Our study will focus on the analysis of two airlines pursuing two strategies: Airfrance with a differentiation strategy, and Easyjet with a strategy of cost leadership. The airline industry is a highly competitive sector, particularly since the advent of Ryanair inspired by a low-cost model in 1991. The European market was transformed in 1997 with the deregulation of airlines, allowing airlines to operate at any airport in the European Union. We will study each of the two companies and the establishment of a business model that will indicate the overall supply and the business strategy, and then we will deepen the study with strategy maps and balanced scorecards to know the different objectives determined by the strategy.
Easyjet is a low-cost airline established in March 1995. The company is of English origin and is a part of the Easy Group, which also includes Easycar and EasyMoney
Its official name is EasyJet Airline Company PLC. It is partially owned by Stelios Haji-Ioannou , a Cypriot ship owner, through his participation in the EasyGroup, a company registered in the tax haven of Jersey. It is a society of more than 4000 employees. The head office is located at the London Luton Airport, a prefabricated building in bright orange.
Easyjet has standard models of aircrafts such as Boeing 737 and Airbus A319 and is present in three airports in England, and serves 45 others in the rest of Europe.
EasyJet is the challenger European airlines called "Low cost", with a clientele of 45 million passengers over the last 12 months. It is also the second largest airline in France, behind Air France. The company generated a turnover of almost 2.2 billion pounds in 2009.
EasyJet is also a pioneer. It was the first company to sell its tickets on the Internet. The company focuses solely on passenger transport and offers only two classes: business and leisure.
[...] These different strategies of "excellence" have helped Air France build a company image and made it a luxury player in the aviation market, and recently it has become the largest European passenger airline. Easyjet with its strategy of "zero cost" and "all pay", and its recent strategy of redeployment on the clientele of the business class, should be able to strengthen its position as a dominant player in the "middle-cost” segment. Air France: Scorecard Objectives Indicators Ratios Targets Axis Financial Improve Rate of return on Profit / capital To maximize profitability capital employed Improve Market Share Market share of the To maximize competitiveness business / market compared to share of largest competitors competitor Axis client Customer Retention rate by number of customers To maximize retention year adhering to the end and number of customers to members earlier Management this year. [...]
[...] The company seeks to offer a reservation service via the Internet, which is more simple and efficient (currently 97% of bookings are made through the website), where all formalities are completed by the traveler himself. The advantage for the company is to collect all the ticket fees without intermediaries. This disintermediation has a direct impact on the offer price, and also saves time. These aspects can improve customer satisfaction, as they seek to gain time and operate at a lower cost. [...]
[...] Easyjet: Scorecard Objectives Indicators ratios Targets Axis Financial Improve Net income / equity To maximize profitability Return on invested capital Dividend Increase ROE Net income / equity To maximize Earnings per Increase the Earnings per seat Net income (per To maximize (per seat) Keep the leading Market Share Market share of the To maximize position in the business / market market share of largest competitor Axis client Maintaining Pricing policy (Ticket price Air To minimize customer France - Easyjet satisfaction ticket price / price (price, of an Air France destinations) ticket) * For an A / R Paris-Nice under the same conditions Proportion of Number of airports To maximize airports served served by Easyjet / number of airports served to competitors Customer Number of satisfied To maximize satisfaction rate customers from the surveys (questionnaires) / total customers Winning new The rate of new Number of new To maximize customers customers customers / total customers Internal business process fixed capital of the device hours Average age of a device Price of plane / revenue per passenger Occupancy rate of Seats occupied / the device total number of seats Reducing flight Cost of flight Charges per To minimize without fuel Inventory Rate of inventory Annual Consumption / To minimize management board turnover Average stock Improving the Customer Satisfied customers quality of satisfaction rate / clients total To maximize Utilization rate Online reservations of the website / booking total Reduction of Rate of Maintenance expenses A Minimize hidden costs maintenance and salaries of (maintenance, charges operations / total treatment and expenses control of operations such seats attributed by) impact And learning and innovation Rate of staff To minimize Improving the Strike rate Number of strike Maintain worked Employee Satisfied employees To Maximize Easyjet pulse) Hours of training Training days / To maximize total days worked Improving and Rate of R & D investment / To maximize maintaining investment in R & total investment Risk security D Indicator Commentary on the strategy map and BSC of Easyjet From the strategy map and Balanced Scorecard of Easyjet, we will try to analyze the strategy followed by the company. [...]
[...] To improve the quality of its offer and its profitability, Air France has adopted several objectives at the organizational level, including that of improving the skills of employees. We can evaluate this improvement by the average number of hours of training per employee per year, which should be as high as possible. It also evaluates the effectiveness of information systems as measured by the error rate for booking and display, which must be minimized. Finally, adaptation to new environmental standards and technology is an important goal. [...]
[...] Staff Costs: 7.32 billion euros or Aeronautical charges: 1.79 billion euros, or Purchasing ground handling: 1.35 billion euros, or 5.62 %.Aircraft maintenance costs: 1.1 billion euros, or Selling and distribution: 1 billion euros, or Purchases of fuel: 5.7 billion euros Other financial expenses: 911 million euros, or The company posted a turnover of 24 billion euros: Passenger transport which represents 20.14 billion euros or 84% of sales, The cargo ship meanwhile was $ 2.83 billion or 12% of sales Maintenance amounts to 0.97 billion euros, or of sales. [...]
APA Style reference
For your bibliographyOnline reading
with our online readerContent validated
by our reading committee
