Ryanair and Shannon Airport Business Strategy

This assignment examines Ryanair's unique business model and its effects on Shannon Airport. It explores how Ryanair's low-cost approach, including a passenger fee agreement with the airport, influences the airport's revenue streams. The analysis highlights the necessity for Shannon Airport to develop non-aviation infrastructure like car rentals and parking to compensate for the lack of traditional airport taxes.

Strategy, Enterprise &
Innovation

Table of Contents
INTRODUCTION................................................................................................................................3
A. Identification and evaluation of the key elements of innovation contributing in the success of
Ryanair..................................................................................................................................................3
B. Analysis of different approaches adapted by Ryanair in shaping the entrepreneurial vision and
identification of Market opportunities..................................................................................................4
Porter's Generic approaches or strategies – a tool to achieve competitive advantages...................4
Three Generic Strategy....................................................................................................................5
C. “Ryanair’s success can be attributed to the successful application.............................................6
of the Blue Ocean strategy” : Analysed ..........................................................................................6
CONCLUSION....................................................................................................................................7
REFERENCES.....................................................................................................................................8
Books and Journals..........................................................................................................................8

INTRODUCTION
This study identifies and evaluates the main elements of innovation that contribute to the success of
Ryanair Ltd. The firm is a low-cost airline which was established in 1984 and it is focused on cheap
flight rates to attract customers and build a competitive advantage within the market. A complete
analysis of various approaches and theories of innovation used by Ryanair to shape its
entrepreneurial vision and identification of market opportunities has been carried out in this report.
The study includes analysis of Ryanair's success considering effective application of the blue ocean
strategy. Furthermore, we will learn about various strategies and tools used by the airline to sustain
and develop a large market share (Johnston and Bate, 2013).
A. Identification and evaluation of the key drivers of innovation
contributing in the success of Ryanair.
There are mainly four key drivers of innovation which contributes in the success
of the Ryanair-
Nurturing talent – The employees who have effective talent leads the innovation, it helps
in bringing new and unique ideas in the innovation.
Managing creativity – The individuals or groups provide their ideas to be used in the
innovation process the management should set a process to manage the creativity in the
ideas for successful innovation.
Building relationships – The employees working in a group should develop strong
relationship within themselves so that they can easily contribute to the innovation by sharing
their views and ideas.
Encouraging a culture of innovation – An organisation needs to encourage and motivate
the employees to create an innovation culture within the organisation, it enables the
employees to adapt and contribute to the innovation process.
Ryanair Ltd. was established by Tony Ryan in 1984. He planned to provide a substitute to the state
owned single airline, is the Are Lingus between the countries UK and Ireland. Ryanair airlines was
the first airline that introduced a budget airline model in Europe on the basis of cost leadership
strategy of the American south west airlines. The company faced lots of issues and problems such
as huge debts, but at the end, it became the top low fares airlines within Europe in 90's.

There are various elements or factors of innovation and strategies that helped Ryanair in
achieving the success such as -
Mission – Ryanair airline focused on offering low fares that helped in increasing
passenger traffic while it also maintained a constant focus on the operating
efficiencies and cost commitment (Grant, 2016).
Vision – To securely develop itself as Europe's top low-budget passenger airline by
constant expanding and making improvements in offering of the low-fare services.
Values – Ryanair airlines is committed to provide customers the cheapest fares and
most on-time flights as compared to other competitors. The important values are the
green policy, safety issues, punctuality and perfect baggage handling.
Goals – The mentioned airlines plan to improve the efficiency and cheaper fares as
compared to the rivals within the industry. The objective of Ryanair is to become the
2nd biggest international airline.
Ryanair airline's success was completely based on the effective adoption of the South airline model
which focused on the cost leadership. it gets a benefit with the first mover advantage of
implementing the low budget model firstly within the European market by proper negotiation of the
best rates possible with the secondary airports. Ryanair ltd has founded a kind of aircraft fleet which
helps in saving the training costs, the point to point flights that helps in fast turn-around times and
flights to the secondary airports that enables airport fee costs reduction. All of these helps Ryanair
airline to increase the efficiency in the operations of the organisation. Another strategy adapted by
the cited firm is hiring the employees on temporary basis with the sub contracts that again helps the
organisation to reduce and save huge expenses which makes it flexible and capable to adopt the
changes in the business environment. Ryanair also saves a lot of expenses by not investing any
amount on the advertisement through the website. It also generates other revenues or income
through various supportive services such as car rental, on board gaming etc. which shares 20% of
the total revenue generated by Ryanair airlines. (Zhang and Kongli, 2013). The airlines effectively
used the low cost organisational strategy to gain a competitive advantage within the market. It
helped them to successfully attract the passengers who are interested in travelling at a low fare as
compared to other airlines available with the same services. Therefore, Ryanair's innovation tools
and strategies helps the organisation to gain success and grow itself as a leading low budget airline
within Europe. The airline leads with the largest number of passenger which is around 57.7 million.
Furthermore, Ryanair successfully operates over 140 airports which is the largest number within the
budget airline industry (Shah and Chattopadhyay, 2014).

