in the running of the airline. Now, more than a year later, with the pandemic still raging, and with many countries, including the U.K., having toughened travel restrictions in response to new strains of the virus, the airline industrys hopes for an early recovery are descending faster than an Airbus A320 on final approach to EasyJets home base at Luton Airport. Over time, a brand may experience enough negative interactions that its reputation is placed into a vulnerable position. Directly accessible data for 170 industries from 50 countries and over 1 million facts: Get quick analyses with our professional research service. All rights reserved. The companys Online booking facility in October 1999 aided Internet sales to pass the one million mark. ENVIRONMENTAL The energy sources used, namely oil has vast ecological/environmental implications. From simple essay plans, through to full dissertations, you can guarantee we have a service perfectly matched to your needs. This analysis will highlight the fundamental changes that the airline industry is undergoing, especially; in defence to the turbulent environment it faces from exogenous forces (terrorism, oil prices, SARS etc) and endogenous forces. Hopes for an early summer 2020 recovery were dashed when the U.K. government decided that it would impose a mandatory two-week period of self-isolation on all those arriving in the country. Cost advantages might be achieved because of EasyJets efficient use of airports. Value chain analysis can provide important insights into what management need to focus on strategically. Ryanair had even tried to capitalize on this connection between vaccinations and travel in its marketing, rolling out at jab and go advertising slogan in January, which it had to withdraw after objections from Britains Advertising Standards Authority that it was not promoting responsible behavior. Significant investment in assets and managing financing costs. The strategy risks serious disruptions to their customer service processes as employee morale drops at the same time that wait times for customers increase. EasyJet also has a strong cash flow position primarily from its policy to retain profits and reinvest it back to the business. Currently, around 12% of boarding passes issued by easyJet are mobile passes, although this can be as high as 50% for some flights. 3. Offers may be subject to change without notice. As the holidays business grows in scale, easyJet plans to make targeted investments to strengthen the business. Study for free with our range of university lectures! (Lundgren declined to comment for this article.). The second is the threats from substitutes, rail travel v air travel, the growing demand in Eurostar and cruses. Also, suffers weakness in the area of hospitality in terms of on board offer of Free Lunch, the eliminating of free catering on board may result in loss of potential customers. 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