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Case Study: Ryanair Business Strategy Analysis

Ryanair is an Irish low cost airline headquartered in Dublin founded in 1985. It operates 181 aircrafts over 729 routes across Europe and North Africa from 31 bases. Ryanair has seen large success over the recent years due to its low-cost business model and has become the world’s largest airline in terms of international passenger numbers. Taking Porter’s generic business strategies into consideration, Ryanair operates a cost-leadership strategy to drive itself into achieving its mission of being the leading European low-cost carrier (LCC). Throughout this essay the business strategy of Ryanair will be analysed and the sustainability of their model evaluated.

Ryanair’s objective is to firmly establish itself as Europe’s leading low-fares scheduled passenger airline through continued improvements and expanded offerings of its low-fares service. Considering their objectives and mission, Ryanair’s decision on their cost-leadership strategy was based on a few main factors which are discussed below.

A major influence was the deregulation of the airline industry in 1978 which removed government intervention within the European continent. Under the new rules, routes and fare decisions were made by individual airlines which meant that they could compete on other factors besides food, cabin crew and frequency. As a result of deregulation, a large number of new airline start-ups emerged within the EU and competition among airlines increased dramatically resulting in downward price pressures. Ryanair was established to take full advantage of these market conditions. By offering low prices, Ryanair entered a huge and virtually unlimited market.

Having seen the major success of the low cost carrier Southwest in the United States, Ryanair decided to follow in their footsteps by establishing a LCC for the European continent that targeted fare conscious leisure travelers and regular low cost business travelers. By doing this Ryanair became the first low-fare airline in Europe. However, they took the Southwest model further by offering no drinks and snacks at all and abolishing the frequent flyer program which Southwest up to this day offers its customers.

The evaluation of Porters five forces influenced Ryanair’s choice of a cost-leadership strategy, as the threat presented by new entrants and the threat of substitutes could hinder their success. The threat of new entrants is high within the aviation industry which meant that low fares would help drive away any further competition. The threat of substitutes to Ryanair had to also be carefully examined. Their primary market, Europe, had the availability of high speed trains and car holidays. For Ryanair to be successful, prices had to be low to attract the public, and resist strong competition from substitutes like Eurostar.

As Europe’s largest low fare airline, Ryanair’s competitive advantage remains in their ability to continue as cost leaders; providing the cheapest fares to its customers. This dictates that the company must minimize its own costs to ensure that they are able to offer customers the service at a price below their direct competitors. This leads us to consider some key functional strategies which directly help Ryanair towards their ultimate goal to be Europe’s leading low fares airline.

The marketing strategy is perhaps the most obvious and significant functional strategy of Ryanair. Low fares are designed to stimulate demand, attracting fare-conscious travelers, those who may have used alternative forms of transportation or even those who may have not traveled at all. Penetration pricing as it is called helps gain market share and simply, more customers equals more revenue. Tickets are almost solely sold on their website ‘www.ryanair.com’ which very importantly keeps sales costs to a minimum since very few phone operators are employed and computers are able to cheaply handle all functions of sales. With ever increasing accessibility of the internet globally anybody with internet access can buy airline tickets from Ryanair, so distribution practically takes care of itself through this medium. Ryan Air relies on low cost promotions and in recent times has concentrated on their ‘One million seats at one pound’ which is usually advertised through their internet site, national press and bulletin boards. It is the simplicity of this promotion which helps keep costs low since expensive advertising agencies can be entirely avoided and advertising can be dealt with in house.

Ryanair’s operations strategy determines how the airline will deploy its resources and the policies it will operate by. To keep costs low they operate a ‘no frills’ service onboard aircraft. This means the fare only includes the flight. There are however a number of other measures directly related to a no frills service. These include ticket-less boarding, unallocated seats, one class of travel, costs for check-in baggage, no refund policy, basic seats (to increase aircraft capacity) and charging for any additional service. All this significantly reduces costs to Ryanair. The Achilles heel of Ryanair is their greater aircraft utilization through super quick turnaround times. Essentially this means the aircraft spends very little time on the ground, they achieve this through their human resource policies and by having none or very little cargo in the baggage hold to speed up loading and unloading of the aircraft.

Logistics strategy deals with the flow of products into and out of Ryanair. Again there is heavy emphasis on cost saving and reducing measures. Ryanair fly to secondary airports which are potentially much further from the City centre but accessible enough by other forms of ground transportation. At these airports Ryanair are able to negotiate extremely aggressively and demand the lowest landing and handling fees. Additionally Ryanair is usually able to gain financial assistance with marketing and promotional campaigns at these airports.

As cost leader Ryanair strives to undercut all its rivals but this means very low income per fare and requires maximum utilization of its resources. Fortunately their financial policy ensures they are able to still profit handsomely from rock bottom fares. The aim is to break-even on fares but to make their profits out of ancillary charges and commissions from their partners. Ryanair has a number of affiliates such as Hertz car rental, Acumus insurance and booking.com all of whom are advertised readily on the Ryanair website. Since the website has high website traffic its partners are able to reach out to Ryanair’s huge client base and are prepared to pay good commissions to the firm for this privilege. Ryanair also generate income from advertising on board the aircraft. Ancillary revenue is generated from many of the services that traditional airlines wouldn’t charge for, such as large baggage into the cargo hold, allocated seating, snacks and drinks.

Ryanair’s strategy when purchasing aircraft is to buy new, uniform aircraft. This is beneficial for a number of reasons all of which directly help cost saving measures. Firstly, by being able to order same aircraft in bulk they are able to negotiate a better price per aircraft. Secondly, uniform aircraft mean that there are potential savings in staff training; air stewards being more familiar with all aircraft and maintenance will be simpler. Finally by buying new, the company has safer, more fuel efficient planes with lower maintenance costs. Safer aircraft also means greater consumer confidence, equating to more fare sales.

Furthermore Ryanair aggressively hedge and fix as many of their costs as possible, such as oil and aircraft prices so they are not subject to future price fluctuations which could adversely affect profitability.

The human resource policy is again directly related to reducing costs. Employees are expected to pay for their own uniform and equipment. Training given is the required minimum and staff utilization is among the highest in the airline industry. Many staff are employed on performance contracts and those who do not meet their expectations are readily replaced. Staff are also expected to take on a number of roles, cabin staff will also clean the aircraft prior to the next service, check in staff assist in boarding the aircraft etc.

Ryanair has successfully experienced years of growth both in the number of its aircrafts and passengers since its launch. However, with the global financial system recently suffering its greatest crisis in more than 70 years, existing business models of many aviation firms are coming under great strain. As this economic downturn bankrupts LCCs like XL and Zoom with more expected to follow, the question is whether Ryanair’s cost-leadership strategy is sustainable or not as it continues to offer lower fares in the face of high costs. Although Ryanair has posted losses along with other aviation firms for the latest quarter, it is expected to emerge from this downturn with fewer competitors because its â €š ¬1.8 billon balance sheet is one of the strongest in the industry. Additionally, as the credit crunch takes its toll, traditional airlines are not in a position to cut fares and the threat of new LCCs is virtually eliminated due to the lack of financing. Although Ryanair faces competition from substitutes like Eurostar, it is at an advantage because of Eurostar’s limited destinations.

Ryanair is sticking to its mantra, when the going gets tough, sell more seats for almost nothing. By offering low fares, Ryanair expects passengers to trade down to the low cost airlines rather than stop flying completely. This trend appears accurate so far based on passenger numbers as recession forces millions of passengers to focus on price. Additionally, the latest statistics from The European Low Fares Airline Association members show a 15.7% year-on-year growth in the number of passengers for 2008, indicating that the LCC model is robust, even in times of crisis. Consequently, there is no doubt that Ryanair looks poised for substantial profits and passenger growth in the coming years. However, in order to compete with other LCCs and maintain its continued market share growth in the future, Ryanair needs to improve its poor customer relations.

