VAT Registration No: 842417633. From the analysis of the business operations it is apparent that these challenges and threats will come from five main areas (appendix A, figure 4). Furthermore, virtually everything but the seat costs. Company Registration No: 4964706. Throughout this essay the business strategy of Ryanair will be analysed and the sustainability of their model evaluated. Considering their objectives and mission, Ryanair’s decision on their cost-leadership strategy was based on a few main factors which are discussed below. Ryanair already faced losses and therefore, the CEO adopts the American Southwest airlines policy. Case Study: Ryanair’s change to a “no frills” business strategy Edgar Weidema University of Amsterdam 5809576 ewa310@student.vu.nl 1. All work is written to order. 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’ (Ryanair). Ryanair brand : Ryanair has built a strong brand based on cost. Firstly, the company receives a discount from Boeing. The low-cost policy greatly aided in the accomplishment of differentiation as well as cost leadership and thus the airline emerged as a successful game changer in the airline service industry. Ryanair faces new payment probe. Johnson, Gerry., Scholes, Kevan and Whittington, Richard (2007). 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. 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). Ryanair should also create a frequent flyer program to establish a fixed customer base and encourage customer loyalty. Journal of Air Transport Management, 11: 259-272. In the future, in addition to discounts, this should be linked to conditions that ensure the fleet includes the latest environmentally friendly specifications, with aircraft being regularly upgraded as part of the purchase options. By taking the recommended improvements into consideration, it looks like Ryanair’s cost leadership strategy seems ideal for the future. If Ryanair can successfully continue to lead the industry in cutting costs and expanding to underdeveloped markets The first is environmental issues., which includes the concerns expressed by consumers and governments relating to the impact that air travel growth has upon the local communities and infrastructure and the second is the natural environment, where businesses are now required to consider the impact that their operations have upon issues such as climate change. Both airlines also have si… Again there is heavy emphasis on cost saving and reducing measures. And because of the strategy of the industry, Ryanair is now recognised as the seco… Discover everything Scribd has to offer, including books and audiobooks 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. Kotler, Philip. This dictates that the company must minimise its own costs to ensure that they are able to offer customers the service at a price below their direct competitors. This program enables Ryanair passengers to donate to offset travel-related emissions when booking their flight with Ryanair. A well planned training initiative may act as an enabler to Ryanair in achieving the business strategy and objective of increasing customer satisfaction (Tannenbaum & Woods, 1992). All this significantly reduces costs to Ryanair. Put your raw analysis in an appendix and, based on this, answer the following two questions: Q2. We've received widespread press coverage since 2003, Your UKEssays purchase is secure and we're rated 4.4/5 on reviews.co.uk. If you need assistance with writing your essay, our professional essay writing service is here to help! This enables the business to achieve market growth and maintain its dominant position. To answer this questions, you need to look at all the major trends that impact the selected strategy – both positively and negatively. 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. London, UK. Innovative cost cutting method:The heart of Ryanair’s strategy involves reduce As mentioned earlier, Ryanair computerises as many services as possible. Haslam, Chris and Ungoed-Thomas, Jon (2007). competition: Ryanair strategy focused intently on delivering first-rate customer service with single fare for a ticket with no restrictions. Fleet replacement is an area that Ryanair has concentrated upon in the past. The second is the threat by the EU to reduce or eliminate the subsidies given to the sector, worth an estimated £6 billion annually (Bized 2004). Competitive Strategy: Techniques for Analysing Industries and Competitors. *You can also browse our support articles here >, http://news.bbc.co.uk/1/hi/business/3458423.stm, http://www.bized.co.uk/current/leisure/2003_4/010304.htm, http://www.channel4.com/news/articles/society/environment/factcheck+how+green+is+easyjet/509642, http://www.lboro.ac.uk/gawc/rb/rb174.html, http://www.which.co.uk/reports_and_campaigns/travel_and_leisure/reports/holiday_advice/Flights/zoom_flights_news_article_557_112479.jsp, http://www.southwest.com/about_swa/airborne.html, http://ec.europa.eu/comm/competition/speeches/text/sp1999678_en.html, Management, professional, and technical resources. The second action would be to assess the potential market players to ascertain which, if any, would provide the business with a strategic fit for expansion of its market reach within the region. There has already been some consolidation within the sector. Published: 15th Jun 2018 in 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’ (Ryanair). Faulkner, David and Campbell, Andrew (2006). Wong, Veronica., Saunders John A and Armstrong, Gary (2004). Ryanair has complied, throughout the year ended March 31, 2020, with the provisions set out in the U.K. Corporate Governance Code and the requirements set out in the Irish Corporate Governance Annex, except as outlined 3.2 Training Ryanair need to pursue 'follow on' training from their induction process. The core elements of the proposed “focused differentiation” strategy being proposed will be threefold. Ryanair generic strategy is cost leadership. The airline’s European consolidation is a reality. New ed. Principles of Marketing, 4th European edition, Pearson Education Ltd. London, UK. 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 (Monaghan 2008). In this area Ryanair, with its successful acquisition and integration of the “Buzz” lo-cost carrier, has been more successful that EasyJet’s experience when acquiring “Go.” Although the major airlines such as BA have responded to threats from Ryanair, to date these have not proved successful. Additionally Ryanair is usually able to gain financial assistance with marketing and promotional campaigns at these airports.