The purpose of this task is to provide a brief overview about the company Easyjet Plc. The task one of this report tells the business strategy which Easyjet used to occupy the maximum market share and attain success. Further the second part of the report explains the global challenges faced by the company in the external market and its impact on the business activities and growth of Easyjet. Further details about the task are discussed below:
Easyjet is a British airline providing low cost carrier services in the international market. The company is headquartered in Luton, London and as founded in the year 1995 by Stelios Haji Ioannou. The company provides its airlines services in total 133 destinations within Europe from 17 UK department points (EasyJet Plc 2017). Being a LCC, Easyjet faced many issues in developing their business practices in the international market; also the company faced many competitions as well. Further the business approach used by Easyjet is discussed below:
Before defining any strategy for the business to achieve success, the business initially needs to define the objectives on the basis of which they have to initiate and implement the activities accordingly so as to achieve success. Thus, considering to that, the objectives of the Easyjet Company is to provide low fares and high frequency between major airports of Europe. Also the company aimed to provide safe traveling experience to the customer at low costs to establish a long lasting relationship (de Grosbois 2016). With context to that the company originated their business strategy to which focused on developing a strong position in the European market by increasing the frequency of works.
The strategy of Easyjet included following attributes which helped the company to succeed in the target market.
The operational cost performance of Easyjet gave better level of satisfaction to customers. Decrease in disruptive cost helped the company to provide services at affordable prices as compared to other companies without bearing losses. The company initiated a programme namely Gatwick North Terminal programme which drove operational balance and customer benefits as well. This programme focused on reducing the technical issues by using enhanced maintenance and improving the disruption management by using efficient technology (Zolfagharifard 2013).
So, with the use of Budget price business strategy EasyJet targeted entered in the international market and not only gained success in numeric figures but also maintained an identified goodwill as well.
Being a low cost carrier company with no frills was not easy for Easyjet to survive in the international market. As it is one of the busiest airlines in Europe, the company needs to maintain its pace in initiating business activities. But one of the biggest issues faced by the company was the problem of increasing oil prices in the international market. The supply reached to $ 130 per barrel, only the companies working large scale were efficient to survive, other companies suffered heavy losses (Harrington, et. al., 2014). EasyJet being holding their business on large scale effectively survived in the market, but somehow the company faced decrease in their profits. Increase in fuel price is one of the most essential issues for a LCC company, as customers use their services because it is affordable and convenient for them. But if the company will increase the price to be in profit making zone then it will lose its effectiveness in the market and customer will not make repetition in sales. This problem affected the growth of the coming making it slow (Economic Environment and Business 2017).
Another global issue faced b Easyjet is environmental issues. As it is noticed that there is no predicting of the environmental calamities, it can happen anywhere anytime. Concerning to that issue, the company faced the danger many time due to which they cancelled many flights resulting in bearing a huge loss in the revenue. During the recession period a huge volcanic ash cloud occurred due to which EasyJet cancelled its flights and suffered from losses. With regards to that the company used thee forecasting method to analyze the calamities and it working safety in the external environment so as to protect the lives of customers and employees working with them (Button 2008).
Consumer confidence is also one of the global issues faced by the company EasyJet. The company needs to ensure that the services provided by them hold good values and standards with them. People e a LCC company as a cheap company which does not provide adequate services in the target market, due to this assumption, the brand image of the company destroys. Resulting to which the company needs to change the mindset of the customers present in the target market by showing their business values in the services which they provide then only the customers will make repeated sales (Aragon-Correa, Martin-Tapia, and de la Torre-Ruiz 2015).
In the 2016, the company faces the major issue due to which they attracted a huge loss for the company. Gatwick Airport was shut down after a tyre was busted during takeoff. This resulted in a huge chaos between the customers and airlines companies as well. Easyjet was forced to shut down their current flights due to which the company faced heavy losses. The company cancelled 3,268 flights in total due to which resulted in decreasing the efficiency of the company. Comparing from 2015, the company delivered 77% on time services to the customers which was 3% less than that of 2015. Resulting o which the company faced heavy losses and the customers also feared to travel with company. But they gained focused on improving the figures for which Easyjet used innovative technology to reduce technical issues and improve disruptive innovation (Altinay, Paraskevas, and Jang 2015).
Conclusion
Thus, in the limelight of above mentioned events, the fact that shall be noted is that the business model of Easyjet adequately supported them to work as a no-frills low cost carrier company. Further the company faced many global issues as well which they properly taken care of by the efficient management team. Thus, in this way the company aced their current target market and earned profits.
References
Altinay, L., Paraskevas, A. and Jang, S.S., 2015. Planning research in hospitality and tourism. Routledge.
Aragon-Correa, J.A., Martin-Tapia, I. and de la Torre-Ruiz, J., 2015. Sustainability issues and hospitality and tourism firms’ strategies: Analytical review and future directions. International Journal of Contemporary Hospitality Management, 27(3), pp.498-522.
Aragon-Correa, J.A., Martin-Tapia, I. and de la Torre-Ruiz, J., 2015. Sustainability issues and hospitality and tourism firms’ strategies: Analytical review and future directions. International Journal of Contemporary Hospitality Management, 27(3), pp.498-522.
Bastida, U. and Huan, T.C., 2014. Performance evaluation of tourism websites’ information quality of four global destination brands: Beijing, Hong Kong, Shanghai, and Taipei. Journal of Business Research, 67(2), pp.167-170.
Button, K., 2008. The Impacts of Globalization on International Air Transport Activity. OECD. Pp: 5-31.
de Grosbois, D., 2016. Corporate social responsibility reporting in the cruise tourism industry: A performance evaluation using a new institutional theory based model. Journal of Sustainable Tourism, 24(2), pp.245-269.
EasyJet Plc, 2017. Strategy. Viewed on November 29, 2017 from <https://corporate.easyjet.com/about/strategy>
EasyJet Plc. 2016. Investing in our strengths. Viewed on November 29, 2017 from < https://corporate.easyjet.com/~/media/Files/E/Easyjet/pdf/investors/result-center-investor/annual-report-2016.pdf>
Economic Environment and Business, 2017. The Challenges Faced by EasyJet. Viewed on November 29, 2017 from <https://sites.google.com/site/economicenvironmentandbusiness/the-challenges-faced-by-easyjet>
Harrington, R., K. Chathoth, P., Ottenbacher, M. and Altinay, L., 2014. Strategic management research in hospitality and tourism: past, present and future. International Journal of Contemporary Hospitality Management, 26(5), pp.778-808.
Sentence, A., 2016. Connectivity and growth The Brexit issue. PWC. Pp 1-44
Zolfagharifard, E., 2013. Finally, a sensor that can detect ash clouds! Easyjet tests ‘AVOID’ system that will allow pilots to fly during volcanic eruptions. Viewed on November 29, 2017 from < https://www.dailymail.co.uk/sciencetech/article-2505453/Easyjet-tests-AVOID-ash-cloud-allow-pilots-fly-volcanic-eruptions.html>
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