2017

Business Environment

EASY JET AIRLINE

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Easy Jet Strategic Planning:

Introduction:

Easy Jet is British-based airline which is operating numerous domestic and international flights
from London Luton Airport. The airline has expanded its flight operations in 30 different countries
and cover 820 destinations from all over the world. This airline incorporated its business from
1995.Now easy Jet is a part of Easy Group conglomerate. The conglomerate was formed after the
establishment of easy Jet Company. The airline company easy Jet is registered under the authority
of London Stock Exchange from November 2000. The airline enjoyed from a high level of
economic returns and acquired its different competitors, for example, GB Airways. Beside the full
acquisition, easy Jet acquire stakes in different famous UK based airlines to diversify the scope of
its flight operations. The level of passenger inflows, EPS and a net profit of easy jet increased
every year through a significant rate (Anon., 2006).

What is Strategic Planning?

The process of defining business strategies, identifying the ways through which important
decisions will take in the organisation along with the process of setting business objectives and
goals is named as Strategic planning. Strategic planning process guide the management about what
objectives and aims are required by business and how these objectives and goals can be achieved
through help of different policies and decisions ( Nickols, 2016)

The purpose of Strategic Planning:

Strategic planning helps the business to identify the desired set of business objectives and goals.
Strategic planning guides the management of business about how the goals and objectives of
business can achieve or what ways a business can use to achieve its desired set of goals and
objectives. This process identifies what elements are a priority for the business and critical for
business growth. Strategic planning is very important for large and growing business. (Gates,
2010).

The role of vision, the mission in Strategic Planning:

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Vision and mission statement of business describe the scope and nature of the business and its
operations as well. Vision and mission statement remain same in the whole life of business. The
whole business operations and activities are moves around mission and vision of the business.

Strategy:

Strategy refers to set of policies and methods which a business will use to gain a competitive
advantage in the relevant industry along with the achievement of business stated goals and
objectives in desired way. The strategy of easy Jet is quite impressive and changed from other
Airlines. The main strategy of easy Jet is to provide cost effective travelling facility to its
customers. The use of cost-effective techniques will bring more inflow of passengers and move
the easy Jet towards competitive advantage. The airline used younger fleet reduce the maintenance
cost for airline and aircraft configuration increase the passenger capacity in the plane.

Source: (Anon., 2015).

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Mission:

The mission statement of easy Jet is “To provide our customers with safe, good value, point-to-
point air services”.

Vision:

Vision statement explains the scope of business type and nature of its operations. The vision of
easy Jet is to provide cost advantage air flight facility through safety and joy.

Goals:

Goals of easy Jet is to gain maximum competitive advantage and maximise the growth of revenue
through building close relations with passengers.

Objectives:

 To provide best air flight operation among whole Europe.

 To obtain maximum inflow of passenger.
 To gain high-profit level in contrast to other competitors airlines.

Core Competences:

Core competencies refer to those specialised resources, features and skills which distinguished one
business from others. Like other easy Jet also have its own core competencies which are stable
increase in average load factor, retain high level of customer satisfaction level in contrast to
competitors and high level of economic returns (Jiang, 2013)

Core Mission
Strategic Planning
Competencies
To gain maximum
passengers in flow
Vision with reduce cost.

Goals &
Objectives
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Strategy Formulation:
The process through which business select the most suitable and efficient actions and methods to
achieve its desired goals and objectives. It provides a guiding map for management of business
for achievement of desired results from operations of business (Ulwick, 2012)
The importance of Strategy Formulation:
 Provide clear understanding of vision to employees
 Increase employees understanding towards business goals & objectives
 Increase quality of communication and reduce ambiguity (Anon., 2015).
Factors Effect Strategic Planning:
Different factors affect the strategic formulation of business. Organisation goals and objectives
paly very important role in strategy formulation of business. As the whole strategy is designed to
achieve business objectives, goals, etc. A number of available resources in the organization also
directly affect the strategy formulation. Business develops strategy while considering its
available human, technological and physical sources. Organisational culture and planning issues
play the role of moderator on strategy formulation of business. The planning horizon refers to the
time limit for which strategy is formulated directly affect the planning and strategies developed
by business. But the change in political environment and change in external environment does
not influence the strategy formulation of business to a great extent. As managers already
consider these two aspects into account while preparing a strategy for business (Odera, 2014).
Like other business, easy Jet also uses different factors during strategy evaluation process.
Organisation vision, mission, objectives, goals and amount of available resources are ranked at
the top of priority list by easy Jet. As the business developed its strategies which guide
management of the business to achieve its stated goals, objectives. Available sources describe
the maximum limit of business and management develop strategies according to the level of
sources hold by business.
Planning Techniques:
Planning techniques help the business to use different tools and methods to develop strong and
more realistic planning approaches. The planning techniques which used by business directly
depend on size and type of business (Pirraglia, 2014).
BCG:
BCG matrix is a planning tool which is used to identify business market share (on the horizontal
axis) and speed of market growth (on the vertical axis) in contrast to competitor’s performance.
This matrix is used to identify wastage of resources and help to identify which activities are
useless for business. The image of BCG matrix is shown below (Hanlon, 2016)
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SPACE:
SPACE matrix is also a famous planning tool which exhibits the type of strategy most suitable
for business. This matrix has four quadrants.1st, and 2nd quadrants mention internal position from
financial performance and competitor’s aspect. While 3rd and 4th quadrant exhibits external
positions from industry perspective and stability perspective of business (Anon., 2015)

