...companies * High productivity of the staff * Emphasizes on Internet use | WEAKNESSES * The company is ready to sacrifice it all for growth. Indeed, Ryanair has a specific strategy that consists in transferring the costs to the passengers (the company has always tried to find ways of charging passengers for services once considered intrinsic to an airline ticket). * Ancillary services can annoy passengers * Bad reputation (misleading publicity, fat tax, toilet costs…) * Secondary airports which are sometimes far from cities) * Expensive manpower (high salaries) * Poor working conditions * Legal trouble | OPPORTUNITIESEnvironmental : newer aircrafts that produce 50 per cent less emission, 45 per cent less fuel burn and 45 per cent lower noise emissions per seat. * The company is expecting a reduction in fares in order to beat its competitors who will be unable to follow Ryanair in this “bloodbath” * An increase in market share thanks to the demise of several carriers * The European market (the EU enlargement) * Launch of new routes : the company planned to open 146 new routes in 2010 * Ancillary services which can generate money | THREATS * The industry is not in very good shape (global economic recession, oil prices) * Competition (EasyJet) * European laws * Airbus doesn’t want to deal with Ryanair * Airport charges and government taxes * Passenger compensation (delays, cancel flights) | SO : Overcome the image...
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...strategic capabilities (SWOT)……...4 Ryanair’s strategic choice (Porter’s five forces)………5 VRIO framework……………………………………………..5 Rumelt’s criteria……………………………………………..6 Ryanair’s implementation of low cost strategy………..6 Recommendations………………………………………….6 Conclusion…………………………………………………...7 Reference List……………………………………………….7 Appendix………………………………....…………………..8 12.1 Presentation’s slides…………………………………8 Word count 1,744 (excluding reference list and appendix) 2 Besmir Lika 1.0 Introduction Strategic Management Individual Report Richard Jump The notion of underlying the concept of generic strategies is that competitive advantage is at the heart of any strategy, and achieving competitive advantage requires a firm to make a choice, if a firm is to attain competitive advantage, it must make a choice about the type of competitive advantage it seeks to attain and the scope within which it will attain it (Porter, 2004). The purpose of this report is to assess the key strategies chosen by Ryanair within cost leadership and that were likely to generate competitive advantages to the organisation. Furthermore, this paper will analyse the Ryanair’s decision to become a low cost airline through Porter’s five forces. It will help to understand the industry attractiveness and competitive forces. PEST analyses will be directed in order to analyse the business environment where Ryanair operates. SWOT analyses will be piloted to diagnose the strategic capabilities of Ryanair. Porter’s five forces...
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...Dogfight over Europe : Ryanair (A) 1. Assessment of Ryanair's launch strategy To analyze the launch strategy of Ryanair i.e. its direction & purview to achieve advantage over rivals by adapting with available resources & build competency we need to first look into the industry level analysis, profitability potential & competitive dynamics and then assess its launch strategy. PORTERS FIVE FORCES * COMPETITORS : * Deregulation-increased rivalry, Competition for marginal customers * Strategic Alliances eg - Aer Lingus & BA * Comfort & premium services to Business Class * Increased use of online ticketing Ryanair’s Perspective: Intense & increasing competition (Aggressive) * ENTRY BARRIER : * Rise of Charter flights in Europe * European Deregulation-New Competitors; Pricing, routing, pooling abolished * Huge financing to enter may cause high entry barrier for new entrants * High maintenance costs & personnel costs * Low/unstable prices & profitability Ryanair’s Perspective: Moderate threat of entry * SUBSTITUTE : * Accessibility: Other cheaper form of transports eg-fast rail & land travel * Charter flights for Holiday goers * Flights bundling ancillary services such as lodging along with cheap fares Ryanair’s Perspective: Low threat from Substitutes * BUYER POWER : * Increased customer base for air travel due to increased competition...
