Case Study Description of EasyJet: The Web's Favorite Airline
Stelios Haji-Ioannou, the 32-year-old CEO and founder of easyJet airlines, achieved profitability for the first time in 1999, almost four years after launching his London-based, low-cost carrier. The concept behind easyJet was to offer low-cost airline service to the masses, and the airline accomplished this by adopting an efficiency-driven operating model, creating brand awareness, and maintaining high levels of customer satisfaction. A key issue in the case is whether the airline will continue to grow and survive in the highly competitive, low-cost segment of the market. In 2000, Haji-Ioannou was anxious to try his hand at launching other businesses, so he started a chain of Internet cafes. Some questioned whether Haji-Ioannou would be able to transfer his low-cost business model successfully to Internet cafes. Undeterred, Haji-Ioannou moved ahead with his plan to create easyEverything, with the belief that he could make a profit by encouraging customers to surf the Internet, send e-mail, and shop online. A 2002 and 2001 ECCH award winner.
Swot Analysis of "EasyJet: The Web's Favorite Airline" written by Nirmalya Kumar, Brian Rogers includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Haji Ioannou facing as an external strategic factors. Some of the topics covered in EasyJet: The Web's Favorite Airline case study are - Strategic Management Strategies, Competition, Internet, Marketing, Supply chain and Innovation & Entrepreneurship.
Some of the macro environment factors that can be used to understand the EasyJet: The Web's Favorite Airline casestudy better are - – banking and financial system is disrupted by Bitcoin and other crypto currencies, digital marketing is dominated by two big players Facebook and Google, increasing transportation and logistics costs, there is increasing trade war between United States & China, competitive advantages are harder to sustain because of technology dispersion, supply chains are disrupted by pandemic , wage bills are increasing,
increasing inequality as vast percentage of new income is going to the top 1%, geopolitical disruptions, etc
Introduction to SWOT Analysis of EasyJet: The Web's Favorite Airline
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in EasyJet: The Web's Favorite Airline case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Haji Ioannou, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Haji Ioannou operates in.
According to Harvard Business Review, 75% of the managers use SWOT analysis for various purposes such as – evaluating current scenario, strategic planning, new venture feasibility, personal growth goals, new market entry, Go To market strategies, portfolio management and strategic trade-off assessment, organizational restructuring, etc.
SWOT Objectives / Importance of SWOT Analysis and SWOT Matrix
SWOT analysis of EasyJet: The Web's Favorite Airline can be done for the following purposes –
1. Strategic planning using facts provided in EasyJet: The Web's Favorite Airline case study
2. Improving business portfolio management of Haji Ioannou
3. Assessing feasibility of the new initiative in Innovation & Entrepreneurship field.
4. Making a Innovation & Entrepreneurship topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Haji Ioannou
Strengths EasyJet: The Web's Favorite Airline | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Haji Ioannou in EasyJet: The Web's Favorite Airline Harvard Business Review case study are -
High switching costs
– The high switching costs that Haji Ioannou has built up over years in its products and services combo offer has resulted in high retention of customers, lower marketing costs, and greater ability of the firm to focus on its customers.
Ability to recruit top talent
– Haji Ioannou is one of the leading recruiters in the industry. Managers in the EasyJet: The Web's Favorite Airline are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Sustainable margins compare to other players in Innovation & Entrepreneurship industry
– EasyJet: The Web's Favorite Airline firm has clearly differentiated products in the market place. This has enabled Haji Ioannou to fetch slight price premium compare to the competitors in the Innovation & Entrepreneurship industry. The sustainable margins have also helped Haji Ioannou to invest into research and development (R&D) and innovation.
Superior customer experience
– The customer experience strategy of Haji Ioannou in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
High brand equity
– Haji Ioannou has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Haji Ioannou to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Digital Transformation in Innovation & Entrepreneurship segment
- digital transformation varies from industry to industry. For Haji Ioannou digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Haji Ioannou has successfully integrated the four key components of digital transformation – digital integration in processes, digital integration in marketing and customer relationship management, digital integration into the value chain, and using technology to explore new products and market opportunities.