PIMS:
Profit impact of market strategy is one of famous planning technique in which the business
market and operational activities are views from the level of economic return received by the
business. This tool uses different business strategies to find out which strategy is most effective
and efficient for business outcome level.
Directional Policy Matrix:
DPM help the management of the business to identify which activities and areas are most
important for the organisation. This planning tool helps the business to decide day to day
activities based decisions and put all decisions in best interest of the organisation.
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The easy Jet airline usually uses PIMS and Space planning tool in its planning process. Being
highly concerned towards financial performance or economic returns and with competitors
financial performance level ,easy Jet frequently used these two techniques as a result obtained
from these two techniques demonstrate the areas where improvement is required in contrast to
competitors and also mentioned the gap in financial performance.
Organisational Audit:
Organisational audit refers to identify and assess the capacity of business from different
operational activity’s perspective. It helps the business to identify the improvement areas and
control the wastage.
The importance of Organizational Audit:
 Reduce wastage of resources
 Reduce operating cost
 Increase productivity
Tools for Organizational Audit:
SWOT refers to identify and investigate the strengths, weakness, threats and opportunities a
business suffered and can suffer in the near future. Through SWOT the internal performance and
external performance of competitors both can easily identify. Besides this, the weakness
identifies the areas of business which required improvement and development in business.
Porter’s Generic Strategies:
Porter’s generic strategies only explain the how well a company van gain competitive advantage
within its selected market or industry. According to this business have two options to gain
competitive advantage. One is through the use of low costs, and another one is differentiated cost
technique.
Value Chain:
In this process, business adds value to its each operational activity (production, manufacturing,
marketing, etc.).Through value chain, business delivers valuable products and maximum utilise
the available resources.
Strategic Positioning:
Strategic positioning refers to how a business competes with its competitors and provide quality
products and services to its valued customers. Strategic positioning helps to identify what are
main parts or important areas of business. It helps the business to satisfy the needs and demands
of customers in most effective and efficient way to retain customers in business (Karadeinz,
2009)
Easy Jet strategically positioned itself through expanding its flight operations towards more
destinations and through cost effective services. The configuration in aircraft increases the
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capacity of the airplane to manage more passengers which increase the flow of passengers
towards easy Jet. Easy Jet uses its available resources to increase the safety of passengers.
Environment Audit & Need:
This audit refers to use different evaluators and parameters to identify the gaps arise in the
management system. It helps the business to understand the legal formalities ad statutory
requirements which a business have to follow. It provide guidance to business about outcomes
and effects associated with different products and services of business.
Tools of Organizational Audit:
Opportunities & Threats of Easy Jet:
Opportunities refer to what benefits business can gear from external environment while threats
refer to the level of risk a business can suffer from the external environment. Through these, the
understanding of organisation about external environment and its related requirement increased.
PESTLE:
It refers to detail analysis of political, economic, social, technology, law and environment
elements related to a specific country in which a business wants to operate its operations.
Porter’s five forces:
This model explains the level of competition exists in a specific industry. The contents of this
theory explain the intensity of market competition which is Threat of new entrants, Threat of
substitute, bargaining power of suppliers, bargaining power of customers and Industry rivalry.
Through the above-mentioned tools, an environment audit for easy Jet can easily conduct. All of
these tools explain the detail situation of the external environment and its related elements which
can affect the business.
Stakeholders:
A group of the individual which have a direct interest in the financial and operational
performance of business. Stakeholders are directly affected by goals, objectives and policies set
by the organisation.
Stakeholder Analysis & Significance:
The process of identifying those groups or individuals which directly affected or highly
interested in the operational & financial health of business. Stakeholder analysis helps the
business to understand which group take what level of effects from organisation performance.
Alternative Strategy:
Market Penetration refers to increase the sale of the business within existing market. Through
this, the existing brand image and goodwill help the business while the internal factors of
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business already have idea about what features are required in product. This strategy is quite
feasible for business and involves less cost.
Horizontal Integration refers to expansion in business operation by producing and managing
different required components and material by its own self for business operations. Horizontal
integration is not internal consistent as required extra and specialised knowledge. While different
external environment effects this integration of business and involve high cost.
Divestment refers to the sale of business own assets for any financial, social or corporative goal.
Divestment can be easily done and not required any special skills and experience from
employees. But it negatively affects the goodwill and image of business.
New Strategy:
Market penetration is the best strategy of expansion for easy Jet. Through market penetration, the
cost of advertisement remain low, and business is not required to purchase more physical,
technological and human resources. Through existing, available sources business can increase its
market share. Currently, business has shared and made acquisitions also due to which it has
strong goodwill value in passenger’s eye. This high value of goodwill will help the business to
expand its operations more within existing market through maximum utilisation of existing
sources. Currently, Easy Jet has high potential in Europe and its nearby region and can expand its
air flight operations within this region. Through market penetration, the trend of travelling
through easy Jet airline will increase which bring positive upwards change in business market
share and its growth trend.
Through a selection of this strategy, a business can easily overcome the challenges raised by
competitors and can easily increase the scope of business operations. This strategy rapidly
increases the product adoption rate among consumers. Due to these advantages, this strategy is
selected.
The role of Strategic Implementation:
Managers are directly responsible for designing a strategy and making different implementation
plans accordingly for execution of policy. Managers are responsible for communicating the
desired goals and objectives in the entire organisation to increase understanding of employees.
Managers are responsible for assigning different tasks to every employee according to job duties
of employees. Beside this manager play an important role in resources allocation process and
allocate resources according to required input level of each department and keep in view the
output produced by the department. Managers develop flexible policies with a little space left to
overcome or cope up the future challenges of external business environment ( Radomska, 2012)
Estimated Resources:
For market penetration required limited use of business resources. Business will need to upgrade
its human, technological and finance resources. While existing material and equipment will help
the business in market penetration process. Human resources are most important and preferably
will require by business under this strategy as through this strategy the current sale level of
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business is increased which is possible through effective marketing and selling techniques. While
a limited amount of finance will be consumed by it and required the least amount of time.
SMART Targets:
Smart targets are specific in nature, clear in meaning, easily manageable and achievable. When a
target is smart or has features of the Smart target, then the achievement process of such goal
become easy and understandable. When SMART goals and targets are involved in business
strategy then the chances of a misunderstanding about business goal and mission will be
eliminated, and employees of the business at all level can easily identify their roles, and the
target assigns to them. Through SMART goals the employees always aware of what are priorities
of business and how the problems raised can settle down through new ideas (Anon., 2012)
SMART goals will help the employees and management of easy Jet to understand the KPI’s
mentioned in each dimension of BSC. When employees have a clear idea about what they have
to do and how then the chances of obtaining the desired outcome increased.
Conclusion:
Easy Jet is currently working in a progressive way and providing tough time for its competitors.
But easy entrance in the market is a continuous threat to easy Jet and demand a further expansion
in the existing market to reduce the risk of competitor’s market penetration and increase its
market share through increased its sale volume.
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References
Nickols, F., 2016. STRATEGY, STRATEGIC MANAGEMENT, STRATEGIC PLANNING AND STRATEGIC
THINKING, s.l.: s.n.

