In this report, the EasyJet airline is chosen, which runs a low cost carrier model that has its primary headquarters in the Luton, UK. The marketing strategy of the EasyJet is based on “making the flying as affordable as the pair of the jeans” (Easyjet.com, 2017). This airline runs almost in the 820 routes in the domestic and more than 30 international countries. The airline is preparing to shift its head quarters from the UK to EU, after the Brexit vote. This report will focus on the benefits the organization will face when their head quarter is shifted to the proposed Alexandria city of the Romania country in the EU. A situational analysis that includes the Micro and the Macro environment of the industry will be further explained with critical evaluation.
The PESTLE analysis of the marketing plan factors of the EasyJet airline is primarily based on the external environmental factors.
Political
Romania is considered as an independent republic with different judicial and executive powers that are based on the independency of the state and is considered as having a low risk in terms of politics as suggested by different chiefs. Hence, the shift of the headquarters in Romania can be considered profitable to the EasyJet. There is a major threat of the Middle East on the EasyJet organization and is considered as a political reason. The Government considers the schemes of the Air Miles as a benefit that is taxable and another factor that maybe highlighted is to compete with the BA on these grounds (Pang 2016). An enlargement into the EU especially when it is Romania will provide a huge access to the viable markets. The political framework of Romania is a semi presidential democratic republic that will help in enhancing the market of the EasyJet airline.
Economic
The unexpected GDP growth is considered as the growth that might result in bringing a strong base effect in terms of the collection of the tax and its generation through the electrical powers. The main indicator of the macroeconomics needs to be registered in case of the positive evolution that might have an impact on the market capital. These can be considered as the major economical environment in Romania that can ensure to slightly affect the EasyJet airlines. The Economic factor of the EasyJet depends likely on the various costs like the fuel and on some of the restrictions that are based on the environment like the insurance and the security system that often reflects the terrorism risk. Even if the recession period strikes, the travelers will get some time to look into the eye of the travelling expense (Spreen 2016). Hence, Romania is a perfect choice for the EasyJet to choice its headquarters. The single currency system that has been introduced in Europe will help in enhancing the business of the airline into a more integrated one. Romania is a perfect place as it is no more suffering from an economic slowdown and is slowly making their growth rates improved (Shaw 2016).
Social
The Romanians are considered to dominate the ethical composition and has a lack in the diversity in the ethical composition that often restricts the movement of the Roman people to their community. This might be a helpful reason to make the EasyJet shift headquarter to EU then it becomes easier for them to refresh the minds of people by making them avail the tickets for destinational tours to different parts at a much cheaper rate. There is rapid change in the demographic and the social system in the life of the people. They people tend to travel more in the holidays around the world and the emergence of the EasyJet as a low cost airline has helped in fostering the changes in the tourism industry. Romania is a beautiful place and Alexandria is considered as one of the famous tourist spot in EU, hence setting up an industry there would ultimately benefit the EasyJet airline. A cultural change is also an important factor that is regarded as a prime source in Europe that reflects the changes in the travelling industry of the EasyJet.
Technological
The Romans were lacking behind in the technological skills earlier but now they have coped up with the pace of the world and hence, have improved even in their finances. The EasyJet have talented technologists that might help in their operational development in the company. The internet enables the EasyJet to operate in a new way that helps in the operational growth of the company. The EasyJet customers in the Romania can buy tickets online and through internet banking that is considered as one of the important source for the ticket sale (Whyte and Lohmann 2016). Europe is considered as one of the biggest internet air-ticketing retailer in the world. EasyJet has to keep track of the various technological developments that were present in the UK headquarters and to apply those in the fields of various e commerce and manufacturing industries so that it can gain an advantage in the fields of competition with the various other aviation industries in Romania.
Legal/ Legislation
The legislative initiatives belong to the Deputies and the powers of the parliamentary people in the nation. Romania is a country that follows strictly the rules and the regulations and the penalty for disobeying the rules can be very harsh upon the wrong doers. Any failure of the rules and the regulations followed may make EasyJet in a serious trouble. There are various laws regarding the nature of the airport and their authorities. The legal factors comprise of the various take off or the landing charges in an airport. In Romania, there will be no lack of the landing and takeoff slots; hence, it might become easy in the airports for the customers.