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...Table of Content RYANAIR THE COMPANY 3 Section A 4 Slow Growth 4 The impact of slow growth on the industry 4 Taxation 4 ECONOMIC FACTORS 5 Unemployment 5 GNP trends 5 Inflation 5 Exchange rates 5 Interest rates 6 Security Factors 6 The Threat of close substitutes and rivals 7 HIGH FIXED COSTS; 7 AIRPORTS 7 PORTER’S FIVE FORCES 9 Threat of new entrants 9 Suppliers: 9 Buyers: 9 Substitutes: 9 Competitive rivalry: 9 Section B 10 Firm Infrastructure 10 Human Resource Management 10 Technology Development 11 Procurement 12 Inbound logistics 12 Operations 12 Outbound logistics 13 Marketing and Sales 13 Service 13 Margin 14 Joint Venture 14 SECTION C 15 Ryanair Business Strategy 15 Low Fares: 15 Customer service: 15 Frequent Point-to-Point Flights on Short-Haul Routes: 15 Low Operating Costs: 15 Taking Advantage of the Internet: 16 Commitment to Safety and Quality Maintenance: 16 Enhancement of Operating Results through Ancillary Services: 16 Analysis of the airline business models 16 Ryanair’s strategy in future: 17 Focused Criteria for Growth: 17 New Aircraft-markers: 18 New design ‘standing seats’ 18 SWOT Analysis 19 Strengths 19 Weakness 19 Opportunities 19 Threats 19 BIBLIOGRAPHY 20 RYANAIR THE COMPANY The company was incorporated in 1995 and became Ryanair limited, and in 1996 it changed to a holding company for Ryanair limited. Registered...
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...Executive Summary Ryanair operates as a cost leader in the European low cost carrier segment of the airline industry. As a cost leader they aim to achieve high volume sales by attracting customers with low prices. As a result of charging some of the lowest prices in the industry, Ryanair has seen growth in traffic and reported record revenues. To remain profitable the company focuses on maintaining low costs and efficient operations. The key issues facing Ryanair include how to remain profitable in light of rising fuel prices and currency exchange risk, the ability to maintain market share and growth in a segment characterized by intense competition, and whether or not it would be profitable to expand into the growing international/emerging markets and internet retailing space. In addressing these key issues, it is recommended that Costco focuses on opportunities in the internet retailing space to grow bottom and top line growth as well as increasing market share. It is also recommended that they remain committed to their low cost high inventory turnover strategy in order to continue to offer consumers the lowest prices and achieve high inventory turnover. By taking these initiating the strategies summarized above, Costco will be able to maintain their position as market leader and continue to operate profitably in the discount membership warehouse segment of the retail industry. Business Model & Strategy Ryanair operates as a cost leader in the low cost...
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...EasyJet – SWOT analysis Strengths: * EasyJet is the primary provider of low budget air travel, employing an overall cost-leadership model. The airline operates services on 500 routes and carries more passengers than any other UK-based airline. * Recognises CO2 emissions and actively seeks to reduce emissions and support green schemes such as UN certified Perlabi Hydroelectric in Ecuador. * With rapid turnaround times of just 30 minutes, EasyJet is able to offer an efficient and reliable service whilst maximising asset utilisation. * The first low cost carrier to introduce 100% electronic retailing, reducing overheads and producing a highly convenient service for passengers. Weaknesses: * Undifferentiated service in relation to other cheap flight providers such as Ryanair etc * Easyjet does not offer schemes for customer retention and as a result there is no brand loyalty - customers choose the lowest priced flights. * As a result of extremely low operating margins, Easyjet puts itself in a sensitive position regarding any additional of taxes or charges that may be imposed on it by the government. Opportunities: * The withdrawal of several long-established airlines from the less traffic-intense routes offers an opportunity for expansion. This may include the introduction of alternative routes to major cities in Europe e.g. from Dublin to London. * Acquire small low budget airlines with different routes to add to its flight timetable ...
