Ryanair's Competitive Advantage Analysis
Added on 2020-02-18
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Running head: SERVICES MARKETINGServices MarketingCase Study – Ryanair - The Low Fares Airline: Whither now?Student’s name:The name of the university:Author’s note:
1SERVICES MARKETINGTable of contentsIntroduction......................................................................................................................................31. Why has Ryanair been successful thus far?.................................................................................32. Is Ryanair’s strategy sustainable?................................................................................................53. Would you recommend any changes to Ryanair’s approach in changing environmentalcircumstances?.................................................................................................................................84. Did the Aer Lingus bid make strategic sense? Explain.............................................................10Conclusion.....................................................................................................................................11Reference List................................................................................................................................12Appendices....................................................................................................................................14
2SERVICES MARKETINGIntroduction Ryanair Airline was established in the year 1985 and in the beginning; this airlineprovided short airline service from Ireland to the UK. This organisation was run by Ryan familyand now Ryanair provides destination services to the 205 places. This organisation has itsheadquarter in Dublin, Ireland. This is mainly an Irish low-cost airline and has been through anexpansion. However, despite being successful, this airline faced several issues from a globaleconomic recession and its strategies taken by management. In the year 2010, this organisationhad 67 million passengers and employed more than 8100 employees. In this study, a case studynamed ‘Ryanair- The Low Fares Airline: Whither Now?' will be analysed. This case studythoroughly analyses the Ryanair's strategies and loopholes in all angles and focuses on thecompetition in the industry.1. Why has Ryanair been successful thus far? Ryanair has been designed itself to be world’s favourite airline and now this airline isworld’s eighth largest airline. Most importantly, Ryanair has been following the notion to growup as second largest airline in the world and it would be second to Southwest. Success factor ofthis airlines are:Firstly, Ryanair was following low-cost airline model as Southwest airline used to follow.Low-cost airline strategy helped this airline to fly to secondary cities largely. By flying to thesecondary airports, this airline could avoid cost and charges of landing in the primary airports(major cities). This strategy was initiated by Michael O'Leary and from the beginning; thisstrategy was helpful to airline in avoiding the congestion. This flying to secondary airports also
3SERVICES MARKETINGhelped the airlines to improve turn-out time as it assisted the each aeroplane to land on time. Thison-time arrival helped to develop customer satisfaction. Additionally, this airline always gaveimportance in point-to-point services that could eliminate the operation like baggage and transfer(O’Connell et al. 2015). Secondly, Ryanair followed the contrarian strategy that enables an organisation to investin a section that goes against the market trends. This contrarian strategy is all about to invest inan asset that does not make a profit right now; however, investor can sell this asset when theright time would come (Casadesus-Masanell and Ricart 2014). During the time of 2009, all theairline's companies were removing the flights, cutting the prices; O'Leary was buying newaircraft and exploring new routes for services. In the year 2010, O'Leary published the profitpercentage and it clearly showed that the airline made 200 percent profit. This contrarian strategyhelped Ryanair to attract more customers and overshadowed the competitors.Thirdly, Ryanair took strategy to provide ancillary services to the passengers of Ryanairwith the airline flight service. This strategy included the services of in-flight beverages,merchandise products, food items and internet based products. In addition, Ryanair decided toprovide customers with the service of car rentals, accommodation and travel insurance throughthe website. This strategy assists to reduce unit cost and ancillary revenues were 28% of the totalprofit (Malighetti et al. 2013). Later, Ryanair included online gambling, in-flight mobile phoneservices to the customers during flight. Fourth, Michael O'Leary was a key person behind the success of Ryanair and this airlinefirst introduced the services of low-cost airline. This visionary leader understood the Southwestmodel and started a low-fare airline in the Europe. Before O'Leary, Ryanair was a small airline
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