The UKs Aviation Industry Overview: EasyJet - Paper Example

This mechanism is normally expressed when examining the outer impacts of an organizations action in order to develop a solid strategy. The factors are explained in the subsequent paragraphs and their impact on EasyJet and Ryanair on the UK economy.

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Political Factors

One big political factor is the issue of the Middle East war. This issue has had an immediate effect on airlines as the Air Miles scheme, does not give advantage to tax reduction by the government, as given to other modes of transport such as car companies. Thus, EasyJet and Ryanair would have to compete with others within the industry, like BA. A European Union East expansion, which could in turn provide new market.

Economic factors

The major factors attached to this industry include an increment in fuel cost, congestion and ecological restrictions. It can be said that customers are looking to reduce their travel expenses, which may be an indication that the aviation industry is still very much affected by the financial recession. Improvements through implementing globalization technique and current international trade should be able to grow the industry in the long run. In addition, the introduction of the Euros could boost business within Europe.

Socio-cultural factors

For this industry, it has been difficult to prevail and succeed in Germany and France, this is because security is an uprising issue, and thus customers are hesitant to book flights over the phone or online. This a challenge for the aviation industry to overcome, as it is not easy to mitigate this risk and provide customer with confidence. However, in general potential customers are keen on the cheaper airfares. Since, Ryanair and EasyJet are firms that position quite predominately in the low cost upfront classification, customers are attracted to the unique selling point and the firms are likely to use this in their strategy.

Technological factors

The new age of technological innovation is growing at a fast pace, very much impacting how airline firms are run and their success. The use of the internet on cost and distribution can also reduce the price and help with cost reduction. Both EasyJet and Ryanair have followed this technological innovation development.

Legal factors

The laws on emission set by the EU could have a negative impact on the ability of growth in the industry. These laws are changing frequently to raise awareness of global climate change, this could perhaps threaten the financial growth of both Ryanair and EasyJet and also puts pressure on their profitability, as the EU is constantly implementing new laws and reforms are happening instantly, its assumed that it would be difficult for the industry and the firms to adapt to the changes.

Overview of the Aviation Industry

The UKs aviation industry consists of airports, airplanes and various aircrafts. Some of the other airlines within the UK are British Airways and Virgin Atlantic - they use the London terminals which include of the Heathrow, Gatwick, and London City. The industry is a key benefactor of foreign investment and its one of the most used trade routes in the world. According to Bloomberg news (2016), the growth of the aviation industry in the UK is a growth of 1.83 percent from 2014 through to 2019, at the forecast.

Porters Five Forces **Please could you find evidence (charts) to support each of the forces below

The business environment comprises of buyer and sellers as well as customers and competition. According to Porter (1985), the theory of the porters 5 forces can be used to measure power of customers as well as threats and competition within an industry.

Bargaining power of Buyers

The industry business is made-up of two classes of buyers. The first class are single flyers while the second sets of purchasers are agents that are intermediaries, as they buy in large quantity. They are travel agencies and they associate with various airlines as they give customers the best and available flight that fit into their budget. Within this two set of groups, the buyers are more than the number of companies, therefore, there is high bargaining power of the buyers with several low-cost airlines in the UK and USA to choose from. Hence, buyers at their choice can choose any airline for visit to specific place.

Bargaining Power of Suppliers

The major suppliers are the aircraft manufacturers. At the moment, the main manufactures are Airbus and Boeing, as they are the biggest in the world. In this business, the use of data is very important and also much regulated. There is high bargaining power of the supplier because majority of airline firms are dependent on the Boeing and Airbus to get aircraft purchased. There are limited suppliers of aircraft and due to this reason there is less bargaining power of suppliers.

Threat of New Entrants

The risk of young and new business is additionally a critical aspect of the five forces in the Porters strategy. This idea has a low risk/danger for the aircraft business. In any case, only two angles raise the risk. Above all else, the business have a low exchange cost. In addition, there is no availability for proprietary product or service.

Looking at the two issues, the business still has a lower risk. The industry and organization within the industry have an expansive cost advantage mechanism. This kind of business require huge amount of capital and clientele for it to survive its first year. Established organization with huge funds can use that to enhance sales and revenue strategy by offering promotions and also by lower cost.

