Microeconomic Theory and Ryanair's Profit Warning

This presentation discusses the aspects of microeconomic theory and how it applies to Ryanair's profit warning due to lower-than-expected air fares. It also covers the importance of demand and supply, market structure, and customer satisfaction in the business environment.

BMP4003 Business Environment
Assessment 1 - Individual Presentation

Review Of An Article And To Expand On The
Aspects Of Microeconomic Theory
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Contents
• Introduction
• The aspects of microeconomic theory
• Conclusion
• References

INTRODUCTION
The business environment basically represent both
internal and external basis that induced direct and
sustained impact over the working possibility and
attentiveness of the business. It basically
comprises of different factors such as customer
satisfaction, customer need and its fulfilment,
market competitiveness, supply and demand,
strategic management, employee, owner, supplier,
buyer, government, induction of technological
advancement, market trends, economic changes,
social acceptance and many others as well.

The aspects of microeconomic theory
The microeconomic theories usually being used by an organisation to measure and control
the likeliness and acceptance of customer so that adequate change and alteration is
induced as per consideration of customer choice and behaviour.

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• Ryanair cut down its profit forecast as due to lower-than-expected air fares, in this chief
executive, Michael O'Leary, state that Ryanair is not able to rule out as per deduction of
fares further as the fare are expected to reduced out with 7% in winter (Ryanair issues
profit warning as fares fall, 2021).

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Demand and Supply
Ryanair is a low cost airline and operates in working majorly in part of Morocco and Europe with
having head office at Dublin Airport in Ireland. The company operates 254 Boeing 737-800
aircrafts in its 43 bases around Europe and Morocco and offer low air travel charge to attain
successful growth and development and it is due to the de-regulation that is processed in 1997
within aviation industry.

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In this it is required that Ryanair must have
maintained focus towards the demand and
supply as with the aim to improvise the
passenger’s satisfaction and to promote the
transportation services offered by business.
In this ability to business to advance the
revenue generation and possibility to
compete with market competitiveness also
enhance perpetually

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The impetus to promote the services is
processed only by evaluating the need and
inclination of customers towards favoured
services in these promotional as well as
marketing strategies get used by the
business in systematic manner. The
Ryanair operates its working as by making
clear assess of market demand and thus
the innovative solution devise accordingly.

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Market Structure
Ryanair is a company that drive with the
fact of undoubtedly one of the most
remarkable business over past 10 years
in Europe as the company also maintain
clear outspoken in terms of
communication style and it is processing
as per support of balanced deal to
publicize its ‘revolution’ in air travel.

The oligopolistic market the industry is concentrated in hands of Ryanair, and the actions of each
firm are interdependent. In this if one firm decreases the prices as Ryanair that the other
businesses also required to reduce the sales so as to experience higher sales as per related to
expense. The product is basically used to differentiate in between differentiated and
homogenous product with this market barrier get in controlled.
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Summary
It has been concluded from the above report that business environment and its balance is
always been essential for the business as with this both micro and macro factors get
analysed and controlled in balanced manner. These factors induced both direct and
indirect impact over the working consequences so that ability of an organisation to
achieve and accomplish its standardised goals and target in timely constrained. In
addition the microeconomic theories are basically used to measure the tendency of
customer to take decision about offered products and services by an organisation.
Moreover, it assist the business to maintain long term success and development as by
measuring the requirement and acceptance of customers in successful manner.

References
• Amankwah-Amoah, J., 2020. Stepping up and stepping out of COVID-19: New challenges for
environmental sustainability policies in the global airline industry. Journal of Cleaner Production, 271,
p.123000.
• Cherunilam, F., 2021. Business environment. Himalaya Publishing House Pvt. Ltd.
• Halbert, T. and Ingulli, E., 2020. Law and ethics in the business environment. Cengage Learning.
• Nudurupati, S.S., Garnego, P. and Bititci, U.S., 2020. Impact of the changing business environment
on performance measurement and management practices. International Journal of Production
Economics, p.107942.
• Rodríguez-García, M., Orero-Blat, M. and Palacios-Marqués, D., 2020. Challenges in the Business
Model of Low-Cost Airlines: Ryanair Case Study. International Journal of Enterprise Information
Systems (IJEIS), 16(3), pp.64-77.
• Sołoducho-Pelc, L. and Sulich, A., 2020. Between sustainable and temporary competitive
advantages in the unstable business environment. Sustainability, 12(21), p.8832.

Thank you