Competitive Positioning of Ryan Air in the UK Airlines Industry
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This assignment examines the competitive positioning of Ryan Air within the UK airlines industry. It analyzes the company's strengths and weaknesses, its competitive advantages, and its response to market changes. The paper also provides recommendations for Ryan Air to improve its competitive position and enhance its profitability.
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BUSINESS ESSENTIAL 1
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Table of Contents Table of Contents Introduction............................................................................................................................3 UK airlines industry................................................................................................................3 Competitive positioning..........................................................................................................5 Aspect....................................................................................................................................5 Ryan Air.................................................................................................................................5 easy Jet..................................................................................................................................5 Pricing....................................................................................................................................5 Brand image...........................................................................................................................5 Marketing...............................................................................................................................7 Customer satisfaction.............................................................................................................7 Table 1: Competitive Positioning...........................................................................................8 Use of internet indiscriminately...............................................................................................8 Block chain will move beyond the buzz..................................................................................8 Advanced security system......................................................................................................8 Customer loyalty.....................................................................................................................9 Recommendation...................................................................................................................9 Congestion:............................................................................................................................9 Recommendation:..................................................................................................................9 Terrorism:...............................................................................................................................9 Recommendations:................................................................................................................9 Passenger comfort:................................................................................................................9 Recommendation:................................................................................................................10 Labour relations:...................................................................................................................10 Recommendation:................................................................................................................10 Conclusion...........................................................................................................................10 Reference list.......................................................................................................................11 2
Introduction Competitiveadvantagesarethespecificconditions,whichallowanorganizationfor producing a service or good at a very affordable price. Moreover, it allows an organization to enhance their sales as well as superior margins comparing to its rival companies. In order to maintain competitive advantages, an organization has to cover a wide range of factors such as cost structure, branding, the distribution network, customer service, the quality of the product offerings and intellectual property. Therefore, assessing the competitive advantages is very essential in order to enhance the sales and profitability of the organization. There are many steps such as reviewing the core strengths of the company, reducing the cost of the product, focusing on service, focusing on service or product quality and differentiating productsorserviceswithotherrivalcompaniesneedtofollowtoapplycompetitive advantagesintheindustry.Anotherimportantandcriticalpartoftheorganizationis competitive analysis of the market. It allows an organization to understand the needs of the customers in the product or service and helps to implement all of the requirements in the product for attracting more attention of the wide range of targeted audience. Therefore, this assignment will outline the overall UK airlines industry and competitive positioning process of Ryan Air. Hence, company’s response to the market changes and a recommendation part would be provided in this assignment for offering a clear idea to the readers. UK airlines industry Airline industry has become a trend to United Kingdom. Moreover, airline industry in the United Kingdom is considered as the most active airline industries around the world. Millions of people use airlines in order to travel across the world. Hence, there are small domestic airline to the full-service international airlines are in United Kingdom in order to providing more satisfaction and reliability to their customers. Furthermore, Ryan Air is one of the leading airline industries in UK and there are many rival companies such as easy jet etc. in the market that are always trying to beat one another. Hence, Ryan Air was established in the 1984 as a small airline industry and started to improve their business strategy in order to expand their overall business structure of the organization (Creaton, 2014). The company already has over 250 destinations across the world. Moreover, the company has the revenue of €6.648 billion in the year 2017. As per the recorded data, the company has the net income of €1.315 billion in the year 2017. On the 3
