Ryanair Case Study Analysis
International Strategic Management
Coursework 2011/12
Case study analysis: Ryanair – the low fares airline: wither now?
Executive Summary
The purpose of this paper is to use analysis of the airline industry and of Ryanair to highlight the firms’ successes thus far. It also considers the sustainability of the current strategy by viewing the future of the firm and its competitors.
Using Porter’s five forces, the VRIO framework and the SWOT analysis it gains intimate information on the factors impacting the firm and industry.
Its success is primarily down to its low cost operations. Price is the distinguishing element in this industry. Ryanair has a great market influence, pricing out new entrants. The ability to use its resources and capabilities to create competitive advantages has helped fulfil its strategies.
Strategies like the use of secondary airports, increasing ancillary services, fast turnaround times and free publicity have insured success. Hence the firm has been efficient in reaching their aims of keeping ticket prices low, keeping on time and increasing efficiency through technological resources.
However, some negative factors could impact Ryanair in the future. Ancillary services which constitute a large proportion of operating profit are at risk of reaching their full capacity. Other environmental factors like higher taxes and oil prices, as well as long term effects of their sometimes bad reputation, could affect long run sustainability. Additionally, in the future there could be a mismatch between the level of industry growth and the rate the firm’s fleet is expanding.
As a result this essay derives some remedies, such as moving to different airports, expanding destinations, reducing the fleet size and decreasing turnaround times.
Introduction
This essay aims to discover how effective Ryanair’s strategy has been, and what have been their competitive advantages. Firstly, this paper analyses the industry strategy using the Porter’s five forces
Coursework 2011/12
Case study analysis: Ryanair – the low fares airline: wither now?
Executive Summary
The purpose of this paper is to use analysis of the airline industry and of Ryanair to highlight the firms’ successes thus far. It also considers the sustainability of the current strategy by viewing the future of the firm and its competitors.
Using Porter’s five forces, the VRIO framework and the SWOT analysis it gains intimate information on the factors impacting the firm and industry.
Its success is primarily down to its low cost operations. Price is the distinguishing element in this industry. Ryanair has a great market influence, pricing out new entrants. The ability to use its resources and capabilities to create competitive advantages has helped fulfil its strategies.
Strategies like the use of secondary airports, increasing ancillary services, fast turnaround times and free publicity have insured success. Hence the firm has been efficient in reaching their aims of keeping ticket prices low, keeping on time and increasing efficiency through technological resources.
However, some negative factors could impact Ryanair in the future. Ancillary services which constitute a large proportion of operating profit are at risk of reaching their full capacity. Other environmental factors like higher taxes and oil prices, as well as long term effects of their sometimes bad reputation, could affect long run sustainability. Additionally, in the future there could be a mismatch between the level of industry growth and the rate the firm’s fleet is expanding.
As a result this essay derives some remedies, such as moving to different airports, expanding destinations, reducing the fleet size and decreasing turnaround times.
Introduction
This essay aims to discover how effective Ryanair’s strategy has been, and what have been their competitive advantages. Firstly, this paper analyses the industry strategy using the Porter’s five forces
References: * Davies, W. (2000)."Understanding strategy. Strategy and Leadership. 28, 5, p. 25-30. * Dierickx, I. and Cool, K. (1989). Asset stock accumulation and sustainability of competitive advantage. Management Science, Vol. 35, pp.1504-1511 * Higgins, E. (2011) Ryanair – The Lowest Fares Airline: Whither Now? University College Dublin * Kawagoe, M. (2008) Air Transport deregulation in the EU: Study from the Europeanization Perspective, Hokkaido University, Sapparo, Japan * Porter, M.E. (1979) How Competitive Forces Shape Strategy, Harvard Business Review, March/April 1979 * Peng, M.W. (2009) Global Strategic Management, 2nd Ed. South-Western, Cengage Learning * Narula, R. And Henry, J. (2011) Lecture Notes, International Strategic Management, Henley Business School, Reading University. Websites * Anon (2009) analysis of low cost airlines [Online] Available at: http://www.scribd.com/doc/40695881/Analysis-of-Low-Cost-Airlines [Accessed 5 January 2012] * Ryanair (2011) About us [Online] Available at: http://www.ryanair.com/en/about/fleet [Accessed 9 January 2012]