Impact of e-commerce strategies on Easyjet Sales
Easy jet is an European airline which was launched in 1995 by its founder Greekcy Priot Stelios Haji-Loannou. It was started with two wet leased Boeing like 737-200 aircrafts and today it operates 196 aircrafts with 20 buses all over around the Europe. It carried 45.
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2 million passengers in the year of 2009 which made it as a second largest low cost European airline behind Ryanair. In 2002, Easy jet bought London Stansted based Go airline ? 374 million (easy-jet.com). Go was the low cost scheduled passenger airline which provides service within the Europe. The main reason behind this acquisition was profitable and established airline with strong growing aspects that reveals a year to year increase of 232 per cent. Nearly 90% of sales in Easy jet are online from this website.
There are two significant features based on its success are: low price and E- commerce strategies .The purpose of this Easy jet‘s, online the presence of information’s and procedures to sketch and propose suggestion on the progression involved in creating a booming online presence( David & Cynthia1999). Apart from this it will define its approaches for its significant success of industry. In this paper, we will first discuss about the approaches and it applies. Then based on PESETEL framework we will find out the reason for applying. And in final the merits and demerits approaches in order to discuss about the alternatives approaches for easy jet.
The above figure shows out about the airlines point which tells the increasing and decreasing of online analysis. As airline industry it was first an upstart one which later tipped to be failed later (Johnson, Scholes& Whittington 2008). An online pamphlet website is debatably best than anything. For instance, to attain more profit many organizations presence the society, community, discussion and contented into Easy jet online website Camerer, C, (1985),. No wonder that, easy jet online sales strategy has made a significant success. Based on this success strategy we will see the two main approaches which are used in this research are: internal company and external company. This approaches precepts more preparation, planning and ideas with precise and clear understanding to reach the perfect goals of company strategy. In order to bud a better online sales we need to concentrate in certain task like forecasting, ease of steering, a well-built reception, implementing text with suitability for web, advertising , testing and accessing the goal for success way.
For example, the internalities of company can be focussed in terms by
(i) Direct sales approach (ii) website designs and merges. Whereas the externalities of companies like (i) density (ii) attraction of point to point networks towards consumers (iii) increasing in confidentiality and (iv) strong intense towards brand and advertising. Based on the above approaches we can define the following aspects into ten divisions.
Divisions of approaches and applies:
First of all Easy jet concepts is to provide a low fare for the route and optimise the saving cost methods. This is the main advantages for the easy jet in terms of comparison with other competitors because it does not consists of any luxury acts in terms of high class seat and all it just provides everything in a simple pricing structure. For example, if you book the tickets earlier you need to pay less. This attracts the consumers in terms of gaining a sensible price( Tony Morden 1993).
Secondly, selling the tickets in online reduces the customers to get rid of from the counter because they are booking the tickets through email. So just an confirmation number is needed on screen, so that more complex issues in fulfilment of sales to distribution or warehouse, logistics to worry about the sale that had happened (Pritchard, 2002).
Thirdly, Easy jet does not utilize outsourcing approach as it applies a direct sales strategy. For example, the customers directly pay with the payments so no commissions and intermediaries problems in terms of extra pay so that, the increases in sale of internet pay will be more than before at the same time.
Fourthly, the website designs are appropriate. For example, it is mentioned in the case study that orange colour is necessary for the convenience of customers. This can avoid the wrong booking date and spell by the customers in rather terms of implying the correct low cost ticket( Pritchard , 2002); instead of high design the website mainly focuses on the speed and simplicity so that , they can efficiently provide good services to the customers.
The below figure tells the seat rates when the customers books ticket earlier. These are also efficient in customer service.
Fifthly, Easy jet pushes out the sales percentage of an internet penetration through the way of carrots and sticks. Carrot means to attract the customers in the guise of discounts and inventory which were booked in a online. Stick means to restrict the flights available to customers on a phone which applies a simple price structure. The more the early they book the less will the cost for the tickets. This provides a milestone like millions seats which were sold online to attract the consumer.
Sixthly, the customers confidences are increased when they book in the online it ensure the security to the data. This reaches the high brand in terms of awareness with consumers and supported by innovative advertising ( Easy jet 2002) . To ensure such type of the security we have to store the customer data in a web platform (Pritchard, 2002).
Seventhly, Easy jet applies to the Microsoft technologies which are more convenient, affordable, ease and focusing resources on a single skill to support the business need.
Eighthly, Easy jet merged with go and working on full support in order to jump it as a transaction volume. It applies a great stress and capacity planning to ensure its ready in terms of volume (Pritchard 2002).
Ninthly ,According to Easy jet annual report of 2002/2003 it utilise the dense point to pint the network with link major airports with an large attachments areas , so it remains in high level frequency for business and leisure travellers. In this consumers will be more for online booking.
Finally, Easy Jet is busy working on intranet projects discussion forums, feedback forms, so the senior managers know about staff’s intensity (Pritchard, 2002). This approach makes employee relations in an effective way and void industrial action (e.g. Cabin Crew strikes) and interrupted operations.
