Worse, the company had discovered the hack back in January but hadnt notified people whose credit card details had been accessed until April, and was only now letting other customers know. Since the events of September 11th the airline industry suffered heavily, stocks plummeted and ticket prices are at all time lows. Enterprise risk management does not create the organisations strategy, but it helps in understanding the risks associated with alternative strategies being considered and, ultimately, with the adopted strategy. To use the Matrix, plot your options into the appropriate quadrant. The54-year-old Greek-Cypriot entrepreneur hasnt had a formal management role in the airline since he stepped down as chairman in 2002, but he remained a major shareholder, owning more than a third of the company before the pandemic hit. As funding from operations are clearly a major contributor to value creation. EasyJet cost efficiency is achieved in a variety of way as shown in the following diagram: The success of low-fare (cost) strategy is primarily dependent on the maintenance of a low cost base. Those airlines are more dependent on business travel, which many analysts forecast might not fully recover from the pandemic until 2024if it ever recovers at all. It is difficult to co-ordinate the individual employee because in principle they operate independently of each other. EasyJets new holiday division launched in December 2019, just months before the pandemic took hold. As previously mentioned manual processes can increase the chances of fraud, but they can also result in other unnecessary risks. And the simulators have been kept busy virtually around the clock, even during the pandemic, as EasyJet has sought to keep its pilots properly certified so they will be ready when flying returns. Improving scheduling processes to drive crew productivity, also benefitting from the seasonality of our network. But with new, more infectious variants of COVID-19 spreading rapidly in Europe, in October renewed lockdowns were imposed across many parts of the U.K. and from Helsinki to Tel Aviv. He said he had discovered a secret meeting in Switzerland, arranged by Airbus, between top EasyJet executives and a lawyer who, according to documents revealed in the Panama Papers leak, may have helped clients evade international sanctions through offshore shell companies. As it turned out, it wouldnt need those flights. It takes up to last extend in the time. After rejecting the bid, easyJet plans to raise 1.2 billion pounds ($1.7 billion) to stay in the race by funding growth at airports. The way the report has classified the risk is whether the risk is a generic risk that will affect the whole industry of whether the risk is specific to the company. This analysis outlines for EasyJets management how individual activities may be altered to reduce costs of operation or improve the value offered to customers. In 2020, those months were grim. It is evident that having only one collaborate is risky due to the possible delays in time. For the battered airline, 2020 couldnt end soon enough. In terms of support activities, EasyJet takes advantage of technological developments in order to reduce costs. The airline began purchasing carbon offsets for the CO2 of all its flights in 2019. LEGAL The European deregulation of the commercial aviation provided both major strategic threats and opportunities, the national mainstream airlines faced severe price competition from discount carriers. Offers may be subject to change without notice. Front and center was the existential risk of the coronavirus. Effective use of digital and data tools to underpin growth and deepen customer relationships. And the government has said the second of these has to be a more accurate PCR test, which can cost as much as 219 ($302) per passenger. Appendices 1. Dense point-to-point network to allow linking of major airports with large catchments areas with high level of frequency, as this will be attractive to business and leisure travellers. Take it up as a as a proactive exercise embedding it into the organizations strategy instead of merely keeping it a reactive one Periodically monitor, review and update the digital risk framework. An important part of easyJets strategy is to operate a modern fleet and based on the current business model, The pace of recovery will be determined by vaccination rates, Alton Aviations Ryan says.The problem for EasyJet is that almost all the routes it flies involve Europe, and the continent was lagging far behind on vaccinations. Objectives To assess the psychological distress, anxiety, depression, coping strategies, Over time, a brand may experience enough negative interactions that its reputation is placed into a vulnerable position. From simple essay plans, through to full dissertations, you can guarantee we have a service perfectly matched to your needs. All rights reserved. Here you can choose which regional hub you wish to view, providing you with the most relevant information we have for your specific region. Implementing this strategy successfully depends on EasyJets ability to deliver enhanced benefits to customers over its competitors together with low prices. EasyJet is forever trying to attain a cost level that is low relative to its competitors. *You can also browse our support articles here >. EasyJet has other advantages over its full-service rivals too. Create a retirement strategy that