Operational resilience
– The operational resilience strategy in the EasyJet: The Web's Favorite Airline Harvard Business Review case study comprises – understanding the underlying the factors in the industry, building diversified operations across different geographies so that disruption in one part of the world doesn’t impact the overall performance of the firm, and integrating the various business operations and processes through its digital transformation drive.
Successful track record of launching new products
– Haji Ioannou has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Haji Ioannou has effective processes in place that helps in exploring new product needs, doing quick pilot testing, and then launching the products quickly using its extensive distribution network.
Training and development
– Haji Ioannou has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in EasyJet: The Web's Favorite Airline Harvard Business Review case study by analyzing – employees retention, in-house promotion, loyalty, new venture initiation, lack of conflict, and high level of both employees and customer engagement.
Learning organization
- Haji Ioannou is a learning organization. It has inculcated three key characters of learning organization in its processes and operations – exploration, creativity, and expansiveness. The work place at Haji Ioannou is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in EasyJet: The Web's Favorite Airline Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Innovation driven organization
– Haji Ioannou is one of the most innovative firm in sector. Manager in EasyJet: The Web's Favorite Airline Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Ability to lead change in Innovation & Entrepreneurship field
– Haji Ioannou is one of the leading players in its industry. Over the years it has not only transformed the business landscape in its segment but also across the whole industry. The ability to lead change has enabled Haji Ioannou in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Weaknesses EasyJet: The Web's Favorite Airline | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of EasyJet: The Web's Favorite Airline are -
Increasing silos among functional specialists
– The organizational structure of Haji Ioannou is dominated by functional specialists. It is not different from other players in the Innovation & Entrepreneurship segment. Haji Ioannou needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Haji Ioannou to focus more on services rather than just following the product oriented approach.
Skills based hiring
– The stress on hiring functional specialists at Haji Ioannou has created an environment where the organization is dominated by functional specialists rather than management generalist. This has resulted into product oriented approach rather than marketing oriented approach or consumers oriented approach.
Products dominated business model
– Even though Haji Ioannou has some of the most successful products in the industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. firm in the HBR case study - EasyJet: The Web's Favorite Airline should strive to include more intangible value offerings along with its core products and services.
Low market penetration in new markets
– Outside its home market of Haji Ioannou, firm in the HBR case study EasyJet: The Web's Favorite Airline needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the EasyJet: The Web's Favorite Airline HBR case study still accounts for major business revenue. This dependence on star products in has resulted into insufficient focus on developing new products, even though Haji Ioannou has relatively successful track record of launching new products.
Workers concerns about automation
– As automation is fast increasing in the segment, Haji Ioannou needs to come up with a strategy to reduce the workers concern regarding automation. Without a clear strategy, it could lead to disruption and uncertainty within the organization.
High operating costs
– Compare to the competitors, firm in the HBR case study EasyJet: The Web's Favorite Airline has high operating costs in the. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Haji Ioannou 's lucrative customers.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Haji Ioannou is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study EasyJet: The Web's Favorite Airline can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
High bargaining power of channel partners
– Because of the regulatory requirements, Nirmalya Kumar, Brian Rogers suggests that, Haji Ioannou is facing high bargaining power of the channel partners. So far it has not able to streamline the operations to reduce the bargaining power of the value chain partners in the industry.
Need for greater diversity
– Haji Ioannou has taken concrete steps on diversity, equity, and inclusion. But the efforts so far has resulted in limited success. It needs to expand the recruitment and selection process to hire more people from the minorities and underprivileged background.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study EasyJet: The Web's Favorite Airline, is just above the industry average. Haji Ioannou needs to redesign the compensation structure and incentives to increase the revenue per employees. Some of the steps that it can take are – hiring more specialists on project basis, etc.