The sustainability of Ryanair’s cost leadership strategy also depends largely on the price of oil and how effective the firm is in cutting costs in order to continue offering low fares. According to the firm’s latest financial report, Ryanair will enjoy significantly lower oil costs thanks to their recent hedging programme, when most of their competitors are already hedged at much higher prices. These lower prices will drive Ryanair’s traffic growth, maintain high load factors and capture market share from higher cost fuel surcharging competitors. In order to cut costs, Ryanair close all its airport check-in desks and have passengers check-in online instead. Other cost saving methods not yet implemented include charging customers for using toilets on airplanes. These cost cutting ideas are not very popular among consumers and it means that Ryanair needs to improve its already tarnished brand image in the future which it had attained through negative press reporting and misleading advertisements .

The current strategy at Ryanair is expected to work so well that despite the recession Ryanair’s CEO has underlined the firm’s commitment to expansion. The firm is expected to grow at 20 percent a year because of a 180 aircraft’s on order from Boeing. These expansion plans for the future will require the company to increase its landing slots at airports and recruit more employees. Currently Ryanair has limited access to landing slots in major airports and the secondary airports are long distances away from city centers which could make it less attractive in the future. However, a remarkable cut in flights by other European airline carriers due to recession is creating enormous opportunities for Ryanair, as many major airports compete to reduce charges in order to attract Ryanair’s growth. Availability of skilled personnel shouldn’t be a problem for Ryanair due to recent high unemployment levels. However, Ryanair needs to improve its current low level of empathy for employees if it is to retain them in the future.

Even though Ryanair’s cost leadership strategy is robust and it looks set to serve them well in the future, there are some key areas within the business that can be improved on to enhance the firm’s profitability and brand image.

Ryanair has always been criticized for many aspects of its poor customer relations. According to The Economist, Ryanair’s “cavalier treatment of passengers” had given Ryanair “a deserved reputation for nastiness” and that the airline “has become a byword for appalling customer service … and jeering rudeness towards anyone or anything that gets in its way”. If Ryanair is to maintain its large customer base, it needs to ensure that it acknowledges its customers’ concerns and maintains a service focused attitude at all costs. Ryanair needs to invest in servicing customers better by providing a non-premium contact number, improving its non user friendly website, and simplifying the terms and conditions of the flight service. Ryanair should also create a frequent flyer program to establish a fixed customer base and encourage customer loyalty.

Ryanair is notorious for its high staff turnover which negatively affects its reputation as an employer. Over utilization of employees, poor remuneration package , and minimal training are a few other critical items to be considered by Ryanair if it is to retain employees in the future. Ryanair needs to understand that although it is currently possible to replace outgoing employees, but with time Ryanair’s overall image will be tarnished. Resultantly, attracting new employees could become impossible and this will hinder their expansion plans. Ryanair should incorporate a flexible benefits package solely designed to improve employee morale such as flexible working hours and extra holidays. To improve its image amongst employees, training at all employee levels must include exposure to similar techniques and methods that help promote the development of a uniform company identity.

Following huge success in Europe, Ryanair should consider introducing low cost transatlantic flights to support its expansion plans and attain a larger customer base. With a high demand for certain routes like London-New York and room for negotiation in airplane prices and airport slots mainly due to the current financial climate, it is an ideal time to further reap the rewards of the cost leadership strategy that has served Ryanair so well over the years.

Ryanair’s model looks set to survive the current industrial downturn through its lower costs and substantial cash balances. No airline is better placed in Europe than Ryanair to trade through this downturn. It will therefore continue to grow, by lowering fares, taking market share from competitors, and expanding in markets where competitors either withdraw capacity or go bust. By taking the recommended improvements into consideration, it looks like Ryanair’s cost leadership strategy seems ideal for the future.

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Ryanair Marketing Strategy 2024: A Case Study

Ryanair, a leading low-cost airline in Europe, has captured the market with its strategic marketing initiatives. With over 610 destinations and a growing fleet, Ryanair aims to expand its reach and solidify its position as a budget airline. This case study will dive into Ryanair’s marketing strategy, exploring key components such as brand positioning, customer segmentation, and digital marketing campaigns.

Ryanair understands the importance of targeting price-sensitive customers, which has been the cornerstone of its success. By offering affordable flights, the airline caters to a wide range of travelers, including students, budget travelers, business travelers, and cost-conscious individuals. Ryanair’s low-cost flight offerings allow customers to reach their desired destinations without breaking the bank. This targeted approach has enabled Ryanair to carve out a niche in the highly competitive airline industry.

One of the key factors in Ryanair’s marketing strategy is the effective utilization of digital platforms. The brand’s digital marketing campaigns extend its reach and engage with customers on various platforms, including Twitter and YouTube. By leveraging these channels, Ryanair can interact with its audience, share travel content, and provide important updates and offers. This digital presence allows the airline to connect with its customers on a deeper level, fostering brand loyalty and enhancing the overall customer experience.

Ryanair’s success on social media platforms such as TikTok and Instagram showcases the brand’s ability to adapt its content strategy to different audiences. On TikTok, Ryanair has captivated viewers with engaging, humoristic, and captioned videos under ten seconds in length. The airline’s TikTok account boasts a large fan base and an incredible view rate, contributing to its popularity. By embracing authenticity, creativity, and a humanized approach in content creation, Ryanair has effectively increased brand awareness and engagement levels.

Key Takeaways:

• Ryanair targets price-sensitive customers with its low-cost flight offerings.
• Demographic segmentation plays a crucial role in Ryanair’s marketing strategy, with the airline targeting students, budget travelers, business travelers, and cost-conscious individuals.
• Ryanair’s digital marketing strategy incorporates various platforms, including Twitter and YouTube, for customer engagement.
• The brand’s success on TikTok and Instagram highlights the importance of using video content to engage with audiences in a creative way.
• Emphasizing authenticity and creativity, Ryanair’s TikTok strategy sets it apart in the industry and contributes to its brand image and reputation.

About Ryanair

Ryanair is an Irish low-cost airline that was founded in 1985. It has become one of the top low-cost carriers in Europe, offering affordable flights to a wide range of destinations. Ryanair’s success as a budget airline has helped build its brand reputation as an affordable choice for travelers.

Ryanair’s commitment to providing affordable flights has made it a popular choice for travelers seeking budget-friendly options. With its extensive network of destinations and cost-effective operations, Ryanair has gained a reputation for its low-cost airfare. The airline’s focus on providing affordable flights without compromising on safety or service quality has solidified its position as a leading player in the low-cost airline industry.

In addition to its commitment to affordability, Ryanair also emphasizes punctuality and efficient operations. The airline prides itself on quick turnarounds and minimizing delays, ensuring that passengers reach their destinations on time. This focus on punctuality has contributed to the airline’s reputation for reliability and customer satisfaction.

Ryanair’s brand reputation extends beyond its affordable flights and operational efficiency. The airline has also gained recognition for its engaging and humorous marketing campaigns, particularly on social media platforms. By leveraging humor and wit, Ryanair has successfully connected with its target audience and created a loyal customer base.

Social Media Presence

• Instagram: 1.3 million followers
• Facebook: 5.1 million followers
• YouTube: 108K subscribers
• Twitter: 808.3K followers
• LinkedIn: 683K followers
• TikTok: 2.1 million followers

Ryanair maintains a highly engaging online presence across various social media platforms. With a large following on Instagram, Facebook, Twitter, LinkedIn, and TikTok, the airline leverages these platforms to connect with its audience and share diverse content formats. From user-generated content to engaging memes and regular fare and service updates, Ryanair’s social media channels offer a unique and entertaining experience for its followers.

The airline’s Twitter account stands out for its humorous and witty responses, which not only diffuse potentially negative situations but also generate positive buzz around the brand. By incorporating humor into its customer service responses and marketing campaigns, Ryanair has managed to create a loyal customer base and differentiate itself from competitors.

