Capstone International Strategy Assignment

1
Capstone International Strategy Assignment

• Dawn Miskelly
• Anna Walsh
• Sinead McCormick
• Claire McAllister
• Catherine McMahon

2
Introduction/Executive summary
Dawn Introduction -IDA
Claire - Competitive Position (C)
Asset Utilisation (A)
Strategy Compass
Anna - Leadership (L)
Markets Served (M)
Catherine -
Incentives to Locate In Ireland
Porters Diamond Model
Porters Diamond Model
- Incentives to Locate In Ireland
Sinead
Dawn Conclusion Why easyJet Should Locate
In Ireland
3

• The IDA - Investment and Development Agency
  Ireland
• Mission Statement Objectives
• Foreign Direct Investment in Ireland

Origins of IDA supported companies
179
UK
GERMANY
166
ASIA/PACIFIC
57
291
REST OF EUROPE
REST OF WORLD
61
USA
524
4
Foreign Direct Investment in Ireland

• FDI - basis of Celtic Tiger economy.
• 10th in World Competitiveness Yearbook 2002.

5
Competitive Position
6
Competitive Position

• RELATIVE QUALITY
• Strategic Quality
• Associated Services
• Promotion
• Distribution
• Service

• INNOVATION
• 1st European airline online
• Fastest Turnaround Times
• No-Frills Strategy
• Only Boeing 737s
• Outsourced Maintenance

7
Asset Utilisation
8
Asset Utilization
9
Asset Utilization
10
Asset Utilization
11
Leadership
12
Market Growth
Full year annual total (000)
Passenger figures for Easyjet
13
Market Niches

• Leisure Travellers
• - Growth due to uniqueness of UK markets

• Business travellers
• - Corporate constraints on travel
• - Frequent flights

14
Growth in low cost corporate travel

• Number of business travellers has more than
  doubled since 1999.
• Cost is most important factor for 44 of
  travellers

Increase in no. of business travellers
15
Performance Post September 11th

• Following September 11th, passenger usage
  increased by 39

Passenger usage for both years in the month of
November
16
CALM
Competitive Position Mkt Share 1 Rel Mkt Share
1 Rel Quality high Innovation high
Asset Utilization Sales/Assets high Invest
Intensity low Fixed v Liquid low Capacity
Utiliz 1
Markets Addressed Growth rate high Concentration
high Logistics simple Customer power low
Leadership Behaviour Leadership respected,
visionary People connected Labour Turnover low
17
Porters Diamond Model of Competitive Strategy
Firm Strategy Structure and Rivalry
Chance
Demand Conditions
Factor Conditions
Related and Supporting Industries
Government
18
Factor Conditions Trade Theory

• Land
• Island Country
• Close to Europe and USA requires transport
• Labour
• Population growth of over 1.1 in 1999
• Dublin Region 30 of total population
• 43 of population under 40 years
• Capital
• GDP expected to grow by 6.5 in 2003

19
Factor Conditions Resources

• Physical
• Dublin Airport 20mins-city
• Old capital- popular tourist and work location.
• Human
• Net migration of 20,000 per year
• Highly skilled low wage workforce
• Good trade union relations

20
Factor Conditions Resources

• Knowledge
• Highly educated population
• 13 govt. budget invested in Education

21
Factor Conditions Resources

• Infrastructure
• Competitive up to date telecommunications system
• Unlimited bandwidth.
• Planned light rail and road improvements

22
Porters Diamond Model of Competitive Strategy
Firm Strategy Structure and Rivalry
Chance
Demand Conditions
Factor Conditions
Related and Supporting Industries
Government
23
Demand Conditions

• Market Size
• 3.8million home market
• 300 million European market since 1973
• Growth Rate
• 1.1 in 1999 - highest in Europe

24
Demand Conditions

• Affluence
• OECD high economic growth country
• Favourable Govt Policy
• Continued economic growth
• Buyers
• Tested market of budget flyers
• Business market - European business investment

25
Porters Diamond Model of Competitive Strategy
Firm Strategy Structure and Rivalry
Chance
Demand Conditions
Factor Conditions
Related and Supporting Industries
Government
26
Related and Supporting Industries

• Related
• Information and communications technology
• Ireland world class location for software
  companies
• E-business
• Supporting
• Dublin airport - 7th fastest-growing airport in
  the world

27
Porters Diamond Model of Competitive Strategy
Firm Strategy Structure and Rivalry
Chance
Demand Conditions
Factor Conditions
Related and Supporting Industries
Government
28
Strategy, Structure and Rivalry

• Strategy and structure
• Culture and structure similar to Irish SMEs
• European outlook of Ireland
• Low cost airline value chain minimisation
• Rivalry
• Domestic rivalry with Ryanair

29
Porters Diamond Model of Competitive Strategy
Firm Strategy Structure and Rivalry
Chance
Demand Conditions
Factor Conditions
Related and Supporting Industries
Government
30
Government

• Pro-business environment
• Stable economy
• High growth, low inflation
• ?51billion in economy 2000 - 2006

31
Government - Fiscal Incentives

• Tax
• Corporation Tax Rate
• 1st Jan 2003 12.5 for all sectors.
• No double taxation
• Capital Allowances

32
Government - Fiscal Incentives

• Grants
• Capital Grants
• Employment Grants
• Training Grants

33
Conclusion Why EasyJet Should Locate in
Ireland

34
Investors in Ireland Achieve a Uniquely High ROI
Conclusion Why EasyJet Should Locate in Ireland