Easy Jet Airline .
OPERATION STRATEGY AT EASY JET
Instructions: This assignment is designed to show an understanding of key strategic performance objectives of organisations in general. It also enables you to apply theory into practice by discussing operations performance improvements in a specific real-life business scenario with basis on key strategic performance objectives of operations.
Assessment Task
You are required to write a report based on a specific organisation of your choice. You can choose an organisation of any type (manufacturing or service), sector (private or public, e.g. a government agency or department) and size (small, medium or large corporation).
The report should address key theoretical and practical aspects related to the subject. The theoretical part of your report should provide a complete characterization of the 5 key strategic operations performance objectives of organisations in general, namely: Quality, flexibility, speed, dependability and cost. Discuss the internal and external perspectives of these performance aspects, i.e. what they represent for organisations what they represent for customers.
The practical part of your report should be developed through a specific discussion of how these performance aspects apply to the organisation of your choice, i.e. what each performance aspect mean in the specific business context of the organisation.
Finally, you are expected to identify performance shortcomings in the organisation being discussed in the light of the performance objectives being considered and propose possible improvements. Discuss the challenges you think the organisation may face to implement the suggested improvements.
Assessment Breakdown
1. (10% of word count)
Introduce the company you have chosen to focus your report on. Describe
a) Which organisation is it?
b) What are the main products and/or services provided by the organisation?
c) Who are the main target customers and competitors?
2. (45% of word count)
Provide a literature review on the subject of Operations Performance focusing on quality, flexibility, speed, dependability and cost aspects. You should draw from academic publications, books and business articles that are no older than 10 years. Address the question: Why are these performance objectives strategic for organisations in general? What are their internal and external perspectives?
3. (45% word count)
Use the theoretical aspects characterized above as a basis to discuss practical aspects of your chosen organisation. Key issues/questions to be addressed in this part are:
a. Characterise quality, flexibility, speed, dependability and cost aspects of your chosen organisation. The key question to address in this part is: What are the key quality, flexibility, speed, dependability and cost aspects of the company’s operations?
b. Point out the relative importance of the performance aspects for your chosen organisation, i.e. from the 5 key operations performance objectives, which ones are most critically important for the organisation?
c. With basis on the performance aspects being discussed, point out organisation’s weaknesses, suggest improvements and discuss potential challenges to implement the improvements
Solution.
Easy Jet Airline
OPERATION STRATEGY AT EASY JET
Introduction
Easy Jet Airline is a British-based airline that is considered the largest across the UK considering the passengers that it services both within its international local operations. The central base of the airline is at London Luton Airport. Considering both its international and domestic services, the airline operates in 32 countries, covering over 700 routes. Any firm’s success within the service industry is highly dependent on the level of satisfaction achieved among the employees, shareholders, and most importantly, the customers. As such, it is key for the management at Easy Jet to define the company’s services effectively. Easy Jet offers various services including: bookings; onboard and cabin services; and Easy Jet Holiday and Easy Jet Hotel services. The booking services include both telephone bookings and online bookings, which allow customers to book a seat to the various destinations within its scope of operation. No complimentary drinks or meals are provided by the airline on its flights, with an exception of a few charter flights. Nevertheless, the flights have program referred to as “Easy Jet Bistro”, which allows passengers to purchase items while on board. The products offered include toasted sandwiches, hot drinks, sandwiches, chocolate, soft drinks, snacks, and alcoholic drinks.
On the other hand, individuals are allowed to book hotels or holidays to various destinations within the countries to which the airline’s network extends. The company targets low cost customers (Oded, et al., 2008, p. 279). As such, the company’s first target segment includes short-haul price-sensitive travelers who wish to travel for leisure, mostly in small groups, reaching into their own pockets to pay for travel. The second target customer is the independent business traveler from small and medium size companies who do not care much about in-flight services. The company’s major competitors are British Airways PLC, Ryanair Holdings PLC, and British Midland Airways Limited. The paper is going to review Easy Jet’s Operation Strategy in view of the five performance strategies in order to determine how the company has been able to achieve a high level of satisfaction among its customers.
