Case Study - 2easyJet

A presentation by Group 2

1. Based upon the information given, here is a SWOT analysis on easyJet.

STRENGTHS

STRENGTHS

• Connects to all the major destinations.• A convenient airliner for the low budget traveler.• Attractive pricing.• Airport network & market share.• Unit cost per passenger.• Reserve pricing strategy.• Encouraging internet reservations.• Quick turn around flights.

STRENGHTS

• Highly distinctive branding.• Feature on television airline series.•Website painted on the aircraft.•Bright orange color.• Catchy slogan: “Come on, lets fly!”

WEAKNESSES

WEAKNESSES

• Cost base not as low as Ryanair.• Brand Vs. Legacy carriers.• Seasonality of earnings.

OPPORTUNITIES

OPPORTUNITIES

• Market growth.• Further cost cutting.• Fleet.• Business passengers.• Allocated seating.

THREATS

THREATS

• Airport price increases.• Labour unrest.• Increasing complexity.• Return of competitor capacity growth.• Stagnant economies / austerity.• External events.• Fuel price & currency movements.• Air travel taxes.• Accidents & failures.

2. Compared to Ryanair and British Airways, where would you place easyJet in terms of Porter’s generic

marketing strategies? Is this sustainable?

• Differentiation strategy: Target customer segment is not price sensitive, Market is competitive, Consumers have specific needs which are under served The firm has unique solutions to satisfy these needs which are difficult to copy. It is considered to be a genuine strategy.

• Cost leadership strategy: It involves the firm wining the price sensitive market share. It has the lowest price available for the consumer. It operates at a lower cost as compared to its rivals and yet achieves profitability. It is not a competitive strategy as the customer doesn’t perceive it, unless it leads to lower prices.

AIRLINES DIFFERENTIATION STRATEGY

COST LEADERSHIP STRATEGY

Easyjet Medium Medium

British Airways High Low

Ryan Air Low High

As the table above suggests, easyJet can be placed above British Airways and Ryanair in terms of Porter’s generic strategy considering the fact that the target customers belong to the economy class.

• easyJet has not compromised in any of its services offered to its flyers.

• Reduced airfares to be competitive in low cost airline segment.• No compromise in passenger safety as in the case of Ryanair

which ran outdated 20 year old aircrafts.• Increased market share by buying other low cost airlines

Example: “Go”• Bought accessibility to new routes and landing rights at

different airports.

3. What is the underlying strategy behind all of Stelios’ ‘easy’ ventures? Can this strategy be replicated in any

market? What is required for it to work?

EASY! IT CAN BE REPLICATED!• easyJet : one of the first “low cost” airliners in the United

Kingdom.• easyCar : a car and van rental business.• easyEverything : a chain of internet cafes and cinemas.• easyValue : which provides impartial comparisons for online

shopping.

“Please fasten your seatbelts, we are about to take off!”- Thank you -