Ryanair is situated in an existing market offering an existing product therefore diversification in this industry is limited as it has limited supplemented services which it can run alongside its transportation of passengers ranging from cargo transport, internet bookings and advertisements, hotel and transport services to and from airports, this however does not eliminate the possibility of diversifying into other support services. Delphi Technique 8 It has continued to develop and has cemented its place as Europe's most profitable. Introduction to Ryanair’ strategy Ryanair is established in 1985 and the most important in the company’ history was the appointment of Michael O'Leary on the management in 1991 and since then the company has shown strong growth among airlines. The Competitive Environment 10 Ryanair goes at length to lower their costs and prices and pride themselves on being the lowest fare/lowest cost carrier in Europe. This gives the aircraft manufacture more power as it can increase prices of aircraft and maintenance cost, another supplier power can be noticed in the fuel suppliers who can set any price standard as Ryan air has little or no control over these prices (Johnson et al, 2008). The Texas airline found a unique approach to the … However the financial crisis also forced Ryanair into creating alternative sources of revenue which includes hotel travel insurance, excess baggage services as a means of sustained profit. 1 Ryanair’s competitive strategy (2013, МВА Formative assignment) 1. The strategy of Ryanair is to be a cost leader. Internal environment adds value in business, in order to put some efforts in opportunities and argue against threats. Ryan air developed its product in terms of updating its fleet of aircrafts by acquiring over 100 new Boeing 737-800 aircrafts. Porter’s five forces are used to analyse Ryanair’s competitive environment while there is a brief explanation of the segmentation theory and its process. Ryanair benefits from this as the airline updated its fleet of airplanes thus having a 2% reduction in fleet fuel consumption; however the airline had to make major investment to effect this change which cost more money (Johnson et al, 2008). In addition to that first mover experience may also have benefited the company. From simple essay plans, through to full dissertations, you can guarantee we have a service perfectly matched to your needs. Ryanair has continued to maintain its position in airline industry as the world’s most profitable airline, this it has achieved via various practices thus giving it a competitive advantage over others. Today Ryanair is Europe’s largest low fares carrier with an annual profit of £503 million that is a 25% increase in profit from the previous year. This section classifies the application of Ansoff’s product / market growth matrix on Ryanair business model. Physical, airline company Ryanair. In 2016, Ryanair reported revenue of more than 6 billion Euros. Ryanair operates out of two major airports, Dublin and London Stansted. Ryanair adopts different employment contract types in the different countries where it operates; this affects it negatively. Key points from the article Ryanair’s Integrated Business Strategy Resource-Based View (Inside out) Marketing View (Outside in) Variety of Destinations &Routes Competitive Advantage Competitive position Low Cost Airline Business Model (Passes the costs directly to Ryanair’s customers) 4. Using the framework a diagnosis can be made of the culture of Ryanair and how this creates competitive advantage; To provide a background information of organisational structure, their vision, mission and strategic goals. Due to the current Global financial crisis the general spending power of individuals have reduced, however they benefited from the financial crisis period due to their refusal to surcharge passengers on increase in price of fuel. Competitive advantage can be defined as strategies, skills, knowledge, resources and competencies that differentiate a business from its competitors (Wang, 2009). Such are as:- Value – Along with this, resources are very valuable for the organisation, they helps in increasing customer value. In fact, the only airline that can match Ryanair for price is Wizzair, but other than that, all other airlines are more expensive. This strategy alone is not a basis for competitive advantages, nor are advantages sustainable over time. The Ansoff matrix model “is used by marketers who have objectives for growth. 2006). What are Ryanair’s competitive advantages? Ryanair has continued to maintain its position in airline industry as the world's most profitable airline, this it has achieved via various practices thus giving it a competitive advantage over others. All work is written to order. But to keep this competitive advantage, the firm has to control its direct costs of manufacturing, marketing, distribution and financial and administrative operations. This involves the consideration of the potential value of complimentary products (Johnson et al, 2008), Ryan air is served with lots of opportunities for diversification, providing other channels for making profit ranging from hotels, excess luggage bookings, travel insurance which had climbed by 36% in 2006, also in western European countries alone there are 431 airports (Fewings, 1999) which were underutilised because national airlines concentrated on hub airports, therefore providing greater opportunity for Ryanair. The airline is carrying £700 million in cash. Ryanair’s business level strategy is cost leadership. Ryanair was the first company in reducing ticket costs and keep them low at all times. Ryanair’s scheduled passengers grew from a already huge 90.6 million to 106.4 million in 2016, this was a 18% increase for Ryanair … The improvement on technology by aircraft manufacturers has also impacted on Ryanair positively, this is due to the manufacturing of new and improved Boeing 737 with 45% less fuel burn and 45% lower noise emission and larger passenger seat capacity. Ryanair at the moment is the biggest low cost carrier I will analyse how the have come to be in this position and I will compare it to Easyjet. The first advantage is of course the price. It has continued to develop and has cemented its place as Europe's most profitable. All four strategic choices indicated in the Ansoff matrix model can be said to be applicable to Ryanairs present services. Any opinions, findings, conclusions or recommendations expressed in this material are those of the authors and do not necessarily reflect the views of UKEssays.com. Legal Constraints is a factor that deters Ryanair from increasing market share, as it has to constantly deal with incoming law suits that are cost effective (Johnson et al, 2008). Managerial Judgement 7 INTRODUCTION Ryanair competitive advantage would be analysed using two models namely; Ryanair operations identifies with cost leadership competitive advantage strategy which provides airline transport services at low cost and operates a broad scope as it carries over 42 million passengers out of 18 European countries at the cheapest rate, however due to its short haul point to point routes and taking Europe as its major market its strategy can also be viewed as a Cost focus strategy. Ryanair competitive positioning in relation to its internal and external environments. Other airlines may have better services but Ryanairs main catch which is low air fare which keeps the passengers returning even with they have complaints about services on board. The firm wanted to enhance its revenue through ancillary services offered in conjunction with its core airline services. Advantages: Their cost leadership strategy is really a huge advantage for them in Europe. Furthermore, tactics and implantation are discussed, and how Ryanair can achieve its objectives through its marketing mix. We've received widespread press coverage since 2003, Your UKEssays purchase is secure and we're rated 4.4/5 on reviews.co.uk. 2. Ryanair was founded in 1985 with only two aircrafts and a single Dublin-London route . Show More. Disclaimer: This is an example of a student written essay.Click here for sample essays written by our professional writers. Technological 9 The three methods for creating a sustainable competitive advantage are through: cost leadership, differentiation, focus. There are a number of low-cost airlines operating on the routes similar to Ryanair. The reduction in oil prices, and the expectation that the prices will remain low should cut the cost of travel and bolster the passenger volume, which should in turn have a positive impact on the financial performance of both EasyJet and Ryanair. Ryanair aims to offer air travel services at low rates and this attracted many passengers while at the same time it maintains a continuous focus on cost reduction, operating efficiencies and continuous improvements. Secondary airports: Ryanair takes advantage of airports that are inactive by landing on them. Ryanair already had a huge clientele base although it seems 2016 it grew even bigger. One more advantage: the … Ryanair services can be classified as Hybrid from the point of the airline which claims that it offers best services at low fares but however this can be contested as a survey carried out by a pool of over 4,000 passengers by Trip advisor voted Ryanair as the worlds least favorite airline indicating a poor service delivery in terms of staff friendliness, delays and poor leg room, seats and safety standards (Johnson et al, 2008).
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