Radomski, J., 2012. THE ROLE OF MANAGERS INEFFECTIVE STRATEGY IMPLEMENTATION, Poland:
Wroclaw Economic University.

Anon., 2006. Corporate and social responsibility report, London: easyJet Plc.

Anon., 2012. Benefits of Setting S.M.A.R.T. Goals. [Online]

Available at: http://leanblitzconsulting.com/2012/01/benefits-of-setting-smart-goals/
[Accessed 21 February 2017].

Anon., 2015. Importance Of Strategy Formulation Of Strategy Marketing Essay. [Online]

Available at: https://www.ukessays.com/essays/marketing/importance-of-strategy-formulation-of-
strategy-marketing-essay.php

Anon., 2015. SPACE Matrix Strategic Management Method. [Online]

Available at: http://www.maxi-pedia.com/space+matrix+model+strategic+management+method

Anon., 2015. Strategy. [Online]

Available at: http://corporate.easyjet.com/about/strategy

Gates, L. P., 2010. Strategic Planning with Critical Success Factors and Future Scenarios: An Integrated
Strategic Planning Framework, s.l.: Software Engineering Institute.

Hanlon, A., 2016. How to use the BCG Matrix model, s.l.: s.n.

Jiang, S., 2013. Easyjet : Core competencies. [Online]

Available at: https://blogs.ubc.ca/sarahjiang628/2013/11/18/easyjet-core-competences/

Karadeniz, D. M., 2009. PRODUCT POSITIONING STRATEGY IN MARKETING MANAGEMENT. Journal of

Naval Science and Engineering, 5(2), pp. 98-110.

Odera, P., 2014. FACTORS INFLUENCING STRATEGIC PLANNING PROCESS BY MAJOR SUGAR PRODUCING
FIRMS IN KENYA, Nairobi: s.n.

Pirraglia, W., 2014. Planning Techniques for Business, s.l.: s.n.

Ulwick, A., 2012. Business Strategy Formulation: Theory, Process, and the Intellectual Revolution, s.l.: s.n.
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