MANAGEMENT 100 800 WORD SUMMARY 836 WORDS EXCLUDING REFERENCES EasyJet EasyJet Airline Company Limited headquartered at London Luton Airport is the UK’s largest budget airline measured by number of passengers carried, operating domestic and international scheduled services.Easy Jet has grown through a combination of acquisitions and base openings fuelled by consumer demand for low-cost air travel.Ryanair another budget airline is currently Easyjet’s biggest competition.
EasyJet has adapted cost-cutting measures such as not selling connecting flights or providing complimentary snacks on board.
The key points of this business model are high aircraft utilisation, quick turnaround times, charging for extras and keeping operating costs low however EasyJet flies mainly to primary airports. EasyJet also focuses on attracting business passengers by offering convenient services such as the “Flexi fare” which allows free of charge changes to the flight within a window, speedy boarding and a checked in bag. General environment – International dimension According to Samson and Daft (2009), general environment is ‘layer of environment that affects the organization indirectly’. It includes external factors that are not within an organization.
One of the dimensions, international dimension is referring to factors that arise from foreign countries that will affect an organization. Factor that will either be an opportunity or threat to an organization will include having to encounter competition globally. An organization will have to face international competitors where it trade on its own even though not involve in exports and operates domestically. Besides, it would be essential to learn to adapt to the changes and trend circulating around the world as technology advances as time passes and political events such as Iraq war.
Apart from that, rise of economic power of China has a significant impact on the international economy due to the massive workforce, brainpower, population dynamics and abundant natural resources that many countries rely on. The always changing worldwide environment has very large impact on organization compared to domestic environment, demanding for great control of the organization. What is a competitive advantage A competitive advantage could be defined as a unique position a firm develops in comparison with its competitors (Hyvonen 1995, 334).
It is imperative for firms to understand what it’s competitive advantage is and take advantage of them as it can change rapidly (Anthony, Perrewe, Kacmar, 1996, p. 468). One of the ways to create a competitive advantage could be, through lower prices or differentiation (Woodruff 1997, 139). Lower prices is a competitive advantage when a firm is able to sell their product cheaply to consumers. Lower prices may be dependent on lower costs, however lower cost itself is not a competitive advantage as it should come along with lower prices for the advantage to be formed (Kotha, Vadlamani 1995, 76).
Differentiation can be achieved through, providing superior goods and services, through the firm’s image, flexibility, total supplies and speed (Kotha, Vadlamani, 1995, p. 76; Sashi, Stern, 1995, p. 126; Helms, Ettkin, 2000, p. 1) Easy jet as a buget airlines has set its competitive advantage through lower prices. How The International Dimension Impacts Easy Jet’s Competitive Advantage There are many ways in which the International Dimension has affected Easy Jet’s Competitive Advantage. After the 9/11 attacks the airline industry suffered extensively. Passengers opted to use less of the big airlines.
This allowed Easy Jet to be more successful as passengers were choosing their services over the big Airlines in Europe. When the number of people who used Easy Jet’s services increased it would have allowed the airlines to spread their fixed costs, which in turn reduces overall expenses and meant that they were in a position to lower their prices thus impacting their competitive advantage in a positively contributing to the overall success of Easy Jet. (Easy Jets Market Structure 2012) Another factor in the International dimension that affects Easy Jet’s competitive advantage as that EU had ruled an ‘Open Skies’ agreement which meant that Easy Jet was given the choice to serve flight paths that may have been normally associated with some specific airlines. This allowed them to choose the routes that they preferred allowing them to choose routes that gave them the most benefits. (Easy Jets Market Structure 2012) Easy jet is also influenced by rising fuel prices. Increased fuel prices meant that the entire airline industry around the globe and Europe had raised their prices.
However, increasing fuel prices meant that even Easy Jet had to raise the price, and this does not work well with their low cost, low price strategy. Therefore there is a negative and positive effect by the rise of fuel prices (Topham 2012) Conclusion In conclusion, the international dimension of the general environment represents event originating in foreign countries as well as opportunities for Easy Jet in other countries. International dimension affects competitive advantage in various way. Easy Jet has proved to be robust and competitive in a tough general environment.
This is due to its large competitive advantages, which is its low cost prices. However, it is the report on the overall international dimensions which affects the competitive advantages of Easy Jet shows that Easy Jet is a highly successful company, which is expanding rapidly. Besides, by engaging with the international dimension, Easy Jet not only get more benefit from its competitive advantages but also increase it’s cash flow from operating activities throughout United Kingdom. References Anthony, William P. , Perrewe, Pamela L. nd Kacmar, Michele K. (1996): Strategic Human Resource Management, Fort Worth: Dryden Press Bamberger, Ingolf (1989): Developing Competitive Advantage in Small and Medium-Size Firms, Long Range Planning, 22 (5): 80-88. Easy Jets Market Structure. 2012. Competitive Advantage and Developing a Competitive Advantage Over Rivals. Accessed September 18, http://www. 123helpme. com/view. asp? id=122608 Helms, Marilyn M. and Ettkin, Lawrence P. (2000): Time-Based Competitiveness: A Strategic Perspective, Competitiveness Review, 10 (2): 1-14.
Hyvonen, Saara (1995): Competitive Advantage, Bargaining Power, and Organizational Performance: The Case of Finnish Food Manufacturing Firms, Agribusiness, 11 (4): 333-348. Samson, Danny, and Richard L. Daft. 2009. Fundamentals of Management. Australia: South Melbourne, Vic: Cengage Learning Australia, 2009. Kotha, Suresh and Vadlamani, Bhatt L. (1995): Assessing Generic Strategies: An Empirical Investigation of Two Competing Typologies in Discrete Manufacturing Industries, Strategic Management Journal, 16 (1): 75-83.
Sashi, C. M. and Stern, Louis W. (1995): Product Differentiation and Market Performance in Producer Goods Industries, Journal of Business Research, 33 (2): 115-127. Topham, Gwyn. 2012. EasyJet losses narrow despite fuel cost rise. http://www. guardian. co. uk. /business/2012/may/09/easyjet-losses-narrow Woodruff, Robert B. (1997): Customer Value: The Next Source for Competitive Advantage, Journal of the Academy of Marketing Science, 25 (2): 139-153.