are also being introduced and several are in manufacturing process, which can give tough time to air transport as well as to Easy Jet. This threat will be mitigated by determining the existing level of substitute product available and the extent to which the substitute can be differentiated from the product including the price.
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 crewmembers 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 if 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. This threat can be mitigated by focusing on differentiating the service from the rivals. For this, the company needs to analyze further possibility of gaining more economies of scale and reducing the cost. The company should also ensure the customers that the cost of substituting to other products is also minimal. This would ensure that consumer base is well maintained.
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. The number of companies operating in it can determine the rivalry level of the industry. If there are low profits, then more venture capitalists will not be attracted. The existing companies have advantage to create an oligopolistic nature of market to prevent new entrants from entering.
EasyJet Harvard Case Solution & Analysis
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 EasyJet 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.
Environmental:
The environmental factor is also very important for EasyJet; the operations of airlines have very adverse consequences on the natural environment, which is enforcing the customers to reduce the air traveling as low as possible. Many green customers have emerged during the recent past who just associates with the airlines,...............
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