Ryanair was founded in 1985 by the Ryan family to provide scheduled passenger airline services between Ireland and the United Kingdom. Ryanair’s strategy is based on providing a no-frills service with low fares to stimulate demand from budget-conscious travelers. The firm wanted to enhance its revenue through ancillary services offered in conjunction with its core airline services. Ryanair’s business level strategy is cost leadership. Although the firm faces weaknesses and threats, their strategy has created a competitive advantage. Ryanair’s competitive advantage will weaken over time due to vulnerability to fuel prices, ancillary charges, low employee satisfaction and their negative brand image.
The cost leadership strategy helps Ryanair to operate their business successfully. This type of strategy has its advantages and disadvantages. By implementing it, Ryanair introduced pilot training in order to train them how to flight in most efficient manner, that means, with the least fuel consumption (Creaton, 2014). Ryanair also took out all reclining seats in order to reduce cleaning service cost. The company eliminated non- essential extras like: advance seat assignment, free meal and beverages and checked baggage. There is no offer of air bridge to aircraft, multiclass seating, baggage transfer or access to frequent flyer program (Tiernan & Morley, 2013).
The strategic plan of Ryanair has been to establish itself as Europe’s leading low-fares airline.” Ryanair aims to offer low fares that generate increased passenger traffic while maintaining a continuous focus on cost-containment and operating efficiencies.” (www.ryanair.com)
Airline industry has been faced with stiff competition due to the increased number of airline companies in the sector. The study will focus on the strategies that are deployed by Ryanair Airline Company, Air Berlin Company and Easy jet plc in ensuring that it meets with the competitiveness in the economy. The strategies for Ryanair Airline include; Low fare, Best Customer service, Short-haul route and destination, Reduction of operating costs, Internet services in its reservation system and Quality management. In the case of Air Berlin airline its strategies comprises of high service standards, blanket coverage, market
Prior to 1991, Ryanair had suffered from continuous losses from 1985 to 1989. The first reason that put it into this situation was that it tried to position itself as a low fare airline with the first rate services. It tried to keep low and unrestricted fare, while keep focusing on the best customer service and relationship. This mixed model was proven inefficiency. The low price could lure number of
The Cost leadership strategy aims for the business to have a low price product being the lowest-cost producer. The differentiation strategy involves the development of high quality unique product or services which is usually priced high. Focus is the third generic strategy based on competitive scope. A focus strategy targets narrow segment of domain of activity and tailors its products or services to the news of that specific segment to the exclusion of others. (Exploring Corporate Strategy, 2012). An example of a company that currently follows the cost leadership strategy is Ryanair. Ryanair Ltd is an Irish low-cost airline based in Dublin Airport with operational bases at Dublin and London Stansted Airports. The airline has been characterised by rapid expansion, a result of the deregulation of the aviation industry in Europe in 1997 and the success of its low-cost business model. Although initially this strategy was used to gain competitive advantage over competitors, their success has seen the emergence of approximately 60 new low-cost airlines. As Porters generic strategy model states that a company has to choose one of these strategies and try not to combine both strategies it meant that other companies could try to emulate their success by employing the same strategy and an example of companies that have done this is EasyJet and Aer Lingus. However later on in Porters career he understood that are some circumstances
Summary: Ryanair was founded in 1985 by the Ryan family to provide scheduled passenger airline services between Ireland and the UK, as an alternative to the then state monopoly carrier, Aer Lingus. It started out a full service conventional airline, with two classes of seating and leasing three different types of aircraft. However, despite growth in the passenger volumes financial problems were of a growing concern.
Ryanair was established in the year 1985 by the RYAN family and has grown from a small airline flying a short hop from Waterford to London, into one of the Europe’s largest carriers. The company expanded and within 4 years it had 350 employees, 14 aircraft, and carried 600,000 passengers a year. It is currently serving to 26 European Countries with 148 destinations. It operates on 794 different routes daily serving by more than 1050 flights in a day. It has totally 169 aircrafts running for different routes with 5986number of employees working in it However, Ryanair’s costs rose drastically and it recorded losses of £20 Million sover four years despite its growth. Although consumers were continuing to fly Ryanair
The aim of this report is to carry out a strategic analysis of Ryanair. This will involve investigating the organisation’s external environment, to identify opportunities and threats it might face, and its strategic capability, to isolate key strengths and any weaknesses that need dealing with. Finally, a SWOT analysis will be carried out to assess the extent to which Ryanair’s strategies are suitable to what is happening in its task environment.
Firstly, The part one is mostly focused on strategic analysis and its related questions has been given. Also, each question is answered that relevant to current strategy of Ryanair organization. And this part included internal environment and external environment of Raynair company.
The purpose of this report is to comment at the first part how Ryanair achieve its competitive advantage through the RBV analysis (Barney,1991), the second part will assess its approach to the diversification through the Ansoff matrix , the third part will discuss the company’s organisational culture using the cultural web modeland last part its internationalization strategy.
This case examines two organisations that have many similarities as well as a number of significant differences. The essential technology and systems behind each organisation may be very similar, but the nature and style of management and its consequent impact on the way people working in these organisations think, feel and behave have created very different organisational cultures. So what are the similarities and what are the differences? The most obvious similarity is that both Virgin Atlantic and Ryanair operate in the UK passenger air transport industry. Both are relatively recent creations and might be seen as new entrants to the
Ryanair, originally an Irish low-cost airline and established by the Ryan family in the year of 1984 starting off with only 25 members of staff. Replicating the American Southwest airline business model and then officially relaunched in the year 1990. It has vastly grown from being a single-aircraft family operation into one of the world’s top leading airlines. Now Ryanair has reached 11,458 employees. The airline carries over 131 million passengers per annum on over 2,000 flights daily, from 86 different routes, flying to more than 205 destinations in 33 countries.
1. In-depth environmental analysis of the European Airline industry and discuss the implications for the budget sector and especially for Ryanair. 2. An integrated understanding of the functioning of a company – its human and technical operations, leadership, customer relationships and financial structure. 3. Implications of the internal functioning to create viable strategic positioning and discuss any changes to Ryanair’s approach to ensure an improved sustainability 4. Evaluate the strategic leadership style of Michael O’Leary