other hand, rival company of Ryan Air is Easy Jet, which was established in the year 1995 with a goal of providing best class airline service at a lower price (Morlottiet al., 2017). Hence, the airline company has to cover more than 132 destinations across the world. Moreover, Easy Jet Company already has the total income of €325 million in the year 2017. Furthermore, more than 11,655 numbers of employees that are still working in this industry. There are many rival companies of Ryan Air in this competitive market such as Wizz Air, Jet2, British Airways, Flybe and so on. Hence, in this assignment, Easy Jet airline is chosen as the rival company of Ryan Air as both of the companies use high discounts in their tickets in order to gather more attention of the passengers. 4
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AspectRyan Aireasy Jet Pricing Pricingofaproductor serviceisoneofthe importantfactors thatreally impactsonthebusiness structure of the organization. Keeping this on mind, Ryan Airusesspecificpricing strategyintheirindustryin order to improve the overall businessstructureofthe organization(O’Connoret al.,2017). The company has provided various discounts in theirticketsinorderto reduce the price of the ticket for gathering more attraction of the passengers. On the other hand, Easy Jet, whichisoneoftherival companiesoftheRyan Air has also reduced their price of tickets. In most of cases, price of the tickets are very much low early on as well as enhanceasthedateof departureapproaches.The Easyjetcompanyfor increasingthesalesofthe ticketsgenerallymaintains this strategy. Brand image Creating a brand image is veryessentialinorderto enhance the overall market andrevenueofan organization.RyanAirisa well-knownairlinecompany around the world. Therefore, thecompanyalreadyhas great type of brand image in the market. Easy jet is also one of the leadingairlinesinUnited Kingdom(Forsythetal., 2016). Therefore, knowingly the importance of enhancing thebrandimage,the companyhasimplemented few policies and changes in theorganizationfor enhancing their brand image inthemarkettogenerate more customer revenue. The companyisfocusingon safety,simplicity,integrity andpassioninorderto enhance the brand image of the organization. 6
Marketing Ryan Air company believes in the simplicity of marketing strategy. They already have implemented e marketing in their organization in order to enhancethesalesofthe tickets(Holloway,2017). Customeracquisitionis another important point that has the ability of serving the requirementsofpassive browsersandconsumers. Hence,thecompanyhas implementedmanyofthe newthingsinorderto develop the overall business structure of the organization. Moreover, the company has started to use search engine optimization,mobiles, customerrelationship manager,emailmarketing and on board wifi in order to develop the whole system of theirmarketingprocess (Palmerand Bejou, 2016) . The company is focusing on enhancing theire-marketing strategyforexpandingthe overall business structure of theorganization.The companyhasusedmany socialwebsitesinorderto promotetheirmarketing process.Hence,usinge- mail marketing and customer relationshipmanagerfor accomplishingthebusiness objectivesofthe organization. Customer satisfaction Customer satisfaction is one of the important things that needtomaintaininthe airlineindustry(Borenstein and Rose, 2014). Therefore, Ryan Air has the decided to implementstrategiesfor offeringtheirpassengers morecustomersatisfaction and reliability. On the other hand, Easy Jet also shows their intention in enhancingthelevelof customersatisfactionin order to raise the profitability and sales of the company. In asurvey,ithasbeen observedthatmostofthe passengers were satisfied by theservicesthatare 7
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providedbythecompany. Therefore, the company has chosen the customer loyalty as one of the important factor forraisingtheoverall structure of the firm. Table 1: Competitive Positioning (Source: Created by Author) Continuous changes are required in order to make continuous improvement in any aspect. Airline industry is one of the leading businesses in United Kingdom. Moreover, millions of people daily use thousands of flights of the companies in order to travel around the world. There are certain changes that have already happened in the present market. Changes are detailed below, Use of internet indiscriminately In order to book tickets or to check the approval of the ticket or any other reason, people uses internet for the fastest result (Blain, 2017). Hence, this use of internet has made the overall airline system smooth and simple to use. Block chain will move beyond the buzz The potential of block chain is huge and it has the potential to revolutionise the whole industry.Usingblockchaintechnologycanbeverycrucialinchangingthewaysto streamlinepayments,travelidentificationandmakeluggagetrackingmoresecure (O’Connoret al.,2017). Furthermore, it a completely new approach to airline industry. Advanced security system Security system is another important factor that an airline industry needs to focus on. In past days, airline industries had used low quality security system to reduce terrorism activities (Dobruszkeset al., 2017). In modern days, advancement of technologies has gifted many advanced security system in order to cut down the probability of terrorism activities within in the airline industries. That practise plays a crucial role in making the airline industries more secure. 8
