...patience, and if the losses are not stemmed soon, will pull the plug. He has given the company 9 month to start showing radical improvement. Currently, they were basically operating off the cuff, with no real operating plan for how to supply and open each new franchise. In order to address this problem, Roger Jones, Managing Director of eIc hired Raj Chopra, an MBA student from a highly regarded business school as an intern to analyze their current operations and provide a report on options for the future. Raj was an IT major during his undergraduate years, and saw this as a way to really combine his new skills from his MBA with his IT and internet knowledge. A brief history and background of easyGroup easyInternetcafé Ltd. (www.easyinternetcafe.com) was part of the easyGroup (www.easygroup.co.uk), founded and promoted by the well-renowned Greek entrepreneur Stelios Haji-Ioannou (www.stelios.com). Other companies in the group included easyJet, easyCar, easyCinema, easy.com, easyMoney and easyValue. He was also in the process of launching new companies such as easyBus, easyPizza, easyCruise, and easyDorm. Stelios called himself a serial entrepreneur. He acted as a venture capitalist, founding and funding his ideas, turning them into businesses with a long-term intent to take them...
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...Compare the applicability of the easyGroup business model in the airline industry and the cinema industry (examine Exhibits 8 and 18, among others). What problems do you see for the cinema business? The business model of easyGroup, a concept embodying low costs, no-frills, maximization of the capacity and utilization rate, and price yield management was taken from easyJet and applied to easyCinema. Despite the fact that in the airline industry the strategy was succesful, the cinema business didn’t enjoy the same fame. In order to compare the applicability of the easyGroup business model in these industries, we first need to identify the differences and the specific traits for airlines and cinemas. The new ventures criteria for idea selection presented in Exhibit 18 is useful in order to observe why the cinema sector didn’t work properly. Looking at the two industries, there are different customer values and expectations that affected the evolution of these businesses. Whereas for the airline industry, the price represents the crucial factor that influences customer’s choice, for cinema goers it is the value and quality of the movie-going experience. Eliminating advertising and promotional activities and reducing comfort standards could be some of the reasons for the problem faced by easyCinema. Moreover, these ventures of easyGroup are led by different market rules and different actors. From the information given in Exhibit 8, we noticed that easyJet focus on the low-cost concept...
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...Easy Jet and Ryanair; pricing strategies Flying high with low prices Introduction Easy jet and Ryanair and the two largest low cost airlines in Europe, they dominate the industry. They introduce low prices to entice customers; the earlier the customer’s book, the cheaper the price. By introducing these prices, Easy Jet and Ryanair have forced other airlines such as British Airways and Lufthansa to lower their prices. Both airlines have copied the American ‘South West airlines’ business model and introduced it to Europe. Easy Jet and Ryanair are able to provide the low prices by maintaining low costs. They cut costs in areas such as administration. With the online booking system, this saves them thousands of pounds every year. While cutting costs, the service given on board flights is not as good as the superior companies such as British Airways and Virgin Atlantic. It doesn’t have to be, as customers know that with the low prices comes low customer service. And for the cheap prices customers pay to fly with Easy Jet and Ryanair, they don’t mind. Ryanair Ryanair is the leading low cost airline in Europe. Founded in 1985 by the Ryan family they began with one flight and one aircraft flying between Waterford and Gatwick airport. Shortly after, they began flying regularly between Dublin airport and London Stanstead, competing with British Airways. ‘Carrying fewer than 700,000 passengers annually in its early years, the figures grew to 21.4 million years...
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...* Question 5: Compare the applicability of the easyGroup business model in the airline industry and the cinema industry (examine Exhibits 8 and 18, among others). What problems do you see for the cinema business? The business model of easyGroup, a concept embodying low costs, no-frills, maximization of the capacity and utilization rate, and price yield management was taken from easyJet and applied to easyCinema. Despite the fact that in the airline industry the strategy was succesful, the cinema business didn’t enjoy the same fame. In order to compare the applicability of the easyGroup business model in these industries, we first need to identify the differences and the specific traits for airlines and cinemas. The new ventures criteria for idea selection presented in Exhibit 18 is useful in order to observe why the cinema sector didn’t work properly. Looking at the two industries, there are different customer values and expectations that affected the evolution of these businesses. Whereas for the airline industry, the price represents the crucial factor that influences customer’s choice, for cinema goers it is the value and quality of the movie-going experience. Eliminating advertising and promotional activities and reducing comfort standards could be some of the reasons for the problem faced by easyCinema. Moreover, these ventures of easyGroup are led by different market rules and different actors. From the information given in Exhibit 8, we noticed that easyJet focus on...
