Overview of the easy jet and its expansion plan in Indian market

Discuss about the Study on Service Quality Passenger Satisfaction.

In the contemporary business, there are many factors that are affecting the business of organisations. It is essential for the organisations to ensure that they have done a thorough market research before making any strategies. The challenges that are faced by the modern day organisations can only be resolved if there will be proper understanding about external and internal environment that is present across the business. The challenge is even bigger for the International firms (Terpstra, Foley & Sarathy, 2012). This is even bigger in the European business environment and the condition has worse because of the increased competition in various industries. Easy Jet is one the biggest Airlines companies in the world. It is operational in more than 30 countries. It is established back in the year 1995.  For their expansion in the emerging markets like India, they will have to make strategies according to the local markets. This report highlights the study regarding the internal and external environment for Easy Jet as well as gives the idea regarding competitive environment for the company in the European region. It also gives the details regarding the marketing strategies like STP for the company.

The various aspects regarding the business of the easy jet in the Indian market has been elaborated in the given case study. The case study provides the current position of the cited firm in the European market. Apart from this it gives the idea about its expansion plan in the Indian Airlines market. For any Airlines company, it is crucial that they have a flight in different regions of the world and the domestic market (Paliwoda & Thomas, 2013). More the number of locations at which company have a flight, more is the chance that they could capture the market. With the fast expansion of the Indian airlines market, there is a wonderful opportunity available with the companies like Easy jet to come into the Indian market. Such expansions have the possibility to increase the revenue and profit margins of the company. This case study compares two nations and justifies the expansion of the company. Britain and India has been selected as the former country is the hub for the cited firm while the later one is an emerging country having highly dense markets (Meissner, 2012).

In the markets like U.K., this company holds a stable or moderate position. In the country like UK is highly developed economy has a fully developed airlines market. This company has a highly profitable business in the UK market as the flight passengers has increased at much faster rate after 2005. With the development of the rural regions in the nation it is expected that company will have a bright future in this nation (Cadogan, 2012).

Current position of the cited firm in the European market

Apart from this report signifies the plan of the company to expand is business in India. With the sky toughing growth rate and huge number of people having higher income this can be an excellent market for the cited firm. India has a plan to develop the domestic flight market. The development of new modern and smart cities has increased the chances of stable business for the Airlines companies (Lee & Carter, 2011). With the increase in the travel and tour sector in India, the chances for airlines market sustainable growth also enhance. At present 35% of the Indian transportation sector has been captured by the Airlines Industry. India is market that loves the low cost services. This is the reason why low cost airlines companies have found it a favourable market. In the last 3 years there are many people that have travelled in many parts of the world and are expected to increase at the two digits rate (Tan & Sousa, 2013). Easy Jet being a low-cost airlines have the capacity to capture this opportunity. The only problem with the company is that it lacks in terms of infrastructure quality. With the PPP model by the government this is expected to improve.

As it is discussed above that a company must be aware of the external environment that is present in their business. In the prescribed case study, Easy Jet operates in both domestic and International markets of Europe. It is providing its scheduled services in around 30 nations over 820 routes. Easy jet is listed in the London Stock Exchange having more than 11,000 employees alone in Europe. There are so many competing companies that doing profitable business tis market hence making profits has become slightly difficult (Cavusgil & Cavusgil, 2012). PEST analysis can give the idea about the external environment of the company.

Political and legal: In the past few years there are many political decisions that are made by the government of U.K. that has directly or indirectly affecting the business of the Easy Jet. The decisions like Brexit had the direct impact on the Airlines Industry as the trade and travel rules are going to change in the nation. With the increasing terrorist attacks in the last few decades within UK, the threat of the customer’s safety is increasing day by day. The legalities for the online business have also changed especially in terms of carbon emission laws (Gilligan & Hird, 2012). Government has increased the taxations and flight operation regulations. On the other hand, government has invested in the infrastructure development but has made decisions that are against airport monopolisation.

Factors affecting the business of the Easy Jet in UK

Economic: Easy Jet has made higher revenue and profits in the past.  U.K. is a highly developed market being 2^nd largest economy in the Europe. This recession of 2009 was a hard hit to the airlines industry of Europe and hence the Easy Jet’s business was also facing problems. But with their strategic planning they have been able to increase the profit. There is consist increase in the fuels cost and conflict in the Mediterranean region has further made the problems worse for the cited firm (Burgess & Bothma, 2011). The increased taxation in the last few decades has severely impacted their business. In the increasing inflation and competition there is a less chance to increase the profit of the company. In the downfall of European economy and the stagnation in the American economic condition has increased the challenges for the airlines companies.

