This report contains analysis of Easyjet’s UK and European markets using information contained in the given case study and also from sources outside the course of study.
To begin with a brief overview of the company will be given. Subsequently using PEST and Five Forces models the external analysis will be completed identifying the companies’ core resources and capabilities.
Next the core of the previous analysis will be used to examine the opportunities for international expansion into the Indian market. The investigation will use theory to outline the threats and opportunities of entering this market.
1INTRODUCTION – THE COMPANY AN OVERVIEW1
2EXTERNAL ENVIORNMENTAL ANALYSIS2
3INTERNAL ENVIORNMENTAL ANALYSIS4
3.1Porter’s Five Forces4
3.1.1Bargaining power of Suppliers (Moderate)4
3.1.2Bargaining power of Buyers (High)4
3.1.3Threat of New Entrants (Moderate - High)4
3.1.4Threat of Substitutes (Low – Moderate)5
3.1.5Rivalry within the industry (High)5
4COMPANIES KEY RESOURCES AND COMPETANCIES6
6MARKET ENTRY MODE: FACTORS TO CONSIDER11
6.2Desired mode characteristics11
6.3Transaction – specific factors12
7MARKET ENTRY STRATEGY14
9.2Porter’s Five Forces21
9.2.1Bargaining power of Suppliers (Moderate)21
9.2.2Bargaining power of Buyers (High)21
9.2.3Threat of New Entrants (Moderate - High)21
9.2.4Threat of Substitutes (Low – Moderate)22
9.2.5Rivalry within the industry (High)23
INTRODUCTION – THE COMPANY AN OVERVIEW
Easyjet is a british owned airline founded in 1995 by Stelious Haji-loannou. They are a low cost carrier across Europe operating a fleet of 110 airbus aircrafts. Easyjet are looking at opportunities to expand operations to the Indian market.
This report carries out environmental analysis of the home market and also looks at the prospective market. The report review’s the core competencies of Easyjet and investigates the possibility of expansion into the proposed market. Using theory of global marketing the report will establish a desirable market entry mode and also a market entry strategy. It will outline risks and opportunities with these expansion theories.
EXTERNAL ENVIORNMENTAL ANALYSIS
Deregualtion of the European airline industry in 1997 seen the rise of low cost carriers in Europe (The Guardian, 26/01/02). This expansion of the European union has helped increase leisure travel and the size of labour market increasing business travel (Europa.eu).
The EU US open sky agreement of 2008 liberalised transatlantic flights and gave freedom to airlines to purchase stakes in airlines across continental borders (BBC, 24/06/10).
Aviation taxes are a key concern in the low cost airline industry. “With holidays and short breaks now in the UK’s top two expenditure priorities” (Mintel 2007) the cost of flights will be influential on destination and mode of travel.
The EU launched the Emission Trading Scheme (ETS) in 2005 which allocates CO2 allowances to airlines annual carbon outputs. If they exceed these allowances fines are imposed (European Commission 2010). (For more detailed analysis see Appendix 9.1.1)
Oil Prices are a key factor in aviation. Accounting for one quarter of the costs in the industry (Mintel 2007).