The case of Dogfight Over Europe: Ryanair describes the journey of two brothers and their emerging airline business. For almost a year their small airline had just one prop plane that held 14 passengers and operated within the small, secondary airports between Ireland and London. They experienced some initial success, but wanted to expand and grow the business more. The airline industry in Europe and more particularly Ireland and London was ripe for a new emerging business. There were many opportunities to take advantage of and many threats to be aware of as well as strengths and weaknesses of their own business to exploit and avoid.
As the case states, the environment in which they launched their business was first shaped by Europe’s national governments. The individual governments controlled the prices of the fares and the domestic fares were intentionally kept high to subsidize international service. As time went on, free competition was eventually permitted, thus creating a great opportunity in the industry. Fare prices plummeted as the airlines competed for customers and market share. This is a perfect environment to enter the industry if you are able to compete with the bigger businesses. Since the Ryan brothers had money from their father, they were able to offer a low price from the beginning and didn’t have to worry as much about covering their costs. This allowed them to be competitive. They planned to offer the same full service flights at a fraction of the cost of the other airlines and without the money from their father they might not be able to cover all their operating expenses. They also noticed that some of the fares from the other airlines were so high that many people were opting to use other means of transportation. If the brothers could attract these customers with their low prices they could make a great deal of money very quickly as well.
There are many problems that can arise when starting a new business, especially in an...
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