Environmental
There is a need to obey the environmental laws and take good care to the environment of the country. Global warming is one of the major concerns in case of the environment in the aviation industry. EasyJet needs to follow all the regulations regarding the environment in the Romania country. One of the greatest purposes that might be beneficial in the shift to the Romania, EU will be to cap the emissions. The EasyJet should always keep an eye on the Emission Trading Scheme or the ETS that could damage the ability of the industry in the world of competency in the international market (Thomas and Housden 2017).
PESTLE Analysis
(Created by author)
A competitive analysis with the help of the Porter`s Five theory can be made based on the various airline industries.
Threat of Substitution
One of the greatest threats is the substitution that is minimal in case of the airlines from various transport modes like the cars and the trains. The time to travel in most of the transport modes is far very high than the airlines but it cannot be denied that the cost of the airfares is much more than that of the land route. The slots for takeoff and landing are difficult, which can be solved at the earliest possible time.
Supplier power
The power of the suppliers is another threat when considering the Porter’s five forces. The price of the oil that is used in the airline industry is related directly with the fuel cost hence, it will not be easy for the EasyJet Company as an individual to alter this power.
Competitive rivalry
There are major commercial planes like the Boeing and the Airbus that facilitates the passengers with various commercial planes whereas the EasyJet deals with only one type of aircraft. There is a need for the EasyJet to launch with the support of the various mechanics in order to sustain in the market and in the demand of the Passengers.
Power of the Buyers
The power of the buyers in an airline industry is much more on the low cost airlines than that of the high. Therefore, in that case, the EasyJet acts as a beneficial airline. In order to sustain to the wants of the customers, the airline must provide discounts in the fare or may redeem fares in some seasonal periods. This will allow sustaining in the market as well as gain loyal customers throughout the year. Ensuring the licenses of the airlines must be compliance with the requirements of the EU legislation that also includes the insurances, the liability and the financial resources.
Competitive rivalry
There is a need to cut the rivalry between the other competitive airlines and maintain a healthy competitive relation that may be useful to build better relations and competitions. Romania is a beautiful place for building the headquarters as it is considered as the major tourist spot in EU (Schlegelmilch 2016).
Porters Five Forces
(Created by author)
Porter’s generic strategy
(created by author)
In the Porter Competitive Generic Strategy are usually based on the two different styles that are combined with different activities in the EasyJet organization that puts forward the different scopes for achievement. In order to achieve those three average performances are considered likely the cost leadership, focus and differentiation.
The VRIO framework is considered as a tool that is required in order to analyze the capabilities and the resources in a sustainable competitive field that has few advantages (Jarach 2017).
Value: Exploiting the various opportunities and neutralizing the threats.
Rarely: Possessed by either one or few industries
Inimitability: Expensive and difficult to find substitutes
Organization: Ability of the organization to exploit the various capabilities
|
Capabilities |
Valuable |
Rare |
Imitate |
Organization |
|
Strong Branding |
YES |
YES |
YES |
YES |
|
Value proposition |
YES |
YES |
NO |
YES |
|
Model of low cost |
YES |
YES |
NO |
YES |
|
Popular Network |
YES |
NO |
NO |
YES |
Table 1: VRIO Framework
(Source: Schlegelmilch 2016 )
There is no doubt that the EasyJet airline has a comparatively strong branding than any other airlines in the EU. In some of the countries, EasyJet is considered as the number one choice for the passengers when it comes to travelling in air. The branding that other companies can easily imitate EasyJet follows hence no secured way is possible for the branding actions (Geiger 2016).
The propositional value of the EasyJet is comparatively low in case of the prices that is considered valuable. The travelers seek for convenience in case of the air travels. The airline has become more conscious about its cost over the last few years. The attractive proposition of the value can be considered rare in Romania EU and is easy for the cost carriers to focus on the initiated convenience and services (Jackson 2016).
Low cost model is definitely valuable due to the price elasticity in case of the air travels. The rarity of these models can be considered, since hardly there are low cost serving airlines in the international market. Hardly, these models can be imitated by other airlines so in that case it is a no. The low cost models bring a competitive advantage that is temporary in case of its expansions.
