Ryanair

Summary Ryanair, one of the most famous low cost airlines, attracts attentions from people and researchers all over the world. As the financial crisis and the European debt crisis have an obvious negative influence on the global economy, the aircraft industry has experienced some decline for the last few years. However, both the sales and profits of Ryanair have increased during this period. In this essay, we will first analyse the external environment of Ryanair by using PESTEL Analysis Model.

Then we will make an in-depth analysis about its strategic capability by SWOT model (strengths, weaknesses, opportunities and threats). In the following part, we will compare Ryanair with its biggest competitor easyJet and critically access the effectiveness of its cost focus strategy. Finally we will give a conclusion of the whole result of our research and give some suggestions for its future development. Introduction Ryanair was first established in 1985 by Christy Ryan, Tony Ryan and Liam Lonergan.

Its headquarters are located in Ireland, while its primary operational bases are at London Stansted Airports and Dublin. In 1989, Ryanair’s businesses saw a decline. At the same time, Tony Ryan persuaded his financial advisor to assume the CEO. Then, Ryanair began to learn experience from Southwest Airline, and was the first one to introduce the cheap air carriers and mode into Europe. Profitability of consecutive years has made Ryanair to become the most profitable airlines in the world. Findings and Analysis Environmental Analysis

PESTEL Model is used in this report to give an overview of the six different environmental factors that the company has to take into consideration. Firstly, political factors refer to the political organizations and relevant policies, laws, regulations as well as other factors which have the actual and potential impacts on operating activities (Gillespie, 2007). The charge which was raised by airports of different countries has a significant effect on Ryanair. Indirectly, Ryanair is also insubstantial to extra charges and taxes, for instance, the €10 tourist tax imposed by the Irish government.

In addition, EU imposed a regulation on 17 February 2005, which asked airlines to provide standardized and immediate assistance for passengers who stayed at EU airports for delays, cancellations and denied boarding. This regulation led Ryanair to raise at least €200 million in their budget every year. (O’Higgins, 2011) Secondly, economic factors mean the organization’s external economic structure, industrial layout, resource situation, the level of economic development and future economic trends (Gillespie, 2007). There are two interrelated economic factors that affect Ryanair. The first one is the recession of 2008/09.

It created adverse economic situations such as high unemployment rates and severe credit crisis, which lead to the leisure spending and business passengers declining. Ryanair’s planned passenger volume growth has been restricted by this depression. Moreover, the continuing growth of fuel price is the greatest concern to this company. It is hard to control and predict the wide fluctuations of Jet fuel price and its increase demand. According to Pearce (2011, 3), “However, the developed economies have seen a much slower recovery and levels of output, income and spending remain well below pre-recession levels”.

Thirdly, social factor refers to the historical development, cultural traditions, values, education levels, as well as customs and other factors of society where the organization belongs to (Gillespie, 2007). It can be found in Ryanair’s own report (2012) that Ryanair as well as other airlines are facing some social changes–threats from terrorist attacks, the continuing acceptance of the security budget suppliers and more price-sensitive business travelers. These factors make up the social factors which affect Ryanair and aviation industry.

Fourthly, technological factors include not only the revolutionary innovation but also some relative new technologies, new materials and new ways of operating or management (Gillespie, 2007). For airline industry and airline companies, the contributions of technology could be separated in three parts: to ensure aviation safety, to improve the quality of services and to make operations more efficient. Even Ryanair bought some of second-hand planes, these aircraft are all Boeing 737, which could reduce the training fee for pilots and flight attendants (Box, 2005).

More important, Boeing’s help to make the unitive structures of plants could decrease the possibilities of incorrect operations and the unsuited spare parts of aircrafts. Although Ryanair is widely regarded as a low cost airline, it is also one of the safest airlines. As some of other airlines rely on the tickets agents, Ryanair built its own website and ticketing system. The cost of agency fee is reduced and the company could make control of the ticket service which could lead to some misunderstandings as some operators of tickets agents would treat customers in a worse mood.

Furthermore, through operating the ticketing system, Ryanair itself, could make booking tickets and bounce easier and speedily. Fifthly, environmental factors include ecological and environmental aspects. Countries in the world are faced with the enormous challenges of environmental issues, and sustainable development is an important way to solve this problem (Gillespie, 2007). Due to the report of IATA, air transport contributes 2% of global man-made CO2 emissions. Although Boeing 737 helps Ryanair to save fuel of airplane, it is not enough at the moment.

New energy sources such as biological energy source are in the experimental stage and should be used in the further, and most airlines have to adapt to the new development. Lastly, legal factors include discrimination law, consumer law, antitrust law, employment law, and health and safety law (Gillespie, 2007). Ryanair’s latest attempt to take over its Irish rival Aer Lingus is investigated by the European Commission over competition worries. Ryanair also has problem with the government. The British government decided to remain the Air Passenger Duty (APD), a ladder-type tax, and raised the tax rate by nearly 10%.

This change leads to the increase of cost of daily operation of Ryanair. To cover the costs of the EU’s new eco-looney ETS tax, the Ryanair has to raise the prices of tickets, which could make their prices less competitive. Furthermore, BAA, the owner of London’s Heathrow airport, is seeking to sell Edinburgh after losing a legal challenge to an order from the UK’s antitrust regulator to break up the company, while the bid of Ryanair is rejected by BAA (Rothwell, 2012). Strategic capability analysis SWOT Analysis Model is used to assess the strategic capability of Ryanair by four dimensions: Strengths, weaknesses, opportunities, threats.

Strength 1. Low-cost strategy The most significant strength of Ryanair is its low-cost strategy. It uses a young efficient fleet with low cost of ownership and industry load factors to increase benefit and gain high asset utilization. The following statement from their CEO Michael O’Leary proves that “These quarterly results are a testimony to the strength of the Ryanair ‘lowest cost’ model which – even during the most difficult trading conditions (including record fuel prices and intense competition) – delivers strong passenger growth and profits. ”(Sorensen, 2005) 2. Youngest fleet

Ryanair only choose to use Boeing 737 planes for easier staff training and also can improve pilot’s familiarity with aircraft operation, in this way to keep customers’ safety. According to O’Higgins Ryanair “reducing the average age of its aircraft to 2. 4 years” which be the youngest planes in Europe and increased the safety of the flight (2011). 3. New kinds of marketing strategy Ryanair uses newspaper, radio, television and all the possible methods they can to advise, which are proved to be efficient on increasing the number of customers: “as a result,Internet bookings account for 99 per cent of all reservations”(O’ Higgins, 2011).

Otherwise, some methods might be controversial and audacious, such as using the pictures of Queen Sofia, President Sarkozy and his wife’s on the air slipping. Although the action is without permission and also costs damage, it still made the company become famous rapidly. Weakness 1. Customers’ dissatisfaction Ryanair takes a lot of ancillary revenues from customers, which causes customer’s dissatisfaction, such as payment for using the toilet on plane, charge for check-in luggage and “fat tax” for overweight passengers. These measures will lead to customer’s bad impression to the company. 2. Overstep in increasing scale

Ryanair is too addicted to increasing scale. This will cause the increasing of operating costs. With the growing of fuel and airport charges, the bigger scale of the company is, the more challenges it will be faced to. 3. Single-handed leader and the controversial acts As Ryanair’s CEO, Michael O’Leary is a controversial leader. The issues he made such as calling thousands of passengers “idiots” (Huff Post, 2012), using the Italian minister Umberto Bossi abusive gestures picture for advertising caused great repercussion. Most of people think this measure was not suitable and will give a bad impression on Ryanair.

