what are the risks associated with easyjet's strategy
Find your information in our database containing over 20,000 reports, largest airline based in the United Kingdom. This report will provide a detailed analysis of EasyJets current corporate appraisal or SWOT analysis. The world economy is however, now on the up post September 11th. The greatest dangers, however, may be the market leaders need to manage its evolving Easyjet are situated extremely in strategic option 1 ( low monetary value, depression added value ) The eight nucleus strategic options are: 1. He added Barton and Lundgren to the list of scoundrels he wanted to oust.Haji-Ioannou kept upping the stakes. Before a new business starts making profits, it needs to be kept afloat with money. This level of disruption and deterioration of the operation cannot continue," the email reads. This time, he succeeded in scheduling a showdown vote for May 22, 2020. Flying point-to-point routes, it was freeof thecostly spoke-and-hub model employed by Europes big national carriers. It has always been a lower-cost airline as opposed to an absolute cheapest airline, Liberum analyst Khoo says of EasyJet. Strategic risk represents one type of risk that businesses face, along with risks like operational, financial, and regulatory, to name a few. EasyJet also enjoys internal strengths in its operations in terms of efficient use of airports by reducing turnarounds to 30 minutes and below, EasyJet can achieve extra rotations on the high frequency routes. Back in 1995 when EasyJet was lunched it was tipped by most to fail with its no frills strategy. In addition to that, EasyJet has been offering no in-flight meals, no in flight movies. It moved aircraft maintenance at three of its U.K. airports, which had been contracted out, back in-house. 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. The strategy risks serious disruptions to their customer service processes as employee morale drops at the same time that wait times for customers increase. Feeling powerless is one of the worst feelings, not just in business.. This analysis outlines for EasyJets management how individual activities may be altered to reduce costs of operation or improve the value offered to customers. Ryanair uncompromisingly fought its way into the market with an aggressive pricing strategy. By mid-May, most of the major European nations had administered first doses to just over a third of adults amid critical vaccine supply shortages and concerns about rare but dangerous blood clots linked to AstraZenecasand Johnson & Johnsonsvaccines.Without a brisker vaccination pace, a third wave of infectionskeeps threateningto take hold in Europe. Every so often Easyjet has aligned to face some unusual risks, for example, IT security and fraud risk, brand ownership, dependence on technology, Industrial action, financing and interest rate risk; while the key risk management system of the company is very formal rather than deepest, To accomplish that, Lundgren has taken drastic steps. EasyJet is an international example, The introduction of Airbus A319 aircraft, combined with the retirement of old generation Boeing 737 aircraft, will result in a two-type new technology fleet, which will commonality and lessen complexity and deliver high level of asset utilisation and reduce unit costs. This strategy is focused on keeping costs down and EasyJets policy of no free lunch and efficient use of airports by limiting turnaround to 30 minutes. The risks associated with a differentiation strategy include imitation by competitors and changes in customer tastes. 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. This also reduces the marginal cost of incremental growth; increasing scale brings valuable economies (Johnson, G., Scholes, K., Whittington, R., (2005). Investments in assets are also key consideration in value creation in that consideration of the extent to which assets and working capital are being utilised. Price wars are becoming more prevalent as traveller use the Internet to compare prices and shop around. A strong and visible brand to create a high level of awareness with consumers. Over time, a brand may experience enough negative interactions that its reputation is placed into a vulnerable position. easyJet holidays is on track to meet the medium-term target of 100m+ PBT. This enables easyJet to be efficient with network choices, with an emphasis on maximising returns. But the surge in new, more transmissible and potentially vaccine-resistant strains of the virus has placed these forecasts in doubt. Lundgren has pulled every financial lever available to him to keep EasyJetaloft. Before the pandemic, EasyJet was looking like it could emerge as one of the biggest winners in the European air-travel dogfight. The web-based questionnaire was distributed to Egyptian healthcare workers from the 20th of April 2020 to the 20th of May 2020. 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. None would fly again until June 15. It announced plans to gradually ramp up to 75% of its normal capacity by August. Continuing to drive product conversions by improving the way ancillaries are sold and product merchandising. WebSupport Risk Management by conducting risk awareness workshops and trainings. The company carries out If it failed to do so, he threatened to call a vote to remove one director from the board every seven weeks, until the board acquiesced. The companys Online booking facility in October 1999 aided Internet sales to pass the one million mark. In 2020, it hemorrhaged the same amount. A no frills strategy is often associated with low cost airline companies like EasyJet. Of popular holiday destinations, only Portugal and Gibraltar were put on the initial green list, with no requirement to self-isolate upon return. Value chain analysis can provide important insights into what management need to focus on strategically. The third force is the threats from the bargaining power of buyers, is this strong for both EasyJet and the entire airline industry with a large number of alternative suppliers, hence, the aggressive pricing strategy. As a budget airline focused exclusively on short-haul flights within Europe, it had more flexibility than long-haul carriers to adjust its flight schedule, canceling flights without worrying about losing connections or violating alliance agreements. Therefore, demand led with proprietary yield management system. In fact, Haji-Ioannou continued to press his allegations that corruption underpinned the Airbus contract, raising the matter at EasyJets general meetings in July and December. e-commerce) and support activities such as fir infrastructure (e.g. Opting for in-house initiatives provides several advantages that can potentially increase margins and overall efficiency, including: 1. Pandemics, lockdowns, trade disputes, financial crises and more can depress travel demand and threaten the bottom lines of industry players. Finally, the key to sustaining high levels of growth is the scalability of the operations. At the end of March 2020, EasyJet grounded its entire fleet. On the other hand, risks which produce The threats are in terms of fines and rise in cost of raw materials. WebEasyJets first generic strategy is to achieve an overall cost leadership in the low cost airline industry. At the same time that it was offloading planes to raise cash and placing others into long-term storage in boneyards, the company still took delivery of 14 brand newAirbus A320 and A321 Neos. But EasyJet could steal an increasing amount of market share from the legacy full-service carriers. 