This case study and analysis is to identify the current strategy of Ryan Air using various models and strategies to develop a better future for Ryan Air. As this report addresses different aspects of Ryan Air with the help of Porter’s 3 Generic Strategies and the justifications using the value chain model has helped in the analysis of the real focus of RyanAir. This report also addresses the various control systems with the implementation of the strategy for Ryan Air together with the leadership styles of Michael O’Leary. As he plays a big role in the company in cost management and many other strategies of running a low budget airline.The Strategy implementation has been carried out using the Mckinsey’s 7 S model. This has helped identify the various aspects of improvement for Ryan Air. As Ryan Air is the first budget airliner, it has been able to become the largest carrier in the UK. To address the short comings and the strategy defects, the following report addresses various models to analyse and implement a strategy to enhance the airline since its cost management systems remain of top notch. Through this report the identification of the strategy and a new implementation of it may enhance through the 7’S model has been able to address all aspects. This report contains vital information of Ryan Air’s position and its strategies and recommendations to ensure the company is performing at high levels in all sectors. 2.0 Porter’s Generic Strategy of Ryan Air
Ryan Air is a low budget airline. Its main focus is more or less cost reduction. Its strategy remains the world’s low budget airline. Therefore we are able to make and analysis of Ryan Air using the Porter’s Generic Strategies to analyze the current position of Ryan Air. Through analysis we are able to outline the three generic strategies such as, Cost Leadership
Cost Leadership strategy is based upon a business organizing and managing its value-adding activities so as to be the lowest cost producer of a product within and industry (Campbell, 2002) The strategy here is based on the goal of the airline. A low budget airline that is value adding and competes against its competitors with the lowest costs. Ryan Air has been able to become a popular airline among European citizens and have attracted many European business travelers who only require getting from point A to point B. With the recent recession and various other factors of customers searching for cheaper option which provided quality service, Ryan Air have been able to create a demand for its tickets. At first they were an ordinary airline with normal service of high quality which also suggested that they are a high priced airline. Therefore the company was forced to go in to cost reduction mode due to the external forces of recession. Therefore along with the expansion to Europe the air line was faced in hardships of surviving as a high costs airline. Therefore the company was forced to become a more effective cost leader in its sector. Through this they are able to become the best low fares airline in the European sector. Differentiation
Differentiation has many advantages for the firm which makes use of the strategy. Some problematic areas include the difficulty on part of the firm to estimate if the extra costs entailed in differentiation can actually be recovered from the customer through premium pricing. Moreover, successful differentiation strategy of a firm may attract competitors to enter the company’s market segment and copy the differentiated product. (Lynch, 2003). As RyanAir faced various hardships in the past receiving losses of up to IR£20 Million, the fight to survive along with Michael O’Leary decided to change company strategy that was based on the model developed by American Southwest Airlines. Ryan air’s generic strategy remained unclear, alas they remained somewhere between a focuser and a cost leader. But their previous strategies...
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