Ryanair’s strong brand reputation, affordable flight options, and engaging marketing approach have contributed to its success in the low-cost airline industry. The combination of competitive pricing, reliable operations, and a humorous brand personality has made Ryanair a trusted choice for budget-conscious travelers.

Marketing Mix of Ryanair

Ryanair, a leading low-cost airline in Europe, utilizes a well-designed marketing mix to effectively reach its target audience and maintain its position as a budget-friendly airline. The marketing mix comprises four key components: price, product, place, and promotion strategies.

Price Strategy: Ryanair’s price strategy revolves around offering low-cost flights to attract price-sensitive customers. The airline implements dynamic pricing and price discrimination, selling approximately 70% of its seats at the two lowest fares. This strategy allows Ryanair to maximize seat occupancy and cater to a wide range of customers.

Product Strategy: Ryanair focuses on maximizing the capacity of its fleet, which consists of 250 new Boeing 737-800 aircraft, with orders for 64 more. By operating a large fleet, Ryanair ensures a wide range of destinations and frequent flight options for its passengers. The airline also provides additional services, such as food and drink purchases onboard, to enhance the overall travel experience.

Place Strategy: Ryanair predominantly sells its tickets online through its user-friendly website and mobile app. This direct distribution channel saves the airline 15% on agency fees and allows customers to easily access reservations, contributing to a seamless booking process.

Promotion Strategy: Ryanair’s promotion strategy focuses on highlighting its brand values of affordability, simplicity, and customer care. The airline adopts an in-house advertising approach to minimize advertising spend. Ryanair also utilizes controversy as a promotional tool, generating buzz and attracting attention. Additionally, the airline collaborates with tourism boards to promote travel to specific destinations, leveraging partnerships to expand its reach.

By effectively implementing its marketing mix strategies, Ryanair has positioned itself as a renowned low-cost airline, capturing a significant market share and continuously attracting price-conscious travelers.

Competitor Analysis of Ryanair

Ryanair, as the first and largest budget airline in Europe, faces competition from other low-cost airlines in the industry. EasyJet, BMIbaby, Fly Be, and Aer Lingus Group are among Ryanair’s main competitors. These airlines also emphasize low-cost tickets as a way to attract budget-conscious travelers.

Among the competitors, EasyJet is a direct rival to Ryanair, offering similar affordable flights and targeting the same market segment . Lufthansa, on the other hand, competes with Ryanair primarily in brand positioning. While Lufthansa focuses on comfort and luxury, Ryanair differentiates itself by targeting price-sensitive customers and offering the lowest prices in the market.

By positioning itself as the top choice for budget travelers in Europe, Ryanair has successfully established its brand as a reliable and affordable airline option. The airline’s emphasis on cost leadership and differentiation aligns with Porter’s Generic Competitive Strategies, allowing Ryanair to maintain its competitive advantage in the low-cost airline market.

Target Audience Analysis of Ryanair

Ryanair, as a leading low-cost airline, has a well-defined target audience consisting of price-sensitive customers who are predominantly young and budget travelers. The airline’s marketing strategy focuses on understanding and catering to the needs and preferences of this specific group of travelers.

To effectively reach and engage with their target audience, Ryanair creates advertisements that resonate with young travelers and budget-conscious individuals. These ads highlight the affordability and cost savings associated with flying Ryanair, appealing to those who are looking for cheap flights and want to save on travel expenses.

In addition to targeted advertisements, Ryanair personalizes its offers based on customer preferences and past bookings. By tailoring their offerings to individual travelers, Ryanair enhances the customer experience and builds a loyal customer base among price-sensitive customers.

Social Media Engagement

Ryanair recognizes the importance of social media in reaching its target audience. With over 1.5 million followers on Twitter, the airline leverages its social media presence to engage with customers uniquely.

Ryanair’s Twitter account is known for its humorous responses to customer inquiries, generating positive buzz around the brand. The airline’s customer service team uses humor and wit to not only diffuse negative situations but also generate positive reactions. This approach not only sets Ryanair apart from its competitors but also creates a distinctive brand personality that resonates with the target audience.

Ryanair’s Twitter account often utilizes pop culture references and current events to create timely and relatable content. This helps the airline stay relevant and connect with the young travelers and budget-conscious individuals they target.

Overall, Ryanair’s marketing strategy effectively captures the attention and loyalty of its target audience by prioritizing affordability, personalization, and engagement through social media channels.

The Need for Speed

In the highly competitive airline industry, speed and agility are essential for success. Ryanair, the largest airline in Europe, understands this better than anyone. With a fleet of 250 new Boeing 737-800 aircraft and firm orders for 64 more, Ryanair operates over 1,100 low fare routes across Europe, connecting 157 destinations in 26 countries.

Ryanair’s commitment to speed can be seen in every aspect of its operations. The airline focuses on quick flight turnarounds, ensuring minimal time on the ground and maximizing efficiency. This allows Ryanair to offer more flights and capitalize on market demand .

But it’s not just about fast turnarounds. Ryanair’s agility shines in its marketing strategies as well. The company has embraced digital marketing, leveraging social media channels like Facebook, Instagram, and TikTok to connect with its audience and enhance brand awareness. With the guidance of Michael Corcoran, Head of Social & Creative Content, Ryanair’s social media presence exhibits a humorous and intentional tone, appealing to a wide audience. The airline’s social media strategy blends elements of disruption, self-deprecation, irreverence, and playfulness, keeping up with current trends and audience preferences.

This ability to adapt is key to Ryanair’s competitive advantage in the industry. The airline recognizes the importance of staying ahead of market changes and responding swiftly to new opportunities. By embracing a customer-centric approach and cost-effective operations, Ryanair has successfully positioned itself as a low-cost, no-frills carrier without compromising on quality.

A significant part of Ryanair’s success lies in its ability to generate ancillary revenue. Deals with Hertz car rental and hotels contribute to the company’s profits, offsetting the low fares offered to passengers. Additionally, Ryanair’s online booking system saves them 15% on agency fees, further increasing their profit margins.

With over 73.5 million passengers expected to fly with Ryanair in the current fiscal year, it’s clear that the need for speed and agility has paid off. The airline’s emphasis on quick turnarounds, agile marketing, and adaptability allows it to navigate a rapidly changing market landscape and maintain its position as Europe’s leading airline.

Digital Marketing Presence of Ryanair

Ryanair, known for its innovative marketing strategies, effectively utilizes digital marketing to enhance its brand presence and connect with customers. The airline leverages various platforms and techniques to engage with its target audience and create a strong online presence.

Website: User-Friendly Experience

Ryanair’s website is a key component of its digital marketing strategy. It provides customers with a user-friendly experience for planning and booking flights. With a streamlined interface, customers can easily navigate the website, search for flights, and make reservations. The website also offers additional services and features that enhance the overall customer experience.

YouTube: Engaging Travel Content

On YouTube, Ryanair shares engaging travel content to connect with viewers and showcase the unique experiences it offers. The channel’s 108K subscribers enjoy a variety of videos, including travel guides, destination highlights, and behind-the-scenes footage. By leveraging YouTube’s visual storytelling capabilities, Ryanair establishes a closer connection with its audience and inspires them to explore new destinations.

Twitter: Customer Engagement and Flight Updates

Ryanair utilizes Twitter as a platform for customer engagement and sharing important flight information. With 808.3K followers, the airline actively responds to customer inquiries, providing timely support and assistance. Additionally, Ryanair uses Twitter to provide real-time updates on flight schedules, delays, and other relevant information, keeping its customers well-informed and connected.

Potential Expansion: Facebook and Instagram

While Ryanair has already established a strong digital presence, it could further expand its reach by utilizing Facebook and Instagram for unique marketing campaigns. With millions of followers across different platforms, Ryanair can leverage these social media networks to engage with a wider audience and showcase its brand in new and creative ways. By incorporating visually appealing content and interactive features, Ryanair has the opportunity to enhance its digital marketing strategy and capture the attention of even more potential customers.