Social: The society in the European region has changed considerably in the past two decades. The changes could be noticed in the lifestyle and connectivity with the technology. People do not have time hence they want to save their time. Such things have empowering the aviation industry to grow wider in the transportation industry (Burgess & Steenkamp, 2013). Easy Jet being a low cost airlines company had the opportunity to expand their reach in the market and make new set of people into their target market. Previously air medium of transport was considered to be mode of transportation for rich people but now a day even common man can afford it. Such things are helping the companies like Easy jet to expand their market base.

Technological factor: After late 90’s there were immense changes that were going on in the airlines industry in terms of technology. At present the aviation industry is noticing a high value of changes in different inventory. Since technology is changing at much faster rate hence companies like Easy Jet will also have to incorporate such changes. Such increments in terms of technology need a huge amount of investment that too at regular intervals. In the little margins of profits such investments requires strategic planning or could result in negative manner (Zou & Fu, 2011). This company has to deal with the data that is generated on their daily basis as it is the biggest source using with new decisions regarding company’s future could be made.

It is not that just the number of consumers in the European region have increased rather many new players in the industry have come up in the past. A considerable change in the competing nature has also been noticed in the past few years. Today’s competition has gone cut-throat as well as the marketing has also become very aggressive between the rivals (Moon & Park, 2011). This company faces the direct challenge from Ryan Air as it is the cheapest airlines in the industry. In Europe, Easy Jet is facing both direct and indirect competition. Direct competition is given by low cost airlines that offer similar kind of services that too in the same price range. RyanAir was a leading choice for the passenger as its total number of passengers that travelled in 2006 was 42 million and at the same time Easy Jet carried 34 million consumers.

The challenges faced by Easy Jet in the Indian market

With the changing environment for business many companies were also giving indirect competition to Easy Jet. British Airways and AirFrance are the two major competitors in this regards. They are categorised as the indirect competitors as they focused on different target markets. The analysis regarding the environment shows that there is still lot of things on which companies have to focus. The changing global environment needs to be dealt with proper management tools if they desire to achieve success in the increasing competitions (Gnizy & Shoham, 2014). Since UK and other parts of the Europe has been their prime market hence it has become essential for Easy Jet to manage their business in this part of the world. It is essential that company focuses on the necessity of analysing the competitive environment in Europe.

There is a considerable change in the ways of doing business each and every part of the globe. At present there are many political and economic reforms that are going on in various parts of the globe. Presently in various parts of the world economic slowdown can be noticed. The European economy have seen a decline in the last decade while from the past few years American economy’s growth has been slowed down. Apart from this there is rise of some of the economies like India and China (WELLINGTON & Jammu, 2014). In recent Year China’s influence on the global market have increased considerably. The polar economy which was the base of the 90’s world has changed considerably and now many new centres of economic zones have developed.

After the technological advancements in various parts of the world, the pace of globalisation has increased. This has not only helped the Aviation industry to expand its business but has also helped the firm to ease their operational procedures. In the process of expansion, it is essential for the multinational firms like Easy Jet to conduct an international market research (Doganis, 2013). It helps the company to understand the problems that might confront their business in the expansion process.

International marketing is always dependent upon the research that is done by the companies before entering into any particular market. The basic outline of the research is to contrast the differences that exist in political, economic, cultural, social and various other aspects of the nations (Assaf, 2011). According to the given case study Easy Jet plans to expand their business in India. For this they will have to do research so as to find the factors that may influence their business operations in this part of the world. Few of these elements have been analysed through the specs of market theories.

Analysis of the external environment using PEST analysis

One of the most severe challenges for any company while expanding into Indian Territory is to deal with political barriers. But in recent years government of India has been very focused towards the development of the new aviation policy that aims to bring reform in this sector. They have also worked hard on the infrastructural development that is required for both domestic as well as international flights (David Mc, 2013). With the poor performance of Indian airways which is having control over major part of the market, the chances of companies like Easy Jet gets easier to come into India. Recently Indian Airways was tried to be sold but not one purchased it. Apart from this the biggest problems that Easy Jet might face in India is the cost that is wasted in lobbying especially in the case of Foreign Direct Investment.

