EasyJet SWOT Analysis Essay

Company description

Easyjet is a public limited company that was founded in 1995 within the aviation industry. Its headquarters are located at Luton, United Kingdom. The firms operation mainly involves provision of short and medium airline services. The firm has a human resource base of 5,674 employees of whom 3,372 are full time employees. The firm serves an approximately 100 countries which are located in 30 different countries.

Business strategy

According to SWOT analysis of Easyjet (Anon., 2009), the firm has adopted an efficient business model which entails keeping the costs of operation as low as possible. Through this model, the firm has been able to offer low fares to its customers thus remaining competitive within the aviation industry.

SWOT analysis of the firm

Strengths

• The firm offers a quality services to its customers at a competitive price. The firm has incorporated the current electronic commerce technology to ensure that the customers are satisfied (‘Driving more efficient business’, 2008, p.2). Incorporation of electronic commerce enables the customers to book for their tickets online thus eliminating distribution cost (Ian, 2002, Para. 4).
• Efficiency of operation. EasyJet offers efficient air travel services with turnaround duration of thirty minutes or less. This has made the airline more reliable to its customers.
• In addition, the firm has developed a strong employee culture which enables the firm to assist the customers with various travel services. The employee culture is maintained in its flights and on the ground. This results into increased customer satisfaction.
• The firm has a strong, proactive and innovative management team which is a continuation of the leadership of its ex-CEO and ex-chairman.
• The firm has also developed a strong brand name within UK market. This has been achieved by the management investing heavily in promotion through public relation and advertising. The management of the firm has been advertising the firm in major airline programs in UK. This has enabled the firm to create a superior brand profile. By adopting the term ‘easy’ as its brand name, the firm has been able to effectively position itself as a firm that delivers value for customer’s money (‘ Bird’s eye view ’, 2007, p.4).
• The firm has also incorporated the concept of corporate social responsibility by addressing issues of global warming and greenhouse effect. The management of the firm has kept these issues as top priority in formulating its future strategies. This has been achieved through purchasing of new fleet that emits minimum amount of carbon dioxide (‘Birds eye view’, 2007, P.4).
• The firm serves many cities within Europe. This enables the firm to be considered as an efficient airline travel firm by business people.
• The firm has an EasyJet Academy which ensures that the firm has sufficient and qualified personnel.
• Distinctive livery. The management of the firm has developed a distinctive livery for their fleet that enables the firm’s aircrafts to be effectively distinguished from that of the competing firms.

Weaknesses

• Difficulty in shaping its pricing policy in some of its routes which are less profitable. The domestic industry is very competitive. Easyjet faces intense competition from other firms such as Ryan Air Jet 2 and BMI Baby. These firms can shape the price in these routes as they try to compete.
• Increased competition can result into the firm’s business model becoming blurred.
• The firm is sensitive to increment in taxes to the aviation industry by the government or other charges by the airport authority.
• The firm has not developed an effective strategy for developing customer loyalty.
• The buyer power within a low cost carrier market is relatively high. This makes the customer to have excessive bargaining power.
• The airline’s brand name ‘easyjet’ is owned by Sir Stelios. This means that it does not have control over the performance of other products that are associated with the brand name ‘easyjet’.

Opportunities

• The firm can increase its market share by considering alternative routes. This can be implemented by considering other major cities in Europe as its travel destination. One of the routes that the management should consider is travelling from Dublin to UK. This is a potential travel route since it’s used by a large number of travelers going to watch football matches in UK.
• The firm can increase its profitability from increased growth of leisure and business passengers in a period of the next five years (Keith & Dave, 1999, p.4).
• The expansion of European Union has resulted into more markets being opened up. This will benefit the low cost carrier. The airline will be considered effective to jobseekers due to its low fares. This in return will promote economic growth (Keith& Dave, 1999, p. 4).
• There is a high probability of increase in the rate of immigration in European countries due to the increased instability within the Middle East over the past few years.
• The firm can increase its level of profit through the Easyjet Academy. This is due to the fact that it can train aviation courses to other parties other than its personnel.
• The firm does not have flights to various travel destinations in the Scandinavian countries. Currently, there is an increase in the rate of immigration into these countries especially into Helsinki and Stockholm (‘Bird’s eye view’, 2007, p. 7).
• Currently there is an increase in entrepreneurial activities within the European Union. More entrepreneurs are travelling into these countries to seek investment opportunities.
• The firm can attain economies of scale in its operation through incorporation of the concept of consolidation. This will enable the firm to minimize its cost and set its fares more effectively (‘Driving a more efficient business’, 2008, p.2).

Threats

• Increase in the level of terrorism and other catastrophic loss can result into a reduction in air travel. In addition, occurrence of natural catastrophes and terrorism can result into destruction of infrastructure that supports the aviation industry.
• Increase in cost of operation as a result of increase in the amount of taxes charged by the government.
• Fluctuation of the US currency can result into increase in the costs that are denominated using the dollar such as the fuel purchasing, maintenance and reserve cost.
• Increased adoption of the low cost carrier concept by the traditional airlines. This could blur the image of low cost carriers.
• Increased apprehension in relation to the travel industry due to threats of war and other pandemics.
• The firm is more vulnerable to fluctuation in the price of fuel compared to other competitors such as Ryan Air and Jet2. This is due to its adoption of hedging policy in the purchase of fuel.

Reference list

Air Scoop.2007. Bird’s eye view: Easyjet SWOT analysis. Web.

Business Teacher. 2009. Easyjet SWOT analysis. Web.

Ian, C. 2002. EasyJet fueled. (On-line). Glasgow, Scotland: Buckinghamshire Business School. Web.

Keith, J.& Dave, H.1999. The contribution of aviation industry to the UK economy.

Oxford: Oxford Economic Forecasting. Web.

Linked Incorporation. 2009. Easyjet. Web.

Sun Microsystems Incorporation. 2008. Driving more efficient business: get economies of scale with recent technology innovation. Web.