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...MARKETING CASE STUDY Table of Contents 1. Introduction and History 2. The Mission Statement of easyJet 3. Competitive Analysis (Porters five competitive forces) 4. Marketing Mix 5. SWOT Analysis 5.1 Internal Analysis – Strengths and Weaknesses 5.2 External Analysis – Opportunities and Threats 6. Situational Analysis 7. PEST Analysis (Marketing Plan) 8. Conclusion 8.1. Strategic Issues facing the airline Industry 8.2. easyJet’s future 9. Appendices 1. Introduction and History A successful example of a European no frills airline is easyJet. Stelios Haji-Ioannou (Greek) founded the company in 1995. It is based on the low-cost, no-frills model of the US carrier Southwest. The concept of easyJet is based on the belief that demands for short-haul air transport is price elastic. That means, if prices for flights are being reduced, more people will fly. Traditionally airline concepts are based on the assumption that airline traffic grows in line with the economy and that cutting prices will only lead to a decrease in revenues. With the introduction of the ‘no-nonsense’ concept to the European market, after its deregulation in 1992, easyJet has proven this theory wrong and goes from strength to strength by actually increasing the size of the market and more recently by taking away passengers from the majors (see www.easyjet.com for passenger...
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...Executive Summary EasyInternetcafe was launched in the late 1990’s by entrepreneur Stelios Haji-loannou as part of the Internet boom, under the umbrella of the easyGroup companies. Originally called easyEverything, Stelios in October 2001 changed the name to easyInternetcafe. The mission of easyInternetcafe is to provide customers with access to the internet at the lowest possible cost. Despite the support and recognition from the public easyInternetcafe is currently experiencing lost profits and is on the verge of having the company be terminated all together. The original concept of the cafes was to have large stand-alone cafes with 250-600 PCs per store. After the initial internet boom phased out a decrease in profits and loss business was happening. A required re-structure of the company is required in order to keep the company operating. Currently smaller franchised stores are operating with 20-30 PCs and no staff onsite except for regular maintenance. With less involvement in store operations easyInternetcafe is able to concentrate on activities of outsourcing all non-core management activities. Some of the issues easyInternetecafe is currently experiencing are having locations operate with too many PCs for the amount of business, and having no real strategic operating plan in place for new franchise’s that are opening. Four alternatives are taken into consideration to help reduce overall costs and to help the business become successful. Through research on all...
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...About EasyJet A successful example of a European no frills airline is easyJet. Stelios Haji-Ioannou (Greek) founded the company in 1995. It is based on the low-cost, no-frills model of the US carrier Southwest. The concept of easyJet is based on the belief that demands for short-haul air transport is price elastic. That means, if prices for flights are being reduced, more people will fly. Traditionally airline concepts are based on the assumption that airline traffic grows in line with the economy and that cutting prices will only lead to a decrease in revenues. With the introduction of the ‘no-nonsense’ concept to the European market, after its deregulation in 1992, easyJet has proven this theory wrong and goes from strength to strength by actually increasing the size of the market and more recently by taking away passengers from the majors (see www.easyjet.com for passenger figures, financial data and employee statistics). Today, it offers 125 routes from 39 European Airports (see www.easyjet.com for route launch dates), with Luton, Liverpool, Geneva, Amsterdam as base airports and is operating 72 aircrafts (November 2003). November 1995: easyJet starts flights from Luton to Glasgow and Edinburgh with to leased Boeing 737-300 with a capacity of 148 seats at a price of £29 one way. Seats are being sold over telephone reservation system only. In 1996 easyJet takes delivery of its first wholly owned aircraft and goes international with first services to Amsterdam from Luton...
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...outsourcing its non-core competence activities which include logistics. Ingram Micro has been chosen as the logistics provider as they offer more full service activities while remaining at a lower cost than its competitors. By including Ingram Micro in corporate decisions and meetings, EIC can keep Ingram Micro accountable and stay updated with issues as they arise (just as they would if they owned the logistics arm of the Company). By having the capital freed from investing in hardware and stores, EIC is able to invest more in creating value through their management of franchisees and their yield management model. Issues Identification EasyInternetCafe (EIC) was launched in 1999 under the umbrella of the EasyGroup. Their mission is to provide customers with internet access at low costs and to capitalize on the tech boom. Despite the excellent support and recognition from the public, EIC is experiencing adversity of keeping their business profitable after the “dot-com” bubble burst. Their business plan of owning many large cafes that could house 250-500 PC terminals at each café is not working. They have decided to restructure their business by downsizing the cafes. They propose to do this by using the franchise business model. These franchised stores will be smaller and house 20-30 PC terminals and only need staff for basic maintenance. EIC believes that by being less involved with the operations of the stores, they can focus on their core...