B. Analysis of different approaches adapted by Ryanair in shaping the
entrepreneurial vision and identification of Market opportunities.
Ryanair airlines have succeeded in maintaining the low-cost leadership since years through the cost
cutting and it is presently the leading low budget airline within Europe. The airline has created
various strategies and plans in order to achieve the success they have today. There are numbers of
airlines or competitors which are developing a great competition in the airline industry but Ryanair
easily survived by obtaining the best outcomes form its operations. Ryanair airlines have the lowest
fares for their flights as compared to various rival airlines, it also provides satisfying services to the
passengers which has developed the trust factor and a good brand image in the market. The main
concern of Ryanair airlines is to create or develop a high level of design, high end branding and
user-friendly interfaces with the help of innovative thinking and ideas while developing and
introducing any new technology.
Ryanair airlines adapted various approaches and strategies for shaping their business vision and
attaining the market opportunities which are described below -
Porter's Generic approaches or strategies – a tool to achieve competitive
advantages
To improve the organisational profit and creating a strong position against the competitors,
Ryanair needed to analyse the business environment in order to regulate a competitive plan or
strategy. Porter provided various techniques and framework to obtain competitive advantage within
the market. The three main elements are strategies regulation, environment evaluations and
competitive moves performances. The objective is to identify various values the organisation can
offer in comparison to other organisation or rivals. To determine the factors which are affecting the
position of the company in the airline industry, regular analysis or evaluation of the operations and
the elements affecting the organisation should be performed.
There are various approaches or analysis Ryanair performed to improve the business vision
and bring opportunities for the growth and development which are follows
Porters Five Factors – To develop an understanding of the industry or market, Porter developed a
framework consisting five competitive forces. This approach helps in creating a structural analysis
of the industry. The various forces in the framework are – Substitution, bargaining power of
suppliers and buyers and the present rival within the market(Teece,2016). The various competitive
forces altogether helped to identify the intensity of the market competition and develops a base for
regulating a strategy. The various forces are discussed below -

1. Potential Entrants – There is always a threat of a new organisation entering the market within a
changing industry. Ryanair identifies various threats of a new organisation or airlines company
entering into the market, for example – cost analysis, competition, services etc (Febrianda and
Tokuda, 2017).
2. Substitutes – Within an industry there always be a substitute of the service and products which
are competing for the market share. Ryanair analyse the services and values offered by the
substitutes and rivals and focus on the innovation in the services provided by them to attract the
passengers.
3. Buyers – Buyers have the bargaining ability due to the prospect of high quality demand, forced
down prices etc. Ryanair airlines ensures that their customers are satisfied with the services they are
provided. Passengers satisfaction is the main objective of the airline organisation, as well as Ryanair
provides the lowest fare to the passengers which creates the most positive impact on building good
relations with them (Miles and Van, 2017).
4. Suppliers – The suppliers also have a bargaining position among the participants in an industry
by giving threat to decrease the quality of the products or by enhancing or increasing the price This
bargaining power is influenced by the figure of suppliers available, the uniqueness of the various
services, possibilities of the alternative suppliers and the cost of changing suppliers.
5. Competitors within the industry – While identifying the various elements or forces that drives
competition, the rivals within the industry with existing organisations are needed to be considered.
Ryanair airlines focus on the various competitors in the industry which can be a threat to them. It
helps to improve their operations and position in the market by developing effective strategies and
plans.
Three Generic Strategy
After overviewing the five forces, Porter created the three generic strategies, which provides the
approaches helping the organisation to outmatch the rivals within the market. The most effective
plan for the company is unique and innovative as well as depend on the various situations identified
in the Porter's five forces. The company's competitive strategies can be identified through the skills
and resources accessible, the managerial styles and the arrangements of the organisation (Weiss,
2014). There are three important internal approaches at the top level that can be adopted to develop
a strong position which includes:

Differentiation: The better tom brings the differentiator position in the market will help to
recognise the identity.
Focus plan: it is important for to make the focus plan to get the exact outcomes.
Cost leadership strategy: A leader has to decide the various cost to implement the strategy used in
their plan.
The Generic strategies can be described in brief by understanding all the strategies
individually –
Cost leadership – The cost analysis is an effective generic strategy against the rivals within the
industry. To gain a leading position Ryanair must focus on low cost with the help of various
operations in the whole organisation. The business operations that controls cost may be quality,
strategies, minimizing the services, sale force, advertising etc. With the implementation of various
plans and strategies, the organisation can create a defending ability against the customers and their
capability to drive the price low.
Differentiation Analysis – This is the secondary generic strategy in which competitive advantage is
achieved by comparing the product or service to provide a specific worth as compared to the rivals
or competitors (Miyake and Kaminishi, 2016).
Cost Focus – Another strategy practised by an organisation is to focus on a particular market area.
To be able to compete with direction, the services and products of the business needs to be more
effective and efficient as compared to the competitors.
Therefore, Ryanair airlines used these effective tools and approaches to obtain competitive
advantages in the airline industry. The techniques and strategies helped the company in increasing
the market share and attracting more passengers as compared to other airline companies.
Application of Innovation frameworks within the Ryanair
There are 4P's of innovation that can be applied on the Ryanair -
 Position – The position of an organisation refers to its success within a market compared to
other organisations. The Ryanair targeted and planned to be the leading low cost airline
company, which they achieved successfully. The organisation brought an innovative idea to
offer cheap flights to the people.
 Process – Ryanair develops and maintain effective operations to provide services to the
customers at the lowest price. The brand reduced the cost and expenses in order to generate
profit even after providing services at low cost
 Products and services – The Ryanair's innovation was to offer the cheapest air travel to the

people, which was a most successful plan by them.
 Paradigm – The airline company follows a simple rule in their business operations. Low
cost and quality services, which is the key to success of the Ryanair.
C. “Ryanair’s success can be attributed to the successful application of the Blue
Ocean strategy”
A new approach or factor that helps in increasing the international development and growth of
air travel is the low cost or low fare airlines. The low budget air travel or transport model has
been imposed by the European countries. It developed a massive change in the airline
industry. The low-budget or cost model for the business activities of air travel and air
transport leads to a great reduction in the cost that the company attain by reducing the free
services and by using modern technologies. Ryanair airlines earlier followed the Red ocean
strategy, in which they were focusing to compete in the existing market conditions and trying
to beat the competitors or rivals in the airline industry. The Red ocean strategy enabled
Ryanair meet the existing demand in the market by developing more value for passengers at a
higher cost or low value at a lower cost. This helps Ryanair to hold a fix position in the airline
industry by serving a specific number of passengers. But the disadvantage of this strategy is
that it does not focus on building more customers or just stand out of a competition through a
completely unique or different strategy or plan (Whittle and Myrick, 2016).
Therefore, Ryanair airlines shifted to the blue ocean strategy to grab the opportunities in the
market and create a completely unique business structure in-order to increase the market share and
make a specific or defending position within the airline industry. Ryanair airlines has become the
leading low-cost airline company in the world. It manages and controls more than 1400 daily flights
in 160 destinations across 27 countries. The airline has obtained this position on the top in its plan,
establishing itself as Europe's number one low-budget air transport as well as to enhance and
expand its varieties of low cost services. The key elements of the Blue ocean strategy are: Flying
through shorter routes, low operating budget, customer services, frequent connections from point to
point, operations through secondary airports and reducing the cost by using a single aircraft fleet. It
helped the company to constantly increase the efficiency of the employees. It also helps the airline
company in reducing the cost of customer services and decreasing the free services provided to
customers at the airport as well as in the airlines. Ryanair airlines implemented the blue ocean
strategy to focus on a monopoly business. The low fare air travel was the main element of the
strategy. Ryanair was the first airline to bring this approach which makes it completely unique and

