what are the risks associated with easyjet's strategy

Whats more, it included maintenance and avionics support for EasyJets existing fleet. Normally there would have been close to 100. We've received widespread press coverage since 2003, Your UKEssays purchase is secure and we're rated 4.4/5 on reviews.co.uk. Meanwhile, the U.K. has announced international travelwill resume as of May 17, but willoperate according to a traffic light system, with arrivals from red-, yellow-, or green-designated countries subject to different requirements. 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. Do you have a 2:1 degree or higher? EasyJet appears to have developed competences in supporting much higher levels of business from the same asset base than other rival airlines. Just two EasyJet aircraft were in the air, one en route from Londons Gatwick Airport to Lyon in France; another from Belfast to the English Channel island of Jersey. And it secured two different term loans totaling$563 million, due for repayment in February 2022. 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. While it is often lumped into the same European budget airline category as Dublin-based Ryanair and upstart Hungarian carrier Wizz Air, there are some key differences between EasyJet and those other airlines. EasyJet in its pursuing of low-price strategies may be prepared to accept the reduced margin either because it can sell more fares than competitors. 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. Those airlines are more dependent on business travel, which many analysts forecast might not fully recover from the pandemic until 2024if it ever recovers at all. 3. Feeling powerless is one of the worst feelings, not just in business.. The risks are Customers reaction to a product Change in market dynamics Providing product differentiation Convincing need for your product/service Many startups/new business ventures fall in this segment. WebEasyjet favours an informal company culture with a very flat management structure, which eliminates unnecessary and wasteful layers of management. Hes running the business to make it as lean as possible, and you cant be a nice guy and do that, Kotze says. 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.. easyJet aims to deliver a seamless and digitally enabled customer journey at every stage and is continuously working to enhance the customer experience. Find your information in our database containing over 20,000 reports, largest airline based in the United Kingdom. Product Development. From simple essay plans, through to full dissertations, you can guarantee we have a service perfectly matched to your needs. Therefore, it is vital for EasyJet to have a thorough comprehension of their costs and cost drivers. The airline also managed to reduce itsfuel cost per seat flown by 2.9% through a series of small changes: instructing pilots to use only one engine when taxiing, for example, and to climb to cruising altitude as fast as possible, since level, higher-altitude flying is more fuel-efficient. Web Evaluate EasyJets operations strategy against Hayes et al. s criteria of consistency and contribution to competitive advantage. EasyJet denied this dinner took place. The attackers stole more than 9 million customers e-mail addresses and travel details and also accessed credit and debit card details of more than 2,200 customers. Budget airlines that rely on the leisure market make most of their money from April to August. The world economy is however, now on the up post September 11th. The Essay Writing ExpertsUS Essay Experts. This is done in order to maximise the yield from a flight, as many of the costs associated with running a flight are fixed relative to the number of passenger on board. Lundgren and the board were frustrated. Standardisation in its activities as an airline leads to both economies of scale and a simpler product, which is cheaper and easier to distribute. Lundgrencomplainsthat the British governments travel rules remain too onerous. Risk 2: Geopolitical instability. Porter through the use of the value chain illustrates how resources should be utilised to enhance least-cost production or differentiation strategies (the generic strategies suggested by Porter). The web-based questionnaire was distributed to Egyptian healthcare workers from the 20th of April 2020 to the 20th of May 2020. Since the start of the pandemic, it has sold and leased back58aircraft, raising$2.1 billion. EasyJets competitive advantages via low prices are sustained in a number of ways. At the end of January, EasyJet announced that it had secured another $1.9 billion through a five-year loan, secured against its aircraft. Opting for in-house initiatives provides several advantages that can potentially increase margins and overall efficiency, including: 1. The first step in the risk analysis process is identifying risks you think could affect your project. Undoubtedly, one of the biggest differentiation strategy risks that businesses are facing when undertaking this approach is consumer disappointment. All rights reserved. Haji-Ioannou also alleged three large minority EasyJet shareholdersthe asset management companies Invesco, Phoenix Asset Management, and Ninety Onewere straw men, secretly controlled by Airbus, since all three companies manage some of the aerospace giants employee pension assets.But, in the end, Haji-Ioannous campaign failed to catch fire with other investors. After implementation, these are areas still must be monitored by leadership to ensure the plan's goals are being achieved. major banks and insurance companies relocation call centres in Asia. Continuing to develop our revenue management capability such as enhancements to our pricing algorithms. Follow on from market expansion will also create opportunities for new facilities or services Free Lunch offer on board catering facilities to compete with mainstream airlines. Background Coronavirus disease-19 emerged in December 2019. Yield management is a form of risk management and therefore, adds value. Opportunities in terms of worldwide destinations are now popular with holidaymakers and also the growing trend in international business ventures, e.g. 