Operations Performance Objectives
The operations management approaches of any organization impact various stakeholders including customers, suppliers, shareholders, employees, and the society at large. It is obvious that the customers will be greatly affected by the decisions made in the operation of any business. This group is the main category affected by the operation performance objectives as promoted by the business. The suppliers are also likely to be affected by the operations of the business especially when considering the effectiveness of their supply operations and their prosperity. Shareholders are bound to benefit from the operations of any business as effective operations lead to increased productivity and sales, and hence profitability. Effective operations also affect employees as they involve establishing favorable working conditions. Lastly, as much as the people within the society are not directly connected to the organization economically, they are likely to be affected by its management of operations. Case in point, the society is bound to be affected by how the operations manager within an organization are responsible towards the environment. To facilitate positive affect, there are five operation performance objectives that ought to be upheld by any organization, which include cost, speed, quality, flexibility, and dependability.
Quality
Quality is highly ranked when it comes to the operation performance objectives considering the impact it has on the consumers and the general image and position of the business. According to its definition, quality refers to the ability to produce of create products or services according to the provided specifications while eliminating any errors. As such, it has to do with producing a product as it is expected to be. Quality has a great impact both internally and external. When it comes to its external impact, good quality across an organization’s operations ensures that the consumers of the products or services offered are satisfied and find no reason to complain. Reduced complaints and increased satisfaction among the customers facilitates recurring purchases and development of loyalty to the brand (Pilikinton & Meredith, 2009, p. 187). For profit organizations, increased consumer loyalty leads to increased revenues, while for non-profit organizations, this leads to increased client satisfaction. On the other hand, in view of the internal effect, increased conformance with quality provisions leads to a reduction in the number of mistakes that are made. As a result of reduced mistakes, an increase is achieved in terms of cost savings, response speed, and dependability. Operations that are constantly caught up in correction of mistakes face challenges responding to any requests made by the customers (Batista, 2012).
Speed
Speed refers to the promptness of responding to issues that may be brought forth by the customers. As such, it refers to the time it takes for an internal or external customer to get a product or service after requesting for it. Like quality, speed also has an impact on both the external and internal environment of a business. The importance of speed to the external environment is obvious as it allows a business to meet the needs of its consumers without delays (Slack, 2015). Such promptness in response promotes a positive perception of the organization among consumers, increasing their chances of returning for more services or products. In addition, when the services offered by an organization are fast, it makes it possible to increase the prices. Case in point, in most countries, postal services are charged according to how fast mails and parcels are transported and delivered. Internally, speed reduces the cost of operation. In this case, cost reductions are observed in two areas, reducing risks and reducing inventories (Kumar, et al., 2011, p. 162). Generally, the increase in the speed of information throughput results in reduced cost. For instance, quick processing of passengers at the airport’s terminal gate could reduce an aircraft’s turnaround time, thus increase its usage. Speed also has a direct impact on the dependability of a business, such that a fast internal throughput ensures that a given service of product is on time.
Flexibility
The objective of flexibility is more complex as compared to the rest owing to the fact that the term refers to different meanings. Importantly, flexibility always refers to the ability of a business to change its operations in a given way in order to suit its environment. There are various types of flexibility that could be upheld within a company, which include mix flexibility, service/product flexibility, delivery flexibility, and volume flexibility (Verweire, 2014, p. 163). The impact of all these types of flexibility both to the internal and external environment of a business are similar. In terms of the external impact, flexibility ensures that the products and services provided by an organization suit the needs of the customers in one way or the other. Mix flexibility involves production of various products or rendering of different services from which the customers can choose one or more that suit their needs. On the other hand, service/product flexibility involves development of new products and creation of new services, with new ideas incorporated into them, which may attract customers. Last but not least, delivery and volume flexibility involves the operation adjusting delivery procedures and output levels so as to handle any changes that may arise in terms of the time of place of delivery that the customers want their products delivered, or the quantity that they want delivered (Greasley, 2008, p. 19). Internally, the impact of flexibility is also outstanding as it includes saving time, speeding up response, and maintaining dependability.
