1 downloaded Airline App, continued to improve with with functionality like upgrading to Leisure Plus and Business Plus, buying travel extras, ‘One flick’ payment, ‘Rate My Flight’ function and Auto check All work is written to order. There is only one class on a Ryanair flight and no pre-booking of seats. *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. Being one of the “first movers” in this new sector (Faulkner and Campbell 2006) Ryanair has taken advantage of the growth opportunities offered by creating a “low Cost” model based on the successful Southwest Airline (2007) strategy. Retrieved 27 July 2007 from http://www.lboro.ac.uk/gawc/rb/rb174.html. Technology There was a trend in European airline industry, which was website establishment. Landing fees and other charges at these airports is substantially lower than the main airports and, even with the “sweetners” paid by Ryanair, the unit costs per passenger of flight into these destinations remains cheaper. This is beneficial for a number of reasons all of which directly help cost saving measures. Furthermore, the corporations own growth pattern could impact negatively upon profitability. No plagiarism, guaranteed! Resultantly, attracting new employees could become impossible and this will hinder their expansion plans. Ryanair gives complete details about current strategy and the management approach which impact on business operations and functions towards carrier's customer relation and the management must take actions to be strong in the low cost market. To maintain its competitive advantage the two major players have sought to consolidate their position by strategic acquisitions. Many of these former Baltic States have now joined the EU, which also provides Ryanair with the opportunity of expanding its destination network. Profit is expected to be made from Laudamotion over the next two years and will require around €100 million … Secondly, It reduces costs in terms of maintenance and training. 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. Low fares are designed to stimulate demand, attracting fare-conscious travellers, those who may have used alternative forms of transportation or even those who may have not travelled at all. The first of these is the gradual refits that will be required to aircraft to include the various new technological facilities that have been recommended. We're here to answer any questions you have about our services. Through a clear business strategy a firm can derive its position in the long term and create a competitive advantage in the market for itself. 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. Safer aircraft also means greater consumer confidence, equating to more fare sales. 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). By offering low fares, Ryanair expects passengers to trade down to the low cost airlines rather than stop flying completely. The aggressive strategies recommended within this analysis study are designed to achieve this objective. 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. There are however a number of other measures directly related to a no frills service. Penetration pricing as it is called helps gain market share and simply, more customers equals more revenue (Wheelen & Hunger 2006). Ryanair, inoltre, così come le altre compagnie, enefiierà per 12 mesi di prezzi più bassi per quanto riguarda il carburante. 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. This strategic option is consistence with the policy that Ryanair has followed in the past and is in accord with the previous intentions of the business strategy, which has been to reduce price at the cost of services, in other words achieving a “no frills” situation. To export a reference to this article please select a referencing stye below: If you are the original writer of this essay and no longer wish to have your work published on UKEssays.com then please: Our academic writing and marking services can help you! Wong, Veronica., Saunders John A and Armstrong, Gary (2004). The human resource policy is again directly related to reducing costs. Ryanair fly to secondary airports which are potentially much further from the City centre but accessible enough by other forms of ground transportation. 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. ... Much more than documents. It is likely that this will continue for the foreseeable future, and this could pose a threat to Ryanair’s dominant position. This trend appears accurate so far based on passenger numbers as recession forces millions of passengers to focus on price (Waterman 2009). Aurum Press Ltd. London, UK. Are the strategies in agreement with the various external trends (and sets of trends) in the environment? The Oxford Book of Strategy: A Strategy Overview and Competitive Strategy. What resources and capabilities have provided Ryanair with An aggressive strategy aimed at achieving free flights to be pursued. BBC News (2004). Doganis, Rigas (2000). Ryanair's aim is 'to solidly create itself as Europe's leading low-fares slated traveler airline through continued improvements and broadened offerings of its low-fares service' (Ryanair). These operational strategies have created immense benefits for the two airlines, including optimizing airline use and increasing airline turnaround frequencies. Despite the number of routes operated and the logistical problems of running a business of the magnitude of Ryanair, the company operates with a minimalist attitude towards head office, admin, aircraft and maintenance crews and administration staff. However, the industry growth has also seen new competitors enter this niche market, including EasyJet, BMI, Virgin express and Aer Lingus. All of the Ryanair employees are expected to multitask. Logistics strategy deals with the flow of products into and out of Ryanair. In order to cut costs, Ryanair plans to close all its airport check-in desks by the end of 2009 and have passengers check-in online instead. Ryanair Holdings PLC (Ryanair Holdings), incorporated on June 5, 1996, is a holdings company for Ryanair Limited (Ryanair). To ensure that the business can successfully deal with the changes these challenges present, it is important that the future strategy is sufficiently robust to be able ensure that the business retains its competitive advantage and profitability levels. Following huge success in Europe, Ryanair should consider introducing low cost transatlantic flights to support its expansion plans and attain a larger customer base. If you need assistance with writing your essay, our professional essay writing service is here to help! Business strategy Professional paper : The Case Of Ryanair. Demands for cheaper fares has increased as prices have fallen, and the consumer perception and lifestyle has changed with regard to types of holidays has expanded rapidly, with weekend breaks and formerly unknown destinations increasing in popularity. Similarly, the company also seeks to maintain value growth for shareholders. The threat of new entrants is high within the aviation industry which meant that low fares would help drive away any further competition. Low Flying Fares: An End to Cheap, No Frills? The Ryanair brand sends a simple, consistent and compelling message, i. e low cost. Ryanair faces new payment probe. Their main business strategy is the cost-leadership strategy, which is when a firm is cutting on selling costs and keeps its production at the minimum, and yet make high profits. 