Like all airlines, it instituted new procedures: increased cleaning, mandatory masks for passengers and crew, and no meal service. It renegotiated contracts with ground handling firms at several airports helping to lower costs. 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. Taken together, those restrictions mean that summer 2021 is looking increasingly in doubt. Savings made from e-commerce is another source of value creation. The threats are in terms of alternative holidays Disneyland Paris via Eurostar (Euro tunnel) and P&O cruise. In this way, it has positioned itself as a more direct competitor to Europes traditional airlines.Lundgren says he wants EasyJet to be the No. EasyJet also have a reputation for paying low wages in line with its low cost strategy. Web1) Economic Risks. After implementation, these are areas still must be monitored by leadership to ensure the plan's goals are being achieved. Ryanair continues to lower costs, which enables it to persist lowering fares aggressively. 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. EasyJet cost efficiency is achieved in a variety of way as shown in the following diagram: The success of low-fare (cost) strategy is primarily dependent on the maintenance of a low cost base. Procurement and firm infrastructure as a support activity does not add much extra value. This involves EasyJet retaining funds from operations; hence, a healthy Balance sheet in terms of retained profits. Competitive pressure. In terms of analysis, EasyJets distribution activities are important in terms of e-commerce, as EasyJet like to consider itself as the webs favourite airline. Due to varying update cycles, statistics can display more up-to-date In terms of strategy, many factors are outside the control of the company, such as use of high quality components and low defect rates for its aircrafts. This analysis outlines for EasyJets management how individual activities may be altered to reduce costs of operation or improve the value offered to customers. With Ryanair maintaining high margins despite reducing yields through strict cost management. Hes running the business to make it as lean as possible, and you cant be a nice guy and do that, Kotze says. EasyJet raised $1.5 billion by selling seven-year bonds, with a 1.875% annual interest rate. If easyJet were to raise money from shareholders, he risks falling below this figure a level at which he can no longer unilaterally block special resolutions. Within weeks of the vote, Findlay, EasyJets CFO, announced his intention to step down, and analysts speculated that the stress of Haji-Ioannous campaign, on top of that caused by the pandemic, had taken a toll. Funding strategies developments is clearly important in that the nature of funding must be appropriate and compliments the low cost strategy of EasyJet, by ensuring that interest costs are low. SOCIAL changes in consumer taste and lifestyle represent both opportunities and threats for the industry. This is critical for EasyJet having analysed the competitive rivalry position in the industry. A PESTEL analysis of the industry will examine the local, national and global influences of political, economic, social and technological factors to understand opportunities and threats well. They have focused on expanding into new markets in Eastern Europe. The value chain analysis will show the total value added by the airline industry and EasyJet. 1 or No. The price of EasyJets tickets various as a function of the number of seats remaining, the time until the flight, and historical trends. Copyright 2003 - 2023 - UKEssays is a trading name of Business Bliss Consultants FZE, a company registered in United Arab Emirates. This will require a mindset where innovation (in cost reduction) is regarded as essential to survival. As Internet transactions have a lower cost associated with it EasyJet encourages its customers to book on-line by offering them a discount for on-line ticket reservations. This will show how its critically important for EasyJet that strategic alliance, size and technological innovation have on its profitability. It is about a man who faces challenge after challenge but he keeps his mood and rises up again, Lundgren told the newspaper. Easy Jet: Company Operation Strategy : Historical-Hall-2840 Statista assumes no On the other hand, risks which produce liability for the information given being complete or correct. Front and center was the existential risk of the coronavirus. Still, it wasnt spared from the industrys general carnage. It takes up to last extend in the time. Lundgren says he likes the site because it keeps airlines honest: When customers can see that their inbound aircraft hasnt even taken off from its previous destination yet, theres no point in feeding them the bad news with an eyedropper, as airlines traditionally had done, gradually announcing slightly longer delays. An important part of easyJets strategy is to operate a modern fleet and based on the current business model, Finally the report will examine the extent to which EasyJets current no frills strategy is the appropriate strategic fit to its organisation both in terms of resource capability and business environment. Budget airlines that fly point-to-point, such as EasyJet, can easily stimulate their demand by running price promotions and advertising and then shifting flight schedules to cover those new bookings. To use the Matrix, plot your options into the appropriate quadrant. Find your information in our database containing over 20,000 reports, largest airline based in the United Kingdom. WebOften, this takes place in four major steps: Figure out how much money you need to retire. Strategies are largely determined by the extent to which they deliver best value to both customers in terms of being competitiveness in the marketplace (leading low cost airline) and also to provide value to shareholders. Consumers are optimistic and the travel and tourism industry are now booming again. The greatest dangers, however, may be the market leaders need to manage its evolving 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. At the end of March 2020, EasyJet grounded its entire fleet. However, if EasyJet could significantly differentiate its service over its competitors then it could obtain higher prices. 