Opportunities 1. New markets With the enlargement of the European Union, a lot of new destinations could be opened up. Skies agreement opened by EU could be a source for increased routes and passenger traffic inwards. According to the opinion of Ryanair’s route development director O’Toole, there remains major opportunities in Spain and Italy, as well as Norway, Portugal, Greece, Bulgaria, Cyprus and Russia (Routes Online, 2010). Besides that, future open skies agreements in Turkey, Tunisia and Georgia could make these interesting countries for the carrier, he added. 2. Benefits from economic recession.

Though economic slowdown created unfavourable economic conditions with reduced spending by leisure and business passengers which restricts the growth of the whole airline industry, actually, it can help Ryanair to improve corporate culture, and ‘steal’ customers from traditional carriers as they seek lower fares. Mr. O’Leary, Ryanair’s CEO, stated that the rise in profit came “despite the economic downturn” in Europe (New Europe Online, 2011), and he intended to double the size of the airline over the next decade. Threats 1. Increasing oil price Ryanair’s earning rate highly depends on the oil market because the fuel cost is influenced by it.

With the increasing of global oil price, fuel cost could be a burden for Ryanair and its expansion plans will be challenged by the high fuel price. 2. Increase of low fare competition According to Newll (2006, 3), “Yet perhaps the price tag has become too much the focus of attention”. Value market segment is being catered by an increasing number of competitors, such as easyJet, Air Berlin, Basic Air, BMIBaby. Slots??? at some primary airports have been established by them (Air Scoop, 2007). Ryanair have to compete directly with other low cost carriers in the near future.

At the same time, additional marketing costs and reduced yields from lower fares force Ryanair to promote additional routes. As a result, Ryanair was likely to encounter increased competition, and continue depressing yields, as airlines struggled to fill vacant seats to cover fixed costs. 3. Customers are very price sensitive Because of the low cost strategy, the customers of Ryanair are much more sensitive to price, that means, any kinds of extra fees could make bad influence on its corporate image. As a result, it is difficult for Ryanair to improve unit profit and have to reduce unit costs through scale expansion (O’Higgins). . Introduction of duty for fuel and environmental charges Since Ryanair is powerless to prevent the environmental charges such as the tax on aviation fuel, its growth potential would be reduced as the unit costs would be increased. SO strategies 1. Ryanair should use the low-cost passenger ticker strengths to attract more customers. Nowadays, global economic recession is a serious problem to all over the world, especially for Europe. Ryanair is a company most facing the European market. Customers now are more concern about the price. The company should catch this opportunity to occupy more market share. . Special “pay by use” service of Ryanair is one of its characteristics and the unusual features compared with other companies which can decrease costs of services. Ryanair can use the financial crisis of competitor’s and capture the opportunity to attract more customers and earn more profit than others. ST Strategies 1. In the next few years, low cost airlines market expansion would probably slow down because new opportunities would be more limited. As growth slows, labor costs for the low-cost carriers will continue to rise as well as the level of oil prices.

Ryanair should be prepared for convergence of costs and conditions and make corresponding strategies, but it should still retain the ‘no-frills’ advantage of high seat density, aircraft utilization and lowest fares in any market (Air Scoop, 2007). 2. In order to achieve the aim to be the biggest player and keep its domination in the low-price market segment, Ryanair will have to expand into more popular routes coupled with retaining its differentiation strategy, such as purchasing newer, more fuel-efficient and environmentally friendly aircrafts and offering best customer services compared with its peer grouping in Europe.

Strategic Assessment The core strategy of Ryanair Airlines is cost-focus strategy. The company continuously keeps its cost at a low level to offer low-fares services. Actually, cost control is the central strategy of all budget airlines, such as Ryanair’s main competitor in Europe—easyJet. In this part, we are going to assess Ryanair’s competitive strategy through a comparison with the operating performance of easyJet. EasyJet is a Europe’s leading airline comes from the United Kingdom, founded in 1995, which has remarkable positions in some key markets: No. in Gatwick, Milan and Geneva; No. 2 in Paris with over 300 million people within a one hour drive of an easyJet carrier (easyJet plc, 2012). And easyJet is one of the leading lights of Europe’s budget flight industry. 1. Financial results analysis with business strategy Table 1 Comparison of operating financial results between Ryanair’s & easyJets in 2012 Ryanair(? million)EasyJet(? million) Scheduled revenues28273794 Ancillary revenues71560 Total operating revenues35423854 Scheduled revenues /total operating revenue79. 8%98. 4% Selected costs Fuel12841149 Maintenance84203 Marketing145104

Total operating expenses29883323 Source: Ryanair Annual Report 2012 & easyJet Annual Report 2012 In their own financial year of 2011/12, Ryanair performed better than easyJet by ? 312 million in the total operating revenues (after exchange EURO to GBP with current rate), which mainly due to the high ancillary revenues from various ancillary services and involvement in other activities connected with its core air passenger services, including non-flight scheduled services, Internet-related services, and the in-flight sale of beverages, food, and merchandise (Ryanair annual report, 2012).

Michael O’Leary talked previously about their ancillary strategy: “If you want a quiet flight, use another airline, Ryanair is noisy, full and we are always trying to sell you something” (O’Higgins, 2009). The ancillary strategy has been working well so far. However, the scheduled revenues which should be the primary business revenue of Ryanair were lower than its competitor easyJet. It might be caused by the cutting routes strategy and lower average load factors, especially the cutting routes strategy carried out in 2009, which has already cut down 389 rotes (1000 routes in 2009).

In terms of operating costs, Ryanair had a better performance in controlling total operating expenses in 2011/12, which is ? 2988 million, while that of easyJet is ? 3323 million. However, Ryanair spent more on fuel and oil, which occupied nearly 43% of the Ryanair’s total expenses. Jet fuel is always variable and cannot be predicted previously. And jet fuel prices are dependent on crude oil prices, which are quoted in U. S. dollars. As a result, Ryanair’s fuel cost is affected by currency exchange. “Based on Ryanair’s fuel consumption for the year 2011, a change of $1. 0 in the average annual price per metric ton of jet fuel would have caused a change of approximately €1. 5 million in Ryanair’s fuel costs” (Ryanair annual report, 2012). In order to minimize its loss on fuel price change and currency rate, like many other airlines do, such as Southwest Airlines, Ryanair uses forward contracts to protect against fluctuations. Ryanair’s maintenance cost is relatively lower than easyJet. It might be largely due to the aircraft it adopts. Ryanair uses single fleet type—Boeing 737-800, which is considered to be one of the most fuel efficient fleet type, while easyJet has two types—Airbus A320, A319.

