Reflective Thinking. Easy Jet on airline markets. PESTEL And SWOT Analysis - Essay Example

? Short Reflective Report Contents Reflective Thinking 3 Reflective ment 5 Reference list 11 Reflective Thinking Reflection is a form which represents personal response with respect to situations, experiences, new information and events. It is termed as a processing phase because learning and thinking take place simultaneously. Reflective thinking starts with one’s ability to examine and identify one’s own thoughts. This step involves revisiting experiences and knowledge with respect to the topic in question and why and how one performs the task. It involves examination of values, beliefs, assumptions and attitudes. Reflective thinking helps clarify and recognise the connection between what one knows and learns (TLC, 2008). Figure 1: The Thinking Process (Source: TLC, 2008) The reflective report prepared aims to demonstrate my knowledge derived from the projects on Easy Jet and various sections like business environment, PESTEL, Porters Five Forces and other relevant theories which were used in the project. Findings from the Report Based on the project made on Easy Jet, I have found that Easy Jet is regarded as a low-cost operator and is performing well in Europe. It operates internationally and also in a domestic airline market. It aims to becomes the best and the cheapest airline operator in the world. The airline faces tough challenges from its competitors such as Ryanair, British Airlines and others. One great impact which I have noticed is that with the coming up of low-cost airlines, travellers prefer to travel by air rather than by bus, train or other means of transport. However, it should also be noted that along with low prices the airline should also be able to provide a level of comfort for the passengers so that the passengers feel comfortable while travelling, and I think the airline will be able to retain its customers in a positive way. I have analysed the business environment with the help of tools like PESTEL analysis, SWOT Analysis, Porters Five Forces along with operational management, supply chain and micro economic factors. In the process of using Porter’s Five Forces – a tool taking into consideration five important forces and helping determine the level of attractiveness in a particular industry – it was learned that the airline industry cannot be considered to be attractive because of the many unfavourable economic conditions prevailing in the airline industry. The cost of entering is high and maintenance of airline is also a costly affair (on the other hand, it reduces the threat from new entrants in the airline industry). The bargaining power of buyers has the potential to result in a threat because of the competitive price offered by other airlines. It has also been seen that a threat of substitute is pretty high, as with the existence of other transport means such as buses, trains, cars, etc, passengers prefer to travel rather than to spend almost the same or a slightly higher amount on more expensive means of transport. Reflective Statement While conducting the analysis, I have learned that the above tools form an integral part of any analysis and have helped me understand the impact of various factors on the organisation. The first framework which I have used to analyse the airline industry is PESTEL analysis; this is because PESTEL takes into account the industry as a whole and analyzes political factors which might impact the industry, as well as economic, social, technological, environmental and, lastly, legal factors. Why PESTEL Analysis? PESTEL gives an overview of the industry and is necessary to conduct, as it helps organisation to take the advantage of the opportunities; it also has the potential to minimise the threats. In the process of conducting the project, I have understood that PESTEL analysis can be carried out in relation to any form of business and industry, and it is one of the most important tools through which the companies evaluate the external environment and make necessary changes to fit the competitive environment and to survive in it. It can be seen in the report that I have analysed the airline industry through PESTEL analysis so to get an exact glimpse of what is actually happening in the airline sector. In PESTEL, the political factors to be taken into consideration are the following: the political condition of the country where the firm operates; whether doing business provides future growth and expansion opportunities, trade barriers and other essential factors which airline industry should consider before starting the business or even before expanding into different countries. The economic factors, as per my view and what I have learned, tend to impact the industry most of all. While analysing the economic conditions, the growth rate, GDP, how the business operates and will operate in the near future, whether the economy will have an impact on the airline industry and to what extent – these are some of the relevant aspects one has to find information about. Porters Five Forces has helped me analyse the industry in a perspective which has proved to be beneficial for the airline. Easy Jet has enhanced further growth in the airline industry and became the top low-cost carrier operating in Europe and neighbouring countries, gaining a competitive advantage over its competitors. Apart from the above findings, the supply chain management has also been a part of the paper. During the process of conducting the report I have found that supply chains play an integral part in the operations. The findings in relation to supply chain revealed that Easy Jet uses the push and pull strategy where push strategy means the communication between the buyer and the seller, which includes Easy Jet as the buyer and the airbus and Boeing as its customers. Easy Jet has begun using e-commerce, through which it is able to provide efficiency to its customers. This way I think the airline is able to reduce paperwork and also the wage cost incurred by the airline. With online booking, the customers of Easy Jet receive the option to book tickets at any point of time. Therefore it can be said that the supply chain of the airline is effective and efficient and also provides opportunity to improve and give effective services to its customers. Why SWOT