Introduction

The resource based view of the firm helps managers of organizations to assess whether their firms have built up strategic resources and capabilities that are valuable, rare and inimitable in order to attain and sustain competitive advantage (Johnson et al., 2008).

Using VRIO, this report examines the key tangible and intangible resources of EasyJet as well as an assessment of its core capabilities. These are reviewed and assessed against the VRIO framework which assesses their value, rarity, inimitability and organization (see figure 1).

5.1Tangible resources

5.1.1 Financial resources

A strong financial base is one of Easy Jet’s key resources. The airline’s revenue grew by 8.1% to £5047 million as of 2017 (Annual Report 2017). The strong financial base helps to invest and manage its low cost business model. This has helped it to acquire part of Air Berlin which will make EasyJet the largest airline in Germany’s capital (Morrison 2018).

5.2 Intangible resources

5.2.1 Human resources

EasyJet has top customer relations management capability which is driving customer loyalty and growing its revenue (Annual report 2017). EasyJet’s growing success has mainly been due to strength of great customer treatment a weapon it has used against its competitors (Morrison 2018). In the last 10 years, the airline’s traffic figures have grown steadily from 44.6 million in 2008 to 81.6million in 2017 (Morrison 2018).

5.2.2 Strong relationships with stakeholders

Easy Jet has created strong relationships with all its stakeholders including its customers and suppliers. This has helped the company to grow its revenue, keep customer loyalty, its strong relationship with suppliers has helped the airline to maintain its low cost business model.

5.2.3 Strong brand name

The airline is the second biggest UK airline and eighth largest in the world (Morrison 2018). Easy Jet is also the largest airline in German capital after acquiring a part of Berlin Air. With 18 number one positions in key markets by share of seats, Easy Jet has been able to create a strong brand name for its self.

5.2.4 Technology

Easy Jet’s award winning platform has become one of the airlines’ core competences and the company’s revenue and customer satisfaction enabler.

Figure 1: EasyJet VRIO Analysis 2018

References

Annual Report (2017) “Annual report and accounts 2017” [online] at http://www.annualreports.com/HostedData/AnnualReports/PDF/LSE_EZJ_2017.pdf

Johnson, G., Scholes, K., and Whittington, R. (2008) “Exploring corporate strategy” 8^th Edition; FT-Prentice Hall

Morrison Hugh (2018) “How Easy Jet is quietly looking to rise above its rivals” The Telegraph [Online] at https://www.telegraph.co.uk/travel/travel-truths/easyjet-quiet-rise-growth-ryanair/ [Accessed on 18^th July 2017]

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