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...3 History: 4 Primary Source - Questionnaire: 5 Quantitative: 7 Qualitative: 9 Secondary Data: 10 Partners in focus 10 Strategy: 12 Routes Operated by Aer Lingus: 14 SWOT Analysis: 23 Conclusions & Recommendations: 25 Bibliography: 26 Introduction: The aims and objectives of this marketing research investigation are to analyse how the airline is currently competing in this business area. There are a number of factors in which we can examine to determine this: 1. Find the main source market profiles? * To get this result I will be using Primary Source information by sending a questionnaire. 2. How is the company continually expanding? * Quantitative paragraph researches how Aer Lingus has progressed over the last 10 years and how the new focus today is for an ever expansion of its long haul flights. 3. What differs Aer Lingus to other airlines? * Qualitative we have a look at the service levels that make this airline unique. * Secondary Data shows who Aer Lingus is partnered with to connect Ireland with the rest of the world. * Strategy specifies why Aer Lingus cannot be a Ryanair. * Routes Operated by Aer Lingus is more central to the peripheral airports offered by Ryanair. * SWOT analysis goes into further detail on how this airline is distinctive from others. History: Aer Lingus was founded by the Irish Government in 1936 to provide air services between Ireland and the...
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...BIRD’S EYE VIEW SWOT Analysis of Ryanair SWOT TEAM Air Scoop launches a new range of articles called ‘SWOT Team’. Each month, we will publish a SWOT analysis of an European low-cost carrier. In this issue, we start with a global SWOT of the market. The no-frills carriers have created new markets, and opened up air travel. A greater proportion of their passengers are people who previously were using other modes of transport for travel, while a certain proportion are from traditional carriers. Relying as they do on linking region to region and by-passing ex¬pensive big-city hubs, lowcost carriers have caused rise in local employment. There is parallel growth in tourism; a rise in property investment and new businesses credited to good, cheap logistic connections. One of the strongest characteristics of the no-frills business model is the ability to adapt rapidly to circumstances. Cost savings of the no-frills business was achieved by effectively supplying a single standard service on all routes and improving both labor and aircraft productivity. Ryanair’s Chief Executive, Michael O’Leary’s, once claimed that “Low-cost airlines are the new Europe». This seems to have been amply proved by the tremendous impact LCC have had on Europe. Ryanair and easyJet are the leading low cost players owning around 50% of the share in the European LCC market. Ryanair is an Irish airline headquartered in Dublin. Its biggest operational base, however, is at London Stansted Airport. It is Europe’s...
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...| |Strategic Management : Principles and Practise | |Case Study A : RYANAIR | | | | | | | | | 1- You’re invited to use the Value Chain framework so as to explain the extent to which Ryanair has been able to propose low fares to its passengers. In order to develop a competitive advantage - implementing low fares to its passengers - Ryanair offers a series of activities referred to as the Value Chain, as it is shown in the following diagram: |Firm Infrastructure | |Corporate partnerships | |Human Resource Management...
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...Case study A : Ryanair Part 1 In November of 2006, the Irish Airline company Ryanair announced a record half-year profit of 326 million euros. In order to understand how they managed to reach such profitability in the overloaded European Airline industry, we will use the business model framework. First, Ryanair’s customers benefit from low fares and punctuality. Offering the lowest fares in every market is the company main goal. As no competitors manage to outperform Ryanair in terms of price, we can say that their value proposition is superior. The second step of the business model framework is to emphasize the architecture of the business and how it enables the company to achieve its aims. Let’s focus on each of the six components of the company infrastructure. ✓ Ryanair aims at offering the lowest prices of the market. Low fares are the main competitive advantage of the company, so whatever the context is they try not to raise prices. Even when fuel costs soared, the company CEO, Michael O’Leary declared that they would be “no fuel surcharges not today, not tomorrow, not ever”. ✓ Ryanair’s flights are point to point only, in order to reduce costs (fuel charges, airport cost…). On those flights, there is no business class. Moreover, the company chose secondary airports as airport charges are lower than in main airports. We can Ryanair also offers ancillary services including non-flight services such as hotels or car rental...