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. There are two other external factors that impact upon the business and affect the determination of strategy. Ryanair has also made full use of the advances in technology and digital processes within its “low-cost” business model. There has already been some consolidation within the sector. This includes drinks, meals and the other retail products available on board, with even free levels of baggage is limited. Press association (2007). At these airports Ryanair are able to negotiate extremely aggressively and demand the lowest landing and handling fees. We're here to answer any questions you have about our services. If you care about the environment, you should fly Easyjet. Retrieved 16 May 2007 from http://www.channel4.com/news/articles/society/environment/factcheck+how+green+is+easyjet/509642. Ryanair also generate income from advertising on board the aircraft. 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). This strategic option is consistence with the policy that Ryanair has followed in the past and is in accord with the previous intentions of the business strategy, which has been to reduce price at the cost of services, in other words achieving a “no frills” situation. 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). Evidence of this can be found in the business move to paperless tickets, with more bookings being made through the Internet and, more recently, a move towards automated booking–in procedures at the airport, reducing the need for expansion of human resources to meet demand increase. New ed. It is said that the company was regarded recently as the most punctual airline between Dublin and London. Retrieved 27 July 2007 from http://www.bized.co.uk/current/leisure/2003_4/010304.htm, Brassington Frances and Pettitt, Stephen (2006). Although Ryanair faces competition from substitutes like Eurostar, it is at an advantage because of Eurostar’s limited destinations.Â. As Lynch (2006) and Faulkner and Campbell (2005) stated within their respective researches, for organisation’s such as Ryanair, who have targeted their strategy at a “low-price” product, it is imperative that, to maintain competitive advantage, who submitted that to achieve and maintain low price in the market place, the business itself had to be structured in a way that provided a limited cost base throughout all aspects of the business, in order to retain a profitable result. VAT Registration No: 842417633. 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. All work is written to order. 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). Interpretation of Ryanair’s USP or unique selling proposition, mission statement and vision … Easyjet and Ryanair have similar strategies to the extent that they both share the low-cost business model. 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. Our academic experts are ready and waiting to assist with any writing project you may have. 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. All this significantly reduces costs to Ryanair. VAT Registration No: 842417633. The Times. The Free Press. Ryanair’s operations strateg1y determines how the airline will deploy its resources and the policies it will operate by. Contracts with Boeing need to be re-negotiated to ensure that environment related conditions are included as an inherent part of the purchase process for replacement aircraft. Although the company had encountered different problems, specifically in line with its cost structures, the company had been able to survive and grow in the marketplace. Budget airline offers low cost New York flights. Ryanair needs to understand that although it is currently possible to replace outgoing employees, but with time Ryanair’s overall image will be tarnished. Looking for a flexible role? By offering low prices, Ryanair entered a huge and virtually unlimited market. Other cost saving methods not yet implemented include charging customers for using toilets on airplanes (Lalor 2009). The “Free-flight” with added services, albeit being paid for, will maintain the unique and differentiated service that the Ryanair brand has become known for. Ryanair is notorious for its high staff turnover which negatively affects its reputation as an employer. However, with other competitors entering the market place, that differential needs to be extended to other areas. Discover everything Scribd has to offer, including books and audiobooks It was one of the first “low-cost” airlines to recognise the changes in the consumer buying habits resulting from these technological advances, using this diffusion to improve its services, encourage further consumer change and continue cost reduction advantages (Johnson et al 2007, p.481). However, from the analysis of the internal situation at Ryanair, it would seem that there are limited options in terms of reducing existing resources, particularly if the business wishes to maintained a sustained growth programme and market share. 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 (Boesch 2007). Ryanair already faced losses and therefore, the CEO adopts the American Southwest airlines policy. New York, US. Does the strategy create and/or maintain a competitive advantage? To implement this strategy means that the business will need to seek cost reductions in areas other than those that directly impact upon the quality of the in-=flight service provided. These expansion plans for the future will require the company to increase its landing slots at airports and recruit more employees. fits the Operational Excellent Model of high reliability and dependability with fewer flight cancellations, great punctuality and fewer lost bags than most airlines. The Airline Business in the 21st Century. Ryanair makes good use of its resources. 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). The Achilles heel of Ryanair is their greater aircraft utilisation through super quick turnaround times. Creaton, Siobhan (2004). 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. Are the external strategies consistent with (supported by) the various internal aspects of the organization? London, UK. This, on top of the launch of Ryanair Sun, is part of the airline’s overall strategy to thrive further in Southern and Eastern Europe. Oxford University Press. Info: 4407 words (18 pages) Essay Business Strategy. Principles of Marketing, 4th European edition, Pearson Education Ltd. London, UK. Ryanair denies baggage ‘scam’. It also reduces the future competition. Published: 15th Jun 2018 in In the following years it started to serve several The core elements of the proposed “focused differentiation” strategy being proposed will be threefold. Kotler, Philip. Training given is the required minimum and staff utilisation is among the highest in the airline industry. In this respect Ryanair operations have to comply with regulations in terms of fair competition, which affects mergers and acquisitions and unfair practices, and targets set by the EU in relation to emission reductions required to address climate change.[PL1]. For Ryanair to be successful, prices had to be low to attract the public, and resist strong competition from substitutes like Eurostar. About us. Retrieved 14 May 2007 from http://www.ryanair.com, Southwest Airlines (2007). Ryanair business model canvas. Both airlines have perfected this strategy by introducing new price reduction measures, such as paperless booking. Il management di Ryanair prevede che il traffio europeo si muoverà inesorabilmente verso quattro grandi compagnie aeree: Air France, British Airwayse, Lufthansa, e una low- cost, cioé Ryanair.
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