Opportunities EasyJet: The Web's Favorite Airline | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities highlighted in the Harvard Business Review case study EasyJet: The Web's Favorite Airline are -
Creating value in data economy
– The success of analytics program of Haji Ioannou has opened avenues for new revenue streams for the organization in the industry. This can help Haji Ioannou to build a more holistic ecosystem as suggested in the EasyJet: The Web's Favorite Airline case study. Haji Ioannou can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Leveraging digital technologies
– Haji Ioannou can leverage digital technologies such as artificial intelligence and machine learning to automate the production process, customer analytics to get better insights into consumer behavior, realtime digital dashboards to get better sales tracking, logistics and transportation, product tracking, etc.
Buying journey improvements
– Haji Ioannou can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. EasyJet: The Web's Favorite Airline suggest that firm can provide automated chats to help consumers solve their own problems, provide online suggestions to get maximum out of the products and services, and help consumers to build a community where they can interact with each other to develop new features and uses.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Haji Ioannou can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Innovation & Entrepreneurship industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Haji Ioannou can take advantage of these changes in consumer behavior to build a far more efficient business model. For example consumer regular ordering of products can reduce both last mile delivery costs and market penetration costs. Haji Ioannou can further use this consumer data to build better customer loyalty, provide better products and service collection, and improve the value proposition in inflationary times.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Haji Ioannou in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Innovation & Entrepreneurship segment, and it will provide faster access to the consumers.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Haji Ioannou to expand its talent hiring zone. According to McKinsey Global Institute, 20% of the high end workforce in fields such as finance, information technology, can continously work from remote local post Covid-19. This presents a really great opportunity for Haji Ioannou to hire the very best people irrespective of their geographical location.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Haji Ioannou is facing challenges because of the dominance of functional experts in the organization. EasyJet: The Web's Favorite Airline case study suggests that firm can utilize new technology to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Learning at scale
– Online learning technologies has now opened space for Haji Ioannou to conduct training and development for its employees across the world. This will result in not only reducing the cost of training but also help employees in different part of the world to integrate with the headquarter work culture, ethos, and standards.
Using analytics as competitive advantage
– Haji Ioannou has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in the sector. This continuous investment in analytics has enabled, as illustrated in the Harvard case study EasyJet: The Web's Favorite Airline - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Haji Ioannou to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Loyalty marketing
– Haji Ioannou has focused on building a highly responsive customer relationship management platform. This platform is built on in-house data and driven by analytics and artificial intelligence. The customer analytics can help the organization to fine tune its loyalty marketing efforts, increase the wallet share of the organization, reduce wastage on mainstream advertising spending, build better pricing strategies using personalization, etc.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Innovation & Entrepreneurship industry, but it has also influenced the consumer preferences. Haji Ioannou can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Identify volunteer opportunities
– Covid-19 has impacted working population in two ways – it has led to people soul searching about their professional choices, resulting in mass resignation. Secondly it has encouraged people to do things that they are passionate about. This has opened opportunities for businesses to build volunteer oriented socially driven projects. Haji Ioannou can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Threats EasyJet: The Web's Favorite Airline External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study EasyJet: The Web's Favorite Airline are -
Shortening product life cycle
– it is one of the major threat that Haji Ioannou is facing in Innovation & Entrepreneurship sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Instability in the European markets
– European Union markets are facing three big challenges post Covid – expanded balance sheets, Brexit related business disruption, and aggressive Russia looking to distract the existing security mechanism. Haji Ioannou will face different problems in different parts of Europe. For example it will face inflationary pressures in UK, France, and Germany, balance sheet expansion and demand challenges in Southern European countries, and geopolitical instability in the Eastern Europe.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Haji Ioannou can face downward pressure on margins from increasing competition from international players. The international players have stable revenue in their home market and can use those resources to penetrate prominent markets illustrated in HBR case study EasyJet: The Web's Favorite Airline .