With its comprehensive digital marketing presence, Ryanair effectively engages with its audience and ensures its brand remains top-of-mind. By combining user-friendly websites, engaging YouTube content, active customer engagement on Twitter, and the potential expansion to Facebook and Instagram, Ryanair continues to drive customer engagement and strengthen its online presence.

SWOT Analysis of Ryanair

Ryanair, one of Europe’s leading low-cost airlines, can be analyzed using a SWOT analysis to identify its strengths, weaknesses, opportunities, and threats. This analysis provides valuable insights into Ryanair’s current position and potential areas for improvement.

• Ryanair is known for its low-cost flight offerings, attracting price-sensitive customers and experiencing high demand.
• The airline operates over 1,800 daily flights across 40+ countries, demonstrating its extensive reach and network.
• Ryanair consistently achieves high load factors, indicating efficient operations in filling available seats.
• Ancillary services such as baggage fees, seat selection, priority boarding, and in-flight sales contribute significantly to Ryanair’s revenue.
• The company boasts a substantial competitive advantage with over 65% more routes than its nearest competitor, holding the top position globally in terms of the number of routes.
• Ryanair’s focus on cost reduction has positioned it as a cost leader in the industry, facilitating competitive pricing and financial success.
• Potential service quality issues and disputes with regulatory organizations are weaknesses that Ryanair needs to address to improve customer satisfaction and public image.
• The low-cost airline market in Europe is highly competitive, with rivals such as EasyJet, Wizz Air, and Vueling vying for market share, posing a challenge for Ryanair.
• Labor relations have resulted in disputes and strikes, impacting Ryanair’s operations and potentially damaging its reputation.
• Despite strong financial performance, Ryanair faces vulnerability to external factors such as economic downturns and fluctuating fuel prices, which can impact its profitability.

Opportunities

• Ryanair has opportunities to expand its routes and operations to new destinations, tapping into new markets and reaching a wider customer base.
• Leveraging digital marketing strategies can further enhance Ryanair’s brand visibility, customer engagement, and revenue generation.
• Government support through initiatives like the COVID Corporate Financing Facility presents opportunities for Ryanair to navigate challenging times in the aviation industry.
• In the wake of the COVID-19 pandemic, Ryanair has the opportunity to adapt its operations and customer offerings to cater to evolving travel trends and preferences.
• The ongoing threat of COVID-19 restrictions, uncertainties related to vaccine access, and the increased popularity of video conferencing may impact the recovery of the aviation industry and pose challenges for Ryanair’s operations and customer trust in travel.
• Intense competition from other airlines, economic recessions, and changing fuel prices are external factors that pose threats to Ryanair’s market share and profitability.
• Internal challenges such as labor disputes and service quality issues can further jeopardize Ryanair’s reputation and competitiveness.

By analyzing Ryanair’s strengths, weaknesses, opportunities, and threats, the airline can strategically capitalize on its strengths, minimize weaknesses, seize opportunities, and mitigate threats. This analysis serves as a valuable guide for Ryanair’s decision-making processes, enabling the company to maintain a competitive edge in the low-cost airline industry.

Market Segmentation by Ryanair

Ryanair, as a leading low-cost airline, utilizes market segmentation to effectively target different customer segments. By tailoring its services to meet the specific needs and preferences of various traveler groups, Ryanair maximizes its appeal and captures a wide range of customers.

One of the key customer segments that Ryanair targets is student travelers. With their often limited budgets, students are cost-conscious travelers who appreciate the affordability that Ryanair offers. The airline understands that students value low fares and are willing to forgo certain frills for the sake of saving money.

Another important segment for Ryanair is budget travelers. These travelers prioritize finding the most affordable flights and are not overly concerned about luxury or comfort. Ryanair’s low-cost fares and no-frills aviation concept cater to the needs of these budget-conscious individuals, making it an attractive choice for their travel needs.

In addition to student travelers and budget travelers, Ryanair also focuses on targeting business travelers. These travelers are often cost-conscious and seek economical options for their frequent trips. Ryanair’s low fares and consistent service offerings make it a viable choice for business travelers who prioritize cost-efficiency.

Lastly, Ryanair appeals to a broader segment of cost-conscious travelers. These are individuals who prioritize saving money and finding the best value for their travel experiences. By positioning itself as a low-cost carrier and consistently offering affordable fares, Ryanair captures the attention of this segment, attracting travelers who prioritize cost savings.

By effectively segmenting its target market and tailoring its services to meet the specific needs and preferences of each segment, Ryanair remains a top choice for student travelers, budget travelers, business travelers, and cost-conscious travelers. The airline’s market segmentation strategy allows it to tap into a diverse customer base and maximize its market reach.

Reputation Management Importance

Reputation management is crucial in today’s digital era for businesses of all sizes. A positive business reputation not only builds trust and credibility but also fosters customer loyalty. It plays a significant role in influencing decision-making by customers, employees, investors, and the general public. Therefore, building and maintaining a positive reputation is vital for sustainable growth and long-term success.

Business reputation goes beyond mere public perception. It encompasses the collective trust, respect, and goodwill that a company has developed over time. It reflects how customers perceive a business, its products or services, and its values.

For companies like Ryanair, which operate in competitive industries like aviation, reputation management is even more critical. In a highly dynamic and interconnected market, maintaining a positive reputation helps Ryanair stand out among its competitors, attract new customers, and retain existing ones.

A strong business reputation instills confidence in customers, assuring them of the reliability, quality, and credibility of Ryanair’s services. They are more likely to choose Ryanair over its competitors, knowing that their travel needs will be met efficiently and with the utmost professionalism.

Moreover, a positive reputation enhances customer loyalty and advocacy. Satisfied customers who trust Ryanair are more inclined to engage in repeat business, recommend the airline to their friends and family, and share positive experiences on social media and review platforms.

Reputation management is not just about maintaining a positive image; it also involves proactively addressing any negative feedback or issues that may arise. By promptly responding to customer concerns and resolving problems, Ryanair can demonstrate its commitment to customer satisfaction and earn their trust and loyalty.

Additionally, a positive reputation has a profound impact on the perception of Ryanair’s brand in the eyes of potential investors, partners, and employees. A company with a strong reputation is more likely to attract capital investment, form strategic partnerships, and recruit top talent, all of which contribute to its overall success and growth.

Therefore, to thrive in today’s competitive business landscape, Ryanair must prioritize reputation management as an integral part of its overall marketing and business strategy. By investing in building and maintaining a positive reputation, the airline can foster trust, credibility, and customer loyalty, positioning itself as a leader in the aviation industry.

Importance of Monitoring Business Reputation

In today’s digital era, monitoring a business’s reputation is crucial for maintaining its success and standing in the market. Public opinion holds significant power and can make or break a company’s reputation. A good reputation is essential for building trust, attracting customers, boosting investor confidence, and ensuring overall business success.

By monitoring a company’s reputation, businesses gain early detection of potential issues that may arise. This early detection allows for proactive response and timely resolution of problems before they escalate. It also enables businesses to gain valuable customer insight and understand their preferences, opinions, and concerns.

Through reputation monitoring, companies can track trends and stay ahead of the competition. By analyzing sentiment analysis and other metrics provided by tools like Brand24, businesses can pinpoint the sources of both positive and negative feedback, enabling them to address issues promptly and prevent reputational risks.

Analytics tools, such as anomaly detection and emotion analysis, help businesses identify potential issues and improve based on customer insights. Monitoring emojis used in mentions can provide further insights into the emotional response towards a company.

Take Ryanair, for example, a leading budget airline in Europe. With over 1.5 million followers on Twitter, Ryanair utilizes its social media presence to engage with customers uniquely. The airline’s humorous responses and incorporation of wit and humor in customer service not only diffuses potentially negative situations but also generates positive reactions around the brand. By incorporating humor into their marketing campaigns, Ryanair differentiates itself from competitors and creates a distinctive brand personality that resonates with the target audience.

