Ryanair

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The managers of the Ryanair chose discovering the opportunities in the market. Evaluating all the facts, Ryanair chose low cost strategy which was quite successful decision. By using cost advantage strategy, the firm tries to maintaining lower cost (C) at the same time achieving willingness to purchase for customers (B) that is comparable to their competitors. The Ryanair had low costs compared to the competitors due to some reasons. To begin with, they were late movers which mean that they benefited from the experiences of the other competitors which in turn decreased their R&D costs. Ryanair evaluated their operations and saw that there is an opportunity to schedule the flight from Dublin to London. This line was quite profitable due to some reasons. First of all, there was stable demand on this line for 10 years. Secondly, the fact that only 60-70 % of the flights of the other two companies was full most probably due to high ticket prices. Thirdly, three quarters of a million of people, who can be called as potential customers, were not using the airline industry for that road because the prices were high. Instead, they were using the railway or sea ferries. Additionally, they chose to fly between secondary airports of the big cities which in turn results in low fees that paid to airports. Moreover, the brothers established the company with their father’s money which also decreased their costs because they did not pay any interest rate. They also used small plains for the beginning which decreased operation and maintenance costs. All in all, by choosing cost advantage strategy Ryanair charged single price for the tickets which was 98. They also tried to give first rate customer service. The price of ticket was quite low than the competitors. By having quite low, they were able to attract not only the customers who were using competitors’ plains, but also the ones who chose the rail or sea transport. However, we cannot conclude that Ryanair strategy gave...
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