Ryanair Analyses

Topics: Airline, Southwest Airlines, Low-cost carrier Pages: 13 (4156 words) Published: December 6, 2012
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BUSI1271: Global Strategy: Analysis & Pr Group Case Analysis D Sircar

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BU/PG 30.00% 14/11/2012

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Group Case analyses Ryanair 2012

Global strategy

Group Case Analysis

DR Deb Sircar
Prepared by: Besmir Lika 000574015

Group Case analyses Ryanair 2012
Ryanair’s implementation of low cost strategy In 1991, Ryanair appointed Michael O’Leary as CEO (Ryanair, 2012). Mr O’Leary travelled to United States and studied the most successful low-cost airline at that time in the USA-Southwest Airline. O’Leary was convinced that once the European airspace was deregulated, an airline that adopted Southwest’s model would succeed in the European airline industry (Barney and Hesterly, 2012). Therefore, with the deregulation of the European transport in 1997, Ryanair started flights towards European countries (Ryanair, 2012). Ryanair not only copied the Southwest Airlines, but they further developed the Southwest airline strategy by creating a unique position in the European airline industry. For example Southwest Airlines sell around 60% of their tickets online while Ryanair sells almost all their tickets online (Barney and Hesterly, 2012). As a result Ryanair has better managed to avoid the costs of call centers or travel agents. The prices of the Ryanair for a seat are estimated to be over 50% less than the Southwest Airlines, however Ryanair manages to gain higher profits mainly because the customers buys only the seat and every other service is charged extra (Barney and Hesterly, 2012; Ryanair, 2012).All those actions have made Ryanair officials able to keep the company’s prices low and the profit high as well as the largest international airline in the Europe (Harper, 2011; Ryanair, 2012). PESTEL Analyses PESTEL analyses stands for Political, Economic, Social, Technological,

Environmental and Legal. According to Johnson et al (2009) PESTEL is stated as the understanding of the political stability and history of the country being important in terms of political analysis. Economic analysis focuses on understanding the risks and opportunities available within the region. Social aspects is the understanding of the social dynamics of the region. This allows for more efficient communication with the natives, access to target markets, builds a labour force, and successfully manage teams. The levels of advancement in the technological aspects of a region can positively or negatively affect the opportunities available for a business. Environmental analysis involves collecting information and analysing weather patterns and climate cycles. There are several kinds of laws and one should ensure that all those rules are strictly followed when doing business. Political analysis: The terrorist attack on Twin towers (US) in 2001 and in London in June 2005 caused extremely serious problem in the aviation industry. These events have increased the number


Group Case analyses Ryanair 2012
of people paying more attention on aircraft safety. This research showed the capacity of the low cost airlines declining by 6% from 2000 to 2004 (Mintel 2005, cited Maolei Song 2012). In order to provide security to people and to guarantee the security of the airline industry, the UK authorities implemented severe security measures at all airports across the country. As...
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