Easyjet: Business Model Analysis

Easyjet.com

EasyJet.com is one of the top travel web sites on the Internet. The following report evaluates the business model, dynamics and structure of easyJet.com. It also outlines the factors responsible for the company’s success including business focus, target market, corporate structure and e-business model. In doing so, the author also hopes to find out what are some of the important aspects of e-business that differentiate and benefit corporations in setting up e-commerce sites such as easyJet.com.

Online travel sites have flocked the Internet in the recent years making travel much easier than before. With the number of online visitors rising every year, the travel market in Europe is estimated to reach Euro 20 billion by 2006 (Europemedia 2002). Success in this market is inherent in deliberate strategic e-business and e-commerce modelling. This is evidence in the following report on easyJet.com.

Building e-business focused web content requires deliberate business as well as technological considerations. These range from the site outlook to the usability and structure of the web site (Dietel, Dietel and Nieto 2001). easyJet.com in terms of an online travel resource is a comprehensive web site designed to deliver a host of services without redundant graphics or advertisements to distract its visitors.

This is because easyJet.com knows its audience: online visitors living in the continent of Europe looking for cheap, comfortable and comprehensive real time travel related deals without the hassle of third party agents. To serve this type of audience easyJet.com has designed a web site that has all information easily available in all the dominant languages of the region and segmented under different tabs of accommodation, car rental, travel insurance, airport related transport and flight booking to allow the visitor to go directly to required service. It also has sub tabs for easy access to schedules, timetables and rates etc. in real time. Each of these sections and sub sections are governed by moderate graphics to represent the services easyJet.com has to offer and links to the different web pages within its web site. Moderate use of text eliminates time wastage yet at the same time conveys accurate message to the audience to guide them to various links based on logical visitor’s usage. For example a visitor booking a flight will first insert the date of travel, destination, and check for its availability; then moves on to make the final booking/purchase. There is enough information on each page to support the requirement of the visitor without abstract marketing banners to detract real buyers. Unlike its competitors’ web sites like www.lastminute.com or www.bahn.de, easyJet.com concentrates on usability and reliability of information (Nielson 1994) rather than visibility and colourful display alone. However, this is not to say that the web site lacks colours. The use of orange colour throughout the web site is consistent with easyJet’s own corporate colour code so that clients can associate with easyJet the airline company, which is a critical aspect of web site development (Nielson 1994).

easyJet is a no-frills airline and it targets at the business and the leisure consumers. Likewise, easyJet.com also targets the business and leisure consumers who are not interested in dealing with third party intermediaries. The target audience is keen on saving time and money. For the business and frequent fliers, easyJet.com provides easy access to booking, scheduling of flights, accommodation and transportation. Amenities like choice of airport lounges or airport parking are important in making the process of travel booking complete. Realizing corporate need for discounted and group travel easyJet.com has reserved a section of its website for B2B transactions which offers unique packages especially for the business to business customers.

On the other hand for the leisure individual travellers, easyJet.com also serves them with daily flights, hotel, insurance, airport transportation and such services and at the same time updates them with offers of the week, seasonal packages, and weekend deals which the consumers may avail whenever they like.

Based on these target audiences and the kind of services offered, easyJet.com could be considered to be an ideal re-intermediation where the manufacturer/service provider (easyJet) is in direct contact with the consumers communicated through an electronic medium (Internet). This form of intermediation reduces cost through agency intermediation, customer service, networks and help in transforming the business to e-business corporate structure. Consequently, the company uses technology mediation to sell its products and services and create business value.

The purpose of setting up an online business is to ensure growth, efficiency, competitive advantage and leverage over competitors. More importantly an e-business structure helps in deciding the direction of the business. easyJet.com initially followed an “e-manufacturer” business model as it had been the provider of online airline ticketing for UK residents (EasyJet Profile 2003). A manufacturer business model in e-commerce sense refers service providers who may or may not be in direct contact with the consumers. Being an e-manufacturer meant that easyJet.com has been able to cut down its supply chain to deal with its consumers directly. This is evidence in the fact that easyJet had sold approximately 90% of its flights online (EasyJet Profile 2003).

