Through the unremitting competition of the flight companies, Ryanair has stood out of its opponents. In 2006, the "Air Travel World" magazine announced that this company became the most profitable flight company on earth.
As we can see on the appendix 1 and 2, Ryanair was facing, in 2008, of several and complexes exterior keys. There exists a major competition in this sector with a growth of companies that use the same strategy (low-cost). Ryanair enjoy the creation of extra and regional international airport where the corporation provide its users. Additionally, some locations aid some companies to move in them territory.
The technology help this sector in conditions of efficiency (more chair in the airplane), the planes are faster than before and more ecological. Furthermore, Internet and its own e-services help Ryanair to save money.
There are some substitutes like the ferry, the automobile or the coach, but this kind of move are longer and maybe more costly than Ryanair services.
The inner keys of Ryanair are also numerous. With a low-cost and "no frills" insurance plan, Ryanair must modify its strategy.
First, the business has only 1 distributor (Boeing) with only one kind of plane (B 737-800) to involve some prices of its dealer and to facilitate the non-public training.
To lessen the expanses, Ryanair choose supplementary and regional airports to reduce the various fees (plane parking, passenger loading. . . ).
Then, Ryanair use the Produce Management to sales the maximum of tickets also to fill its airplane. This company sales its seat tickets by internet to reduce even more the fees.
The marketing of Ryanair is quite simple; the business use its website and some media like mag to place advertising. The business make also good discount airfare and advertising of its airfare to become more competitive than its contestants.
From this analyse and based on the Porter's generic strategies, we can say that Ryanair use two strategies of this model (Cost control strategy and Focus strategy). Indeed, Ryanair use the "Cost Innovator Strategy", as we realize, it is a low-cost company and offer for its customers the lower price in this market. Ryanair use also the "Target strategy", in truth, it focused a tiny customer portion (people who cannot offered a standard company airline flight).
In its competitive position, Ryanair is on the low-cost sector. Matching to an article of "Thisismoney. co. uk" in 2007, the corporation has 7, 2 % of the Europe market share with 5. 12 million of individuals. Ryanair like a good brand image and is the command in this sector.
However, the future is never certain and a lot of things can be happen. In fact, today, with the stock market, the price tag on the raw materials can increase rapidly like the petrol price or the price of airplanes and the business must increase its price to endure.
Furthermore, the rivals can imitate this plan for in readily available in which to stay their turn competitive, on the top of computer to make it through.
As records by "Johnson, G. , Scholes, K. & Whittington, R. (2009) Checking out Corporate Strategy (P189)" an organisational culture is "the essential assumptions and values that are distributed by members of any organisation that operate unconsciously and identify in a basic taken-for-granted fashion an organisation's view of itself and its own environment".
A strong organisational culture enables to web page link the employees mutually, to provide us membership feeling with same worth and common goal. Employees are usually more motivate to do the work and are better. The organisational culture is given in a huge part by the supervisor in case the organisational culture is strong, the employees take this culture for granted.
In spite of Ryanair is not a very old company, it has a great history. Ryanair has known an easy expansion to become the most profitable air travel company on earth. However, this company knew a whole lot of affaires with for example its mavericks behavior. The CEO, Michael O'Leary is a hero along with his strategy but he's also a villain along with his obsession to reduce the costs, specifically the communal right. About the question of syndicalism he said "Direct Management = Better pay". The press play also the role of the villain with its scandal article.
Ryanair has some particular symbols like the No Frills policy, the ancillary earnings, the in-flight services as well as safeness and environmental friendly.
Concerning the power structures, M. O'leary is a solid head with pragmatic beliefs and has a strong main assumption like the will to always raise the costs and always more development. But there some blockages to change like contestation of employees to new procedures.
Ryanair has a mechanistic structure (with a higher centralisation) in addition to a formal composition. The structure encourages the competition to earn more money.
The control systems are very developed to monitor the expenditures, the profitability. The grade of services is not really a real occupation; the expenses are incredibly well managed and the costumers have to pay entire the excess.
Historically, the point to point routes that the fleet removes are a source of routine. The exercises and rituals in this sector are difficult to improve.
Like this, after this analysis, the ethnical paradigm of the company is defined as common ideals like the will to slice the prices and the no frills insurance policy. Regarding the values of the brand, people speak about the extension issues, that the business is the greatest low-cost company in the competition but it must concentrate its work to prosper in the market.
