Strategic Plan For Relocation Of EasyJet’s Headquarters To Madrid, Spain

Purpose of the report

Easy Jet is an airline which is based on London Luton airport. This is a British airline which operates both domestic and international services. The company was established in the 1995 by Stelios Haji-loanno. In the year 1996, company owned 2 planes to start first international flight from London luton to Amsterdam. EasyJet started selling online tickets to the customers in 1998. In the year 2002, easy jet became one of the low cost airlines of the Europe; this took place after the merger of the Easy Jet and Go Fly. This airline was the first low cost airline who introduced online check in system for its customers who belongs to UK in 2006. Company has expanded their business in many countries outside EU. With the emergence of the online facility customers find more attractive facility like seating arrangement and speedy boarding (Easy Jet plc, 2017).

EU chief warned the airline that there are the possibilities that either Easy jet or Ryanair need to relocate their headquarters from European nations, if they want to continue by providing services to the customers. London stock exchange statement state that as per the brexit vote easy jet needs to relocate their headquarters from UK to EU member state. For that Easy Jet appointed me as the consultant which helps the company to understand the strategic plan. The business plan shows the relocate of headquarters from UK to Spain. Spain is one of the recommended options to the Easy Jet. The city selected in Spain is Madrid which is having population 3.2 million.

The company can face the restriction from the government that can affect the working of the company. The laws related to the labor, can affect the working of the Easy jet company in Spain. In the Spain there is inflexibility in the labor market. For setting up headquarters in Spain Company need to take care of the resources which are essential. Human resource plays the most important in the working of the company. Easy Jet needs to take care of the Political Stability of Spain.

Talking about the Spain economy is growing continuously, in the year 2014 GDP grew 1.4% and in the year 2015, Spain achieved GDP 0.9% in the first quarter of the year (Department for international trade, 2015). This shows that there is the increase in the growth of the company and living standard of the people. This is a good sign for Easy Jet Company to set up their business in Spain.

PESTLE Analysis

The company takes care of the social factors that is the reason the company offer cheap prices along with the low-cost carriers. In Spain also company find huge tourism activities. So considering that company can also keep the prices low, this helps the company to attract more and more customers (Filipovic, 2013). By providing convenient way to book the tickets company is taking care of the society as well.

Technology advancement is required in the country as this is essential for the Easy jet. The company motive is to attract customer by providing attractive services to them. Spain is investing in the Research and Development capabilities of the company. The aim of the Spain is to bring more participation and innovation in the company.

Legal factors related to the consumer law, health and safety law etc. can be faced by the airline. While setting up the business in the Spain company need to make sure that the customer safety is must. And considering the safety of the customers they need to take the right step.

Tourists can affected with the change in the climate and according to that only they make further plans for the visit. Bad weather can affect the revenue of the Easy jet in Spain. Company need to take care to use fuel efficient tools so that the impacts on the environment of the Spain reduce.

The competition is high in the airline industry, Ryan air is a big competitor of Easy Jet. Easy Jet competitors are going be high in the case because company is relocating the place. That may involve the huge risk of rivalry as Spain has some of the airlines. Bravofly an airline which is established in Spain also follows LCC model so there can be possibility of high level of Industry Rivalry. (Refer Appendix 1.2)

The airline companies totally relay on the aircraft manufactures because for connecting people and routes and for their business they need Airbus and Boeing. Easy Jet also have tie up with suppliers suited in UK, but now as the company is switching the place to Spain then the ties between the buyers and suppliers might be possible break or sustain in the business. This totally depends on the Easy Jet requirement, after relocating company can find other supplier who can offer them a fair deal. Hence, company can switch the supplier as well so the bargaining power of the supplier is Low.

Porter’s five forces

The customer or buyer in this industry plays an important role, customer check the prices where they can get the best suitable prices. The customer can easily switch the flight according to their requirement. Considering Easy jet implement LCC model which attract more and more customers (Fedosova, 2016). Spain is the place where the tourism is increasing day by day. Generally people who prefer Easy Jet include who go for the office purpose and tourists. Over here the bargaining power of the buyers is low.

The threat of new entrants in the airline industry is quite low, entering in the field of the airline need a big investment in the field (Mullins, 2013). Easy jet is the biggest operator and that is the reason the company follow LCC model. Due to Brexit Referendum; Company can face difficulty as the EU might not allow the company to set a base in Spain and apart from it company can face problem in settling the business and earning revenue out of it.

The threat of substitutes medium to the easy Jet company, because Ryan air also follow LCC model so customer can switch from Easy Jet to other company. Customers can also relay on other way of traveling for the short distance this will reduce the revenue of the company for the short run travels (Refer Appendix 1.3). In Spain the tourism visits because of the beauty of the Spain. Though easy jet offers attractive holiday packages to the customers thus this reduce the risk of the substitutes (Easy Jet, 2017).

Easy Jet is running business in more than 30 countries which include more than 600 routes. This airline flight provides services across the different countries. The amount of the pricing and the fuel is included in the inbound logistics. The pricing to the passengers is low, as Easy Jet is one of the low cost carriers. The company spend amount on the fuel approx. 1251 million euro.

In the operations, the activities included are safety services of the customers. The airline take care of their customers, the members provide directions to the crew members that ensure the safety of the crew and passengers (Curran, et.al., 2010). Easy Jet makes sure that customer needs to manage the ticket counters so that customer can easily buy tickets. The airline ground crew management and on board services are included in operations activities.

Apart from the internal logistics Easy Jet also perform outbound logistics which include the baggage system in which they bring bags in one cabin that includes wheels and handles. This airline provides hotel reservation and rental car services to the customers, in which customers can hire car from the airport to the different places (OriAde, & CAmerOn, 2016).

