BM3- Strategic Management
Report on the capabilities of a chosen business (Easyjet)
Popovych Sergiy PMF C3
Tutor: Fraser Hamilton
word count : 912
Report on the capabilities of a chosen business (Easyjet).
Easyjet is a British low-cost airline which was founded in 1995 by a British entrepreneur
of Greek-Cypriot origin Sir Stelios Haji-Ioannou. It is based at Luton airport. During
these days the company is one of the largest low-cost airlines in Europe. It performs
domestic and international flights to over 600 destinations in more than 30 countries. In
2013 easyJet carried over 60 million passengers. Their fleet consists of more than 200
aircraft. They employ over 8000 people. It is listed on the London Stock Exchange
(EasyJet plc 2014).
Their sustainable business model is to make travel easy and affordable and to drive
growth and returns for shareholders. in the view of Porter (1996) who subscribe to the
‘positioning school of thought’, EasyJet made a strategic choice to be different. EasyJet
operates in the short-haul flights, so the company needs to use its planes effectively.
For those flights aircrafts needs to have a lot of take-offs and landings and the plane
spend more time on the ground. Keeping its aircraft in the sky and minimizing the time
spent on the ground is the only way easyJet can outperform its competitors. EasyJet
was one of the first airlines who started ticketless travel. The era of the internet has
helped to increase direct bookings and to reduce costs. In the cabin there is only one
class - economy. It allows to put more seats in the cabin. During short-haul flights hot
meals are less important, so the company provides only snacks and soft drinks.
Customer should pay extra for it. Buy that they reduce the ticket price. Also company
uses Airbus aircraft brand, which is produced in Europe. They operates a young fleet
which should be not more than 10 years otherwise risk of maintenance rises due to the
age of aircraft. Easyjet uses uncongested airports in smaller cities or less congested
airports in the big cities. All this reduces the flight time as there is less in-air waiting and
landing charge is less in those airport ( Gillen and Lall 2004). However as Porter (1996)
says , operational efficiency is not strategy . Sustainable competitive advantage comes
from making commitments or choices and then ensuring that capabilities complement
the big choices.
Here are some of the competitive advantages of easyJet. It is the leading short-haul
network in Europe. They provides a good range of business and leisure destinations.
EasyJet has a strong position in key markets. It has a leading presence in top 100
routes. Another competitive advantage is their low cost and efficiency. Scale and cost
advantage compared to airlines flying to similar airports. EasyJet have high asset
utilisation. They using their aircraft on the average 11 hours a day.Their load factors are
leading in the industry. Financial and Balance Sheet strength is also a competitive
advantage.It is a profitable organisation. In 2013 profit after tax was £398 million. There is no compromise on safety. Safety of their passengers is on the first place. Company is
focused on its customers. EasyJet provides friendly service and make travel easy and
affordable. Company is focused on their employees. They listen what the workers say in
order to improve the quality of the service.The staff turnover is only 6,5% which is not a
big number. They focus on their network development .EasyJet is improving routes, slots and bases to be the leading short-haul airline across Europe (esyJet plc 2013).The
business model for EasyJet includes : they provide a simple product for their customer.
Which means no food or drinks for