The single fleet type reduces the number and cost of aircraft components in stock, as well as its maintenance cost. Ryanair’s marketing cost is more than easyJet’s. This may be a result of its promotion for ancillary revenue. In order to earn a widely range of revenue apart from scheduled revenue, Ryanair advertises its services in national and regional newspapers, as well as controversial and topical advertising (Ryanair annual report, 2012). 2. Growth capacity under strategy: Table 2: Ryanair’s financial performance(€Million) 20122011Changes Total revenue4,324. 93,629. +19% Profit before tax560. 4375. 6+50% Adjusted net profit after tax502. 6400. 7+25% Basic earnings per share (in euro cent)38. 0325. 21+51% Adjusted basic EPS (in euro cent)24. 1026. 97+26% Source: Ryanair annual report 2012 Ryanair’s operations have grown rapidly during 2011/12. This year, net profit after tax had a 25% increase after adjusted, total operating revenues increased by 19% to €4,324. 9 million as average fares rose by 16% (Ryanair annual report, 2012). Furthermore, ancillary revenues grew up by 11%, faster than the 5% increase in passenger numbers.

Although the average load factor of Ryanair was lower than its competitor, there is still an increase of 13% (Ryanair annual report, 2012). In 2012/13, Ryanair plans to develop 330 new routes and intend to continue expanding its navigation, new destinations and new flights, which are expected to increase Ryanair’s booked passenger volumes to approximately 79 million passengers per year. In addition, there is a strategy of transferring operating flights from high cost airports to low cost airports in winter in order to reduce cost in off season.

Overall, the company’s growth has been largely dependent on increasing performance and growing capacity. 3. Star rating & customer satisfaction From Low-Cost Airline Ranking in Official SKYTRAX Airline Star Ranking website (2012), the star ranking of Ryanair is two stars while easyJet is three stars. And easyJet ranked 5th in World’s Best Low-Cost Airlines award, however, Ryanair wasn’t in this list. Actually, Ryanair always has a worse public image than its competitors due to its marketing strategy by making stunts.

And in some instances, the extra charges imposed on passengers such as check-in charges and booking fees make customers unsatisfied. What is worse, some flying accidents make its statements of punctuality and safety being doubted by the public. Conclusion Overall, Ryanair is successful in planning and performing its cost focus strategy. Facing with the strength, weaknesses, opportunities and threats, it is recommended that: 1. Ryanair should continue using its low fares to attract price-sensitive customers. 2. Ryanair can keep following its “pay by use” service, which is an effective way to ensure low price.

However, when taking extra charges, it should consider the public’s attitudes to the fee. 3. Ryanair should continue controlling its costs to compete with other low fare airlines, especially fuel and oil costs. 4. Ryanair should pay attention to its brand and reputation, and make some efforts to earn a better degree of satisfaction. 5. Ryanair should take measures to build a good relationship with authorities and governments. Reference List Gillespie, A. (2007), Foundations of Economics, Oxford University Press: Oxford O’Higgins, E. 2011), ‘Ryanair: the low fares airline – future destinations? ’,IN, Johnson,C. (ed. ) Exploring Strategy: Text and Cases, Pearson Education, pp. 618-627 Pearce, B. (2012), ‘The state of air transport markets and the airline industry after the great recession’, Journal of Air Transport Management, Volume 21, July 2012, pp. 3-9 Rothwell, S. (2012), Ryanair Deepens Cuts at Edinburgh as BAA Seeks to Complete Sale [Online]. Available: http://www. businessweek. com/news/2012-04-12/ryanair-deepens-cuts-at-edinburgh-as-baa-seeks-to-complete-sale [Accessed: 12th April 2012]

Box, T. M. (2005), ‘RYANAIR (2005): successful low cost leadership’, Journal of the International Academy for Case Studies, Volume 13, Number 3, pp. 65-67 Air Scoop, (2007), The Low Cost Carriers Analysis Newsletter, [online], Available: http://www. air-scoop. com/pdf/air_scoop_May2007. pdf [Accessed: 10th December 2012]. Huff Post, (2012), Ryanair CEO Michael O’Leary Calls Passengers “Idiots”, [online], Available: http://www. huffingtonpost. com/2012/09/05/ryanair-ceo-michael-oleary-calls-passengers-idiots_n_1857143. html [Accessed: 10th December 2012]

New Europe Online, (2011), Ryanair profits rise despite fuel costs and economic downturn, [online], Available: http://www. neurope. eu/article/ryanair-profits-rise-despite-fuel-costs-and-economic-downturn [Accessed: 10th December 2012]. Newll, I. (2006), ‘Is win-win just pie in the sky? ‘, Strategic Direction: The airline industry, Volume 22, Number 6 June 2006, pp, 3-5 O’Higgins, E. , 2011, Ryanair: the low fares airline – future destinations? , IN, Johnson,C. (ed. ) Exploring Strategy: Text and Cases, Pearson Education, pp. 618-627

Routes Online, (2010), “Major opportunities remain in Europe”—Ryanair route director,[online], Available: http://www. routesonline. com/news/36/the-hub/97447/amajor-opportunities-remain-in-europea-a-ryanair-route-director/ [Accessed: 10th December 2012]. Sorensen, T. C. , (2005), An analysis of the European low fare airline industry- with focus on Ryanair, Aarhus School of Business. EasyJet Evidence, 2012. AT A GLANCE. [online] Available at: [Accessed 1 December 2012]. Ryanair, 2012. Annual report 2011-2012. [online]Available at: [Accessed 1 December2012]. easyJet plc, 2012. Annual report 2011-2012. online]Available at: [Accessed 1 December2012]. STARTRAX Evidence,2012. Low-Cost Airline Ranking. [online] Available at: [Accessed 1 December 2012 ] Appendix Selected operating data RyanaireasyJet PASSENGERS (JAN’11 – DEC ’11)76. 4million55. 5million AVERAGE LOAD FACTOR82. 2%87. 5% NUMBER OF DAILY FLIGHTS13531260 COUNTRIES SERVED2730 DESTINATIONS162130 ROUTES6111400 PERMANENT EMPLOYEES75719000 NUMBER OF AIRCRAFT275202 AVERAGE FLEET AGE3. 03. 9 FLEET TYPE275 Boeing 737-80035 Airbus A320 167 Airbus A319 Sources: European Low Fares Airlines Association (ELFAA), December 2011

Case Study Coursework LEADERSHIP and ORGANISATIONS BABA SDL 2012-13’B’ Virgin Atlantic and Ryanair This case examines two organisations that have many similarities as well as a number of significant differences. The essential technology and systems behind each organisation may be very similar, but the nature and style of management and its consequent impact on the way people working in these organisations think, feel and behave have created very different organisational cultures.

So what are the similarities and what are the differences? The most obvious similarity is that both Virgin Atlantic and Ryanair operate in the UK passenger air transport industry. Both are relatively recent creations and might be seen as new entrants to the sector: Virgin’s air transport business was founded by Richard Branson in 1984 and Michael O’Leary took over as Chief Executive at Ryanair, a small Irish airline which had been founded as Guinness Peat Aviation in 1985 (Creation, 2004).