By monitoring their reputation and engaging with customers effectively, Ryanair showcases the importance of proactively managing their reputation. This approach has contributed to their success as a budget airline and highlights the increasing popularity of humor as a marketing strategy.

In conclusion, monitoring a company’s reputation allows for early issue detection, customer insight, proactive response, trend tracking, and effective reputation management. It is a vital aspect of maintaining a positive brand image and staying competitive in today’s digital landscape.

Ryanair’s marketing strategy as a low-cost carrier and its strong brand positioning have contributed to its success in the airline industry. By employing tactics such as price discrimination, customer segmentation, dynamic pricing, and digital marketing campaigns, Ryanair optimizes the customer experience. The airline primarily targets price-sensitive customers, including young individuals and students, in its advertising campaigns.

Reputation management is also a key aspect of Ryanair’s strategy, as it plays a vital role in attracting and retaining a loyal customer base. By continuously improving its marketing approach and effectively managing its reputation, Ryanair remains a leader in the low-cost airline market.

With over 610 destinations in Europe and plans to expand rapidly by 2024, Ryanair aims to further strengthen its position as a dominant player. By leveraging opportunities in new routes and digital marketing, Ryanair can continue to serve a broad customer base that includes students, budget travelers, business travelers, and cost-conscious individuals. With its focus on exceptional value and customer service, Ryanair’s well-established brand and commitment to innovation ensure its continued growth and success.

What is Ryanair’s marketing strategy?

How does ryanair differentiate itself from its competitors, who is ryanair’s target audience, how does ryanair leverage digital marketing, what is a swot analysis of ryanair, how does ryanair segment its customers, why is reputation management important for businesses, what is the importance of monitoring business reputation, related posts:.

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Nina Sheridan is a seasoned author at Latterly.org, a blog renowned for its insightful exploration of the increasingly interconnected worlds of business, technology, and lifestyle. With a keen eye for the dynamic interplay between these sectors, Nina brings a wealth of knowledge and experience to her writing. Her expertise lies in dissecting complex topics and presenting them in an accessible, engaging manner that resonates with a diverse audience.

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Increasing Profitability: Strategic Management at Ryanair Case Study

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Executive Summary

Managing strategic change, how ryanair used strategic approach in managing human resource, strategy on cost, british airways compete with ryanair, works cited.

Ryanair gives us a good overview of strategic management practices that improve the status of an organization and makes a company get more profits. From the statistics of Ryanair collected over time, one is able to see the competitive moves and business approaches that the management has taken.

These systematic steps have led the company to success (Barrett 90). It took the company a lot of time to start growing. It accrued loses within the first five years after its establishment in 1985 amounting to IRE£20m. On changing the management team the company rose to the top of Europe’s airlines in the early 90’s.

O’Higgins (2007) says that in 1997, Ryanair first sold its shares through the Dublin Stock exchange and afterwards with NASDAQ in the year 2002 (O’Higgins 687). It not only rose in Europe but also by the year 2006, it was leading the world’s airlines as the most profitable company.

In the same year, Ryanair announced its profit to be £329m for the first half of the fiscal year 2007. Its profits rose by 1% to 26% in that half year (O’Higgins 687).

This essay focuses on some aspects of strategic management that the leadership of Ryanair used to come to the top in terms of profitability. These are: managing strategic change, strategic management on human resource and cost.

Michael O’Leary has done a lot to propel Ryanair to the top in terms of profitability. This is because of how he has been strategic in his leadership, since he took over this role in this company (Barrett 90). After his promotion to be the chief executive of Ryanair, he had a very clear vision; to model the Ireland’s Ryanair after the novel Southwest Airline Business Model.

He had the objective of making it to come to the top rank among all Europeans Airlines in terms of profitability. O’Leary did not take a very long time before he steered the short haul airline to the top. From the early 2000, the airline has topped not only in Europe but also globally.

“Ryanair took delivery of the largest number of new aircraft in 2009, with 54 B737-800 deliveries – or an average of 4.5 per month” (“Ryanair tops 2009 aircraft deliveries” par 1). This report shows exactly how O’Leary’s is effective and how the company is doing.

In this discussion we focus on four aspects of strategic management; managing strategic change, strategic approach on managing human resource, strategy on cost, and finally, an over view of how Ryanair compares with British Airways. These four aspects fall under the whole domain of strategic management.

The company focuses on the scope and the direction in which it will carryout its activities over a long period of time. This enables the organization to make use of the changes in the environment, principally viewing them as opportunities.

The organization or the company configures its potentials and resources to achieve this goal (Hitt, Duane and Hoskisson 3). Studying the above-mentioned four concepts will validate the fact that Ryanair has benefited from the initiative its management took in those areas of strategic management.

Change is usually a challenge. It comes because of many factors. Managers should always be on the lookout because the change may bring a negative growth to the company if not well managed (Grugulis and Adrian 33). Both positive and negative changes may cause a negative growth if they are not monitored.

The first approach that the company used to manage change was by planning. Planned or regulatory ways looks at organizational change as a procedure that progress from a certain “type of state” to another by a sequence of carefully planed stages (Hill, and Gareth 53).

This is when, amongst all other things, when Michael O’Leary the Chief Executive Officer was went to America to gain knowledge of the business model of the then best performing Airline Company, Southwest Airlines. It was the most profitable airline company in the USA.

This led to the Ryanair’s model that is still fuctional to date. This was a clear application of planned changes. This was at the initial transformation of the company.

The former traditional model had made the company incur loses very fast. Eventually the low-cost airline model has elevated the company to the top, amongst all the airline companies in the world (Barrett 97).

Ryanair’s management also mixed their style of managing strategic change with the emergent approaches. This approach does not depend on exact plans put down. It studies the upcoming issues and devices means to manage such changes (Hill, and Gareth 120).

Some of the issues that arose and the company showed a good manner of managing change were the rising cost of fuel, managing the increasing number of passengers, using ancillary resource, and maintaining fleet commonality (O’Higgins 687).

As other companies surcharge their customers because of the rising prices of fuel, Ryanair maintained their prices low. Contrary to many companies that had increased their prices because of the rising fuel cost in the year 2005, and even higher in the year 2006, Michael O’Leary declared that they would not levy their customers more at any time, not even in the far future.

Customers welcomed this assurance. This is because the statistics show that the company further increased its revenue during this period. Many of the companies of the long – haul routes surcharged their customers (O’Higgins 688).

In addition to that, these levies were not proportional to the overall fare. Ryanair in this case handled this change with care making sure that it would not lose its customers.

Due to its low travel cost, Ryanair had an increase of its customers. To cope with this growth change, the company bought new aircrafts (Barrett 92).

This was between September 2006 and April 20007 when they acquired 30 aircrafts. This also ensured that the increasing customer would not come, miss the service, and later tarnish the reputation of the company.

However, the company needed to compensate the rising fuel cost in order to increase its profit margin. Ryanair therefore focused on ancillary revenue. This revenue rose by 36% in 2006, far much more than the passenger revenue (O’Higgins 692).

The company calculated it to be at £7.70 per person (O’Higgins 692). The ancillary revenue comes from the schedules that do not involve flight. These are rail and bus ground services, hotels, charges on excess baggage, car rental services, and flight charge fees, in flight sales, personal loans and commission from Ryanair credit card.

This initiative also started the in-flight mobile phone service and online gambling. This did not receive a positive reaction from a majority of the customers. Michael O’Leary kept the company’s stand on the fact that they would not stop doing the business.

The kind of the business had made some passengers uncomfortable because of the perceived noisy environment (O’Higgins 691). The management refused to adhere to the customer’s complaint because of the relatively low prices. This was an act of balance.

It had to be there in order to maintain the company’s profits as well as provide affordable service to the same customers. They did this to respond to the rising costs of fuel (Warren 146). The company therefore gained much more than many companies.