different as compared to other airline companies in the industry. It helped the organisation to build a
completely contrastive image in the market. The passengers got attracted with the low-cost strategy
which did not had any substitute within the whole airline industry. This boosted the customers of the
company and helped it in developing as well as growth of the organisation. Therefore, Ryanair by
adopting the blue ocean strategy achieved success and became the leading low budget airline within
the airline industry with and outstanding brand image. It also helps the brand to create an irrelevant
competition between the various airline companies (Lambert and Davidson, 2013).
Value curve for comparing Ryanair, British airways and Emirates
 Ryanair offers the lowest fare compared to the Emirates and British airways
 Ryanair has a most effective online booking access compared to other airlines
 The Ryanair also offers the best ancillary services to the customers compared to the
Emirates and British airways.
 The Ryanair is spending the lowest amount of money on its Advertisement and promotions.

The Above diagram shows the comparison among the various airlines, Ryanair, Emirates and
British Airways
Ryanair Emirates British
Airways
Low Fares 6 1 3
Online Booking 6 1 4
Primary Airports 1 6 5
High Ad Spend 1 6 5
Ancilliary Services 6 2 4
Value Curve is an investigation apparatus. It permits us contrast what we are arranging with
do with what is as of now out there. We have to figure out what is on offer and what the client truly
needs. On the off chance that the present, got astuteness does not line up with the clients' requests,
at that point we could recognize a hole in the market and create items and administrations to fill that
hole.
The main drawback is: whether we do improve a mousetrap, soon every other person is busy, so we
should come back to this examination and choose where to go at that point. Methodology is a
constant procedure.
CONCLUSION
In this report the importance of the strategies development in an organisation is described with
context to a leading airline company the Ryanair. The ideas and techniques which are identified in
developing various strategies leads to a effective innovation within an organisation. The report also
includes the various strategies used by the Ryanair airlines to achieve success and grow the business
in the airline industry The demand for low cost airlines measure the supply and it is impossible that
the airports may reach more appropriative financial conditions than other airports (E. Ryanair
utilizes its market power and it even does not impose any cost for services, but it requires minimum
fare for each passenger as compered to the other airlines. Ryanair requested Shannon airport to pay
EUR 4,7 for each passenger which it will bring to the airport and will not pay any airport taxes.
Therefore, it is important for the airport to develop infrastructure for non-aviation activities such as

car rental, parking etc.

REFERENCES
Books and Journals
Johnston, R.E. and Bate, J.D., 2013. The power of strategy innovation: a new way of linking
creativity and strategic planning to discover great business opportunities. AMACOM Div
American Mgmt Assn.
Grant, R.M., 2016. Contemporary Strategy Analysis Text Only. John Wiley & Sons.
Weiss, L., 2014. America Inc.?: innovation and enterprise in the national security state. Cornell
University Press.
Whittle, R. and Myrick, C.B., 2016. Enterprise business architecture: The formal link between
strategy and results. CRC Press.
Lambert, S.C. and Davidson, R.A., 2013. Applications of the business model in studies of
enterprise success, innovation and classification: An analysis of empirical research from
1996 to 2010. European Management Journal, 31(6), pp.668-681.
Miyake, K. and Kaminishi, K., 2016. Study on the Focus Strategy of Small to Medium Enterprise
& Start-up Companies in the Semiconductor Manufacturing Industry Case Study of
Minimal Fab. INNOVATION AND MANAGEMENT, p.1460.
Miles, S.J. and Van Clieaf, M., 2017. Strategic fit: Key to growing enterprise value through
organizational capital. Business Horizons, 60(1), pp.55-65.
Shah, M. and Chattopadhyay, N., 2014. Innovation in procurement from rural India using enterprise
mobility strategy: a case study. World Journal of Entrepreneurship, Management and
Sustainable Development, 10(2), pp.143-153.
Febrianda, R. and Tokuda, H., 2017. Strategy and Innovation of Mushroom Business in Rural Area
Indonesia: Case Study of a Developed Mushroom Enterprise from Cianjur district, West
Java, Indonesia. International Journal of Social Science Studies, 5(6), pp.21-29.
Teece, D.J., 2016. Business models, business strategy and innovation. Long range planning, 43(2), pp.172-194.
ZHANG, T.J., Kong, S. and Li, X., 2013. The research on strategy model of enterprise technique innovation of middle
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