The company was awarded as Airline of the Year in 1999 by the Irish Air Transport Users Committee. Besides, an increasing problem is that more and more competitors start to offer cheap prices, as well. In fact, Cost leadership companies cannot avoid the competition coming from companies with differentiation strategy because if the product which is to be sold is not suitable by consumers, cost leadership firms sell products cutting them which however repeals the cost advantage Akan et al, 2006. These include ticket-less boarding, unallocated seats, one class of travel, costs for check-in baggage, no refund policy, basic seats to increase aircraft capacity and charging for any additional service. Given the size of the company they had hired a total of 1,060,378 workers.
For instance, there are no weight limits for luggage brought on board. It became the first European airline to implement such a flexible and low cost pricing strategy. Return on Capital EmployedFigure 2. Finally, the company claims to have high efficiencies — punctuality and less lost baggage compared to competitors. It is without a doubt that due to the enthusiasm, clear viewed determination and strategic insight, these characteristics were proven to drive the company forward.
First, the company offers the lowest cost of fare than its competitors in the airline. Evidence from Air Transport Magazines proves that they were the most profitable creators in the five years to 2009. Seminar Case Study, 2013 p. This drastically increases the amount of daily flights, as air traffic is avoided, adding significant value to the business. Nevertheless, its strategy still has some challenges. This was mostly due to factors out of the control of Lego and other toy companies because, firstly, a research suggested that the demand of children who were primary customers of these companies were changing rapidly to fashionable and electronic products. The average aircraft age was about 10 years vs.
Ryanair determines the fare price according to demand of the certain flight and by day count left till the departure day, for example, the less days left till the departure the higher price will be. Buyer are good informed at monetary values and trades via cyberspace and other mediums. Built on the success of the American Southwest Airline, Ryanair was the first airline introducing the low fares model in Europe. In this situation for Ryanair it shows if it is worth entering budget airline industry Dobbs, 2014. Often readers scan through the business case study without having a clear map in mind. Ryan brothers took account about various factors when he launched his company, the key choices from were: first, they chose the most lucrative route possible at the moment one of the most lucrative routes for their competitors , and with a potential growth if they can attract passengers from train or sea ferries.
Therefore, in-depth understanding f case guidelines is very important. After defining the problems and constraints, analysis of the case study is begin. Accordingly, economies of scale coupled with industry cost efficiency, mean the firm can market offers practically unbeatable by most competitors. Lastly exploitability, I would say that Ryanair was able to turn its resources to revenue very well with their current business models as they were selling business seat tickets cheaper than other airlines in the market and providing full service in short route flights making the company number 1 low cost airline in Europe. This differentiation is vital to the company.
The tasks of crafting, implementing, and executing company strategies are the heart and soul of managing business enterprise. Moreover, for big airlines, luxury is the key component, if these airlines also start work on cost leadership, they will lose the brand value and also the brand identify, causing airlines to lose the profits. The staff increased from mere 57 to 120 staff members and the plane carried for about 82,000 riders on two paths. Fortunately their financial policy ensures they are able to still profit handsomely from rock bottom fares. The corporate culture determines how Ryanair operates and conducts its business. Although Ryanair has eliminated extras such as in-flight meals, advanced seat assignment, free drinks and other services, it still prioritises features which remain important to its target market.
Putting Rynair in the light, the airline followed a mix of two strategies, which were cost leadership and differentiation focus. This has been evident by their operations to this point. Introduction Success of any organisation is dependent on proper business planning and development. Accordingly, price is the most distinguishable element. Ryanair also generate income from advertising on board the aircraft.
What 's your asse ssme nt of Ry anair 's launch str ategy? As we have seen, these include extra charges, priority boarding, in-flight food and drink charges and baggage fees. Managing staff costs and productivity is another factor used for reducing the cost for Ryanair. Cost advantage may achieve in terms of how product or services is designed or in terms of its quality. The next step is organizing the solution based on the requirement of the case. In that way Ryanair captures its prospective plans to expand internationally.
It is clear from the financial statements that scheduled revenues from primary ticket selling activities decreased from 2009 to 2010. Step 8 -Implementation Framework The goal of the business case study is not only to identify problems and recommend solutions but also to provide a framework to implement those case study solutions. Porter Five Forces is a strategic analysis tool that will help you in understanding the relative powers of the key players in the business case study and what sort of pragmatic and actionable case study solution is viable in the light of given facts. Providing two undesirable alternatives to make the other one attractive is not acceptable. It is used for the purpose of identifying business opportunities and advance threat warning. This leads to unstructured learning process resulting in missed details and at worse wrong conclusions.