Primary activities

Promotion and advertisement is the essence of the business. The main promoters of the company include customer who travel in Easy Jet, apart from it company also follow some discount packages for the regular customer that attract customers (Rigby, 2011). The color used by the easy jet is very bright color (orange), for the advertisement company use catchy slogan “come fly with us” which attracts number of customers.

The company includes some of the services which they believe in and those services are approach to customer satisfaction, sales with the use of the technology wither through internet or telephone sales (Althonayan & Sharif, 2010). The seating arrangement is on the basis of first come first serve basis. These things are included in the service activity of the airline.

Infrastructure of the Easy Jet matters allot for the company, as the brand is the well-known brand and the reputation of easy jet is good in the market. Though the brand model is LCC which ultimately effect the customer perceptions; LCC impact services and they believe they are getting low cost services.

Easy jet believes in recruiting young people and wants to maintain a corporate culture on the workplace that includes people should be well dressed up (Boxall, & Purcell, 2011). In this activity company also provide training and development plans to the employees of the airline and they want to make the employee should develop personal skills which help them in personal grooming.

Technology is used by the Easy jet as this helps the company to attract more towards the airline (Enkel, & Gassmann, 2010). With the emergence in the competition in the world there is emergence in the technology as well. After the availability of the online ticking Easy Jet 95% customer book ticket online only. Currently, easy jet has Launched Right Now Service so that they can help out the customers. The launch of the App also helps the customers.

The suppliers of the easy jet include Airbus and Boeing which the help the company in regular dealing. The company maintains a good relationship with their supplier, and forming deal with the external companies. They follow an innovative system with the help of which they will be able to evaluate the supplier’s performance so that they can bring increase in the quality of their work.

Company has a strong reputation in the market and among the customers (Dey, 2015).

Inbound logistics

Company follow LCC model in which company provide benefit to the customers along with that company provide facility of booking ticket online.

Company is applying different strategies to reduce the cost of the fuel and bring the fuel efficiency. Safety is the major concern for the company and company take care of that safety.

There is no separate class for the customer; there is only one seating plan that may be a reason of losing customers.

The departure airports of the company Easy Jet are limited which force the customers to shift to the different airline.

The company has the vast opportunity in the airline industry. Spain tourist count is increasing day by day which leads to an opportunity for airlines.

Spain consists of innovative carbon reduction solutions which help airline to reduce carbon.

With the EU referendum company faced barrier in growth, further company can face political barriers in Spain.

Company can face the threat of terrorism activities in Spain.

Justification – The headquarters of the company are going to relocate to Spain company need to maintain the same mission and vision there is no need to bring any change in the mission and vision of the company. As the company believe in uniqueness of the brand and the services they provide, this will help the company to set the new market in Spain. Carrying the same value company can easily get the success in setting up the headquarters in Spain.

Selection of EU city Spain is done considering the place where Easy Jet can set up the business and have business opportunity.

The strategy Easy Jet is maintaining LCC model also to create strong bounding, the company should continue maintaining this strategy as the model is attractive for the customers of the Spain (Easy Jet plc, 2017,). In Spain the count of tourist is continuously increasing which gives the company a better opportunity. The city selected Madrid is consists of most popular markets for local, regional and foreign tourists. Thus the reason behind the selection of the Madrid is increasing number of the tourist. The city consists of the popular and unique markets and this attracts the customers (Leahwarner, 2017). Madrid, capital city of the Spain is having the highest population. The market for the airline in Madrid is good, even the company easy jet provide holiday’s packages to the tourists to visit to Madrid.

Operations

The airline service product includes the services to the passengers. The essence of the company is the services that company provides to its customers (Poulsen, & Fowler, 2012).

Company should keep adding to the services with the implementation of new technology.

Company should maintain LCC model in Spain which help the company to attract the customers (Malighetti, Paleari, & Redondi, 2015).

Company is offering different holiday packages of Spain, now company should focus on other cities. This brings expansion of company and they will be able to provide packages of different countries to Spain customers.

The place includes the way for a customer, there are different way of booking the tickets- internet booking system and telephone reservation is the best suitable for the company. Company should bring innovative app in Spain through which customer can easily book ticket, book cab, get rewards on regular visits etc.

Doing promotion with the mode of internet is the best promotion strategy that company follows. Company should bring innovative slogan which attracts the customers, and that slogan needs to be catchy which will be easier for the company to prove the presence.

The airline industry also faces some of the risk which includes the safety of the passengers. The security of the details of the passenger is also must for the company. Security from unusual incidence such as terrorism attack, flight hijack, etc. it is necessary to be taken care.

Easy jet maintain proper business and aviation security risks this include personal data and business sensitive (Easy Jet plc, 2017). For the safety of the passengers all easy jet aircraft contains On board defibrillators. Emergence heart problem is going to be resolved with the implementation of such kinds of measures (Easy Jet plc, 2017).

Company is serving good services to the customer and company is able to fulfill the social and economic responsibilities. Further company can bring a change in the way of providing the services. Advance technology use can help the company to develop App or advancement in the booking. Company can also make use of technology to bring cost efficient fuel system (Althonayan, & Sharif, 2010). By managing the risk company can easily win the trust of the customers. Hence, company should take care of the things which are related to the passengers.

Conclusion

The analysis shows that the company is the leading company having LCC model and form a good reputation or image in the market. With the strategies Implementation Company has acquire the attention of the customers (David, 2011). Setting up headquarters in the Spain can be a good deal for the company, for this company need to maintain employees having good skills and capabilities. Further company can focus on the investment which is must for the expansion of the business.

Outbound logistics

References

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