Aging population
– As the populations of most advanced economies are aging, it will lead to high social security costs, higher savings among population, and lower demand for goods and services in the economy. The household savings in US, France, UK, Germany, and Japan are growing faster than predicted because of uncertainty caused by pandemic.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study EasyJet: The Web's Favorite Airline, Haji Ioannou may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Innovation & Entrepreneurship .
Technology acceleration in Forth Industrial Revolution
– Haji Ioannou has witnessed rapid integration of technology during Covid-19 in the Innovation & Entrepreneurship industry. As one of the leading players in the industry, Haji Ioannou needs to keep up with the evolution of technology in the Innovation & Entrepreneurship sector. According to Mckinsey study top managers believe that the adoption of technology in operations, communications is 20-25 times faster than what they planned in the beginning of 2019.
High level of anxiety and lack of motivation
– the Great Resignation in United States is the sign of broader dissatisfaction among the workforce in United States. Haji Ioannou needs to understand the core reasons impacting the Innovation & Entrepreneurship industry. This will help it in building a better workplace.
High dependence on third party suppliers
– Haji Ioannou high dependence on third party suppliers can disrupt its processes and delivery mechanism. For example -the current troubles of car makers because of chip shortage is because the chip companies started producing chips for electronic companies rather than car manufacturers.
Technology disruption because of hacks, piracy etc
– The colonial pipeline illustrated, how vulnerable modern organization are to international hackers, miscreants, and disruptors. The cyber security interruption, data leaks, etc can seriously jeopardize the future growth of the organization.
Stagnating economy with rate increase
– Haji Ioannou can face lack of demand in the market place because of Fed actions to reduce inflation. This can lead to sluggish growth in the economy, lower demands, lower investments, higher borrowing costs, and consolidation in the field.
Increasing wage structure of Haji Ioannou
– Post Covid-19 there is a sharp increase in the wages especially in the jobs that require interaction with people. The increasing wages can put downward pressure on the margins of Haji Ioannou.
Backlash against dominant players
– US Congress and other legislative arms of the government are getting tough on big business especially technology companies. The digital arm of Haji Ioannou business can come under increasing regulations regarding data privacy, data security, etc.
New competition
– After the dotcom bust of 2001, financial crisis of 2008-09, the business formation in US economy had declined. But in 2020 alone, there are more than 1.5 million new business applications in United States. This can lead to greater competition for Haji Ioannou in the Innovation & Entrepreneurship sector and impact the bottomline of the organization.
Weighted SWOT Analysis of EasyJet: The Web's Favorite Airline Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers in the HBR case study EasyJet: The Web's Favorite Airline needs to zero down on the relative importance of each factor mentioned in the Strengths, Weakness, Opportunities, and Threats quadrants.
We can provide the relative importance to each factor by assigning relative weights. Weighted SWOT analysis process is a three stage process –
First stage for doing weighted SWOT analysis of the case study EasyJet: The Web's Favorite Airline is to rank the strengths and weaknesses of the organization. This will help you to assess the most important strengths and weaknesses of the firm and which one of the strengths and weaknesses mentioned in the initial lists are marginal and can be left out.
Second stage for conducting weighted SWOT analysis of the Harvard case study EasyJet: The Web's Favorite Airline is to give probabilities to the external strategic factors thus better understanding the opportunities and threats arising out of macro environment changes and developments.
Third stage of constructing weighted SWOT analysis of EasyJet: The Web's Favorite Airline is to provide strategic recommendations includes – joining likelihood of external strategic factors such as opportunities and threats to the internal strategic factors – strengths and weaknesses. You should start with external factors as they will provide the direction of the overall industry. Secondly by joining probabilities with internal strategic factors can help the company not only strategic fit but also the most probably strategic trade-off that Haji Ioannou needs to make to build a sustainable competitive advantage.