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...supply_chain_strategy All questions are compulsory CASE I LAUNCHING CPFR AT TEXAN FOODS: IMPROVING INVENTORY REPLENISHMENT WITH COLLABORATIVE ACTIVITIES AND TECHNOLOGIES Introduction Angela Preston sank back into the cushy leather chair in the Captain’s Club at LAX, and rubbed her eyes. She and her supervisor, Gordon Ross, had flown halfway across the country to Fresno to meet with representatives from a key supplier, Valley Bakers, to review the outcomes of their 180-day CPFR pilot program. When her drink arrived she hardly touched it,except to stir it nervously, until Gordon returned from the ticket counter. When she had agreedto accept the promotion to Category Director last year, she had no idea that the pressures ofthis job would be so enduring. The last six months had seemed like one long, dull headache. Since the initiation of the CPFR pilot program, it seemed that Valley, their supplier, had been making all the demands in this relationship. Wasn’t the customer supposed to be the one who was always right? Gordon eased into the chair next to her and immediately noticed the weary, pained look on her face. As Vice President of Supply Chain Operations for Texan Foods for the last 9 years, he had learned a lot about dealing with employee and customer frustrations. The CPFR pilot with Valley had tested his resolve as well. Valley’s CPFR team was unhappy with the small performance gains – and the occasional significant losses – that the program...
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...Executive summary Stelios Haji-Ioannou opened the first easyinternetcafe on June 21st, 1999. During the internet boom between 199 and 2002, internet cafes were booming. Following the yield management model1 to this business brought in great profits. After the dotcom/internet bubble deflated, losses were continuing to mount. A change had to occur. The company’s CEO gave the managing director 9 months to start showing improvement. The only way to do this is by changing the operational structure of the company. A complete redirection in the operations philosophy was to franchise the operations. In order to help with this, it is recommended to use the company Ingram Micro to assist with this task. Ingram is the world’s largest B2B trade-only wholesale provider of technology products and services, including supply chain management. The total cost of a franchise will be £976 per store. This will reduce the cost of opening franchises and start increasing profit for the company. Issue identification The most important issue that easyinternetcafe currently experiencing is their operations. There is no organization on how the future internet cafes will open and be setup. There is an expectation of opening 208 locations in the next 3 years. The logistics of how this will occur must be defined and solved prior to the project moving forward. Other issues that the company is experiencing are: * Internet investment bubble burst in 2000 * Closing and downsizing...
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...CASE I supply_chain_strategy LAUNCHING CPFR AT TEXAN FOODS: IMPROVING INVENTORY REPLENISHMENT WITH COLLABORATIVE ACTIVITIES AND TECHNOLOGIES Introduction Angela Preston sank back into the cushy leather chair in the Captain’s Club at LAX, and rubbed her eyes. She and her supervisor, Gordon Ross, had flown halfway across the country to Fresno to meet with representatives from a key supplier, Valley Bakers, to review the outcomes of their 180-day CPFR pilot program. When her drink arrived she hardly touched it,except to stir it nervously, until Gordon returned from the ticket counter. When she had agreedto accept the promotion to Category Director last year, she had no idea that the pressures ofthis job would be so enduring. The last six months had seemed like one long, dull headache. Since the initiation of the CPFR pilot program, it seemed that Valley, their supplier, had been making all the demands in this relationship. Wasn’t the customer supposed to be the one who was always right? Gordon eased into the chair next to her and immediately noticed the weary, pained look on her face. As Vice President of Supply Chain Operations for Texan Foods for the last 9 years, he had learned a lot about dealing with employee and customer frustrations. The CPFR pilot with Valley had tested his resolve as well. Valley’s CPFR team was unhappy with the small performance gains – and the occasional significant losses – that the program had delivered for the 34 SKUs that...