Both started life in competition with major national flag carrier airlines (British Airways and Aer Lingus respectively) and grew to be major challengers to these established companies. As they grew, their scale of operations brought them into competition with a much larger number and range of airlines operating from the UK: Branson’s Virgin Atlantic competes with some major US and other intercontinental companies such as American Airlines and United Airlines; O’Leary competes with the likes of Flybe and EasyJet in the short-haul market.

Both Branson, who was born in 1950, and O’Leary, who is ten years younger, are individuals with strong and distinctive personalities, who have a relentless appetite for media presence and who make extensive use of themselves in their frequent marketing communications. They engage in advertising stunts, readily appear on the news media in relation to stories about the industry, and their faces and personalities are easily associated with their companies. Charting different courses There are, however, some major differences. First, they differ in their choice of markets.

Virgin’s air transport business originated in the long-haul, mainly transatlantic market which might be highly profitable but is also extremely competitive. As the business grew, offshoots were founded as independent companies; for instance, Virgin Blue in Australia and Virgin Express which has its hub in Brussels and serves European destinations outside the UK and does not compete directly with Ryanair. Ryanair started as a short-haul carrier and has remained so, focusing on European destinations from a small number of airports in the UK and Eire. The two companies’ competitive positioning is also very different.

Ryanair is well known as ‘The Low Cost Airline’; the first thing that hits you in its publicity material is the price and this is very clearly the core of its business strategy (Ryanair website). The ‘no frills’ approach means just that: even the in-flight food is limited to sandwiches and costs extra. Virgin, by contrast, attracts passengers by offering a superior experience and is firmly positioned at the quality end of the market: Publicity material emphasises style and comfort, and there is a range of in 1/4 Case Study Coursework LEADERSHIP and ORGANISATIONS BABA SDL 2012-13’B’ light extras which, even at the economy end of the price range, includes in-flight food and drinks and packs of ‘amenities’ such as flight socks, eye shades and lip balm. As was noted, both men love publicity stunts and often use humour in their public communications. Branson is usually smiling and in poses which indicate fun and a desire to show close links with his staff and popularity with employees, customers and the public in general. O’Leary is much more likely to be acerbic, critical and uses what might euphemistically be called ‘colourful’ language in his public statements.

He seems to care little about public opinion of him as an individual and has been in trouble with the advertising standards authorities in the UK and Eire on more than one occasion for ‘offensive’ adverts that have upset people from British Airways (who were accused of being ‘Expensive ba * * * * ds’ in an Evening Standard advert in 1999) and the Catholic Church (the ‘Fourth Secret of Fatima’ advert of 2000 featured the Pope) (Creation, 2004). The brand values are also very different. Virgin as a collection of businesses does everything from running trains, manufacturing contraceptives and cosmetics o offering financial services. All these enterprises are linked by the single powerful central image of the founder and the characteristic red livery; Ryanair does one thing and one thing only, but in doing so sets an almost buccaneering tone, readily taking on authorities such as the European Union over competition policy and the British Airports Authorities over charging practices. Branson has certainly had his conflicts with British Airways, notably over the ‘dirty tricks’ affair of the early 1990s, but is not likely to challenge governments.

Virgin tries hard to build customer loyalty and gain repeat business through brandrelated service values; Ryanair’s repeat business (and for some customers the Ryanair experience is one which inspires the thought ‘never again’) is on price, not loyalty to the brand. These differences have a significant effect on the nature of employment relations and the psychological contract between the two companies and their employees. Working for Richard and Michael Each company’s brand image and treatment of customers have a bearing on the nature of organisational relationship with staff, and vice versa.

Aspects of organisational behaviour therefore show through in a variety of interconnected ways to create consistent and very different cultures. At Virgin Atlantic, cabin crew are there to be helpful and welcoming; they are important projectors of the brand image and their job is partly to encourage the allimportant customer loyalty which generates continuing profit. The importance of staff as carriers of company values is clearly reflected in the recruitment material and other statements about the nature of work at Virgin Atlantic.

Virgin Atlantic brings together all manner of people in all manner of roles, all playing a crucial role in the smooth running of a very complex operation. But whoever you are and wherever you join us, you’ll never stop thinking of our customers and what 2/4 Case Study Coursework LEADERSHIP and ORGANISATIONS BABA SDL 2012-13’B’ we can do for them. From frontline cabin crew to IT analysts, everyone here plays a role in delivering the Virgin brand. That means using initiative, taking responsibility for your actions and being ready to support those around you at all times.

Similarly, you’ll play your part in maintaining the friendly, unconventional professionalism that makes Virgin Atlantic such a unique place of work (Virgin Altantic website). The recruitment process is lengthy and includes a group interview which acts as a filter for further tests before job offers are made. Training programmes for cabin crew and other staff are run from a dedicated training centre, and there is a wide range of benefits for full-time staff including seven free flights a year, private pensions and medical schemes and discounted goods and services across the Virgin group.

At Ryanair, the cabin crew work for a supplier organisation called Crewlink. You can discover whether you qualify to apply for a job by answering a series of 11 on line questions. Successful applicants for cabin crew posts are trained at one of Crewlink’s centres and are expected to pay an up-front charge of €1,200 for the fiveweek course (or with a €400 deposit it can be offset against initial year’s salary at a total cost of €1,300). Students are not paid to attend the course; successful graduates get a three-year contract with Crewlink to work on Ryanair flights on a shift-work basis.

Ryanair crew are not expected to make overnight stops at its destinations. Post-tax starting salary is listed as being ? 1,100 per month (? 13,200 pa); Crewlink suggests that after the initial three years, and subject to satisfactory performance, a permanent job with Ryanair itself might be available at a salary of up to ? 25,000 pa. Staff must be flexible in terms of their work location across the 15 European centres and Crewlink does not guarantee work if individuals specify a preferred work location (Crewlink website).

By comparison with long haul, a short-haul operation involves very tight turnaround times and Ryanair aims for 20 minutes. This creates a very different pace and set of pressures on the workforce compared with those at Virgin, which is likely to have higher staffing levels and to give crew longer rest breaks in the destination locations between flights. The nature of customer relations, by contrast, might be more demanding at Virgin than at Ryanair – staff and customers are together for longer and the brand image must be maintained.

Complaints and horror stories can be found about work at both organisations; however, Ryanair is subject to a more systematic and organised campaign of criticism for its employment practices by trade union organisations. In particular, the International Transport Workers’ Federation has run a major campaign on its website since 2004 called ‘Ryan-be-fair’, the purpose of which is to pressurise the management at Ryanair into accepting the role of trade unions in representing the workforce.