The ethnic web of the Ryanair Company is very complete, but this brand is aware of some difficulties and should be change some components of its cultural web.
For example, its policy about the trade union is a source of problem in the company. Indeed the employees are persecuted never to be a account of union (as the CEO M. O'leary said: "Direct Management = better pay" pertaining to his union position).
Moreover, its no frills insurance policy is maybe too strong. For example the employees cannot recharge their mobile phone in the company because Ryanair needs to reduce its electric invoice. This solution can detract the motivation of the employees. Furthermore, Ryanair put forward the idea to deal more expansive seat tickets for fatty.
After made two failed bids for Aer Lingus since 2006 (the first one by way of a decision of the Western Court and the next by the Irish federal government), Ryanair says that it's "highly unlikely" to make another bids for the Aer Lingus company (article from the Financial Time, "Third Ryanair Bid for Aer Lingus "Unlikely" " 07. 01. 10).
As we can easily see on the SWOT examination (Appendix n5), Ryanair is the first low cost company in European countries and its brand is very recognised by its customers. The business, with a No Frills coverage, sales its places by internet. With only Boeing 737 aeroplanes, the business has only point to point itineraries.
Regarding its weakness, Ryanair is very hypersensitive of the increase of its charges (for example, the fuel's cost). The business endured of the bad press and the reduced commitment of its customers.
However, Ryanair has many opportunities in the market like the extension of Europe or the increase of low priced demand. But the company has also different threats. The competition in this market is high, its charges can increase rapidly (dependence of essential oil market) and the customers are incredibly receptive of the price augmentation.
As we have seen on the question one, Ryanair has two main strategies; the first one is of course the "cost management strategy" and the next is "the emphasis strategy" (despite the fact that the customers diversified).
To continue to prosper in the forex market, Ryanair must find new strategy.
First, the business can focused of its offer, for example, it can develop the regularity of its fleet (today, the average is 3, 8 fleets each day and per route), available new routes (for example the North Africa) and can also create some program tour for vacations. Knowing the fact that Ryanair experienced bad press, this company can also improve its services.
Secondly, Ryanair can choose a strategy even more give attention to the no frills insurance policy and goal even lower prices. It could take up a 100% online sales ticket and always find other solution to reduce its cost.
Finally, this company can choose an aggressive insurance plan to buy others. It can also take up a merger and alliance policy.
After these three strategies and following the failing of the bids for Aer Lingus, I recommended to not adopting the third technique for the moment.
According to the Tows analysis (appendix n6), I would recommend to Ryanair to look at the first strategy.
In reality, as Ryanair is the first low-cost company, for as soon as and while maintaining to give low cost, the company can interest of other strategy.
If Ryanair improve its offer, the company can get market show of its competitor. By improving the consistency of its fleets, beginning new routes and by increasing its quality of services, Ryanair will enjoy more customers who acknowledge themselves in the offer of the low cost company.
Appendix n 1: PESTEL analysis
* Protectionism of certain countries to help them companies
* Some locations financially helped the firms going in them territories
* The growth of the EU
EU regulation (for example the taxation for the environment)
Abolition of the "Duty free tax" in Schengen
* Increase of gas prices
* Increase of LOW PRICED company
* Economic crises
* Economic expansion of the eastern Europe
* The change of lifestyle
* The change of the consumer's comportment
* Increase of business travel
* The scare of terrorism
* The planes are more efficient
* Infrastructures of air-port are more preferment
* The planes need less of fuel
* The technology is more ecological
* Reduction of carbon dioxide
* Reduced amount of noise
* The competition law
* New regulations to lessen the pollution
Appendix n2: The Five Causes analysis
Appendix n4: Strategic Features and Competitive advantages
Johnson, G. , Scholes, K. & Whittington, R. (2009) Exploring Corporate Strategy
Porter, M, (1985) Competitive Advantages: Creating and Sustaining Superior Performance.
Pearce & Robinson, (2003) "Strategic Management" Levy, A. , Merry, U. (1986) "Organizational transformation: approaches, strategies, theories"
Valentin, E (2001) "SWOT research from a resource-based view", Journal of Marketing Theory and Practice D¶nig, r. (2009) "The "No Frills" Strategy of Low-Cost Carriers"
Doganis, R. (2006) "The air travel business"
Ryanair: http://www. ryanair. com/en/about
European Low fares Airlines Relationship ELFAA website: http://www. elfaa. com/
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