diversifies your assets and manages risk. The airline cut a deal with a health care company to provide the test at half the normal cost, or 60 per test. By mid-May, most of the major European nations had administered first doses to just over a third of adults amid critical vaccine supply shortages and concerns about rare but dangerous blood clots linked to AstraZenecasand Johnson & Johnsonsvaccines.Without a brisker vaccination pace, a third wave of infectionskeeps threateningto take hold in Europe. WebAccordingly, children enrolled in childcare before age 12 months had experienced 0.5-0.7 more infections at age 6 years (in total 4.5-5.1 infections) than peers enrolled at age 3 years, differences that persisted throughout adolescence. We're here to answer any questions you have about our services. Analysis of financial resources in order to understand the strategic capability of EasyJet will need examination of financial capability and performance. We need to focus on the things we can control. Dynamic fares with a simple structure and also ensuring that it are the cheapest fare on the route. Reducing the cost, managing the cash burn, and getting access to liquidity, Lundgren told CNBC inNovember. Finally, the key to sustaining high levels of growth is the scalability of the operations. In terms of competitive advantage, the internet offers overall cost leaders new abilities to reduce costs in primary activities such as marketing (i.e. The primary outcomes were anxiety (GAD-7), depression (PHQ-9), risk perception towards COVID-19, interprofessional teamwork attitude, and coping strategies during the Coronavirus disease-19 pandemic. )The crisis has also posed complications for the 54-year-old Lundgren that his competitors dont face, including some particularly unwelcome excess baggage in the form of Stelios Haji-Ioannou. Statista assumes no The minute consumers start to make a choice based on this, and I think they will, an emphasis on sustainability will pay off, says BCG consultant Molenaar, and EasyJet has been out front in preparing for this.. This is critical for EasyJet having analysed the competitive rivalry position in the industry. EasyJets competitive advantages via low prices are sustained in a number of ways. As a result, EasyJet occupies a kind of middle groundin both pricing and costsamong European carriers. easyJet aims to deliver a seamless and digitally enabled customer journey at every stage and is continuously working to enhance the customer experience. Haji-Ioannou founded EasyJet in 1995, eventually using it as a springboard to create of an Easy-branded empire that extended from car rentals and pizza delivery to a hemp business. Registered office: Creative Tower, Fujairah, PO Box 4422, UAE. Diversification. So when the industry was slammed by COVID-19, government was responsive to pleas for help. We will start by looking at strengths: EasyJet serves diverse ranges of European routes with principle activities in both Leisure and business markets, offering 60 key European routes. And it secured two different term loans totaling$563 million, due for repayment in February 2022. Bills will pile up, suppliers will need payments, and your employees will be expecting their salaries. This analysis will highlight the fundamental changes that the airline industry is undergoing, especially; in defence to the turbulent environment it faces from exogenous forces (terrorism, oil prices, SARS etc) and endogenous forces. But EasyJets contract required it to pay the aircraft maker at least $6 billion through 2023a sum considerably greater than the airlines entire current market These moves enabled EasyJet to reduce its operating costs, excluding fuel, by about 31% in the year through Sept. 30, 2020. Thats the day the U.K. government first advised Britons abroad to return home as soon as possible in advance of impending travel restrictions because of the growing coronavirus pandemic. And finally, service, activities that ensure that customers enjoy their flight by providing friendly on board service and assisting traveller with any special needs requirements. Combining perceived low price with perceived added value can be a highly successful strategy but one that requires innovative thinking. Ryanair uncompromisingly fought its way into the market with an aggressive pricing strategy. The same figure for Ryanair was 2.25 pennies, while it was about 5 for British Airways and 5.37 for Air France and KLM. Feeling powerless is one of the worst feelings, not just in business.. The value chain analysis will show the total value added by the airline industry and EasyJet. EasyJet also operates a flat management structure, which may lack a formal discipline that is needed as the organisation grows. SOCIAL changes in consumer taste and lifestyle represent both opportunities and threats for the industry. EasyJet announced it had lost more than $1 billion in the 12 months through September 2020. Hannibal HanschkePool/AFP via Getty Images, Christoph SoederPicture Alliance via Getty Images, Chris RatcliffeBloomberg via Getty Images, one of the biggest winners in the European air-travel dogfight, agreed in January 2020 to deferred prosecution agreements, began purchasing carbon offsets for the CO2 of all its flights, might not fully recover from the pandemic until 2024, LinkedIn has officially entered its cringe era, and its working. Beneath the surface of EasyJets cosmetic cost savings of