RyanAir Case Study
MGT 472; Strategic Mgt.
Ryanair Case Study
1.) What are the characteristics of the European aviation environment at the time of the case? (20 points)
When Ryanair was established in April of 1986, there were many factors to consider in order to properly assess their current environment. In order to attain a firm grasp of their current atmosphere, we must delve deeply into its external, general, industrial, and competitive facets. European aviation at the time was dealing with different pressures from innovation and quickly advancing technology. Additionally, privately owned commercial airlines began to emerge in addition to the “flag carriers” of several European nations. Before long, the airlines service began to focus on international routes while at the same time tagging domestic routes with high fares so as to allow the subsidizing of international service. Eventually, there arose a large threat of the Americans dominating the skies due to the free competition and privatization. To avoid this monopoly of sorts, the International Air Traffic Association (IATA) set international fares through government regulation of the major airlines, to include all aspects of air travel between countries. Looking at the general environment, we must consider its demographic, economic, political/legal, sociocultural, technological, and global segments. Demographically, at this point in time there was a large, diverse population just waiting to discover air travel. Since the airlines introduced another travel alternative, the service providers began to show a large geographic distribution across country borders. Due to “pooling arrangements”, the industry had a rough economic start due to the pooling of the providers’ capacity, routes, and revenues. However, despite the European flag carriers shifting their focus to international flights/routes across the North Atlantic, which proved quite lucrative, these carriers eventually collapsed due to disparate
Ryanair Case Study
1.) What are the characteristics of the European aviation environment at the time of the case? (20 points)
When Ryanair was established in April of 1986, there were many factors to consider in order to properly assess their current environment. In order to attain a firm grasp of their current atmosphere, we must delve deeply into its external, general, industrial, and competitive facets. European aviation at the time was dealing with different pressures from innovation and quickly advancing technology. Additionally, privately owned commercial airlines began to emerge in addition to the “flag carriers” of several European nations. Before long, the airlines service began to focus on international routes while at the same time tagging domestic routes with high fares so as to allow the subsidizing of international service. Eventually, there arose a large threat of the Americans dominating the skies due to the free competition and privatization. To avoid this monopoly of sorts, the International Air Traffic Association (IATA) set international fares through government regulation of the major airlines, to include all aspects of air travel between countries. Looking at the general environment, we must consider its demographic, economic, political/legal, sociocultural, technological, and global segments. Demographically, at this point in time there was a large, diverse population just waiting to discover air travel. Since the airlines introduced another travel alternative, the service providers began to show a large geographic distribution across country borders. Due to “pooling arrangements”, the industry had a rough economic start due to the pooling of the providers’ capacity, routes, and revenues. However, despite the European flag carriers shifting their focus to international flights/routes across the North Atlantic, which proved quite lucrative, these carriers eventually collapsed due to disparate
Cited: Hitt, Michael A., R. Duane Ireland, Robert E. Hoskisson. Strategic Management:Competitiveness and Globalization Seventh Edition. Mason: Thomson Higher Education, 2007. Rivkin, Jan W. “Dogfight over Europe: Ryanair(A)”. Business Case Study, 23 October 2000. Harvard Business School. President and Fellows of Harvard College. 2000. Acknowledgments No Help Received.