Dependability
This objective refers to the aspect of being on time. As such, this operations objective is aimed at ensuring that the services or products that the customers may ask for are received on time. As much as the definition of this term appears as simple, it poses various difficulties when it comes to measuring what is meant by “on time” (Greasley, 2008, p. 19). Different individuals consider “on time” to mean when the delivery of the service or product was needed by the customer, when the delivery was expected, when the delivery was promised, or when the delivery was promised for the second time after failure to deliver it the first time. However, the impact of dependability both internally and externally is clearly of importance to the operations strategy. Externally, the customers regard dependability as a good show of the business to meet the customers’ expectations. In most cases, customers are irritated when the delivery of services or products is delayed. Dependability is highly valued by business customers, with most using this to decide on whether they should renew supplier contracts. Most customers buy products because they need them to meet certain needs that have arose in their lives. As such, they expect such products to be supplied in time to meet such needs. Delivery of products on time satisfies customers, increasing their chances of returning for more business interactions with the provider as they are confident that such products will be delivered when required (Slack, 2015, p. 113). On the other hand, the internal impact of dependability is directed at cost reduction. In this case, cost may be affected by making direct financial savings, by making time savings, and by increasing the stability of an organization and allowing it to facilitate change that ensures efficiency. Important to note is the fact that systems that are highly dependable facilitate an increase in the performance of speed.
Cost
The objective of cost revolves around an organization’s ability to render services or produce goods while spending as little as possible. Different organizations embrace different cost structures. Nevertheless, all organizations yearn to reduce their cost in order to positively affect the profit margin. This objective of cost is unique as all the other objectives aim at reducing cost, internally (Coughlan & Coghlan, 2011, p. 21). Externally, reductions in cost make it possible for an organization to reduce the prices of its services or products, an aspect that is bound to attract more customers, hence increase profitability (Slack, 2015, p. 114). Internally, cost reductions may lead to tax savings and increased profitability.
Operations Performance Strategy at Easy jet
The five operation performance objectives have all played a role in increasing the profitability and competitiveness of Easy Jet. With reference to the airline industry, quality refers to delivery of services in a way that matches the customer’s expectations. At Easy Jet, the company has heavily invested in satisfying its customers through introducing the online booking system that has made it easier for consumers to make bookings at their convenience unlike it was before, where bookings were only carried out through the telephone, and customers would face problems with connectivity or being put on hold (Barnes, 2008, p. 25). Another approach embraced by the airline to promote quality is the introduction of rapid turnaround times, an aspect that has promoted punctuality. In addition, the company’s fleet is standardized to ensure the safety of the flights. All these factors make great contributions towards improving the quality of the airline with e-ticketing and punctuality adding value to its services. Another factor that has enhanced the quality of Easy Jet’s is that it not only flies to primary airports across its destinations, but also lands in secondary destinations, improving convenience for the customers. Easy Jet also allows its customers an opportunity to transfer to an earlier flight without any additional cost, an aspect that promotes convenience for the customers (Bamber, et al., 2009, p. 111). In addition, the airline offers an option for one-way ticketing as opposed to most airlines, which only offer a two-way ticket. This approach is more convenient for the customers as it allows them to flexibly plan adequately for their trips. The company also established a business model that was focused on quality service delivery for the customers.
Speed, in the case of air transport services, refers to punctuality, being fast, and providing convenient services (Robinson, 2009, p. 61). Easy Jet has directed its focus on shortening the turn-around times and promoting punctuality as the operational strategies that allow it to promote speed. Such speed is attained via the consistency of flights to major airports in main cities across Europe. When it comes to the distribution channel, the company enhances speed through quick response to the requests of the customers and online booking, approaches that have been proven to save resources and time that was wasted through manual booking. Short-haul air transport is associated with long queues, which take up most of the customers’ time when booking flights, an aspect that online ticketing eliminates. In addition, Easy Jet introduced a Plus Card that minimizes the steps that a customer has to go through while booking for a flight and also increases the speed with which the customers board a flight (Robinson, et al., 2016, p. 64). Further, the airline has adopted a point-to-point model to increase its operations’ speed, as opposed to the conventional spoke and hub model that involves transfer of passengers in transit to another aircraft.
In view of dependability, airline customers expect to be guaranteed that they will receive their services on time. The business model at Easy Jet holds punctuality in great regard. The increased efforts towards promoting rapid turnaround time ensures that the customers are able to board the flights on time and that such (Robinson, 2009, p. 62). The company has experienced minimal flight delay and cancellation cases, an aspect that has greatly influenced the customers’ perception of its dependability. On the other hand, the company has expanded its scope into the hospitality industry, providing its consumers with hotel booking options and holiday packages, an aspect that has promoted consumer convenience, hence increased dependability (Barnes, 2008, p. 171).
