INTERNATIONAL STRATEGY

International Strategy

Table Of Content

Introduction4

Mission statement4

Major stakeholder groups5

Internal Analysis5

Strengths5

Weaknesses6

Value Chain Analysis7

Resources & core competence8

Physical9

Financial9

Intellectual capital and other intangibles9

Core Competence10

External Analysis10

Opportunities10

Threats11

Porters Five Model11

Potential Entrants11

Bargaining power of buyers12

Bargaining power of suppliers12

Threat of substitutes13

Industry competitors13

STRATEGY14

Generic strategy14

Product & Market Analysis15

Product Analysis15

The Boston Consulting Group (BCG) growth share matrix16

Growth Strategies16

Strategy Implementation17

Matching strategy with resources17

Convergence and Focus17

Extraction18

Shielding18

Acquisition/Diversification18

Managing change18

Evaluation19

Turnover20

Market share/industry leadership20

Technological leadership20

Broaden customer base20

Innovation, creativity and entrepreneurship21

Conclusion21

References23

Bibliography26

International Strategy: Easyjet

Introduction

Easyjet was established in March 1995, with low-cost flights from London's Luton Airport to Glasgow and Edinburgh in Scotland. The flights were full; and the demand for low-cost flights grew rapidly throughout the whole country. Since then, Easyjet was concentrated on expanding itself and raised additional finance to invest in additional aircrafts.

Today, Easyjet is one of the Europe's leading low-cost airlines offering 105 routes to 38 key business and leisure airports in Europe (www.easyjet.com).This is proved by their corporate figures, with a total turnover of 932 million and pre-tax profits of 52 million in 2003 (www.easyjet.com). With a customer base that has consistently grown from the first flight to an impressive 20.3 million (www.easyjet.com) passengers in the 2003 financial year, the company has gone from strength to strength.

Although, Easyjet stands at a very strong position in the industry, but there are also other companies that are offering similar services, its main low cost carrier competitors are Ryanair, Virgin express, Buzz and British Midlands etc.

Mission statement

To afford our consumers with secure, good value, point-to-point air services. To affect and to offer a consistent and reliable product and fares appealing to leisure and business markets on a range of European routes. To achieve this we will develop our people and establish lasting relationships with our suppliers (www.easyjet.com).

Major stakeholder groups

Aircraft/Maintain service suppliers (e.g. Airbus, Boeing)

Airports

Fuel suppliers

Shareholders

Staff

Banks

Travel agencies

Advertising agencies

Government (taxation department)

Internal Analysis

Strengths

A key strength that Easyjet have been able to develop over the years is that it has a very efficient process of management. For example, the technological operation of online booking that it employs has improved the efficiency of the management and saved cost. As Ray Webster [2003] stated -"Over 90% of sales are online" (www.easyjet.com).

Another strengthening aspect that Easyjet adopted was the reputation and the brand awareness. Punctuality was important to Easyjet, because customer satisfaction was closely linked to punctuality in terms of responding to customer needs and maintaining a strong customer base. One example of this is Easyjet allows the public to view their flights' "arrival on time" statistics through their website (www.easyjet.com).

Weaknesses

One of the major weaknesses for Easyjet at the moment is the downside of its merger with "GO", could be that more pressure is put on the management team, which can possibly de-motivate and stretch them, as the joint operation is now larger and more time demanding. Meanwhile, the adjustment of organization structure also required, this could resulted issues in high cost (Gordon, 2004, pp.7-11).

Easyjet 2003 Annual Report and Accounts summarized:

"Costs of integrating the businesses of Go Fly and Easyjet were 7.9 million in financial year 2003(2002: 7.1 ...