not offering free in-flight refreshments or different first, business and economy classes, was a philosophy of cost saving that permeated through the entire organisation. If you need assistance with writing your essay, our professional essay writing service is here to help! All airline companies within the industry will have similar value chain, which will include activities such as obtaining fuel, designing fare structures, airport facilities, developing co-operative agreements, and providing customer service. And he was not a happy shareholder: For a decade, he had sparred with a succession of EasyJet CEOs and boardsfaulting them for overly ambitious and costly expansion plans and for ordering too many new aircraft from manufacturing giant Airbus. Now, at the cusp of a summer season that normally would be the source of the majority of EasyJets profits, the airline and its CEO face what could be a make-or-break season. The U.K. requireseven those returning from green countriestake COVID-19 tests before boarding a plane to return to the U.K. as well as within two days of returning. Previously it used telesales and now sales are through e-commerce web site. The fourth force is the bargaining power of buyers. This will show how its critically important for EasyJet that strategic alliance, size and technological innovation have on its profitability. The first step in the risk analysis process is identifying risks you think could affect your project. EasyJet also faces potential threats in terms of unprecedented tragic events like September 11th. Hover your cursor over an icon and you can see what type of plane it is, which airline it belongs to, where it is flying to and from, even its altitude and airspeed. On the other hand, risks which produce Haji-Ioannou also alleged three large minority EasyJet shareholdersthe asset management companies Invesco, Phoenix Asset Management, and Ninety Onewere straw men, secretly controlled by Airbus, since all three companies manage some of the aerospace giants employee pension assets.But, in the end, Haji-Ioannous campaign failed to catch fire with other investors. Due to a recession, fewer business tourists are travelling to downfall the quantity of sending amount. Each node of the supply chainsuppliers, plants, warehouses, and transport routesis then assessed in detail (Exhibit 1). Having considered the possible future opportunities what are the potential threats that EasyJet needs to bear in mind? Please do not hesitate to contact me. Create a retirement strategy that diversifies your assets and manages risk. But at the same time, Haji-Ioannou and his family sold off a portion of their shares, bringing their total holdings to less than 27% of the company by May 2020. Hopes for an early summer 2020 recovery were dashed when the U.K. government decided that it would impose a mandatory two-week period of self-isolation on all those arriving in the country. EasyJet is known for its low-cost competitive pricing. Porter explains that there are five forces inherent in a market, which will jointly determine the intensity of competition and profitability of EasyJet and the airline industry. Protect and build on easyJet's strong brand, Provide an easy and reliable customer experience. This is intensified as a result of little or no differentiation in the service offered. 100 per cent direct selling of fares; over 90 per cent of sales are online. Clicking on the following button will update the content below. The fuel-efficient jets could help EasyJet reduce its carbon footprint at a time when consumers and governments seemed increasingly likely to hold airlines accountable for their climate impact. The airline couldnt simply abandon it without jeopardizing any chance of a quick recovery when the crisis ended.Lundgren also thought the contract made long-term strategic sense. This will require a mindset where innovation (in cost reduction) is regarded as essential to survival. In practice, this means EasyJet has little chance of beating Ryanair or Wizz head-to-head on routes and pricing. That delay exposed EasyJet to greater risk of both hefty fines from Britains chief data protection regulator and class-action lawsuits from customers. Budget airlines that rely on the leisure market make most of their money from April to August. The airlines hopes for summer 2021, like those of almost all airlines, rest on vaccinations. If COVID doesnt ease more quickly, and leisure travel doesnt rebound as hoped,EasyJetshole will only get deeper, and its plans to grow could be spiked indefinitely. It is about a man who faces challenge after challenge but he keeps his mood and rises up again, Lundgren told the newspaper. Many full-service airlines are locked into hub-and-spoke flight networks that limit their scheduling flexibility, BCGs Molenaar says. Responsive to pleas for help full-service rivals too aggressive pricing strategy selling of fares ; over 90 per cent sales... One of the operations be a highly successful strategy but one that requires thinking! The customer experience of all its flights in 2019 CO2 what are the risks associated with easyjet's strategy all its flights in.! Their scheduling flexibility, BCGs Molenaar says EasyJet announced it had lost more than 1. The cost, or 60 per test launched in December 2019, just months before pandemic! 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what are the risks associated with easyjet's strategy