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...Case Study: easyJet and Ryanair Flying High with Low Prices Toifl Edith, Maike Klement Hamiyet Karaman, Tsolmonzul Erevgiylkham FK ABWL Marketing 040177/1 WS 06/07 Story - easyJet Founded in March 1995 by Stelios HajiIoannou - the family remains the major shareholder The airline is based at easyLand, at Luton airport 2 Concept - easyJet Reduction of costs through: - reduction of distribution costs No free lunch Efficient use of airports (fast turnaround terms - 30 min)) - Operations out of secondary airports main target group: business travelers 3 Story - Ryanair 1985 founded by the Ryan Family (with a share capital of only £ 1 Million) First route from Waterford in Ireland to London Gatwick 4 Concept - Ryanair Cheap point-to-point flights from secondary airport Single aircraft policy Fast turnarounds Main target group: leisure customers 5 1. How do easyJet and Ryanair achieve success using low-price strategies? 1. How do easyJet and Ryanair achieve success using low-price strategies? A new system allows airline seats to be priced according to supply and demand and achieve high occupancy. - how does it work? They start with low ticket prices, and raise it according to demand. Stelios from easyJet calls this system „yield management“ 7 1. How do easyJet and Ryanair achieve success using low-price strategies? Examples: Ryanair: Linz Stansted flight: 08.12.06 € 59.99 flight: 08.04.07 € 39.99 easyJet: Munich Stansted...
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...Fuerzas competitivas de Porter en el sector aéreo de España Las fuerzas competitivas de Porter constituyen un elemento esencial para el análisis del grado de atractivo de un sector. Estos factores que rodean a la empresa son cinco: Poder negociador de los proveedores. Los proveedores son elemento clave en la empresa puesto que suministran las materias primas. Por ello, tienen poder negociador sobre la empresa en función del número de proveedores, de los productos sustitutivos, del nivel de importancia del producto para la empresa, de la diferenciación del producto del proveedor y de la amenaza de integración hacia delante. Poder negociador de los compradores. Los compradores tienen poder cuando están concentrados, el producto está estandarizado o pueden cambiar a otro producto a un coste más bajo. Posibilidad de competidores potenciales. Las posibilidades de competidores potenciales se miden a través de las barreras de entrada. Existen dos tipos: las legales, como son las normativas del sector, patentes, licencias, etc.; y las económicas, elevadas inversiones o inversiones específicas, el acceso privilegiado a materias primas que puedan tener las empresas instaladas así como las ventajas de diferenciación, las ventajas en costes y las represalias. Grado de rivalidad de un sector. La competencia dentro de un determinado sector depende del número de competidores que existan, de lo diferenciados o no que estén los productos, de la demanda de bienes y también depende...
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...Project Report The Jomera Hotel March 2013 Project Report TABLE OF CONTENT PAGE NO. 1. About the project, Tourism in Galway 3 2. Location Advantage, Business in Ireland 4 3. Competitive analysis, Advertisement 5 4. Transports to Galway, Investment 6 5. Our service, Wedding Package 7 6. The profits, The prices 8 7. Security and Safety 9 8. Bibliography 10/11 About the project To set up a Hotel in an area of 20 acres, having the entire modern facilities and we going to name it The Jomera Hotel. Tourism in Galway Galway is the fastest growing and the fourth largest city in the Republic of Ireland and the only city in the province of Connacht in Ireland. The city is located on the west coast of Ireland. The population of Galway City is 72,729 (based on the 2006 census carried out by the CSO), if the current growth rate continues; the population of the city will hit 100,000 by 2020. Galway has a strong local economy with complementary business sectors including manufacturing industry, tourism, retail and distribution, education, healthcare and services that include financial, construction, cultural, and...
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...Dogfight over Europe: Ryanair (A) Case In 1986, Ryanair announced that it would begin flight service between Dublin and London. The founders of Ryanair are brothers Cathal and Declan Ryan who essentially grew up in the airline world. At this time, the company had already been operating for a year, flying between Ireland and London with their 14 seating plane. In terms of competition, these two locations did not pose a challenge. However, the Ryan brothers recognize the competitiveness and complicated industry as they attempt to enter the European aviation business world. The European aviation business environment has been heavily impacted by the European national government. Following World War I, several private commercial airlines arose carrying the flag of their nations. These “flag carriers” and other airways gradually became owned by or subsidized by their national governments. Governments began focusing on international routes from their respective capital to colonies and other areas of national influence. World War II brought several advances in the airline industry as air travel became increasingly economical for the average individual. The war also brought the threat of American dominance in the airline industry as efficient and privately owned carriers of the United States would have captured a large portion of the international market. As time passed, European governments continued to consolidate airlines, impose further restrictions on international routes, create...
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