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...This report analyses and evaluates the potential for EasyJet to continue to be competitive in the UK and Europe but also the opportunity to expand into India INTRODUCTION – THE COMPANY AN OVERVIEW Easyjet Airline was established in 1995 by Sir Stelios Haji-Ioannou a Greek Cypriot as part of EasyGroup Holdings Ltd. He envisaged it as a low cost airline which could impact on the existing domestic market in the UK which was at the time dominated by large British companies such as British Airways and British Midland. The Company started with two leased airplanes and began operating from London Luton to Glasgow and Edinburgh In 1996 they began operating from Luton to Amsterdam and now in 2014, operate on 633 routes across more than 30 countries and own 217 Airbus aircraft. They employ over 8,000 people including 2,000 pilots and 4,500+ cabin crew and in 2013 they flew over 60 million passengers They now claim that “over 300 million people within a one hour drive of an EasyJet airport” (Easyjet About Us 2013) The obvious move for the airline for further growth may now be outside of Europe and India may be the best market to consider. PESTLE Analysis Political/Legal Up to April 1997 the European Airline Market was regulated strictly and each county controlled their own airline companies. After 1997 and deregulation the European market opened up for carriers and subsequently for example an Irish low cost carrier like Ryan Air was allowed to operate between two other European countries...
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...Market Segmentation * Introduced by Smith (1956) * Heterogeneous group of customers can be grouped into homogeneous clusters each requiring different marketing mix to meet their wants and needs. * Is to bridge the gap between diverse customer needs and limited company resources, by encouraging distinct marketing offerings to be developed to suit the requirements of different customer segments Segmentation Assumptions: * Consumers differ from one another in some respect which could be used to divide the total market into homogeneous groups * Selected segments can be isolated from the remainder of the market to enable targeting with a distinct market offering Segmentation can be performed by answering the following questions: * Where? (Geographic) * Who? (Demographic) * Why? (Psychographic) * How? (Behavioural) Geographic Segmentation is based on: * Continents * Countries * Regions or cities * Counties, provinces or states * Neighbourhoods Example: McDonalds Aloo Tikki and Chicken Maharaja Mac Geographic segmentation is useful because it: * Provides a quick overview of differences and similarities between consumers based on the geographical location * Can identify cultural differences between geographical units * Takes into consideration the climatic differences between geographical units * Recognizes language differences between geographical units Demographic Segmentation is based on: * Age *...
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...Strategy in Entrepreneurial Ventures A case study by, Arun Venkatachalam FT MBA 2009/10 May, 2010 Table of Contents 1. 1.1. 1.2. 1.3. 1.4. 2. 2.1. 2.2. 2.3. 2.4. 2.5. 3. 3.1. 3.2. 3.3. 3.4. 4. 4.1. 4.2. 4.3. 5. BACKGROUND ....................................................................................................................................... 3 Who or What is ‘LOVEFiLM.COM’? ................................................................................................. 3 Why are they considered a high growth entrepreneurial company? ..................................................... 4 Where they are currently? .................................................................................................................... 6 What is the basis for this report? .......................................................................................................... 6 BEGININING OF ‘LOVEFiLM.COM’ .................................................................................................... 7 The Innovative Online Business Opportunity ...................................................................................... 7 The Market Analysis of 2001/2002 ...................................................................................................... 9 Strategic Analysis of the Business Environment ................................................................................ 10 Competitor Analysis ...........................................
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...Master’s thesis M.Sc. in EU Business & Law An analysis of the European low fare airline industry - with focus on Ryanair Student: Thomas C. Sørensen Student number: 256487 Academic advisor: Philipp Schröder Aarhus School of Business September 13, 2005 1 Table of contents 1. Introduction 1.1. Preface 6 1.2. Research problem 6 1.3. Problem formulation 7 1.4. Delimitation 7 2. Science and methodology approach 2.1. Approaches to science 2.1.1. Ontology 2.1.1.1. Objectivism 2.1.1.2. Constructivism 2.1.2. Epismotology 2.1.2.1. Positivism 2.1.2.2. Hermeneutics 9 9 9 9 10 10 10 2.2. Methodology 2.2.1. Types of research 2.2.2. Types of data 2.2.2.1. Quantitative data 2.2.2.2. Qualitative data 2.2.2.3. Primary and secondary data 11 12 13 13 13 14 2.5 Reliability and validity 15 3. Theoretical framework 3.1. The structure of this thesis 16 3.2. Theory on strategy and competitive advantage 3.2.1. The Positioning School 3.1.1.1. Theory on Porter´s Five Forces model 3.2.1.2. Theory of Generic Strategies 3.2.2. The Resource-based School 3.2.2.1. Theory on SWOT analysis 18 24 20 23 25 27 4. The low fare airline business model 4.1. Introduction 28 4.2. Differences between the LFA model and the FSA model 4.2.1. The service factor 29 29 2 4.2.2. Turnaround times 4.2.3. Homogenous fleet 4.2.4. Point-to-point travel vs hub-and-spoke travel 4.2.5. Higher seat density 4.2...
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