Extending the 'easy' business model Case Solution And Analysis, HBR Case Study Solution & Analysis of Harvard Case Studies

Introduction

Easy jet Airline Company was established in 1995. It was a low cost airline which pretty soon established itself and made its strong market in the industry. They employed impressive management skills and the strategies they introduced were quite unique and innovative and their strategies totally changed the working environment of the airline industries as how they operate.

It broke the monopoly of the highly costly airlines who used to suck the cash out of their costumers as they were quite expensive and not many people could afford their services and air travelling. So as a result they were forced to take the alternative ways of travelling and thus, they were deprived of this convenient and less time consuming ways of travelling and were forced to look for alternatives were too time consuming.

The journey that would take five to six hours of air travel took them ten to twelve hours. The people who travelled by the airliners of these companies had to pay these companies the charges of their will. It was the gap created by the costly airliners which Easy Jet exploited and killed their dominance in the airline industry.

QUESTION 1

The decision-makers and CEO of the Easy Jet airline company Stelios Hajiloannou were wise enough to recognize the environment of the airline industry and the sentiments of the general public or the customers and were ready to consider this feedback and address these concerns expressed by the customers and they knew it was the key to success if their airline company was to compete these high priced airlines and to break their dominance in the airline industry.It was Europe’s first low cost airliner for low-end customers with no extra services attached; it was just a point to point journey facility provided to those who were looking for a cheaper air journey. It initially modeled itself on the U.S. based South West Airline. They also studied Value Jet, another U.S. based south western airline as they wanted to know the reasons why it could not succeed.

Their team of researchers and experts regularly visited the U.S. to find out reasons for the success and failure of both the companies. They reshaped their strategy with some innovations like completely ignoring the agents for flight bookings. Initially bookings were done on telephone but with the expansion of internet most of the costumers shifted to it for convenience. This also facilitated the management to employ a more sophisticated and modern management system and also to employ flexibility in deployment of planes unlike their other low cost airline competitor RyanAir which had assigned planes for designated routes and destinations.

The bookings in its first flight from London to Glasgow were booked at twenty-nine pounds for a one-way ticket and comprehensive marketing was done with slogans like “fly to Scotland for the price of a pair of jeans” and they showed increasing turn out of costumers. The company initially started with two planes operating out of London Luton airport and over the period of five years it already hosted eighteen Boeing 787-300 s and flying to twenty seven destinations across Europe. It hosted more than just a decent fee structure and the chargers were quoted for one way destination which gave costumers the luxury to choose when to fly according to their comfort. Charges were based on demand and availability of seats.

The earlier the costumer booked the cheaper price they would get. Bookings were reviewed daily through systems of all flights to see the popularity and demand of each flight and resources were diverted accordingly and worked efficiently to cut cost from its operations by cutting an in flight meal for fourteen pounds per costumer, ten pounds savings for each costumer by operating from Luton airport instead of Gat wick airport, however, Easy Jet operated from major airports unlike there competitor which operated from smaller airports. Seating capacity was maximized by not offering business class and avoided hiring travelling agents which add up to over twenty five percent of the operating cost.

By 1999 the company started getting recognition as was termed as one of the hundred marketing achievements of the twentieth century as the management was able to establish the company with the lowest cost expenditure as possible. Free flight tickets were distributed by the company’s CEO dressed in an orange suit to undermine a rival low cost airline company Go Airline on its launch day. In ways such as these they were able to keep the focus of media and market on themselves other than their competitors. In 2002, Easy Jet customers continued to grow while all the other airline companies were making losses with a market value of 1.5 billion pounds and reaped profits worth 71.6 million pounds while also purchasing GO for 374 million pounds from British Airways......................

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