Business Model Evaluation Easy Group This work was done in cooperation with
Vishnevetskaya Alina. We were working together whole the week-end on other projects, so we have done this together too.
Please see the screen shot on Alina's page as we had problems in downloading images.
1.
Easy Group founded was by Stellios, Greek businessman. His first brand was EasyJet, cheap flights. Then he expanded into other industries: cruises, cars, buses, pizzas, internet café, cinemas…etc, based on the same low-cost concept, making the products no-frill, cheap, available for the masses. In other business the customers are being ripped off. ‘It’s about value for the many, not the few’. Easy companies are based on the principles of the yield management, where customer pays less the further in advance they buy.
Wikipedia gives the links to all the brands. We have also used the links that gives Wikipedia to the articles and the last year’s article
“There could be a fight”
2. Customers can save their money and get the products that were before unaffordable for some of them. It gives more choice, some of them just don’t need the additional frills to the services, and they prefer to economize. It gives them the value, they feel respected and understood. As Stellios uses the same services, they don’t feel like the company is above them. In general he lowers the prices of the industries.
Suppliers benefit from the success of the company and increase their turnover.
Partners see more possibilities in developing their business and use the name of Easy to attract the customers. The number of customers increases and they can reach other social levels of people than they are used to.
For the owner of the business the comprehensive low-cost structure and internet booking helps to develop the business and assures the healthy profit margins. The company is one of a kind it’s a leader in low-cost sector and can compete with the real industry giants and conduct the price wars. They challenge the price elasticity.
3. Easy Group customers is the mass market, they are price-sensitive. They prefer to buy in advance to pay less. They are not concerned by the frills of the product, what they need is just the core product, no additional fees.
4. Having the low-cost structure plus increasing the volume of sales by proposing low prices helps in generating the healthy profit. The planes are fully booked, the pizza oven are operational over 50 percent of the time, and so on. They have less expenditure in staff and distribution as they sell generally online, product is really basic. The scandal makes the buzz, quite often contributes to good image, so promotional costs are reduced too.
5. In the airline business there are more and more direct competitors, amongst them:
Sky Europe
Ryanair 6. To ensure the low-cost structure the most of the business should be on the Net.
7. We think that in the middle term the model will be of a success, for the moment it’s the turnover is increasing. This is true for some industries, like airline, busses, cruises, cars. For new industries where Easy Group enter even Stelios is not really sure which one will work out.
8. If we owned the business we would have create more of the partnerships. We would have proposed a package of services like Easy Jet+Hotel+Car and create like Easy Voyage. We would have also promoted image of the responsible company who cares about their customers.
In order to expand revenue sources once again, we would have created EasyVoyages and we have also an idea of creating EasyGym, where customer could freely choose the dates and the period of his subscription, from tomorrow till one year and from 1 day duration till 1 year.
In the conventional methods of yield management, the company start to sell the products at a certain price, then lower if it isn’t selling fast enough, and rapidly high the price in the peak seasons or when the fixed costs are covered. Stelios did completely the opposite with Easy products. He starts the price with low headline price that grabs attention, and then raise it according to the demand. But the customer doesn’t know how high it will go, or how quickly.
EasyCruise works on the basis of other Easy Companies. It sails on different destinations now, and targets independently minded travelers at the age 20-40s. So the age of travelers differ a lot, because normally these are more aged people. This is due to the fact that Easy Cruise stays up to the morning at each port, so passengers can really enjoy the nightlife at each port. This repeats every night. Plus passenger can get up and get down whenever they want, with 2 nights minimum and 14 nights maximum on the board, so they are free to choose how long they want to cruise.
The itineraries are designed so that you can take a weekend, short break or a week away at any time of the year. Ships are designed in Easy “Orange” way. There is no spa pool, but there is a small gym. The design is rather simplistic. There are no windows
Prices are based on availability; early bookers got cabins lower price. The cleaning, food excursions, and other services are not included, but can be purchased separately.
Easy Cruise has touched younger generation, made Cruises more available, and appealed to people who have not previously considered of taking a cruise in their life. The cruise industry has become mass-market, it has democratized. This is become fast growing industry sector.
At the same time there is a growing protest from ecologically minded people.
The young adults seem to be interested by this offer. It’s getting popular. And people are switching from other means of transportation to take a cruise that has become as accessible as any other way of traveling. Cruising has become another sort of traveling package.