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. EasyJets no frills strategy does not only mean a cut in Cabin crew and denial of food, but also allows for a faster pre-flight preparation, thereby reducing the time grounded as well maintaining fare. Accepting this fact and having a strategy in place to mitigate risk is critical to being a successful innovator. Johan Lundgren, the chief executive officer of EasyJet, one of Europes largest budget airlines, is a fan of Flightradar24. The54-year-old Greek-Cypriot entrepreneur hasnt had a formal management role in the airline since he stepped down as chairman in 2002, but he remained a major shareholder, owning more than a third of the company before the pandemic hit. WebOften, this takes place in four major steps: Figure out how much money you need to retire. You can tailor the resources of this strategy type to focus on positive brand images. Out on the tarmac, a short distance from the simulators, almost a dozen real EasyJet A320s sit idle. Protecting and building brand awareness and consideration. The global, interconnected nature of the aviation industry means that airlines, lessors, MROs and suppliers are highly vulnerable to external factors out of their control. WebThere is one main reason which influences these economic factors is the recession in the Easy jet. Each node of the supply chainsuppliers, plants, warehouses, and transport routesis then assessed in detail (Exhibit 1). Introduction Company Background, Financial Performance and Key Services EasyJet is an airline company based in Britain WebWhat are the advantages and risks associated with low-price strategies? easyJet has refined its strategy to drive our purpose of making low-cost travel easy. These risks may include: Shifts in consumer demand and preferences. Create a retirement strategy that diversifies your assets and manages risk. 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. The primary weakness is the perception of low quality low cost can also be seen as low quality service than that offered by the established national airline i.e. A classically trained trombone player who has said he went into business only because he failed to get into Londons Royal Academy of Music, he said he hadnt been playing his instrument lately because I dont have the inspiration for it. He said hed been trying to draw lessons in resilience by rereading HemingwaysThe Old Man and the Sea, finding perhaps parallels between the Job-like fate of its protagonist and his own plight. The same figure for Ryanair was 2.25 pennies, while it was about 5 for British Airways and 5.37 for Air France and KLM. They can easily shift capacity from Spain to Greece, for instance, to deal with new travel restrictions, he says. And, from a practical standpoint, the threat he posed to Lundgrens plans receded. Such lower costs benefit EasyJet initially as innovation is rewarded. 1 or No. Are you interested in testing our business solutions? We will start by looking at strengths: EasyJet serves diverse ranges of European routes with principle activities in both Leisure and business markets, offering 60 key European routes. Risk 2: Geopolitical instability. 2 airline by market share for each airport it serves. Powered and implemented by Interactive Data Managed Solutions. Therefore, it is vital for EasyJet to have a thorough comprehension of their costs Those planes are Airbuss most fuel-efficient models, offering operational savings for EasyJet in the long run. Take it up as a as a proactive exercise embedding it into the organizations strategy instead of merely keeping it a reactive one Periodically monitor, review and update the digital risk framework. EasyJet also faces potential threats in terms of unprecedented tragic events like September 11th. Research expert covering mobility and logistics. When EasyJets board did not accede to his demands, Haji-Ioannou carried through on his threatrequesting a special meeting to vote on the removal of board member Andreas Bierwirth, a former Austrian Airlines and Lufthansaexecutivewho Haji-Ioannou termed a friend of Airbus. When the board tossed out this request on a technicality, Haji-Ioannou resubmitted his call and asked for the removal of the chief financial officer, Andrew Findlay, too. Protect and build on easyJet's strong brand, Provide an easy and reliable customer experience. Table 1 shows that EasyJets sales has increase year on year since 1998, with profit and gross margins also experiencing a positive trends. 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. The airlines hopes for summer 2021, like those of almost all airlines, rest on vaccinations. This has the highest risk, but Lower costs are the only competitive advantage in the short-haul economy sector as air travel is effectively a commodity product. But flying to those primary airports in Western Europe is more expensive. Effective use of digital and data tools to underpin growth and deepen customer relationships. Highly utilised fleet of aircrafts that are large, modern, efficient and relatively environmentally friendly. After listing the risks and putting them in a risk matrix, the report will then aim to explain how the risk will affect easyJet and justify the position of it in the risk map. This form of strategy combines a low price, low perceived service benefits (no free lunch) and a focus on a price-sensitive highly competitive market segment. We mentioned the seven most common risk events above, but other project risks could include contractor failure, unexpected life events, data transfer issues, shifting priorities, legal risk, market risk, and project deferral. But what are the internal weaknesses suffered by EasyJet? Given that they were doing almost nothing before, there is a big opportunity to move from zero to something, he says of the holiday tours. This will involve retention of best salespeople supported by HR management, engineering support in terms of maintenance of the web page supported by technology development to ensure that web site has the latest prices and route and flight information. Lundgren had been an industry leader in trying to position EasyJet for this new world. Data security and regulatory risk Data security and regulatory risk can be associated with loss, leakage, or unavailability of data. 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