Easy Group miracle

The EasyGroup, founded in 1998, is the holding company controlling the "easy" ventures; it is privately owned by Stelios Haji-Ioannou. The "easy" format is to take away the frills in something to make it cheaper overall, and use the yield management system of supply and demand; so known as discounters.

Some EasyGroup subsidiaries have been more successful than others; the most actually successful division is EasyJet ; there are some less well-doing, that have been losing during the last several years such as EasyInternetcafe or Easycar.com.


1.Easy groups try to minimize costs for their customers cutting off all the supplementary services and minimizing a service package.
Here is the explanation of EasyJet policies which is cloned and adapted for other Easy groups:
http://www.easyjet.com/FR/La/Dossier/infopack_companyoverview.html

2.Targeted customers – modest price categories who could sacrifice the comfort or usual service package for the cheapest offer or accessibility.
3.Most part of reservations and services access is provided through the internet that allows avoiding the heaviness of distribution chains, reduces costs and increase customer flexibility. A lot of activities being put into the internet make known e-management profits.
Here is the example of EasyJet costs’ reduction management and considerable service flexibility for a customer:
http://www.easyjet.com/FR/La/Dossier/infopack_internet.html

4.Some services being too expensive for some clients groups are now accessible for lower price but for modest service package (as for example cruise line for young and middle aged groups, traditionally considered as vacations for seniors).
5.Strategic partnership could be very promising as Easy group implementations is well known for their limits of reasonable charging as though attract the consumers for cheap prices.
6.Yield management could offer really cutting off prices in low demand period. Flexible pricing can compensate the expenses by increasing rates in high demand period as is not evidently realized by a client.
7.Strong orientation for promoting low prices has created a strong brand, recognized by customers worldwide.
8.The business model seems sustainable as it focused to adapt sales to consumer behavior finding the possibilities for very low prices. Nevertheless a lot of Easy subsidiaries used to be not profitable or nowadays make modest revenues.
9.As to the business model growth, Easy ventures spread all over the Europe and the USA in franchisees, the form mostly used for Easy product extension.
10.A lot of business thinking introduction in Stelios’s ventures become standard and world widely used for example yield management approach (used almost everywhere in airline companies).


Yield management conception

It is defined as the process of improving corporate revenue through the implementation of strategic pricing and inventory control. The approach was elaborated in 80s in the USA by Delta Airlines and nowadays is used worldwide. Revenue management is also a widely used term for unit price optimisation according to previous sales and forecasts.

The approach is applicable for services and faces the following business peculiarities:
1.Nonflexible product inventory
2.No possibility to stock the products
3.Based on previous sales, the capacity to forecast consumer behavior and as a result - consumption.
The conception is widely used by Easygroups in its subsidiaries.
Marketing advantage of the yield management
The yield approach favors easy adaptation to the product life cycle and other marketing strategies. Flexible schemas of services rates allow to optimize easily pricing during the product life cycle, change a pricing strategy under pressure of competitors, introduce a new product with entering low price to create a consumer awareness etc.

EasyInternetCafe

Let’s have a look at EasyInternetCafe, chain of cybercafés in Europe and United States. The company was founded in 1999 in London and was later followed by several cyber cafes in New York. Originally, the EasyInternetCafes were called EasyEverything, to reflect the fact that just about everything can be found on the Internet. The name was changed EasyInternetCafe in October, 2001. Easy Internet cafe was the first online business for Stelios Haji-Ioannou.

The EasyInternetCafes opene the biggest Internet cafe in the world in New York City’s Times Square (opened in November 2000), originally with 850 PCs (it now has 648).
As is the case with other Easy group companies, EasyInternetCafe aims to deliver the best value for money services. The stores are built and operated on the principle of ‘economics of scale’: most stores are open 24 hours a day, 7 days a week, and each has an average of 350 PC’s:
http://www.easyeverything.com/mission/index.html
Even thought the cafes are ideally located (Times Square, Manhattan, NYC, for example), the rates at the cafes are very competitive and the minimum purchase may be as low as $0.50.

The EasyInternetCafes are run by individual franchisees. In fact, EasyInternetCafe is today one of the most important Internet cafe franchises in the world.
http://www.easyeverything.com/hosting/index.html