Easy Jet Case Solution And Analysis, HBR Case Study Solution & Analysis of Harvard Case Studies

Easy Jet Case Study Solution

EasyJet is one of the largest Airline operating in London providing both local and international flight. Its low cost fares strategy has been well received by the masses leading to rise in competition too, with its biggest competitor being Ryanair. The company focuses on low cost structure to maximize its profit and increase its customer base. The main point of focus is how the airline company managed to keep the cost low, while maintaining high level of services, given that the competition in the industry is high.

The airline caters to specific needs of its various customers enabling the company to generate consumer loyalty. Furthermore, the pricing system of the firm is also appealing to the masses. The company is focusing on maintaining the quality of the services including punctuality, in-flight hospitality and early booking advantages including low prices.

EasyJet

Porter’s Five Force Model

Bargaining power of supplier:

The bargaining power of supplier appears to be moderate; there are many products and services, which the airline has to render from many suppliers. Some suppliers are very small while some suppliers are very large even bigger than the airline; airplanes are the main products, which the airlines have to purchase. As EasyJet is one of the biggest airline of the world, which makes it bigger than many suppliers do. However, there are some suppliers, which are bigger than EasyJet such as Boeing and Airbus. The bargaining power of these suppliers is moderate to some extent while the other small suppliers have low power of bargain.

Bargaining power of customers:

The bargaining power of customers appears to be moderate-high, the competition between the airline is increasing day by day. Several low-cost carrier services have been launched by many airlines which makes the competition fierce. Due to this competition, all the airlines have reduced the fairs to a very lower level. The switching cost of the customers is very low; they can choose the airlines, which gives them cheapest price. However, the fact that EasyJet is the best airline of the world reduces the bargaining power of customers, as they know they have to pay premium price in order to get premium services.

Easy Jet Harvard Case Solution & Analysis

Threat of Substitute:

The threat of substitute appears to be low, although there are many substitutes of the air transportation but the effectiveness of the substitutes is lower as compared to the air transport. The main substitutes are ship transportations and railways, both these substitutes have higher life security and these modes of transportation are also cheaper than air transportation but these means of transportation require a lot of time for the transportation. Airplanes can transport in very quick times as compared to various ships and railway lines. However, several technological advanced trains are also being introduced and several are in manufacturing process which can give tough time to air transport as well as to Easy Jet.

Threat of new entrants:

The threat of new entrant in the airline industry is very low; it requires many financial and technical resources to operate in this sector. The new entrant will have to invest huge sums in the airplanes and other infrastructure. Furthermore, they have to acquire some highly skilled employees such as pilots and other crew members and engineers which is also very costly. Prior to commence operations the new entrant will have to obtain operating license for which they have to go through from a very strict process. Many of the potential new entrants fails to pass the requirement of the regulatory authority. Even they obtain the operating license they have to follow strict laws and regulations imposed by the regulatory authorities or government which also makes difficult for the new entrants to compete with the established players.

Rivalry among current competitors:

The rivalry among the current competitors is also high, all the players in the market runs aggressive marketing campaign to capture the market share from other players. Furthermore, the airlines are also highlighting the weaknesses of other airlines in order to damage the reputation of other airlines. In addition to this, the fares are also reducing drastically by every airline especially from the low-cost carrier airlines, which also increases the intensity of the competition among the industry.

PESTEL Analysis

Political:

The political environment is very important for the survival of the companies and even more important for the airlines as their operations spread in many geographically dispersed locations. If the political and diplomatic relations of the government of one company deteriorates with another government the operations of Easy jet can be massively affected. The governments can impose restrictions on the EasyJet, to not operate in a particular country due to these poor political relations......................

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