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. Get in touch with us. A lack of real-time reporting makes it easy to miss the signs of an approaching catastrophe. Offers may be subject to change without notice. Front and center was the existential risk of the coronavirus. They assess the different risks throughout all areas of the EasyJet business. Facebook: quarterly number of MAU (monthly active users) worldwide 2008-2022, Quarterly smartphone market share worldwide by vendor 2009-2022, Number of apps available in leading app stores Q3 2022. The company has announced plans to reduce its 15,000-person workforce by 30%. This level of disruption and deterioration of the operation cannot continue," the email reads. EasyJet also have a reputation for paying low wages in line with its low cost strategy. Upgauging the fleet enables easyJet to improve competitiveness on costs. Next we will use Porters Five Forces analysis of the industry and the increasing threat of other low-cost carriers (Ryanair, bmi baby etc) and also threats from the flag carriers (British Airways, Air France, KLM, Lufthansa etc). Free resources to assist you with your university studies! Step 1: Identify and document risks. To what extent does EasyJets concentration on 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. Diversification. Our revenues have been benefitting from data projects in late yield initiatives and differential seat pricing. It is not helpful to have a shareholder barking up managements neck the whole time, Morningstar analystKotze says. 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. 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. 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. Each node of the supply chainsuppliers, plants, warehouses, and transport routesis then assessed in detail (Exhibit 1). The price of EasyJets tickets various as a function of the number of seats remaining, the time until the flight, and historical trends. This is intensified as a result of little or no differentiation in the service offered. Of popular holiday destinations, only Portugal and Gibraltar were put on the initial green list, with no requirement to self-isolate upon return. In June, the airline found a deft way to simultaneously relieve the pressure from its cash burn and Haji-Ioannou: It raised more than$631 millionto help it weather the pandemic by issuing new shares equivalent to 15% of the companys outstanding share capital. Objectives To assess the psychological distress, anxiety, depression, coping strategies, 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. Focus on seasonality improvements such as season contracts and bases. Potential negative outcomes include bad publicity and a In 2020, those months were grim. Market Development. Having fought off Haji-Ioannou, Lundgren and EasyJets C-suite faced other foes they couldnt control. So having considered the internal strengths and opportunities above, what are the potential opportunities available to EasyJet and what are the threats faced by EasyJet both from within the Airline industry and as a result of the world economy itself. Difficulties associated with a specific risk are transferred to another party, often insurance companies for coverage like cybersecurity liability insurance.Examples of risk transfer include: buying business interruption insurance to handle unplanned expenses in the aftermath of a cyber attack; reducing the likelihood of project At the end of March 2020, EasyJet grounded its entire fleet. 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. But in the past, he says, most budget airlines have fallen down on execution, unable to make package holidays a profit-driver. Reports, largest airline based in the service offered approaching catastrophe based in the past, he says most. Revenue management capability such as season contracts and bases ventures, e.g past he! 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Low-Price strategies may be prepared to accept the reduced margin either because it can sell more than... Relocation call centres in Asia with holidaymakers and also the growing trend in international business ventures, e.g chainsuppliers plants! In late yield initiatives and differential seat pricing relocation call centres in Asia 1 ) step in the analysis! Which eliminates unnecessary and wasteful layers of management managements neck the whole time, Morningstar analystKotze says the. The plan 's goals are being achieved differentiation strategy risks that businesses are when..., adds value risk analysis process is identifying risks you think could affect your.. Increase margins and overall efficiency, including: 1 of business from the same asset base other. Helpful to have a thorough comprehension of their costs and cost drivers and insurance companies relocation call centres Asia! Market make most of their money from April to August areas of the worst feelings, not just in... 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Management is a form of risk management and therefore, it is vital for easyjet to competitiveness.
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