6. Risk 2: Geopolitical instability. This level of disruption and deterioration of the operation cannot continue," the email reads. The primary outcomes were anxiety (GAD-7), depression (PHQ-9), risk perception towards COVID-19, interprofessional teamwork attitude, and coping strategies during the Coronavirus disease-19 pandemic. The web-based questionnaire was distributed to Egyptian healthcare workers from the 20th of April 2020 to the 20th of May 2020. The Essay Writing ExpertsUS Essay Experts. All work is written to order. A typical approach for risk identification is to map out and assess the value chains of all major products. It moved aircraft maintenance at three of its U.K. airports, which had been contracted out, back in-house. Findlay said only that after almost six years with EasyJet, it will be the right time to pass the financial reins to someone who will help take EasyJet into its next chapter, and Lundgren said he was sorry to see [Findlay] leave.. We're here to answer any questions you have about our services. Here you can choose which regional hub you wish to view, providing you with the most relevant information we have for your specific region. Do you have a 2:1 degree or higher? This report will provide a detailed analysis of EasyJets current corporate appraisal or SWOT analysis. EasyJet through its use of an overall cost leadership strategy can use internet-based technologies to reduce value chain costs in a variety of ways: On-line bidding and order processing to eliminate the need for sales calls and decrease sales force expense. From June 15, when EasyJet resumed flying, through September 2020, it carried 9.5 million passengers, compared to 37.1 million in the same period the year before. *You can also browse our support articles here >. Failure to acquire adequate funding for your business can damage the chances of your business succeeding. Many of those airlines are limping along on government funding they might never be able to repay, says Leah Ryan, managing director of Alton Aviation, a leading industry consultant. To accomplish that, Lundgren has taken drastic steps. 3. EasyJet announced it had lost more than $1 billion in the 12 months through September 2020. In terms of competitive advantage, the internet offers overall cost leaders new abilities to reduce costs in primary activities such as marketing (i.e. They assess the different risks throughout all areas of the EasyJet business. The airline couldnt simply abandon it without jeopardizing any chance of a quick recovery when the crisis ended.Lundgren also thought the contract made long-term strategic sense. Legal and regulatory change. Data security and regulatory risk Data security and regulatory risk can be associated with loss, leakage, or unavailability of data. This affects value creation as follows: Table 1: Sales and Trading Profit of EasyJet. From simple essay plans, through to full dissertations, you can guarantee we have a service perfectly matched to your needs. This eliminates the need to any commissions to external sales agency. Feeling powerless is one of the worst feelings, not just in business.. EasyJet currently has two suppliers, Boeing and Airbus. These risks may include: Shifts in consumer demand and preferences. Therefore, it is vital for EasyJet to have a thorough comprehension of their costs and cost drivers. WebIts evident that EasyJet takes few risks and applies firm business principles while carefully exploring the market. easyJet seek to strengthen their position in key markets as the competitive landscape evolves. The first is the threat posed by new entrants, as with the European deregulation of commercial aviation and the emergent of low cost carriers. 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. This has lead to EasyJet customers enjoying Ticketless travel this reduces the cost of issuing, distribution, processing and reconciling tickets. EasyJet also has a strong cash flow position primarily from its policy to retain profits and reinvest it back to the business. Worse, the company had discovered the hack back in January but hadnt notified people whose credit card details had been accessed until April, and was only now letting other customers know. But the strategy also burdens EasyJet with higher costs as it tries to recover from the pandemic. Having fought off Haji-Ioannou, Lundgren and EasyJets C-suite faced other foes they couldnt control. WebOften, this takes place in four major steps: Figure out how much money you need to retire. The findings in this In 2020, it transported a They can easily shift capacity from Spain to Greece, for instance, to deal with new travel restrictions, he says. EasyJets revenues in 2019 were $8.9 billion, on which it made$600 millionin profit. It announced plans to gradually ramp up to 75% of its normal capacity by August. WebThere is one main reason which influences these economic factors is the recession in the Easy jet. To what extent does EasyJets concentration on It is also anticipated that Ryanair will continue to lower costs, which will allow it to continue to engage in a price war, by lowering fares aggressively. Disappointing your customers. Significant investment in assets and managing financing costs. Implementing this strategy successfully depends on EasyJets ability to deliver enhanced benefits to customers over its competitors together with low prices. He also likes the site because it allows EasyJet to easily gather competitive intelligence about the performance of rival airlines. The strategy has four strategic priorities that will build on easyJets structural advantages in the European aviation market, helping easyJet move closer towards its destination of being Europes most loved airline, winning for customers, shareholders and our people. 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what are the risks associated with easyjet's strategy