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An analysis of Ryanair competitiveness

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educational...
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Harvard

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Rachet B.
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documents in English
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case study
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7 pages
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  1. Executive summary
  2. Introduction
  3. Porter's Five Forces Analysis
  4. How Ryanair Adapts to the PESTEL Factors in the UK?
  5. Conclusion

This report illustrates an analysis of Ryanair competitiveness, adaptation to the macro-level factors in the United Kingdom and factors contributing to its current success. Initially, the Porter's five-force model entails analysis of the threat posed by buyers, suppliers, industrial rivalry, substitutes and entrants. Here, the company competitiveness is addressed based on strength posed by above-mentioned forces. Secondly, Ryanair adaptations to the macro-level environment is demonstrated in response to political, economic, social, technology, environment and legal climate in the UK. Besides, evaluation of the main stakeholders in the company, the report concludes in analyzing factors contributing to Ryanair success. Since Tony Ryan broke the aviation duopoly in London-Ireland flights, Ryanair has generated a turnaround in the European aviation industry. Over the years, the company has rivalled the legacy carriers across Europe by positioning its services as a low-cost carrier. Although criticized for its aggressive competition policies, Ryanair cost leadership amidst expensive air travel arises from its flat management decisions converging at low-cost carriage and aircraft optimization.

[...] An analysis of European low-cost airlines and their networks. Journal of Transport Geography 249-264. Dudovskiy, J. (2012, September 10). Analysing Competitive Environment for Ryanair. Retrieved January from http://research-methodology.net/ryanair-porters-five-forcesanalysis/ Hoskisson, R. E., Hitt, M. A., & Ireland, D. (2008). Competing for Advantage. Mason: SouthWestern. Nwagbara, U. (2011). Homing in on Paradigm Shift: Ryanair Leadership in the Age of Expensive Air Travel. [...]


[...] In response to passenger complaints, Ryanair has modernized their operations to improve on punctuality and fewer cases of lost luggage. Considering their social bond with passengers sustained through their pocket-friendly flight charges, it has established a reason why Ryan air is the favourite airline (Ryanair p. 6). Technology The company has runs online booking of flights through their homepage to avoid potential inconveniences associated with accessing travel agencies. This enables Ryanair optimizes on their seat allocation maintained through a first-come-first served basis to secure maximum revenue at 85% book rates. [...]


[...] Today's development in the transport sector involves the modernization of traditional substitutes to current high-speed trains. However, the threat posed by trains is limited to regions connected to the requisite infrastructure (Szymanski p. 11). Besides, substitution arises from other transport means including sea transport, coaches, and carhire companies. Ryanair cheap pricing strategy yields the prime competitive advantage, thus containing the threat. Competitive Rivalry The outcome of aggressive competition amongst airline companies yield benefit for customers that takes the form of improved services and lower pricing. [...]


[...] Ryanair sustains an active bond with Boeing as its sole supplier of its efficient aircrafts. Similarly, the company operates through contributed capital by its shareholders, upon which it invests in profitable avenues. The company maintains its support from the fact that its board members and management team own a significant stake and therefore act along the interests of other shareholders (Ryanair p. 10). Ryanair Success Factors Since the emergence of low-cost carriers in the airline industry to rival the full-service network carriers, Ryanair success is championed by multiple factors. [...]


[...] Although faced with stiff competition from rival airline companies replicating its strategies, Ryanair cost leadership emerges from its comprehensive approach comprising point-to-point 8 routing, aircraft optimizing through large seat density and online flight booking. Finally, the company proactive approach to keep pace with the dynamic macro-level environment enables in sustaining its leadership in the low-cost carriage while responding to issues affecting its main stakeholders Bibliography Brophy, S., & George, D. (2003). How Ryanair has Exploited the Economic Theory Behind Airline Contestability and Deregulation. Student Economic Review 245-257. Dobruszkes, F. (2006). [...]

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