Over view of PESTEL analysis:
Political factors: it decides the deregulation of European flight market in 1997, theResult for this is any airline can operate any route within the European Union. Before, the market for flight was largely controlled by the governments of European countries, trying to secure their respective national carriers market share (Geiger et al., 2009). According to The Times, the development of freedom of movement and trade in the European Union has led to greater levels of completion on European routes coupled with increased movement of people. These enable Easy Jet to offer the route between any point in the European Union. For example the countries like Iraq with an unstable political Environment may cause restrictions and the uncertainty of air travellers; the United Kingdom and European countries have a stable political environment.
Economic factors: Back to 1998 the Easy Jet applied E- commerce strategy, as the world economy grew and the development of global economy, the demand of air travels increased rapidly. But the cost of fuel has increased recent years, therefore efficient financial management of fuel reserves including trading with options and futures is getting more and more important to keep cost down and be competitive in the market place. And because the global economy recession, the air travel is affected, but on the other hand easy Jet focus on Low cost strategy which became attractive to travellers.
Social factors: Lifestyle, tastes and fashions are all changing; customers require opportunities to visit new and interesting, haul, destination (Oxford IS, 2010).Because of this economy recession the number of unemployment has increased and the bargaining power as an employer has increased. So low fare air travel has a significant travellers. So it is important to ensure customer comfortableness.
Technological factors: There are two main technology issues involved: modern aircraft and Internet technology. According to the Times, modern aircraft are safer and economic to run in cheap as possible. With the development of Internet, airlines can easily realize direct Sale approach, and also it takes benefits to both customers and the company. For the customers, it would be efficient and easy to purchase the tickets and confirm through email. In same time we can book hotels and other things. As a result, it improves the customer satisfaction in terms of convenience.
Environment factors: The company needs to pay attention to the noise pollution control and energy consumption control that required by the government, and it may increase the operation cost. Consumers are becoming aware of the environmental impact of their actions (British Airway, 2009) and it started to get increase among them. So the failure of adopting a protect environment strategy may affect the company income and reputation.
Legal factors: According to Open Skies Agreement (AEA, 2009), it provides the opportunity for airlines freely transport between the European Union and the Unite State. It increases the opportunity for easy Jet to expense the network and attract more travellers. The recognition of trade unions and industrial action (e.g. Cabin Crew strikes) is an important issue the company needs to pay attention to. So it is necessary for the company to know the feeling of staffs to remain good employee relations.
Through the PESTEL analysis we can find that the approaches of Easy Jet has used in the creation of online sale which are suitable for the vision of the company. This develops the strength of largest low cost airline in European country (Easy Jet, 2003).
Merits and demerits of approaches:
Figure 1 and 2 illustrates the financial performance of Easy Jet since 2000 to 2010. The strategies applied have made a positive impaction on the sales and the number of passengers’ increases every year, especially in 2003 after merging with Go. I think there are five main advantages by applying the approaches: more customers, customer satisfaction, wider geography, high efficiency and cost saving. Through the low strategy planning the Easy jet wins in terms of quality.
To access the online booking of Easy jet it is very simple and also customer can book hotel and transport through this website while booking the tickets. It offers a better and convenient service to customer which can increase the customer satisfaction. As Easy Jet maximize the using of e-commerce, it enables a wider geography for the tickets that can be booked online.. For example, customer can get all the travel information such as time, price, and so on the Internet, so the call centre agent does not need to cover each Item for every customer. It saves the workload of the company and makes more efficient.
As this applied for the direct sale approach and the majority sale of tickets is through Internet, the cost for operation is been decreased. It needs not to be re-located to a larger facility .Through these approaches we have made a big success but there are some disadvantages which needs to pay attention like offer of low fare tickets, fuel prices increase, and this will affect the profit from the increased fuel costs. As we know, 90% of sales are generated from its website, so Internet and information system play a very important roles for the sale. It will be a disaster if the system crash or customers cannot access Internet, as the company would face big loss and impact the reputation of company. To void such disadvantages, the alternative approach is to reinforce the distributors to balance the ticket sale approaches. Instead of direct sale and sale most of the tickets through Internet, Easy jet can apply outsourcing strategy to corporate with intermediaries. With a balance tickets sale system, the risk and loss will be minimized when the internet system does not work.
Thus from the above case study and analysis we conclude that Easy Jet has become one of the largest low cost airlines in Europe with 90% sale online. And through this case study, we can also notice that information system has a significant impact on the process of strategy management. Based on the case study, we can conclude that there are three aspects that information system affects strategic management: reach new customers, Easy Jet applied online ticket sail which helps to reach wider geography customers. The business information is processed efficiently and lower cost for the operation change the industry structure, the fast and accurate information can affect the industry structure, especially when high information content is required. For instance, the information system does not need to establish new call centres for the increasing sale. So the provision of effective information system is therefore an important part of the corporate strategic task (Lynch, 2006).
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