The industry has a reduced risk level, and its reflective on the substitutes. Travelers have the ability to choose any method of transport for example by car or ship to their destination, but there is a cost of switching to the use of aircraft. However, in some cases, it is more expensive to travel using other means of transportation, when compared to the use of airplanes and the cost is very significant.

The air transport is by far the fastest way of transport. It does also have better comfort than other transport, and also in prices it could be cheaper than some other type of transport. Customers sometimes pick various means of transport based on the cost and the need as well as the proximity in total as well as due to risk assessment.

Rivalry among Existing Players

The industry at the moment is very slow when compared to past years. It could be as a result of the life-cycle of the business as it is in the mature phase. The number of existing player within the industry remains the same and this doesnt appear to change for a while. The expenses and cost attached to the industry is relatively very high. It could be difficult for a player to leave the industry because of financial commitment already made including credits and loans.

EasyJet

Overview

Easyjet was founded in 1995 and its the biggest rival to Ryanair in the United Kingdom. It does have a market share of 18.3% of the overall air transport in the UK (IBISWorld, 2014). It does have its head office in London and operates in more than 600 routes crossing thirty-two nations. It does have employed base of 8,945 as of 2013. The business strategy of EasyJet is within two methodologies; and they are cost-cutting mechanism and the acquisition strategy. As of 2008, the company acquired GB Airways which was used to grow the base of EasyJet in North Africa region and Southern part of Europe.

The company witnessed an expansion in income of 10% from 2012 through to 2013 and there was an increase in working benefit of 15% (EasyJet, Annual Report, 2013). The organizations growth of monetary benefit is linked to the development of various rotes and increase in its base when compared to previous years. It also expanded by acquiring a bigger plane which helped to increase the effectiveness of the organization. The new A320 that was acquired helped with eh monetary health that is reflected on the revenue and growth.

**Please could you write roughly 500 words on EasyJet strategy (e.g new strategies to attract customers and beat competitor)

Strategy

We live in a rather competitive world and to succeed in business, you either have to step up or step out. It is a man eat man society and the weak in the food chain are preyed on and consumed. To avoid this, one has to up their game to remain relevant in the market. In that case, positioning is everything. You could have all the other factors correct such as labor, proximity to raw materials, ready market, you name it but if your positioning is not right, you are bound to fail. Positioning is the ability to occupy a distinct, special and advantageous position in the mind of the consumer. It is a combination of several factors such as pricing, distribution and advertising.

EasyJet positioning strategy is rather unique and capable of beating competitors. First EasyJet management is very organized and efficient. It carries out all the functions of management such as planning, controlling, staffing, and coordination. It sees to the smooth cohesion between the employees and the customers and their ultimate goal is to offer the best services at the most competitive prices. EasyJet also has its own brand culture that is unique and gives them an upper hand in attracting customers as it is an effective marketing strategy. Marketing plays a significant role in positioning. For a product or a brand to stick to the mind of a consumer, or even still for a consumer to know that the product exists in the first place, marketing in necessary for both cases. Most successful companies and organizations know this too well and for that reason invest heavily in marketing their brand and products. Various marketing approaches and techniques have been employed to reach the customers but for this to be successful, they have to have some background information on the target audience. For instance, it would be futile to use television mass media to target consumers with a reading culture, and the opposite is true. In the current digital generation, the best and most effective way of targeting customers is through digital marketing.

Through the incorporation of internet use in its daily running of transactions, operations and communication with the clients, EasyJet is targeting the new customers through digital marketing. It has an excellent goodwill and reputation meaning that it is more likely to attract new customers such as first time travelers who have no idea which airline to choose. Its strategy also puts into consideration the aspect of pricing. Pricing in the context of positioning involves researching about your competitors prices and adjusting yours respectively. The goal is not to offer the lowest price in the market but rather to remain relevant in your pricing without compromising on the quality.

EasyJet Market Share by Country

**table on marketshare like RyanAir below

SWOT Analysis **Please could you find evidence to support EasyJets SWOT...