It collects comments from disgruntled crew and former workers which give a flavour of the operational stresses and organisational culture. Both organisations have been successful – Ryanair has turned in significant profits for several years in a sector which is prone to disruption and financial loss and which has seen a number of brands disappear (Buzz, Go and Debonair) (BBC, 2005). Virgin also continues to go from strength to strength commercially. But the cultures and values which get them off the ground could hardly be more different (BBC, 2006). /4 Case Study Coursework LEADERSHIP and ORGANISATIONS BABA SDL 2012-13’B’ References Creation, S. (2004) Ryanair – How a Small Irish Airline Conquered Europe. Arum Crewlink website www. crewlink. ie International Transport Workers’ Federation website www. iftglobal. org Ryanair website www. ryanair. com Virgin Atlantic website, Working for Us, http://www. virginatlantic. com/en/gb/careers/workingforus/index. jsp BBC News articles: News website: www. news. bbc. co. k Profits Jump at Virgin Atlantic (27 May 2005) Ryanair Profits Jump on Hot Spots (1 August 2006) Question: Using relevant leadership and organisational theory, explore the impact of organisational features and external environment influences on the leadership and management styles and performance of Richard Branson and Michael O’Leary. Critically evaluate the effectiveness of their leadership approaches in their specific context with their specific set of strategic challenges. (1500 words) Closing date: 1st April 2013, submit on StudyNet by 23. 30 UK time 4/4

Is Michael O’Leary an asset or a liability to Ryanair? The case suggests that he is both. Students could debate the pros and cons of Michael O’Leary’s continued leadership of the company. The characteristics that have driven the company forward – his enthusiasm and energy, his strategic insight, his determination and mission orientation – can be carried too far. Is it all part of an integrated inseparable whole, so do you have to take the good with the bad?

Is this where we may enter the realm of Sidney Finkelstein’s failure warning signs, when you have too much of a good thing? In fact, some schools of thought would value Michael O’Leary’s relentless energy and his thriving on adversity. It shows a lack of complacency – quite the opposite of what Finkelstein points out as a danger signal. The capacity to irritate may bring about conflict and change. Also, in Michael O’Leary’s favour, as Ryanair’s largest single shareholder, he literally ‘puts his money where his mouth is’.

Another way of looking at Michael O’Leary’s leadership is whether he was the right person for the job during the change era, but does the company now require more of a ‘manager’ than a ‘leader’ during a consolidation era? In other words, this is a ‘horses for courses’ approach to the evaluation of O’Leary’s leadership. One may ask whether and/or for how much longer Michael O’Leary wants to stay in the job. Will he get bored and retire to his cattle farm, currently his hobby?

There is a suggestion that he would not be happy to preside over a static comfortable situation. Or, would he be headhunted by another airline or by another business altogether? Students might consider whether they would headhunt Michael O’Leary, and why or why not. Chapter 10 discusses types of leaders, i. e. transformational versus transactional and types of leadership emphases and approaches. It is an interesting exercise to see how students would categorise Michael O’Leary. Perhaps what emerges is that he is difficult to categorise. What does this imply?

MEMO To: Steven Rand From: Morgan Murphy and James Klein Subject: Response to Memo Assignement Date: February 28, 2013 Purpose: Demonstrate the similarities and differences between an article from a magazine and an article from an academic journal and apply what is learned to future learning. Summary: The areas that will be examined regarding the two articles will be; tone, vocabulary, author background, details about the airline that are included and excluded, as well as length.

Using this examination we will decide how to treat academic and magazine articles from here forth. Discussion: To begin with, Ryanair is a European budget airline based out of Dublin, Ireland. They are able to keep prices low, such as a round trip ticket from Dublin to Edinburgh for $30, because of their numerous budgeting techniques. The techniques and ideas used to cut costs, such as paying to use the restroom, cause a lot of controversy amongst the consumers. Still Ryanair has one of the largest fleets in Europe and continually has its flights filled near to capacity.

The question asked by these two articles is whether or not this type of business plan can last and if consumers will continue to put up with Ryanair’s budget tactics. The tone of each of the articles is the first trait noticed by the reader. The titles of each of these articles are a good indication of what the tone will be throughout the article. The Newsweek article, “Is this Any Way to Run An Airline” (Any Way to Run), puts the reader immediately in a relaxed state and almost makes the reader feel as though the author is on their side.

On the other hand, the article by the International Journal of Transport Management has a more formal title suggesting to the reader that this article is more for relaying facts than opinions. This article is titled, “The Sustainability of the Ryanair Model” (Ryanair Model). The introductions for both of these articles are also very different in their tone. “Ryanair Model” uses only facts and statistics to give the reader a short background as to where Ryanair stands amongst its competitors.

However, in “Any Way to Run” there is a background on the current savings techniques used by Ryanair that directly affect their customers because this article is meant to be read mainly by Ryanair customers. Going hand in hand with tone, vocabulary can also contribute to how formal or relaxed an article may sound. The type of vocabulary used in each article is used to effectively reach the targeted audience of each article. The vocabulary used in “Any Way to Run” is meant to be simple due to the fact that Newsweek is being read by a much larger audience than an academic a journal would be.

There are also many more quotes by Ryanair’s CEO, Michael O’Leary, that are in fairly simple terms. An example of this would be O’Leary’s comment about fares when he stated, “You paid us a fare of $19-go away”. The other end of the spectrum is more technical vocabulary. Vocabulary that is used in “Ryanair Model” is only fully understood by economics and business professionals. In the “Ryanair Model” article, each section begins with pure statistics and facts with many terms such as net margin, industry average, deregulation etc.

These terms are somewhat understood by the common reader but in order for their full meaning to be understood it would take a business professional to understand the meanings behind them. There are also many tables and charts included in this article that would make mean more to someone who is familiar with reading those kinds of statistics. The choice of vocabulary is made by the author and the background of the author can determine what kind of vocabulary they may choose to use. The article, “Any Way to Run”, was written by Daniel McGinn MBA.

The academic article, “Ryanair Model”, was written by Sean Barrett PhD. While these authors are fairly similar in their qualifications for writing, Barrett, being an economics professor at Trinity College, is much more qualified to comment on qualities of business models and McGinn is much more capable of capturing the consumer perspective. After reviewing the author’s profiles it makes sense that Barrett would give the reader tremendous amounts of facts in his article and then comment on whether or not what Ryanair is doing is a good business decision, purely from an economic stand point.

McGinn, being a reporter and have some knowledge on the economics behind the Ryanair model, would choose to comment only on quotes from customers and employees of Ryanair. While these authors are writing to different audiences there are still some facts about Ryanair that are included in both articles. Both the Newsweek and the Transportation Journal articles comment on Ryanair’s extensive use of the Boeing 737-800 aircraft. They both mention how versatile an aircraft it is and how it is able to hold a large amount of passengers. Any Way to Run” goes into more depth about what it means to the consumer to have an aircraft that can hold more passengers. “Ryanair Model” on the other hand goes more in depth about how Ryanair was able to negotiate with Boeing to purchase these aircraft as cheap as they did. One of the most visible and, aside from tone, the most noticeable to the viewer is length of the article. Length is one of the main deciding factors in how much credibility is received by an article, academic or general.

The length directly correlates to how many sources are cited within the article and how much information is available. “Ryanair Model” is much longer than “Any Way to Run” because academic articles need many more sources to sustain their credibility in the academic world. In “Ryanair Model” most of the length is taken up with facts and statistics about Ryanair and its competitors while opinions make up most of the “Any Way to Run” article. Action Statement: After an in depth analysis and comparison of this academic and magazine article we have realized the different intended uses for each article.