Ryanair maintained the fleet commonality by using Boeing 737 planes. The company has replaced the old aircrafts with new efficient and environmental friendly planes. The policy is in place to keep the employee training and the maintenance of aircraft very low. This and the above-discussed points have shown how Ryanair has managed change strategically.

Another evident aspect in this company in managing strategic change is the use of learning organizations (Sange, 270). They understand that by continuously learning and seeking knowledge, they will be able to deal with most of the emerging issues. In this Ryanair has a consistent program for training and retaining its workers (O’Higgins 699).

Managing resources strategically in general entail studying the resources that are at the company’s or the organization’s disposal. This is with the aim of exploring their role and their contribution in order to comprehend how they can yield high profits (Barrett 87).

In Ryanair’s analysis, they found out that in order to increase the productivity of the human resource, they would increase their number in order to reduce the workload of the then present workers. This would highly increase their profitability. In the year 2006 the company’s employee count increased by 700.

The number rose to 3500 (O’Higgins 689). This gave the workers who have been there relieve. It improved their working conditions. This is majorly by reducing their working hours. This eventually increased their efficiency and so maximizing their profitability.

The management of Ryanair must have performed a resource audit before arriving at the decision of training and retraining their workers. Such an audit aims at assessing the amount of the resources existing, the quality of such resources and the uniqueness as compared to what other organizations would have (Grugulis and Adrian 125).

On this fact, the company focused on the quality of service their workers offered. It is at this point that they decided to establish a culture of training and retraining them. In that view, they embraced the value of learning organizations.

Learning organizations give people educational opportunities while on job (Sange 270). This will always be a fulfillment to the employee because it is a direct form of developing his or her career further.

The educational opportunities will profit the company directly too. This is because the skill gained by the staff or the employee will improve the productivity of the company.

In view of resource base view (RBV), a certain resource should pass five market tests so that the company would embrace it. In their appraisal, Ryanair made sure that its Human Resource meets these standards (Warren 148). In order to pose competitive advantage to their rivals they decided to pay their workers higher than the other airline companies did.

From the claim that they had an average pay of £49, 692 in 2006, insinuates that they are paying higher than any European airline (O’Higgins 690). This still implies that that Ryanair pays its employees well. This is another fact that improves on the working conditions of the staff. Motivation is the principle issue in this.

This strategy had the quality of inimitability within it. High pay is usually one the hardest things companies get involved in when they are remunerating their workers. Their initiative to maintain this proved that it was a durable value on this resource.

On the aspect of quality, Ryanair still went a step ahead to improve the working conditions of workers; the company complied with the regulation, which enforces a ceiling on pilot flying hours to an average of 18 hours per week. This will help the workers to work with renewed strength making them to be more efficient (Warren 194).

This is because of reduced fatigue. At times, it goes to dangerous levels. Keeping the health of workers in an organization is sustaining its productivity.

In focusing on competence, the ability of an organization to perform in certain areas of business, Ryanair also implemented the above strategy in order to improve the knowledge, attitude and potentials of the workers. The aim was to achieve the general competence of the firm.

The company has however been criticized for mishandling workers at some point. The focus has been more on the pilots. The company has not allowed them to join unions in order to express themselves freely (O’Higgins 715).

The company allegedly subjects its workers to stringent working conditions. An example of such an allegation is that the workers are not allowed to charge their mobile phones in the company premises to save on power cost.

The Ryanair had an appeal to the Supreme Irish court over a ruling that its pilots should collectively bargain through Irish Airline Pilot Association. The court ruling was in the favor of Ryanair. The company thereafter launched a claim for it s legal expenses.

Furthermore, in 2006 the Irish High Court found the company to have bullied pilots to accept a harassing contract. The contract was that they should pay £15 000 for retraining. This is on new aircraft if the pilot had left the airline.

The same would also apply if the very situation forced the company to negotiate with unions in the next five years. Some senior officials of the company were judged in court to have given false evidence (O’Higgins 702). This was as concerns the above-mentioned case. The company has had this wrong side while handling its human resource.

From the previous statistics about the remuneration, Ryanair is said to be the one paying higher than all other companies. It means that they pay their workers highly.

The company declared that their pilots are the best paid among all the short-haul pilots in Europe. They should therefore balance these with a more human relationship with its workers. This would cure their image and further sell their brand name.

The Ryanair Company also analyzed the way they would maintain their prices. In this, they looked at the value of ancillary revenue sources. This answered the question about value. It is the first question managers should be asking themselves when they want to capitalize on a certain resource (Grugulis and Adrian 225).

In the list of the four questions VRIO framework, the company found that the ancillary revenue would be very handy in substituting on imposing an extra levy on the customers. This was a unique way of balancing costs to bring them down to increase the profit margin. Some of the recurrent costs are not always predictable (Warren 255).

The main one that has it prices badly fluctuating is fuel. The company decided that the challenge will not cause them to increase charges on travel costs. To manage this, the company has refocused its energy on the value of ancillary revenue sources as earlier seen.

The second aspect of VRIO, which is the resource rareness, is evident (Hill and Gareth 402). Focus on ancillary revenue is a common thing in most airline companies. It is usually there but it is not the major focus. Focusing on it made Ryanair to look for more aggressive means of capitalizing on this resource (Warren 105).

To some point, some customers said that it caused discomfort on plane. The reason was that the place becomes very noisy. They forgot one thing, that they are paying low fares for their flight.

This is the reason, Michael, the CEO, stuck to the fact that this will go on (O’Higgins 679). Other high fare airlines do not have such aggressive types of ancillary strategy.

On the point of value, they also cited value in flight commonality. This company has dwelled on this policy. This policy adds value to the company by reducing the cost of having diverse types of flights. By using the Boeing 737, the company is able to save on the cost of training staff and the cost of aircraft maintenance.

This was by doing away with the small and less environment friendly planes. These aircrafts were also older which meant a higher maintenance cost than new ones. The cost would reduce by a big margin because the fuel consumption alone would reduce by about 47%.

“Then newer aircraft produced 50 per cent less emissions and 45 per cent less fuel burn… Also, a winglet modification program on the fleet was providing better aircraft performance and a 2 per cent reduction in fleet fuel consumption, a saving which the company believe could be improved over the next year” (O’Higgins 699).

This has benefited the company by efficiently saving on cost, therefore increasing the profitability margin. All focus is still on value.

Employing more workers also improved on the efficiency of the current workers. Increasing their number seems to be increasing on the cost of wedges, but the firm had seen it right that more work would be finished and the result will be more profits.

On this O’Higgins (2007) says, “Also, by tailoring rosters, the carrier maximized productivity and time off for crew members, complying with the EU regulations which impose a ceiling on pilot flying hours to prevent dangerous fatigue.

The airline adhered to the general rule of a maximum of 900 flying time per year, averaging 18 hours per week (O’Higgins 699). This positive aspect increases the value of workers, consequently improving on the quality of the work they offer to the company.

The last aspect (VRIO) comes out clearly on the point they introduced more measures to manage cost. This how an organization takes advantage on the potential of certain resources to increase profitability (Warren, 89).

The measures were luggage handling and passenger check-in techniques that were designed to reduce the cost and enhance productivity. The first was to introduce a web-based passenger check-in that saves time. The company was able to take advantage of these funds generating resource to gain competitive advantage over other companies (Hitt, Ireland and Hoskisson 154).

This also saved the cost on using airport facility for check-in services. The other cost minimized was of the check-in staff. The second was luggage handling (O’Higgins 688). They introduced charges on the check-in bags.

This encouraged the customer to travel with few or at some cases without the check – in bags. This saved on cost of handling the luggage and increased speed. This had an overall improvement on the efficiency of organizing the travels throughout.

They decided to focus on the airline budget model. They therefore maintained point-to-point routes only. “Ryanair reduced airport charges by avoiding congested main airports, choosing secondary and regional airport destinations, anxious to increase passenger throughput” (O’Higgins, pp 699).

