Analysis of the external environment of "Ryanair –"Southwest" of European airlines" case

1699 WordsMay 18, 20097 Pages
The objective of my report is to analyze the external environment in "Ryanair-'Southwest" of European airlines" case, which is very important factor for the firm's formulated effective strategy. The external environment consists of a wide array of economic and sociopolitical factors. It is the specific market arenas that the organization has chosen in its strategy; it provides the business opportunities to the firm and it's also a source of threats or forces that may impede the successful implementation of a strategy. Macro-environmental Analysis (PEST factors affecting Ryanair Airlines)To analyze the macro environment, I will use the PEST analysis, which refers to political, economic, social and technical factors that confront Ryanair…show more content…
-The improvement of technology aid European airline industry development and competition. -Airlines provided satellite TV and phone services on board as well as broadband Internet and thus enhance value to customers. -Information systems allowed airlines collect data about passengers, cost, and prices as well as ensure better service when boarding and handling luggage. Industry Analysis: The effect of the Five Forces of Industry Competition on Ryanair. The five forces were identified by Michael Porter as the industry Five-Forces model. This is a framework for evaluating industry structure according to the effects of rivalry, thread of entry, supplier power, buyer power, and the thread of substitutes. Rivalry is the intensity of competition within an industry. The European airline industry is highly intense; market is highly competitive. Passengers have choices to switch to another mainstream (KLM, or British Airways) or low-cost budget airlines (EasyJet), because there is a low level of switching costs. The airline industry, therefore, is highly competitive and barely attractive. At the same time, the low-budget sector is in a more favorable situation due to greater traffic and customer affection. This sector is more attractive, as entry costs, as well as bargaining power of both passengers and suppliers are lower. Most cost advantages can

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