India is one of the fastest developing nations in the whole world. The growth rate of the nation has been above 6 since last 10 years. India is becoming one of the greatest attractions for investors in many parts of the world. In the last few decades it has converged towards becoming a world leader in many industries. It has been seen that in Indian economy there are many economic reforms that are going on. With the formalisation of various aspects of business this can be an excellent place where new companies can come and do their business. The changes like introduction of GST and removal of many trade barriers, this company encourages many of the global firms to do their business. The per capita income of the nation is on the lower side but this acts as a wonderful opportunity for the low-fare airlines like Easy Jet to expand their market in the nation. The only problem with the Indian economy is that the bureaucratic process is very slow which makes the process of investments very slow. Government has invested a lot of wealth over the development of new airports in the new cities so as to empower the domestic flight market (Bottasso & Conti, 2012). This is the market on which Easy Jet could capture. New political tie ups from various nations have led to increase in the number of direct flight routes to other nations. It is estimate that till 2025 this market will be three times that of today so it is essential that companies make their mark in the industry beforehand. The poor performance of the public company Indian Airways is also an opportunity for the Easy Jet to enter into the market.

Discussion on the competition in the European airlines industry

India is a country of 1.25 billion people having very different social backgrounds. India has been one of the diverse nations especially in terms of the types of culture that exist in the country. Indian society has been considered as the place where people from diverse economic backgrounds also exist. Most of its population are middle class and is considered to be as the service class nation. The travelling behaviour of the people has changed considerably. With the increasing number of people coming above a particular economic line, number of travellers through air mediums has also increased (Sarker, Hossan & Zaman, 2012). The purchasing behaviour of Indian suggests that they like economical services. This is even better scenario for the low-fare airlines like Easy-Jet to enter into the Indian market. It is having a large number of labours that are highly qualified and they are available at comparatively lower cost than that of European region. With the major part of the nation’s population being under the age of 35 years, there is a huge target market on which Easy Jet can focus upon.

In the past few decades the consumer law have strengthened along with rules and regulations related to aviation industry. The trade and investment laws have also changed. This has made the process of expansion to be smoother. The aviation laws expected to get changed in the coming years. On the other hand in the last decade India has made huge advancements in terms of technologies. With many cities developing into IT hubs and the expansion of communication infrastructure has made it an advanced market for the entry of new business in every sector. In the aviation industry there is no big manufacturer within the nation hence they will have to arrange it from the external market (Joshi & Desai, 2012). This lack of research in terms of technology development as well as over dependence on the manufacturing parts from the other nation can somehow limit the companies from any large investments. In terms of technology development there is a huge possibility that India gets transformed into the manufacturing hub.

In the last few years there are many companies that have come up in the airlines industry. Presently the market of India is expanding at much faster rate. Currently it is the 9^th largest airlines market in the whole world and is expected to become the 3^rd largest by the end of 2020. Middle class people constitute the most parts of the Indian market. It is essential that company understands the future of the market. The travelling behaviour of Indian people has changed considerably and hence this market is understood to be expanding at much faster rate (Saranga & Nagpal, 2016). Easy Jet provides low-cost services which are perfect to lure the middle class companies. Alone in the year 2006, such low cost airlines have increased with a growth rate of 114%. Traditional airlines are making profits but the low cost airline companies are also making huge amount of competitive advantage over the others. Many new companies are making their mark in the industry and have come up with new kind of services. It is essential for the company to establish powerful brand image because of their long term sustainability plan. With the emerging new travel and tourists destinations, number of people is expected to increase vastly (India Brand Equity Foundation, 2018). Easy Jet needs to be ready with the plan so as to capture this segment of the market.

Analysis of the global economic scenario and changing business environment

The Airline Industry is at expansion in India. Considering that the domestic market to be getting twice there are many national and international players coming to the services. Apart from this there are many well established airline firms like Spice Jet, Indigo Airlines, Go-Air etc. that is operating at a low cost fare. Most of the companies that are operating with low price products have adopted the business models of European low cost airlines. Spice jet and Indigo have captured the major part of the market and stealing a market place for them will not be smoother in the case of Easy Jet.