The popular network of the EasyJet, have recently been shifted from the UK headquarters to Romania in EU, that will ultimately benefit the travelers as there were less low cost flights that used to fly from this destination. A tough competition will take place between the various low cost airlines specially that from the Ryan air (Carnegie 2017).
The SWOT analysis is based on the various strengths and weakness that focus on the internal analysis of the EasyJet and the opportunities and threats focus on the Romania of the EU.
Strengths
The strength analysis focuses on the images that have differentiation on the brands and the price and there is a need for the EasyJet to become financially successful so that it can include various opportunities that may be flexible and innovative for the benefit of the organization. The e business of the airline organization is quite strong that might help in the benefit of the business (De Neufville 2016). The part of the consortium has awarded UK to run in case of the air traffic control systems.
Weakness
The Weakness of the EasyJet lies in the customer retention policy that has little scope outside the UK. Hence, choosing EU as the next headquarters would be of little risk. Having a lack of the business focus, service and the flexibility will make the cost of the models low amongst its business travelers of the low cost model airlines (de Oliveira Cabral 2016). There are drivers of growth that needs to focus primarily on the convenience and the price in order to reach their natural limits from the differentiation of the difficulty remains. The own success of the EasyJet helps the company to recruit and train the staffs at a fast pace.
Opportunities (External)
The external analysis of the opportunities of the EasyJet that will face when the head quarter is shifted from the UK to Romania EU will revolve around the potential growths for the last few years. The recession period is quite favorable for both the business and people that is of more cost consciousness (Fedosova 2016). On an average, the full service airlines will withdraw from the regional markets and will focus on the long haul routes that are considered more profitable in the business. So in this case the EasyJet will somewhat follow these techniques in its shift of the headquarters from the UK to EU that will also benefit in the low cost budget systems. The short break travels of the EasyJet in the EU market will help in its rapid growth to the UK travel market. This will eventually reduce the prices of the aircrafts.
Threats
The external threats to the shift of the headquarters from the UK to EU are scarce in terms of the expansion. Always a competition needs to be intensified when in a saturated market level of competition. There are also chances of having other shortage of options as well as resources. There are scopes of greater difficulties like high in the incentives demand from the communities that are otherwise very low in receiving the fees (Badicu 2016). The companies need to cut down the economic downturns that may have several measures in the security level and that are how the substitutes of the video conferencing are held.
The decision of relocating the airport to EU will benefit the EasyJet airline. Romania is one of the best holiday destination in EU, hence shifting the headquarters to such a beautiful place might help in the enhancing the profit level (Carnegie 2017). The terror attack in Romania is a quite thoughtful decision and as per the intelligence analysis, the region is highly at a risk. Effectiveness revolves around the anti corruption measures in their judicial system apart from these there is hardly any critical view of the country. Some experts stated that the airport might not be able to provide the different facilities regarding the parking lot in the arrival terminals. Some also contradicted this thought by stating that the airport will be able to provide a parking lot but that will be very small and might be a paid parking lot. There may be some problem regarding the transportation accommodation from the airport that might get resolved with the help of the State Government. These are considered some of the critical reviews on the relocation of the airport to the EU state. UK had all the facilities in the airport and there was hardly any problem in there. If the headquarters of the EasyJet is shifted to Romania that will highly be beneficial as the commercial traffic is quite high.
Romania is a beautiful place and attracts tourist all the year round. Their economy is very dynamic in the Central and Eastern Europe. Hence, investing in Romania and making it headquarter of EU can be considered as one of the fruitful result of the EasyJet airline (Cattaneo et al 2016). The attacks that have been explained above and if they are sorted then nothing will be like Romania. The mission of the EasyJet airline is to provide with value goods and services to the travelers that will make their journey smoother (Badicu 2016).
The marketing mix consists of the four P’s that includes the Price, Place/ Distribution, Product and Promotion.
Price
One of the greatest and the prime key element of the EasyJet brand is its low price of the fare; hence, it also uses the differential pricing techniques to manage its customer’s desires. The shift to the Romania city may enhance the organization with its profits. (COUASME and GURGEY 2016). These can be considered as the many techniques included for the pricing as well and in the peak travelling seasons certain amount of offers must be provided and those who book in advance the tickets so that they become little reasonable. Benefits should be provided to the travelers that books on online.