Customer loyalty Customer loyalty, which is one of the important aspect that helps to gather more attention of thepassengersthroughprovidingcustomersatisfactionandreliability.Inpastdays, passengers were needed to spend a lot time in the checking process while entering or exiting from the airline. This practise had irritated passengers. In order to provide more reliability and satisfaction to the passengers, airline industries have focused to provide services in ways that are more professional. Knowingly the importances of these new approaches in the airline industries, Easy Jet and Ryan Air have implemented several changes in their industries in order to develop and improve their overall business function of the organizations. Both of the companies, has started to use block chain technology to improve their tracking and payment method. Moreover, both of the companies’ ahs used advance science for improving their security system. Companies have improved security system to cut down the probability of terrorism activities within the industries. Eventually, both of the companies giving focus to offer more customer loyalty in order to respond tto new changes in the market. Recommendation The four general problems that exist in UK airlines industry are enlisted below: Congestion:UK airports operate a huge number of flights and that is why there is not only congestion in the sky but also in the runaway and airports, which is often resulting in flight delays (Andrew and Hendriks, 2017). Recommendation:In order to overcome the congestion problem, Ryan Air needs to discuss with the airport authorities to increase the number of runways of the airports so that the congestionscanbeavoidedandtheairlinescanflywithoutanydelaysorfurther inconvenience. Terrorism:Terrorism has been a rising problem in the landscape of UK and this is a constant threat to the UK airline industry. This uprising problem is making the role of UK airline industry observant and the passengers very fearful (Blain, 2017). Recommendations:To overcome this terrorism threat, Ryan Air needs to incorporate more safety measures for the passengers. Ryan Air also needs to provide a training program to their staffs so that they can help the passengers during any tough situations. Passenger comfort:Due to the tendency to increase profit, airline industries have stuffed the flights with more seats, which is creating discomfort for the passengers and impacting on 9
passenger attrition. This problem is gradually decreasing the good will of UK airline industry (Andrew and Hendriks, 2017). Recommendation:In order to recover from this problem, Ryan Air needs to increase the number of airlines and stop stuffing additional seats for increasing profit. This will help in satisfying the customers as well as increase profit. Labour relations:The airline industry of UK is crippling due to the labour problems. It is not only hampering the good will of the industry but also increases employee attrition which results financial losses in the airline industry (Blain, 2017). Recommendation:In order to stop facing labour relations, Ryan Air needs to engage the labour in decision making process as well as start training programmes for the employees which will eventually motivate them. Ryan Air also needs to resolve the queries of the employees. Conclusion Hence, it can be concluded in the above that Ryan Air needs to incorporate measures which willincreasecompanyprofit.RyanAiralsoneedstobringinnovationincustomer management so that they can forbid the customers from choosing any other airlines. Ryan Air needs to innovate ways to handle the suppliers as well as help the airline company to stay in market competition. The above discussion sheds light on the competitive advantages of Ryan Air and Easy Jet. It is identified from the above that Easy Jet is the prime competitor of Ryan Air. It can also be said that Ryan Air needs to incorporate changes in their pricing strategy in order to increase profitability. The response of Ryan Air is vulnerable towards any market changes and Ryan Air has selected cheap price in order to compete in the market. There are many difficulties faced by Ryan Air whenever they try to access distribution channels, which is considered as another barrier for the airline company. It is also observed from the above discussion that the bargaining powers among the airline staffs are quite high compared to other industries. Furthermore it can be said that Ryan Air needs to implement redefined strategies that will help the company to grow and achieve higher levels. 10
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Reference list Andrew,D.andHendriks,N.,2017.AirportRegulationintheUK.InTheEconomic Regulation of Airports(pp. 101-115). Routledge. Blain, A.N.J., 2017.Pilots and management: Industrial relations in the UK Airlines(Vol. 16). Routledge. Blain, A.N.J., 2017.Pilots and management: Industrial relations in the UK Airlines(Vol. 16). Routledge. Borenstein, S. and Rose, N.L., 2014. How airline markets work… or do they? Regulatory reform in the airline industry. InEconomic Regulation and Its Reform: What Have We Learned?(pp. 63-135). University of Chicago Press. Creaton, S., 2014.Ryanair: How a small Irish airline conquered Europe. Aurum Press. Dobruszkes, F., Givoni, M. and Vowles, T., 2017. Hello major airports, goodbye regional airports? Recent changes in European and US low-cost airline airport choice.Journal of Air Transport Management,59, pp.50-62. Forsyth, P., Gillen, D., Muller, J. and Niemeier, H.M. eds., 2016.Airport Competition: The European Experience. Routledge. Holloway,S.,2017.StraightandLevel:PracticalAirlineEconomics:PracticalAirline Economics. Routledge. Morlotti, C., Cattaneo, M., Malighetti, P. and Redondi, R., 2017. Multi-dimensional price elasticity for leisure and business destinations in the low-cost air transport market: Evidence from easyJet.Tourism Management,61, pp.23-34. O’Connor, P., Flin, R., Fletcher, G. and Hemsley, P., 2017. Methods used to evaluate the effectivenessofflightcrewCRMtrainingintheUKaviationindustry.CrewResource Management: Critical Essays. O’Connor, P., Flin, R., Fletcher, G. and Hemsley, P., 2017. Methods used to evaluate the effectivenessofflightcrewCRMtrainingintheUKaviationindustry.CrewResource Management: Critical Essays. Palmer, A. and Bejou, D., 2016. Retrospective: service failure and loyalty: an exploratory empirical study of airline customers.Journal of Services Marketing,30(5), pp.480-484. 11