This was in the time the handling and airport charges raised by 21per cent. This was slower relative to the growth of passengers giving a net reduction on costs from transactions at new bases and airports. This defied the increased costs at some bases like Stansted (O’Higgins 700).

Generally airport charges had increased in the year 2006 prompting the company to use alternative routes. Aircraft numbers increased in that year on the existing routes therefore congestion was evident.

Congestion would make the Ryanair waste time and so losing income at any particular time. That is why they decided to use alternative routes. This saved on the operational costs.

As all the fuel companies were devising ways to maintain or reduce cost during the fuel price rise, British Airways as well increased its fare charges. They did this to hit back on the strategy Ryanair had (O’Higgins 689).

Ryanair did not surcharge the customers for the same reason. Contrary to their thought that Ryanair would have its revenue reduced, it went up higher for the low prices attracted the customers.

British Airways had monopoly over some main airbases. From this, they collect much revenue. Increasing airport charges was a strategy to get off those companies that would not sustain the charges comfortably. Their alternative was to look for alternative routes.

Such routes that would not favor the passengers especially those are far away from the city center. That is why, “Ryan air continued to protest at charges and charges and conditions at some airports, especially the Stansted and Dublin, two of its main Hubs (O’Higgins, pp 699).

In addition, O’Higgins says, “It vehemently opposed the British Airport Authority (BAA) airport monopoly plans to build a £4bn gold plated Taj Mahal at Stansted, which we believe, could be built for £1bn” (O’Higgins, pp 699).

British Airways also has tried to reduce operational cost in several ways. It has withdrawn some refreshments formerly given to the customers. This has so far discouraged some customers showing that it is not that successful in using this measure.

In its struggle to increase, its revenue the firm is also introducing charges for travelers who would book seats beyond 24 hours before the travel dates (Smith, par 3). This will make the customers struggle for seats always as travel dates draw closer. This will also make the customers look for alternatives.

This is contrary to the Ryanair’s strategy of turning on ancillary revenue. The ancillary revenue does not hit on the customer directly. This is because some of the services give the customer the choice not to use or to use the service available. Customers then will continue to prefer such a company to the British Airways.

Ryanair’s strategic plans were very successful since Michael O’Leary took over in the early 1990’s. Though he has received sharp criticism from rivals, O’Leary has kept standing strong to keep implementing the ideas he had. That is why he steered the short-haul firm to great success in the last few years.

Ryanair has hitherto kept growing as Michael O’Leary leads it. “Never the less, Ryanair is growing at the expense of its competitors. The airline reported a 17% increase in passenger numbers for September 2009. The airline said it carried 6.12 million passengers in that month, up from 5.12 million the same time last year” (Smith, par 6).

Barrett, Sean D. International Journal of Transport Management 2.2 (2004): 89-98. Print.

Grugulis, Irena, and Adrian Wilkinson. “Managing Culture at British Airways: Hype, Hope and Reality.” Long Range Planning 35.2 (2002): 179-234. Print.

Hill, Charles, and Gareth Jones. Strategic Management Theory: An Integrated Approach . Cengage Learning, 2009. Print.

Hill, Charles W. L, and Gareth R. Jones. Strategic Management: An Integrated Approach . Cengage Learning, 2007. Print.

Hitt, A. Michael, Ireland R. Duane and Hoskisson, E. Robert. Strategic Management: Competitiveness and Globalization : Concepts & Cases . Cengage Learning, 2008. Print.

O’Higgins, Eleanor. Ryanair – Low-Fares Airline . University College Dublin, 2007. Print.

“ Ryanair Tops 2009 Aircraft Deliveries, with 54 New B737s, EasyJet Second, China Southern Third .” Centre for Asia Specific Aviation . 31 Dec. 2009. Web.

Senge, Peter M. The Fifth Discipline: the Art and Practice of the Learning Organization . Doubleday/Currency, 2006. Print.

Smith, Shaun. “Ryanair-a branded customer experience?” Weblog post. Smith+co Homepage. Shaunsmith+co Ltd, 28 Apr. 2009. Web.

Warren, Kim. Strategic Management Dynamics . John Wiley and Sons, 2008. Print.

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Ryanair Case Solution & Answer

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Ryanair Case Study Solution

Introduction

Ryanair is an Irish Airline found by Thomas Anthony in the year 1985. The organization operates more than 1600 flights per day and over 500,000 flights per year. From the years 2013-2018; the organization remained the  largest, cheapest and most profitable European airline. In the year 2018, the organization hired more than 9000 employees and carried one million passengers in the year 2017.

The business model for the organization includes:offeringlow cost to the passengerswhich helps the company to have a creating manufacturing process. In addition to this, the organization has applied the no-frill pricing strategy, aggressive and unique marketing methods, significant investment in innovation and technological infrastructure, which have enabled the company to be the first ever company to introduce e-commerce in Ireland.

Ireland has always beenthe major market for the company, as it has successfully achieved a market share of 48 percent in the year 2018 due to Irish market. The company then has proceeded to provide  traveling services in Poland, the United Kingdom, Spain, France, Portugal, Germany, Italy and Belgium. The major competitors of the organization include: Lufthansa, International Consolidated Airlines Group (IAG), Air France–KLM, EasyJet, Norwegian and Wizz Air.

Problem Statement

The organization is experiencinga massive growth for a long period of time, which the company has made possible by applying well designed, unique marketing methods and low-cost  business model. However, the model appears to be unsustainable as the company’s growth is restricted due to various growth hindering factorsexisting in the internal as well as external environment of the company. Therefore, in order to gain its competitive advantage, the companyhas revamped its business model by diverting its core focus towards customers satisfaction, due to which the employees have been faced with various workplace issues. These issues have emerged because the company has neglected the employees’ welfare by having a major emphasis towards its customers only, which has expectedly led to unfair work culture and employment policies beingimplemented. The factor that added much to the difficulties of the company is that after the implementation of such unsatisfying employment policies the company has been faced with a series of ultimate challenges, which includesdoubts over the sustainability of the new business model, business strategy and achievement of targets that have been set by the company in a desperate attempt to get its competitive advantage back and re-emerge asa leading player in the airline industry.

External Analysis

In order to recommend a profitable and sustainable business strategy to the company, the external environment of the organization is analyzed by using PESTLE framework and Porter Five Forces framework:

Political : The political environment of Europe is stable, however several terrorist attacks were witnessed in the region. Moreover, the growth of the organization ishindered, due to the decision of the United Kingdom’s separation from the European Union. The hinderance is caused because the European Union was serving as one of the most influencial factors contributing to an increase in the total revenues being eraned by the company.In addition to this, the change in the company’s rules and regulations as well as its policies, imposed by the Irish Aviation Authority made an obligation on the company to abide by the changed rules and regulations, due to which the copany has to have some changes in its annual leave period (off-period) for the employees, which has resulted in the dissatisfaction of the employees, affecting their performace which is directly related to the operational performance of the company.

Economic: The airline industry is vulnerable to the fluctuations in fuel prices,due to which an aggressive price competition is witnessed in the region. In addition to which, the economy of the country appears to be weak as a result of various austerity measures, weakening UK-Euro exchange rates post Brexit and terrorist attacks in the region………………………….

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Ryanair case study and strategic analysis

An analysis on the competitiveness and low-cost strategy of europe’s leading low-cost carrier ryanair.

Research Paper (undergraduate) , 2011 , 37 Pages , Grade: A

Autor:in: BA (Hons) Christoph Müller (Author)

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This report conducts a competitive analysis of Europe’s leading low-cost carrier Ryanair. For this purpose, various concepts and frameworks of the strategic paradigm are applied, such as Michael Porter’s Five Forces and Value Chain Analysis, SWOT or Resource-Based View. When it comes to Ryanair’s external environment the report provides extensive information on the external factors that are having a significant impact on Ryanair’s low-cost strategy and its economic viability. For example, it takes into account recent global incidents, such as the volcanic eruption in Island or the public turmoil in Libya. Furthermore, based on the competitive analysis recommendations are made on Ryanair’s future direction and as to how it can sustain and extend its strategic position. In particular, this part deals with strategic human resource management, corporate social responsibility, lean thinking and diversification. Due to the complexity of the aspects covered in this report and the need to clarify some of them more comprehensively, appendices are provided to promote understanding.

