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Business Strategy of Ryan Air - Case Study Example

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Business Strategy of Ryan Air

An Irish airline – it has its headquarters in Dublin and its biggest operational base is London Stansted Airport in UK. Ryanair has profited immensely due to the deregulation of the air industry in Europe in 1997and has undergone rapid growth to become on of the leading names in the industry. But its rapid expansion has been characterized by the numerous controversies and complaints about its functioning. In October 2006, Ryanair was voted the world's most disliked airline in a survey by the TripAdvisor website, and in November 2006, it was revealed as the subject of more complaints than any other airline in the EU. (Irish Examiner, 2006-11-28)
But this aside, it has evolved into one of the most profitable low-cost airlines in the world. EasyJet, Monarch Airlines, Centralwings, Air Berlin etc. are the main low-cost competitors for Ryan Air.
BUSINESS STRATEGY
Business strategy or the long-term business plan is typically characterized by major resource issues or their allocations in an organization. there are two main categories of strategies that are usually followed by the companies ---- the Generic (general) strategies, and Competitive strategies. Some of the generic strategies are:
a. Growth or the expansion of the company by purchasing new assets or developing new products.
b. Globalization – Going international that is -- moving operations into more countries – becoming multinational companies.
c. Retrenchment --- This is typically characterized by focusing on the core business by cutting down on ancillary plans.

And some examples of Competitive strategies are :
a. Lowering the prices. This is useful if the company is the market leader and can benefit from the advantages of producing large volumes of output such that the lower costs can be covered by more output. And the competitors are unable to match the lowered prices.
b. Differentiation - that is position the company as providing something different from the other rivals. For e.g. The aviation industry. It is divided into two main segments --The low cost airlines such as Ryanair who offer low prices and fly on short routes without providing any special services and the high priced airlines such as British Airways that concentrate on differentiation. They offer better services to passengers such as more legroom, in flight entertainment, and more individualized attention. (Grassley, 2002)


CURRENT STRATEGY OF RYANAIR
As per the official website of Ryanair, its main objective or mission is to become the Europe's leading low-fares scheduled passenger airline through continued improvements and expanded offerings of its low-fares service. (Ryanair Website). They are looking to increase their customer base by increasing their cost-effectiveness and operational efficiencies.
The key elements of Ryanair's strategy are:
Low Fares, Good Customer service, Frequent flights, Low operating costs, Internet advantage, Safety and Quality maintenance, Enhanced ancillary services.
Basically, Ryanair is trying to achieve economies of scale by trying to increase its number of flights and keeping its planes in the air as frequently as possible in a 24 hour period. Its competitive advantage lies in its ability to keep low fares and provide frequent flights for point-to-point short distance routes.
Ryanair sells seats on a one-way basis, thereby eliminating the minimum stay ...Show more

Summary

The objective of this study is to look at the current business strategy adopted by Ryan Air - Europe's largest low-cost carrier and how it should further move towards its growth in future. In the following sections, we will take a brief look at the history and background of the airlines…
Author : reicherternesti
Business Strategy of Ryan Air essay example
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