Analysis? In addition to PESTEL, I have made use of SWOT to analyse the strengths, weaknesses, opportunities and threats. I have used SWOT because it helps identify the external as well as internal factors associated with the company. SWOT is one of the effective ways for a company to identify its weaknesses and overcome them through its strengths, while identifying the threat and overcoming it through the use of opportunities available for the firm. SWOT provides a complete summary of the operation and it allows the firm to take action against the weak areas and to neutralize threats. I have conducted the SWOT analysis by making a list of the strengths, weaknesses, opportunities and threats with respect to Easy Jet based on few questions. The following questions were asked to evaluate the strengths of the airline: what is the brand value, what is the market share of the airline, what is its major focus, revenue and profit earned per year, what do others see as the airline’s strengths. Based on the discussion, the strengths of the airline have been analysed and stated. Similar is the case with weakness, threats and opportunities. List of questions with respect to weaknesses is as follows (but is not limited to the following): what does the airline see as its weaknesses, what should the airline avoid, are its marketing strategies effective, is the performance of its employees high, why do passengers travel by other airlines, and why is it behind Raynair. To evaluate the opportunities, the list of questions was prepared that concern technological development, market trends, ways to create competitive advantage over the competitors with respect to price, policies, expansions and other factors. And to analyse the threat faced by Easy Jet, the competitors strategy is analysed along with changes taking place in the airline industry, financial crises, and changes in consumer behaviour. Need of Porters Five Forces In addition to PESTEL analysis and SWOT analysis, which are the most important tools as they helps to analyse the present and the future external and internal environment of the company, Porters Five Forces is also used to analyse the airline industry. I have learned that it is the five forces that tend to determine the level of intensity and attractiveness of the market and also refer to competition from the internal sources as well as external sources. It is a powerful tool and it helps understand in which phase power lies in the industry. I have used Porters Five Forces, as it has helped me to understand the strength of the current position of the airline. According to this tool, the important components which determine the competitive power include buyers’ power, suppliers’ power, threat of substitute, threat of new entry, and competitive rivalry. To use the tools in the most effective way, I had looked into the forces and noted the observation roughly, brainstormed the factors which I thought to be relevant and then checked each of the factors. Through the use of the tools, the situation of the airline has been analysed and how the industry affects the firm. From the analysis it is clear that Easy Jet has been operating well and it does not face any threat of a new entrant but other factors are not in favour of the airline, and thus it would be possible for the firm to come up with a solution that would make it much stronger than it is in the present stage. This analysis tool, Porters Five Forces, was created by Michael Porters. Effectiveness of Supply Chain Management and Learning Supply chain management forms an important part of the analysis in the paper and is one of the most important processes undertaken in various industries. Supply chain is the buzz word, and with economic crises and uncertainty at the highest level of economies, optimisation of resources is a must. It has been learned that Easy Jet has introduced e-commerce, through which passengers are able to buy online tickets. By making use of supply chain management in the paper, I have learned its importance and usefulness. In some cases it can act as a competitive advantage for the firm and can help it stay ahead of the competitors. Since the level of competition is high in the airline industry, it is important and essential for the airlines to have an edge over the competitors, and it can be well achieved through supply chains. It is through the incorporation of supply chains that resources are utilised at optimal level, and when extra cost is reduced to a certain extent, the management has the option to utilise it in other ways, which would prove beneficial for the airline and help it capture the top position in the European market. Thus, based on the discussion about and the analysis of Easy Jet, it is clear that the airline has the second largest market share next only to Ryainair; also, writing this paper has enhanced my knowledge about the organisation – how it works, its market share, its position in the market, its drawbacks, threats it faces, future opportunities, and so on. In addition, the learning about the concepts which I have used in the paper – for example, why PESTEL is used, why it is necessary, in what way it helps the organisation – has allowed me to perform a better analysis and come to a certain conclusion. Through SWOT analysis I have learned to analyse the internal sources (strengths and weaknesses) and external sources (opportunities and threats), so that companies can make use of the strengths and opportunities in order to overcome the weaknesses and threats. Along with it, Porters Five Forces has also been used, through which I have understood that this analytical tool helps determine the powers and decide how attractive an industry can be, and firms can decide whether to enter the market, at what stage, and whether it will be profitable for the firm to enter the new market. The learning based on the airline industry has proved beneficial for me, as the concepts became clear and, most importantly, I learned how to use them; this learning will further help me in the practical life to analyse the reports of organisations with the help of the concepts and tools discussed here. In addition, it will enhance my analytical ability, providing me with bright future and growth. Reference list TLC, 2008. Reflective thinking. [online] Available at: [Accessed 8 August 2012]. Read More