Table of Contents

1 Table of Figures

2 Table of Tables

3 Introduction

4 Ryanair Competitive Analysis 4.1 Competition 4.2 SWOT Analysis 4.3 Ryanair’s Strategic Capabilities 4.3.1 Physical Resources 4.3.2 Human Resources 4.3.3 Core Competences 4.4 How Ryanair adds value and differentiates itself from competitors 4.5 Industry Life Cycle / BCG Growth-Share Matrix

5 Conclusion

6 Recommendations on Ryanair’s future direction 6.1 Michael Porter’s Generic Strategies / Bowman’s Strategic Clock 6.2 ANSOFF Matrix 6.3 Strategic human resources and CSR 6.4 Lean thinking 6.5 Diversification

7 Appendices 7.1 Five Forces Analysis 7.1.1 Barriers to entry 7.1.2 Power of suppliers 7.1.3 Power of buyers 7.1.4 Threat of substitution 7.1.5 Competitive rivalry 7.1.6 Competitive factors in the airline industry 7.1.7 Facts & figures of Ryanair and two major UK competitors 7.1.8 Flight ticket price comparison 7.2 PESTEL Analysis 7.2.1 Political & Legal 7.2.2 Economic 7.2.3 Social 7.2.4 Technological 7.2.5 Environmental 7.3 Value Chain Analysis 7.4 Asset/Resource Analysis

8 References

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Award winner: Ryanair: Flying too Close to the Sun?

Author perspective

Instructor viewpoint, who – the protagonist.

Michael O’Leary , CEO of Ryanair .

Ryanair is Europe’s largest, cheapest and most profitable airline. It was founded in 1985 in Dublin and initially provided flights between Ireland and the UK.

Between 2013 and 2018 Ryanair successfully planned and delivered a strategic turnaround, cementing its position as Europe’s number one airline. Its “Always Getting Better” programme introduced a host of changes to improve customer experience from online booking, to smoother travel and related services. This helped Ryanair digitally transform towards a travel platform.

Initially, passengers and profits grew as the airline expanded into new routes and services but, by 2017, it faced new challenges. Mishandling of pilot holiday rostering, frequent inabilities to conclude labour agreements, and the UK's withdrawal from the EU was starting to affect customer perception and its profits.

Ryanair’s headquarters are in Dublin, Ireland but it operates bases in over 40 countries across Europe and North Africa.

This case explores Ryanair’s growth and challenges in the period 2013 to 2018 following the launch of its “Always Getting Better” programme.

Early in 2019, Ryanair announced a decrease in profits, putting its reputation as Europe’s most profitable airline in jeopardy. Challenges faced over the last two years had damaged customer satisfaction and their brand image, leaving O’Leary and the management team wondering, will they ever achieve their target of flying 200 million passengers by 2024?

AUTHOR PERSPECTIVE 

This is the first award for authors Ciaran and Dorota, and the fourth for UCD Michael Smurfit Graduate Business School.

The authors said: “We are very pleased that so many of our fellow case instructors found the case study suitable for their needs. This recognition certainly motivates us to develop more cases in the future.”

Developing the case

They continued: “We developed this case to address a specific learning need among our students, and in light of a gap in the market for a case study showcasing the evolution of a business model and the digital transformation of a firm in a mature industry. The fact that there are few other such cases is probably one of the reasons for its popularity. We also designed the case to be modular so that instructors could use it in ways that best suit their needs. This adds to the versatility of the case.”

Rich story to tell

The authors added: “We thoroughly enjoyed writing this case. There was much publicly available information to work with and a rich story to tell.

“Perhaps the biggest challenge was condensing this richness to a workable total length and choosing which insights and data not to include.”

Student engagement

The authors explained: “Students find this case study relatable as many of them have first-hand experience flying with low-cost airlines.

“We benefited tremendously from the feedback of our undergraduate, graduate, and executive students when developing this case and would like to thank them for being such enthusiastic learners.”

They concluded: “Identify a true need in the market, pilot the case on various audiences before writing its final version, and write a teaching note as comprehensive as you would like to get yourself with a case.”

INSTRUCTOR VIEWPOINT 

Discover how this case works in the classroom.

"This case study is contemporary in timing, providing many challenges for students in terms of the company achieving its business goals, whilst recognising the fast-changing nature of the business environment.

"In addition, there is an intriguing challenge for students with the proposed change from the original strategic intent of the low-cost business model to a strategic intent to deepen the relationship with customers to support growth. Students will be challenged to consider the structural, social and reputational implications of this proposed change.

"The case study offers a wide range of challenges for students to consider, and will help them understand such complex issues should they meet them in their own managerial careers."

"When using a case in my Global Corporate Strategy course at Maastricht School of Management, there are a few key elements that are important: is it current; does it illustrate at least one key tool (5-forces); can it be used as the jumping-off point for other strategy discussion; is it about a brand that most students will recognise; and is it interesting for the students. It can be difficult to find a case that hits all these points, as the Ryanair case does. When I find a case like this, I will keep it in my curriculum as long as possible.

"Ryanair: Flying Too Close to the Sun? will continue to be an important element of my course for a few years."

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• Ryanair strategic positioning (B): Always getting better

By 2013, after over near 30 years, Ryanair has become the largest airline in Europe in terms of passengers flown internationally. It outperformed its low cost rivals on most operational dimensions. It was unambiguously positioned as the lowest cost of the low cost airlines. Its success, however, came at a price. Ryanair was far from loved. Its operational model, which enabled such low cost flying, had as a side effect service that was seen as far below industry norms. In 2013 its outspoken CEO, Michael O’Leary, came under increasing pressure to tone down the macho image he had cultivated and enhance service levels. To do this he would need to adapt the successful operational model. The A case asks whether such an adaptation make sense. The B case documents the evolution and implementation of Ryanair’s response, a change program called “ALWAYS GETTING BETTER” (AGB). AGB encompasses a digitalization program that chief marketing officer Kenny Jacobs believes can enable Ryanair to become the “Amazon of Travel in Europe.” The B case asks whether this is a realistic ambition.

• Understanding customer centricity
• Understanding strategic alignment
• Understanding whether and how successful incumbents can embrace change.
• Understanding how incumbents can best embrace digitalization

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• Ryanair strategic positioning (A): July 2013

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Ryanair Holdings plc

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• | Pages: 26

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Ryanair Case Study: Analysis, Problems, and Solutions

Added on   2023-01-12

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Dogfight over Europe: Ryanair (A) Harvard Case Solution & Analysis

Home >> Harvard Case Study Analysis Solutions >> Dogfight over Europe: Ryanair (A)

Dogfight over Europe: Ryanair (A) Case Solution

Introduction

Ryanair was founded by Ryan brothers in the year 1885. They had essentially grown up in the environment of airline industry and had received the information first hand from their own father. Their father, Tony Ryan, initially worked as a leasing manager for the airline company. In 1975, Tony Ryan the father of Ryan brothers co-founded an airline leasing company known as Guinness Peat Aviation and it soon became the world`s most dominant aircraft leasing company. He had 10% share in the company and it was more than enough to finance an airliner company as he was the one who invested capital in the company of his sons. Dogfight over Europe RyanAir (A) Case Solution

Ryanair’s entry into Doublin-London route

However,other than that it did not have anything else to offer to its customers

The prices that Ryanair are offering are much convenient and cheaper to afford by the consumers and relatively less then what these other two airline companies charge to their consumers. This move is predicted to attract a lot of population among the market that will be contested by these companies as Ryanair is also offering quality meals that the other two airline organizations offer to their customers who fly with them........................

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