Easy Jets strategy is mainly focused on the cost objective, whereby they offer no frills so as to lower costs, enhance profitability through maximizing assets’ usage, and promote online bookings in order to cut overhead costs (Oded, et al., 2008, p. 283). The company’s business model is aimed at lowering the costs of its operations and facilitating optimal use of resources. It utilizes standardized and modern fleet, meaning that only one type of fleet is operated, an aspect that has a cost advantage as the uniformity enhances efficiency and effectiveness of training, maintaining, and operating costs.
Customer requirements are constantly changing, an aspect that requires organizations to effectively adopt to these changes and ensure that they adjust their operations to meet such changes, an aspect referred to as flexibility. Flexibility, in the airline industry, involves being able to expand the market, to introduce new products and services, to change the number of clients served, and to offer various service options. As such Easy Jet’s weakness is that it has failed to invest properly in flexibility as they have focused their strategy on providing no-frills services at low cost (Oded, et al., 2008, p. 280). The company has not yet diversified its services and is still confined in Europe, only serving 32 countries. It has emphasized on a single flight operation area, an aspect that has made it difficult for the company to provide frills, to introduce other services including long haul flights, and to provide its customers with any onboard additional services for a premium (Oded, et al., 2008, p. 291). This has made the company to lose a lot of business.
To overcome this weakness, the company should consider expanding its reach in order to introduce new destinations and long-haul flights. In addition, the company should introduce premium services that would allow them to offer on-board services. This will not require them to do away with their former no-frills customers, but will give them an opportunity to also attract other corporate customers who desire frills while on board. If upheld, these recommendations will expose the company to a new customer base and further increase its profitability considering the fact that the premium rates will cover all the costs involved in running long-haul services and providing onboard services.
Conclusion
It is clear that Easy jet has done much to ensure
that it upholds the operation performance objectives through its operations.
The company has achieved customer loyalty and increased sales over the years
through introducing online ticketing, which has made it easier for customers to
make bookings without the need to queue, and it has also allowed customers to
book one way tickets, an aspect that allows them, to travel at their
convenience. The company targets a majority of the population within its scope
of operation, who desire to travel by flight at a reduced cost, and have no
interest in onboard services or frills. This has been seen through its
increased profitability over the years, an aspect that has made it stand out as
a major player in the UK airline industry. Nevertheless, the company offers
less flexible services, which lock out a large population of travelers,
especially corporate travelers, who make most of their trips across different
regions by flight and desire onboard services. The company ought to introduce
premium services in order to effectively attract new customers.
References
Bamber, G. J., Gittell, J. H., Kochan, T. A. & Nordenflycht, A. v., 2009. Up In the Air: How Airlines Can Improve Performance by Engaging Their Employees. New York: Cornell University.
Barnes, D., 2008. Operations Management: An International Perspective. London: Thomson.
Batista, L., 2012. Transporting trade and transport facilitation into strategic operations perfromance objectives. Supply Chain Management: An International Journal, 17(2), pp. 124-137.
Coughlan, P. & Coghlan, D., 2011. Collaborative Strategic Improvement Through Network Action Learning: The Path to Sustainability. Cheltenham: Edward Elgar Publishing Limited.
Greasley, A., 2008. Operations Management. London: SAGE Publications.
Kumar, V., Batista, L. & Maull, R., 2011. The Impact of Operations Performance on Customer Loyalty. Service Science, 3(2), pp. 158-171.
Oded, K., Eitan, M. & Naufel, V., 2008. EasyJet® Pricing Strategy: Should Low-Fare Airlines Offer Last-Minute Deals?. Quantitative Marketing and Economics, 6(3), pp. 279-297.
Pilikinton, A. & Meredith, J., 2009. The Evolution of the Intellectual Structure of Operations Management. Journal of Operations Management, 27(3), pp. 185-202.
Robinson, P., 2009. Operations Management in the Travel Industry. New Jersey: CABI.
Robinson, P., Fallon, P., Cameron, H. & Crotts, J. C., 2016. Operations Management in the Travel Industry. 2nd ed. Oxfordshire: CAB International.
Slack, N., 2015. Operations Strategy. New York: Jones Wiley & Sons.
Verweire, K., 2014. Strategy Implementation. Abingdon: Routledge.