From this point forward we will also keep in mind, when reading magazine articles, that they are meant to be appealing to the reader and not necessarily include all the facts about the topic. For academic articles we learned that we may not necessarily understand all the content unless we are well versed in the field that the article is written for. Going forward, if we need an in depth analysis of a specific subject we will research and use academic journals. If we need more of an overview of a topic we will use magazine articles.

The marketing audit is a fundamental part of the marketing planning process. It is conducted not only at the beginning of the process, but also at a series of points during the implementation of the plan. The marketing audit considers both internal and external influences on marketing planning, as well as a review of the plan itself 1. Environmental Audict on Easy jet(the factors that can influnce the company) A)Five porter’s forces: *Threats from new entrants : When new airlines enter the market ,how they affect easy jet *Threats from subsititue products: more options to go to a destination such as buses,train.. ow these things affect easy jet *Bargaining power of suppliers: if plane manufacturer factories sell planes with a high price ,how this affect the easy jet’s finance *Bargaining power of buyers: for instance easy jet makes a contract with plane factories for 10 years with the fixed charge so the factory can’t increase the price during this time. Bargaining lets you buy products at a cheaper rate *Internal Rivalry: Internal competation ,easy jet fight against other airlines Threat of substitutes-this can be anything that can be a substitute to EasyJet or airline industry in general.

For instance, another airline with even lower prices, consumers opting to use other modes of transport (trains for instance). When Heatrow was hit by that huge fog just before Christmas and no planes were flying, Eurostar trains were suddenly all booked. I would think, however, that for Easy Jet, there would be no big threat of substitutes. There is a threat of ever growing competition but this isn’t the case of substitutes. Substitues are in other words ‘me too’ products which are less likely to occur in airline industry or service industry then in FMCG. I think. Buyers-here you can list down any possible threats from buyers.

This is where you look at the relationship between Easy Jet and its targeted consumers. How strong is Easy Jet brand? Do consumers believe in, and to, Easy Jet? Are they loyal to Easy Jet or do they switch to other airlines with no real or perceived risks? If yes, why? If not, why not? Do consumers have alternative to Easy Jet? If yes, and I would say they do, how does the relationship between Easy Jet and its consumers change? Who has greater leverage in this relationship, consumers or Easy Jet? Who is more dependable on whom, why and to what extent? Etc… Ask as many questions as you can and you will get your answer.

Talk to someone who has used Easy Jet services, ask them what they liked and disliked about it, would they use it again and why, how do they feel about Easy Jet, how did they decide to fly with Easy Jet, will they choose Easy Jet again B)Swot analysis: 4 main strenghts and the opposite ones are for weaknesses *Finance *Technology *HR Department *Reputation and image EasyJet Airline Company Limited: Strengths: * EasyJet is a leading provider of low budget, no frills air travel servicing many of the leading city destinations in the UK and across Europe, including Berlin, Amsterdam, Barcelona, and Prague. They offer a high quality service at competitive prices and offer a number of features including ticketless travel, internet booking and assisted travel services. * They have a highly distinctive livery on their fleet of aircraft making them easily recognisable and distinguishing them from their competitors. * They have a user friendly website which fully discloses the price breakdown of the passengers planned travel. Offering a full breakdown of the price plan prevents any hidden charges when the customer confirms there booking. EasyJet offers an online promotion alert which is e-mailed to existing customers and contact on the company’s database. * Recognised as a leading brand name in the UK travel industry. * As a market leader in an industry widely seen as a leading contributor to the green house effect and global warming, EasyJet actively embrace there environmental responsibilities and continue to keep these factors as a keep priority when developing their future strategies. * EasyJet operate a fast and efficient service with an average turnaround time of 30 minutes or below.

This enables them to maintain a reliable and hassle free service to their passengers. * For the case study,planes and turnaround times means to take short time on departure,use of internet,financial position The easy brand is a well known brand across the UK and some areas of Europe. It is knownfor ‘low cost for the masses’ which is implied by their orange culture. They want to paint the worldorange, implying that they want to provide goods and services at the lowest possible price. easyJeteasyJet only offers a single fare class. Its pricing strategy is to offer ‘value for money’ and this is doneby keeping costs to a minimum.

Unit costs are kept low by eliminating travel agents, maintaining highaircraft utilisation, focusing on internet sales, eliminating unnecessary service frills, operating a fleet of similar aircraft and establishing long-term agreements with suppliers. One of the key strengths of easyJet has been the utilisation of the internet. easyJet bookings over theinternet relate to over 92% of total sales and is expected to increase. They see themselves as becomingthe first internet only airline. Strengths: • Cheap tickets. • A simple fare structure. • Image, differentiation on price andbrand. •

Commitment to customer service. • Multi-base network. • Strong corporate culture. • Flexibility to change bookings on theinternet. • Lower costs than the established airlines Weaknesses: * Domestic air travel is an extremely competitive industry with EasyJet’s main competitors being Jet2, BMI Baby, Ryan Air plus a host of smaller independent competitors. These external competitive forces can restrict and shape pricing policy on some of EasyJet’s less profitable routes as they seek to compete with their competitors. * They do not offer a free food service on longer flights of 2 hours plus. asyJet has many weaknesses but the main include the lack of service,flexibility and business focus making the low-cost model unappealing to business travellers. Businesstravellers are not included within easyJet’s business model. Since September 11 business travellersaccount for 50% of passengers and therefore should be a target for marketing and should be included inthe business model. This can be seen as a weakness for not targeting this segment. easyJet’s business model also relies on people flying more often. However, there is a limit as to howoften people fly.

The growth is not infinitive, it is possible that the low-cost market will be saturated. Itwill come to a point when the low-cost airlines will not be able to stimulate any more demand fromlow prices. (CPRE: The Future Development of Air Transport in the UK, July 2003 Weaknesses: • Pilots over 65 are not allowed to fly over France, Italy and Portugal. • No guaranteed departure. • No unaccompanied children under age of 16. • No autopilot. • Lack of service, flexibility and business focusmake the low-cost model unappealing tobusiness travellers. • Focus on price and convenience is reaching itslimit.

Differentiation will be difficult. • Due to quick success it is difficult to recruitand train new staff. • No customer retention scheme Opportunities: * Possible opening of alternative routes to major cities in Europe. A key route could be from Dublin to the UK, as this has a large potential for travellers going to soccer matches in the UK plus new links into corporate flyers to and from the UK. * Offering of free refreshments on flights with a travel time of over two and a half hours. This would offer an extra perk and comfort to passengers making their experience with EasyJet all the more comfortable and enjoyable. Updated versions of the fly on the wall documentaries would provide the brand with more coverage and publicity. The opportunities in the industry mainly come from the Eexpansion. On the 1st of May 2004, 10 countries will be joining the EU. Thus, the EU’s membership will be expanded from 15to 25 countries. The new states include former members of the Eastern Block and smaller “island”states. (bized. ac. uk) These are Cyprus, the Czech Republic, Estonia, Hungary, Latvia, Lithuania, Malta,Poland and the Slovak Republic.