However, as the company evolved its e-business model also changed to have become a travel related service “merchant”. This is evidence from the expansionary steps taken to include hotel and apartment booking services, car rental, airport lounges as well as parking services which are out of bound of easyJet.com’s core product category. By subletting services of hotels, car rental and the like easyJet.com has become the intermediary and has been able to generate more profits, add value to its product offering and target more customer base (Afuh and Tucci 2002).

easyJet.com’s success could be attributed to management understanding of its business model and its function to the organizational structure. Given the constantly evolving business environment of today, easyJet and other businesses need to understand the dynamic nature of their organization and anticipate future business needs. Understanding and adopting business models are critical endeavours that enable the business to develop competitive advantage and add value to products and services (Eckersley, Harris and Jackson 2003). Understanding one’s business model helps in reducing inefficient functions, redundancies and untargeted markets. It helps in designing and adopting new business model(s) that may be more attuned to the requirement and needs of the market by creating niches or segmentation. Especially on the internet, business models need to be evaluated constantly to match with the consumer demands and business environment need to sustain competitive edge (Bloch, Pigneur and Segev 1996).

A flexible company or entrepreneur would be able to understand the need in keeping its e-business model dynamic and be able to anticipate change management as and when required. In the author’s opinion this is critical for the success of any business whether online or offline because change management is important. Organization today have to take into consideration transaction cost, budgets, organizational design and its implications as well as the impact of change on the organization (Jones 2003). Considerations to these aspects mean that the entrepreneur or the management of the company needs to be flexible enough to react and implement change as required not for the benefit of being flexible but also for profitability’s sake. For example easyJet.com initially started out as a no-frill airline at the domestic level but it has been fast in adapting to the new e-business model of merchant/retailer for travel related services without compromising its core product and service. Consequently, it has been able to gain competitive advantage in the no-frill airline business before other organizations have been able to forecast its emergence. Thus, in my opinion organizations that do not capitalize on opportunity cost inherent in flexibility lose out in competitive advantage and therefore fail to add value to the products and services that they have to offer. Ultimately, it will lose out in the competition.

The above report reflects easyJet.com’s dynamic strategy for its online business model. Through its web site, easyJet has been able to secure one of the top positions among travel related web sites. Not only this but the structure, design, usability and usefulness of the website have enabled it to secure leverage over its competitors. More importantly, easyJet.com has incorporated flexibility in its e-business model which enables it to foresee change and develop strategies to counteract accordingly. Consequently it has become one of the most successful web sites on the Internet.

References

Afuah, A. and Tucci, C. 2002, Internet Business Models and Strategies: Text and cases, 2nd edition, McGraw Hill

Author not available, 2002, Europeans flock to online travel sites. Europemedia. Amsterdam: Feb 14, 2002 Issue.

Author not available, 2003, EasyJet Profile, BizEd, Accessed on 7-11-2005 from: <http://www.bized.ac.uk/compfact/easyjet/easyindex.htm>

Bloch M, Pigneur Y, Segev A 1996, ‘Leveraging Electronic Commerce for Competitive Advantage: a Business Value Framework’ 9th International Conference on EDI-IOS Bled, Slovenia.

Deitel, Deitel & Nieto, 2001, e-Business and e-Commerce: How to program, Prentice Hall.

easyJet Official Website, Accessed on 7-11-2005 from: <www.easJet.com>

Eckersley, P. M, Harris, L. and Jackson, P. 2003, E-Business Fundamentals: Managing Organisations in the Electronic Age. Routledge: New York.

Jones, G. 2003, Organizational Theory, Design, and Change, Fourth Edition, Prentice Hall.

Nielson, J. 1994, Ten Usability Heuristics. In Nielsen, J., and Mack, R.L. (Eds.), Usability Inspection Methods, John Wiley & Sons, New York, NY. Available at: http://www.useit.com/papers/heuristic/heuristic_list.html

Phillips P. 2003, E-Business Strategy, McGraw-Hill.

www.bahn.de

www.lastminute.com