Place/ Distribution
The places that have been selected is of immense diversity and there are many tourist spots in Romania so the shift of the headquarters to the Romania can be considered profitable. Romania has many visiting places like the Peles Castle, Bran Castle and many more and the Alexandria cannot be avoided.
Product
The product of the EasyJet is only the air services and consist no frills. Almost maximum bookings are done through internet and less is done through the telephonic booking services in case of the EasyJet (Baines et al. 2017).
Promotion
The promotion of the EasyJet is done in a very attractive way and hence it remains one of the cheapest low cost airlines. The advocates in the internal marketing consider it as a creative in house work.
The decision of relocating the headquarters from UK to EU will be easy for the EasyJet to maintain its cost efficiency (Budd and Ison 2016). Hence, increasing the maintenance powers and the liability for the customers with various negotiable positions is required. The mission of the company of the EasyJet is to provide safety and goods that are valuable to their customers. As per the external analysis, the EasyJet needs to accomplish the objectives and then need to implement the vision as the government of the Romania need to develop towards the implementation and the objectives in the competitive environment of the nature of the airline sector. The headquarters of the EasyJet has been shifted to Romania in EU that will be benefitted in their relocation (Budd 2016). In Romania, the EasyJet has been considered as a beneficial program to the presence of the low cost airlines.
Conclusion
From the above report, it can be deduced that there will be much benefits if the EasyJet airline shifts its headquarters from the UK to the Romania of EU. The SWOT analysis became very helpful to understand the external and the internal benefits of the airline with other airlines in the international market. The benefits of the PESTEL analysis have been vividly elaborated in the above portions that will enhance ones knowledge about the different airlines as well as the EasyJet airline. The PESTLE analysis has been briefly explained with the help of a chart format. The Porters Five forces have also been elaborately explained with the help of a diagram that will help to understand the different forces of the competitiveness amongst the other airlines. The end conclusion can be made that the Romania can be considered as the best place for the shift of the headquarters in an EU city.
References
Badicu, G.D., 2016. Low-Cost Aerial Transport in Europe. Valahian Journal of Economic Studies, 7(2), pp.31-40.
Baines, P., Fill, C., Rosengren, S. and Antonetti, P., 2017. Fundamentals of Marketing. Oxford University Press.
Budd, L. and Ison, S. eds., 2016. Air Transport Management: An International Perspective. Taylor & Francis.
Budd, L., 2016. Airlines, information communication technology and social media. Air Transport Management: An International Perspective, p.265.
Carnegie, D., 2017. The marketing issue. Marketing in the Boardroom: Winning the Hearts and Minds of the Board, p.5.
Cattaneo, M., Malighetti, P., Morlotti, C. and Redondi, R., 2016. Quantity price discrimination in the air transport industry: The easyJet case. Journal of Air Transport Management, 54, pp.1-8.
COUASME, M. and GURGEY, J., 2016. Airlines experiential marketing: gaining and retaining customers: Case studies of British Airways, SAS, Air France, Easy jet and KLM.
De Neufville, R., 2016. Airport systems planning and design. Air Transport Management: An International Perspective, p.61.
de Oliveira Cabral, J.E., 2016, April. Market-related Key Influences on the Early and Rapid Internationalization in the Airline Industry: The easyJet Case. In GAI International Academic Conferences Proceedings (p. 33).
Easyjet.com. (2017). Home | easyJet.com. [online] Available at: https://www.easyjet.com/en/ [Accessed 17 Jul. 2017].
Fedosova, A., 2016. Comparison between Low-cost and Traditional Airlines. Case study: easyJet and British Airways.
Jackson, J., 2016. Airline finance. Air Transport Management: An International Perspective, p.169.
Jarach, D., 2017. Airport marketing: Strategies to cope with the new millennium environment. Routledge.
Pang, K., 2016. A changing role. MHD Supply Chain Solutions, 46(5), p.62.
Schlegelmilch, B.B., 2016. Assessing Global Marketing Opportunities. In Global Marketing Strategy (pp. 21-41). Springer International Publishing.
Schlegelmilch, B.B., 2016. Global marketing strategy: an executive digest. Springer.
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Spreen, W.E., 2016. Marketing in the international aerospace industry. Routledge.
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