Further EU expansion is expected in 2007 when Bulgaria andRomania are hoping to join the EU, while Turkey is now currently negotiating its membership. (europa. eu. int)The addition of more than 100 million people to the EU’s market of 370 million will present anopportunity for further growth for the low-cost airline industry. easyJet has already announced its newroutes from Luton, Berlin and Dortmund airports to Budapest (Hungary) and from Stansted airport toLjubljana (Slovenia). (easyJet. com) Threats: * Competitors flying the same routes compete very competitively on price forcing pressure on margin on more popular flights and time slots. External market forces can have a significant impact on EasyJet’s business, e. g. the rising cost of oil can have a significant impact on running costs putting significant pressure on the profitability of less popular routes and time slots. * Pressure from unions and employee relations committees can signifigantly impact on the day to day operations with strikes proving to be very costly to the company’s image. * Economic downturn may lead to a decrease in casual flyers and corporate travel as companies seek to curtail what they see as unnecessary expenditure and in turn make less business trips.  Financial Analysis Within the low-cost/no-frills airline industry in the UK,Ryanair is easyJet’s main competitor. Inevaluating the financial performance of easyJet, it is therefore useful to compare its performance withthat of Ryanair. For the purpose of this comparison, we will be making use of a number of ratioswhose formulae follow that of FAME. The data used for this financial analysis are easyJet’s unauditedpreliminary results for their financial year ended 30 September 2003, which provided results for boththe year ending 30 September 2002 and 2003.

Ryanair’s financial year-end however is 31 March 2004. Therefore in order to obtain data that would be directly comparable, it was necessary to use data fromtheir half-year which ends 30 September 2002 and 2003, and to use figures taken from their financialyear end 31 March 2002 and 2003. This enabled us to obtain figures for a full 12 months ending 30September 2002 and 2003. For a quick overview of all ratios refer to Appendix 3 and details of allcalculations are contained in Appendix 4. All financial reports were obtained from downloadsavailable onwww. easyjet. com and www. ryanair. com.

The first numerical set of data to be analysed is the Profit and Loss Account. This deals with therunning of the business, i. e. the amount of turnover, the cost of what has been sold, the expensesgenerated during the year and of course the profit that has been made, perhaps the figure that theshareholders are most interested in, but there are other criteria that could affect the profitability of thecompany PEST analysis for easyJet The following factors are likely to have an influence on the airline industry and should therefore be taken into account when formulating a Marketing Plan for easyJet.

Politico-legal factors • Threat of war in the Middle East • The Air Miles scheme is not considered as a taxable perk by the government in the way that company cars are taxed which may change to allow easyJet to compete on more equal grounds with the likes of BA. • A EU east-enlargement may provide access to viable, new markets. Economic factors • Likelihood of increasing fuel costs, congestion and other environmental restrictions, as well as the prospect of higher security and insurance costs to reflect the risk of terrorism. As the recession is likely to last for some more time, business travellers will keep an eye on their travel expenses. • Globalisation should continue to boost traffic in the long-term. • The introduction of the single currency in Europe is likely to bring more business to easyJet as Europe becomes more integrated. Socio-cultural factors • To win over the French and German publics might cause problems as there appears still to be a general reluctance to use credit cards over the phone and Internet . • The public are general quite friendly to the prospect of cheap flights.

However they may feel begrudged where they see promotions found in newspapers where flight are for ? 10 only to find that the actual cost is much higher for the particular time or day they wish to fly on. Technological factors • A key issue will be the extent to which technological advancements – such as the use of the Internet on distribution and cost synergies from industry consolidation – can offset upward pressures on prices and costs. • easyJet has to keep track of technological developments in the field of e-commerce and aircraft manufacture in order to gain a competitive advantage. CONTINUE..

The business environment is a set of political, economic, social, technological, environmental and legal factors otherwise know as PESTLE analysis. These factors are not controlled by the business. Which means that businesses must adapt quickly as the environment changes. These macro factors have a positive or negative impact on the business. The political factor can be affected through tax policies as Easyjet are charged with landing in different countries, employment laws, environment regulations, trade restrictions, tariffs and the government. The economic factor is forever changing with prices constantly fluctuating.

For example oil prices increasing affects overall profits for the company which in return affects how much money Easyjet can invest on improving the airline or giving back to the communities. Baines, Phil and Page (2008a) explain firms are effected by environmental issues such as wage inflation, price inflation, gross domestic product and income sales and corporation taxes. From the social aspect this looks highly on safety of the airline and its staff and passengers. Which then attracts passengers to fly again after being ensured of safe and secure flights.

To keep up in technology Easyjet must be internet dependant as flights are booked and checked via the internet. Therefore customers need to be satisfied with a quick and simple service. Easyjet also have a great career attitude which commits staff to be up to a excellent standard of service. Technology plays a huge factor within Easyjet as it has to rely hugely on the reliance of technology. Also as things improve technology becomes cheaper which means barriers to entry could be lower for competitors to join which could affect the profit of Easyjet. “Barriers to entry are designed to block potential entrants from entering a market profitably.

They seek to protect the monopoly power of existing firms in an industry and therefore maintain supernormal profits in the long run. Barriers to entry have the effect of making a market less contestable“. (Tutor2u n. d) To prevent this research and development expenditure can act as an obstruction to potential entrants to industry PEST analysis PEST analysis is chosen, to look at the possible business environmental impacts that may affect theindustry and easyJet. It can be used to infer a variety of trends, patterns and projections which willinfluence easyJet’s future strategic decisions (ACCA 2004).

PEST analysis was chosen over SLEPTanalysis as we found it difficult to differentiate between legal and political factors. The legal issubsumed into political. Consideration will be made to the political, economic, social and technologicalenvironments that may affect the industry and easyJet in the future. Political Environment The industry and easyJet must react to any regulations that are imposed by the political party and thecorporate governance code. The EU compensation ruling that will take affect in 2005 is currently beingchallenged by easyJet as well as other airlines.

If this challenge is unsuccessful then it would meanincreases, in legal battles, compensation payouts and overall increases in costs. As a result, fare prices easyJetwill increase and demand will fall. This would make it very difficult to see the future for the low-costindustry. Expansion of the UK airport system will play a major role in the future of the airlines growth model. Stansted is expected to have one additional runway and terminal, increasing UK air traffic growth to402 million by 2020, 501 million passengers by 2030 (Mintel report 2003).

The government are seeingthe benefits that the aviation industry can bring to the country. The question that remains to beanswered is, for how long are the government willing to help the growth of the industry before theystart to intervene? Any intervention from the government is likely to be costly in the future to theindustry. Economic Environment The government may decide to impose taxes on the industry. A possible introduction of a ‘Green tax’,a tax on fuel to try and reduce the pollution that it causes, would increase the costs and as a result couldraise easyJet’s fares by more than 20% (Financial Times, 1 st

November 2003). Also the ? 6 billionworth of subsidies that is currently received from the government may be reduced over time to limit thegrowth of the industry. The growth of the industry may need to be controlled to keep pollution to aminimum. As subsidies decrease there will be an adverse affect on fare prices causing demand to fall. This will also affect the business model as it would need to be revisited. The recent rises in the UK interest rate, which currently stand at 4%, has increased the public’sliabilities.

