Organizational Strategy and SWOT Analysis on EasyJet

Personally, I think the main knowledge points of this week are scattered, which covers many parts, such as SWOT --- an analysis, Mintzberg's strategies, levels of strategy, strategy development directions, etc.

CS -- EasyJet

Background

EasyJet is a company by most standards, having been set up in 1997. Its basic business model is that it is a low cost airline: competing head on major with the carriers: Ryanair, IAG, Lufthansa, AF-KLM and so on. The ambitions of the company are becoming Europe's preferred short-haul airline, delivering market leading returns and putting to make travel easy and affordable as its aim. 

SWOT Analysis

Talked about the threats to EasyJet, it's definitely the competitive environment, the government policies and current domestic economical position. I've showed some powerful rivals above, they "share" customers with EasyJet even benefits, so it directly shows the connection between bargaining power of buyers, substitutes and the profits of EasyJet. It's a quite big threat, isn't it? As to wider aspects, in recent years, the sustained high price of aviation fuel combined with restricted European economic growth and consumer spending, rising aviation taxes and scarcity of financing has led to a difficult operating environment for all airlines. Therefore, we can see that EasyJet not only does undertake the pressure from other competitors, but also needs to deal with the negative factors from government and social situation. 

Facing those kind of challenges, EasyJet of course has to show relevant response and make specific strategies in order to occupy a positive position. Thus, it focuses on four key objectives: 1. build strong number 1 and number 2 network positions 2. maintain cost advantage 3. drive demand,conversion and yields across Europe 4. Disciplined use of capital. I think the first two points are the strengths of EasyJet. It leads short-haul network and has an efficient and robust capital structure. The most impressive one is that it is one of the very few pan-European low-cost carriers in the European short-haul passenger aviation market. It does save costs from establishing a high asset utilization system, so EasyJet gains "low-fares" ability and reputation. Different companies have different strategies. I think cost advantage is the most enormous merit to EasyJet, which can be regarded as a competitive advantage and also absorb various ages of customers. 

As to opportunity, the impact of globalization becomes increasingly distinct. Traveling is no longer rear any more, traveling by air is much more common and popular. So customers in emerging markets tend to buy air tickets is definitely a good news to EasyJet.

Concerning the demands of customers' intention, EasyJet found offering free seating is not an 100% attractive factor.  Some people especially business persons are tire of waiting for clogged aisles and finding own seat, they tend to find a particular seat. Therefore, EasyJet wants to start allocating seats and charging for some of them, such as the first few rows and seats over the wing. Besides the airlines would allocate blocks of seats to family bookings which is quite attractive for families who don't want to sit separately. It's a kind of EasyJet's allocated weakness.

Conclusion

Overall, I think the most important thing is safety and it is also the thing that people put in the fist position. EasyJet has "low-fares" advantage but cannot ignore primary and initial problems, otherwise I'd rather it increases the price and guarantees the security.