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In reality, an industry's set of characteristics define its own success factors. Different industries will thus have different success factors. In service industry, however, cost and customer service are the major factors that companies compete for. With cost the firm aims to create added value by delivering same benefits as its competitors, but at a lower cost. Customer service is to deliver great service to exceed their expectations. It is the service experience that builds reputations and expands business, or destroys reputations and contracts business (85words).
In airline industry, customers' demand varies. In the past, most customers travelled in luxury airplanes. British Airlines (BA) is a good example. BA provides great services and travellers had no choice to pay high cost. Today, definition of 'airline' has been changed with the presence of low fare carriers. Air travel is no longer luxury and everyone now can fly at affordable price. The key objective of low fare carriers is to reach the market at a lower cost and to provide the services to large segment. EasyJet and Ryaniar are two top low fare carriers in Europe with different operation strategies. Traveller who look for low price and if comfy is not a factor, Ryanair could be a good choice. Traveller who is in budget and looking for convenience, EasyJet is the best choice. Low fare is a distinct order qualifier in low cost airline industry.
EasyJet is the second largest low fare airline service provider behind Ryanair, expanding rapidly since its establishment in 1995. Operating from its Luton headquarters, it carries around 40 million a year with a growing fleet of over 180 aircrafts. Today, EasyJet employed over 7,300 people and flies to over 500 routes including to European, North African, and West Asian countries. (207words)
Travellers are attracted to different attributes, termed as performance objectives. Travellers with budget control will likely to use either EasyJet or Ryanair; both offer a competitive low price. Ryanair claim an average £34 per 600km, EasyJet claim £45. EasyJet is not as cheap as Ryanair's, but travellers have an option to travel at different times on the same day. EasyJet's options are more visible and easier to understand compared to Ryanair.
However, cost is not only the basis they can compete. This brings to another objective, dependability. EasyJet flies to both primary and secondary airport with high frequency. Flying to main airport is to provide convenience, secondary airport to avoid delays, high turnaround and cut operating cost, and high frequency per day is to enable travellers to choose suitable scheduled flight and load more passengers. Ryanair only flies to secondary airport to keep cost low with minimum flight frequency.
Following this is flexibility. In theory, it refers to the ability of EasyJet to offer a wide variety of services to their passengers. With the increasing demand of business travellers who are under budget control, EasyJet is the right option who serves the market with quality services. EasyJet is now serving both, leisure and business travellers, which Ryanair do not have. Low cost, high dependability and flexibility in providing their services are the main competitive factors identified in this study.
To differentiate EasyJet further, EasyJet is good in innovation. Corporate customers are now for the first time able to view and make reservation through Global Distribution Systems (GDS), business.EasyJet.com. With such service, there is no change to either EasyJet`s business model or its unique pricing structure. Unlike Ryanair, they innovate their service to cut operating cost but at the same time to charge every single service offered to their passengers. The different the way they innovate their services can distinctly distinguished between the two. Innovation is the EasyJet's order winner.(319words)
From the above, EasyJet has their own competitive factors over their main contender, Ryanair. However, EasyJet values in no frills, care and convenience, low cost concept and to keeping costs low requires high assets utilization and high efficiency in every parts of their operation. There is no reason for travellers not to use EasyJet as their main carrier. (58words)
In theory, innovation is any new idea or getting ideas from already existing ones and redesigns it to make it work better. It is what keeps EasyJet moving forward and to succeed in its competitive environment. Speedy Boarding Plus is the latest EasyJet innovation to give their customers more choice and flexibility. This new facility builds on the success not only providing passengers with the opportunity to board a flight first and have a wider choice of seats but also offer them a dedicated check-in area compared with Ryanair innovation to cut cost without considering their passengers convenience. This could be seen in their plans to cut costs by making fliers perch on stools with seatbelts around their waists. Ryanair wants passengers to stand onboard so the budget airline can squeeze more people. EasyJet aimed to offer more convenience to passengers while keeping the cost as low as possible.
EasyJet's innovative deal with Business Travel International (BTI), which is a leading travel management company, will give access to their booking inventory and certain back-office systems. This will help increase EasyJet`s penetration into the lucrative corporate travel market. Also, the innovation of a new technology called AVOID (Airborne Volcanic Object Identifier and Detector) which would be mounted on a plane's tail fin, will allow pilots to detect dangerously high levels of ash and to avoid violent thunderstorms. This new technology will prevent a repetition of the blanket bans on airspace that brought havoc to millions of passengers across Europe in March and April. (272words)
Task 6 -
Low cost Leadership Strategy
EasyJet is adopting a low cost leadership strategy - a strategy that allows them to provide services at low price than their competitors. This was identified as EasyJet's order qualifier. Low cost concept can be derived from high asset utilization and high operating efficiency (Figure). At EasyJet, the aircraft flies 11 hours a day, four hours longer than BA while the pilots fly 900 hours a year, same as Ryanair, but 50% more than British Airways.
EasyJet provide convenience to its customer through direct sales of ticket through the company website, www.easyiet.com. This gives their known consumers no hesitation about booking online and choice is offered 24 hours a day, seven days a week and reductions are offered for booking on the web. Passengers are also given the best fare available on each flight which is quoted one way. This means that the best price for the most convenient flight can be obtained both ways, optimizing the round trip cost for the passenger. This compared with the inflexible pricing and ticketing structures offered by conventional airlines. (223words)
It is also identified that EasyJet is adopting a bidirectional supply chain as well as outsourcing strategy (Figure ) in their attempt to cut cost. EasyJet acts as an agent to travellers while outsourced many of its services and goods from suppliers. Services such as aircraft maintenance is oversee by SR Technics, Network Infrastructure to enable the online booking is managed by Alfred McAlpine, and In-flight magazine is provided by Ink Company. Gate Gourmet is responsible for the supply of all food for onboard purchase, duty free products, and crew meals. Both bidirectional and outsourcing strategies helped EasyJet to focus on their core operation and help them to cut their cost.(111words)
EasyJet make use of value-based approach to quality in terms of cost and customer service. Customers may accept low quality service for a lower price compared to BA where customers are offered great quality service for a higher price. EasyJet offers quality service to its customers by targeting both leisure and business travellers. At EasyJet, the checked in baggage charge is slightly higher than Ryanair's, at £22, but travellers are allowed 20 kilos of baggage. In addition, EasyJet has no specific weight for hand luggage. EasyJet also charge a booking fee, but this is per booking, rather than per person, as in the case of Ryanair. As for business travellers, they are allowed to check-in and board earlier without charge. Ryanair do not offer such services. At EasyJet, online check-in is also available to all travellers with no fee but Ryanair charged £5 per traveller. More business services are summarized in table __. (153words)