People have less disposable income and as a result are less likely to travel abroad. Theincreases will also affect easyJets’s loan repayments on its new order of aircrafts. At present, paymentsrelating to the purchase are not included in the hedging policy and therefore will affect the liabilities of easyJet. Social and Cultural environment The UK population as a whole are aging, people are living longer. The number of people between theage of 25 and 34 has been decreasing but the age group between 55 and 64 are expected to increasefrom 2005 (Mintel report 2003).

The older age group tends to have more disposable income (SAGAholidays target this group) and therefore should be targeted more by easyJet. Saying this, younger people who have less disposable income are now starting to go abroad for their holidays. This meansthat the airline industry is attracting more potential passengers because of their low fares. Technological environment easyJeteasyJet’s use of the internet needs to be enhanced, they are aiming to become the first ‘web-only’airline.

Currently 92% of their tickets are sold online and improving this figure will bring cost savingwhich in turn could be passed on to the consumers. This will make easyJet more competitive on price. easyJet will need to keep track of technical developments in e-commerce and aircraft manufacturing inorder to compete against its rivals 2. 7ps Marketing Mix of Easyjet Product – Easy Jet is a flight booking company located at London. The benefits of Easy Jet being online and on teletext means that they are providing better margins; this is where they are dedicated to customers digitally.

Place – Not solely online but majority of sales are online so Easy Jet will concentrate on this target market. Today, technology allows us to sell more goods to fewer people, which is far more efficient than selling fewer goods to more people. This is confirmed by Peppers and Rodgers in their Marketing concept. Peppers an advertising executive and Rogers a marketing scholar, their concepts addressed “one to one marketing”and how it concentrates on providing services or products to one customer at a time. This is by identifying and then meeting their individual needs.

It then aims to repeat this many times with each customer, this is so consumers feel relationships are in place when perhaps they are forged. Price – With Easy Jet being on the internet for such a long period it means it has cut out aspects such as “the post”, this is because tickets and boarding passes are now emailed to customers or printable online, therefore “cutting out the middle man”. Promotion – Easy jet’s website is offered through search engines and travel/flight comparison websites, this is both advertising and selling their service.

They also send members emails with promotional offers. Physical Evidence – Although Easy Jet is based mainly online now, Easy Jet are still booked through travel agents or in the airport itself. Physically offline Easy Jet have recently in the previous few months been advertising in Sainsbury’s stores by staff (uniformed Easy Jet T-shirts), advertising there new partnership. Physical evidence online differs, they have aspects such as “security icon” and policies in place which gives consumers a sense of security when booking online.

People – On Easy Jet’s website they have sections, such as blogs, FAQ’s and a whole section dedicated to customer service to try and give consumers a sense that even though they are online they still have some form of contact to Easy Jet. Process – As mentioned above Easy Jet integrates online and offline by having customer service in the airport and online. CASE STUDY Product: Easy jet is an low cost budget airline as well as no frill. The easy brand has been extended to other products. There are now easyinternet cafes,easycar,easymoney and new easycruise products.

Price: There 3 types of pricing which are Premium Pricing this is for specific segment of people for example apple targets for certain people. Low cost pricing which is for easyjet,targeting low cost price and low income people. Psycological pricing,99p instead of 1pound They use a low cost price to be competitive Place: It means Distrubition . Distrubition has manufacturer,agents,wholesalers,retailers,consumers. The more distrubition you have ,the more expensive your products will be. easy jet has manufacturers and directly deals with consumers so they save money. lmost 90 percent of tickets are sold through the internet for the 10 percent agents sell so they sometimes deals with agents too. Promotion : internet People : Paperless opeartions since its launch easyjet have simplified its working practices by embracing the concept of the paperless office. they do everything online rather than people going to branches and taling face to face ,everthing can be done online so easyjet saves money for hiring less people Process : Ticketless travel passengers,instead receive an email containing their travel details and confirmation number when they book online. his helps reduce significantly the costs of issuing,distrubuting,processing and reconciling millions of tickets each year Physical Evidence: it means beauty,new planes ,comfort flights… Each boeing is new 737 aircraft and has a list price in the region of 35million gbp. Therefore maximising utilisation of each aircraft reduces the unit cost NOTES FROM THE CASE STUDIES MARKETING:The mutual satisfactions of both suppliers and customers. The method is the process of shaping and managing the marketing mix in a way which takes into considerition the needs of the customer and the goals of the organisation at one and the same time.

Marketing is the performance of business activities that direct the flow of goods and services from organisation to their customers. Chartered Institute of Marketing defines marketing as; The management process which identifies ,anticipates and satisfies customer requirements effciently and profitably Professor Philip Kotler 1999 states;Marketing is a social and managerial process by which individuals and groups get what they need and want through creating,offering and exchanging products of value with others. People don’t only buy what they want to ,they buy them because of the value of products they require.

Marketing is concerned with customers ,they are the main element in marketing not quality or products. If customers are demanding for new products features,marketing department will have to communicate these requirements to the production department to make provision for new processes and new machinery. On the other hand if the customer change their pattern of shopping or seek more information regarding the safe us of product ,the company may have to recruit new marketing executives to match up to the demand. )Using technology on easyjet One of the most important developments in the UK travel industry in the last 15 years is the growth of the ‘budget’ or ‘no frills’ airlines, easyJet and Ryanair. Both of these airlines were launched when new regulations made it easier to operate between countries within Europe and both used new technology and other methods to sell seats, rather than through traditional high street travel agents.

The growth of both companies has been exceptional and the airlines have used similar approaches in their ‘business models’ * Use of the Internet to reduce distribution costs – easyJet was one of the first airlines to see the opportunity of the Internet when it sold its first seat online in April 1998. Now approximately 95 % of all seats are sold over the internet. * Maximise the time the aircraft is being used – For both Ryanair and easyJet maximising the use of each aircraft reduces the overall cost of running the aircraft. Ticketless travel – Passengers receive an email containing their travel details and booking reference when they book online, rather than a traditional ticket. This helps to reduce significantly the cost of issuing and processing millions of tickets each year. * ‘No free lunch’ – Not offering free catering on-board reduces cost. Passengers can purchase food on-board if they choose to. * Free seating – Unlike traditional airlines, Ryanair and easyJet passengers are not assigned a seat, unless they pay extra to board first.

This helps passengers to take their seats more quickly and saves time. * Efficient use of airports – By reducing turnarounds (the time between landing and take-off) to 30 minutes and below, easyJet and Ryanair maximise the use of their aircraft. Not having pre-assigned seating, like traditional airlines, helps reduce turnaround times. * Reduced fares – generally Ryanair and easyJet offer cheaper fares than traditional airlines, especilally for passengers who can book early and take advantage of the deals available.