The technology and internet facilities in India are expanding at much faster rate. Use of technologies has empowered the airlines companies to make sure that they have a profitable business. With the communication channels becoming very powerful, it has become easier for the airlines companies to provide better and fast services to the people (Archana & Subha, 2012). The trend in the airlines industry also shows the positive future for the Easy Jet. Checking the demographics this market suites the nature of business for the cited firm. Easy Jet will be able to target the people that will be coming in the future.

India is a country having highly diverse market. This is because of the fact that there are large numbers of people that are from different cultural and social backgrounds. It is crucial that Easy Jet segments its target market based on various variables. Some of these variables are psychographic, geographic, behavioural and demographic characteristics. In geographic they have selected urban and semi-urban regions in which their major focus is metropolitan cities. In the developing economy like India this segment of the market are large in number (Deeba, 2014). It will focus on the individuals on the basis of the life style i.e. people living average and luxurious life. In terms of demographics they are concentrating on the age group between 18-30 years. This is because of the fact that they need to travel to different parts of the India or abroad for the purpose of study or business purpose.  In terms of professional they have segmented both service class people as well as students.

They have done targeting of the people that are in different segments. Easy Jet’s major focus is towards the middle class people as the number of travellers from this section of the society is increasing at a much faster rate. The low cost services that this company is offering will focus on the population that is having middle level income. The populated towns of the India have been targeted most of the time. In these states, it might target the people that are more into travelling purpose (Kanthe, 2012). This group of people are increasing at much faster rate. People that are unable to afford traditional services of bigger firms can avail the services from Easy Jet.

Importance of understanding the competitive environment in Europe

For any organisation it is essential that they know how they want to position their brand. It is necessary that organisations understands the behaviour of their target customer and then position their products (Muthusamy & Muthumeena, 2015). In order to create a positive perception about the company Easy jet need to make it according to the demands of the market. Since this company is targeting middle class people hence they need to position their services as low cost services. It will have to concentrate on the vision to empowering each and every middle class Indian people to fly through the air mediums. The company will need a better communication plan so as to attract more number of people towards their services. It will help the company to expand their business in Indian market and at the same time can gain competitive advantage over the other rivals. In the coming years if they want company to see itself making its name in the market, they need to position themselves in the market in a better manner. It is crucial that a company understands its resources and capabilities as well as the value that it provides to its customers and then only they must position themselves in the market (Sumberg & Jonathan, 2011). It is essential that Easy Jet understands the market base present in the country and react accordingly.

The nature of the business with which Easy Jet operates with makes them highly suitable for Indian market. There are many strategic challenges that this company will face while expanding their business into India. There are many strategic decisions this company will have to make in order to ensure that its expansion process is smoother. The first thing on which they will have to focus upon is to choose the best market entry mode. It can come into the Indian market with the help of some other local companies. The other way in which it can enter into Indian market is equity where it can invest into Indian market is foreign Direct Investment (Kachaner, Lindgardt &  Michael, 2011). This would help them in reaching to the larger part of the aviation industry in the nation in a very short time period. Apart from this Easy jet must have a proper research about the connection of location that could provide them with maximum benefits. It is crucial that a company understands its available resources and then make a plan for the development of their business inside the country. Market understanding is very important which will help the company to know the preferences of the target market. For promoting its services use the use online mediums will be very beneficial. Since the communication and technology industry within India is growing at faster rate hence it is essential that company takes use of social media sites (Powley, 2017).

The type of business model that it used in Europe can be beneficial but the effectiveness of their business in the India will depends on the strategy made by the firm understanding the behaviour of the population. With the easy availability of resources they can easily adopt low cost strategies. Since Indian market is highly diverse hence they must provide every kind of services to the customers. This is essential for reaching to maximum number of consumers.

Conclusion

From the above based report it can be concluded that Easy Jet is one of the leading low cost airlines company in U.K. It is known for its best services at low prices. In order to ensure that it’s long term growth can be achieved through the help of investments in Indian market. The external environment of UK and India is very good for the growth of the company. This company faces both direct and indirect competition from various companies. In order to gain competitive advantage it is essential that Easy Jet has a proper understanding about the Indian market so that it can make strategies accordingly. In the current business environment understanding the market dynamics is essential hence segmentation, targeting and positioning plays a very crucial role in their success of business.

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