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- The company's motto is "Our strategy is like Wal-Mart: We pile it high and sell it cheap". It is important for top managers to clearly understand the policy and follow it all the. The Ryanair follows the low-cost strategy. It means the decreasing spending on production versus opponent's wasting. There are cheap rates for flying in the air sphere. The company reduces costs in the way of quiet costs on repairing the flights, reducing wealthy service, public boarding service, and ticket sales through the Internet. The benefit is a poor aircraft fleet and expansion to regional airports. Moreover, while flying to secondary and regional airports, the company reduces the expenses for congestion and terminal delays. These airports have few restrictions, slot requirements and unlimited landing. According to low-cost strategy, it was a great decision to cooperate with them. On the other hand, the seats at the airplanes are without pillows and frills. The disadvantages of this kind of strategy are low wages, possibilities to copy opportunities, the necessity to carry for the price, follow the competition with insight, and search the ways to better the product without high costs. The strong part of the company is marketing. Using different kinds of promotion, the Ryanair attracts the clients with the best propositions. Moreover, having the advertisements inside the planes, it receives additional money and potions it out among production. The company has also cooperation with accessory services. For instance, the client can book the ticket for plane and hotel, order beverages, food, and merchandise online on the website per few clicks. Furthermore, the fixed fee for credit and debit cards can induce the client to order more. The negative factor of decreasing costs is buying used planes. It is not the way to reduce costs as life of a passenger is the main aim. The company should think how to save money in other ways. The low-cost strategy depends on the number of clients. The company has the biggest part of market shares most frequently. It explains keen margins between net cost and retail margin. For that reason, the firm should make up this difference by the quantity of the passengers. The Ryanair has a big success in this sphere as it has the largest market share in different geographical markets and plans to expand its possibilities. For instance, in Dublin-London route, the market share is 45%, and in Stockholm-Milan, it is 50%.
- The airline industry has a forcible competitive atmosphere. It is the most intense among the companies with low-cost strategies. People are searching to book the cheapest tickets, and the airlines do everything to conquer the biggest amount of clients. The buyer power is the strongest competitive advantage for the Ryanair. The firm can change their offer, looking for the demand of the customers and their desires. It may add new opportunities any time. For instance, the Ryanair established hotel booking and bus tickets. Taking into consideration the number of clients, the prices for tickets can be slightly changed according to the strategy. The decreasing number shows that the company turns to the wrong way and needs something to modify in its policy. On the other hand, the increased number of clients shows positive tendency of company's affairs and stimulates the firm to keep going this way. The threat of new entry is the weakest competitive force. New partnerships are likely to keep low prices to become stable in the market. The low-cost strategy can be easily copied or begged. The short-term low prices of the opponent can be a trap for the firm. The competitor can operate at a deficit in some period, but it sharply cuts other rivals' affairs. Moreover, it is important to have power barriers for entering and for disposing this disadvantage. The company should also have modern technologies and innovation, which cannot be copied or used by others. It gives an assurance of the calm and safety when someone new will come to the market. The money is the main factor for the buyer, so a new participant can low the revenue index in the whole market. The airlines are attractive industry and gain popularity nowadays. People prefer to get quick to the destination point and to spend less money. It becomes popular every day all around the world. Moreover, it is a very profitable sphere. The most important issue is to choose the right strategy and to pursue it all the time. The airline industry is a developing system, which does not have stability. Moreover, some catastrophes play negative roles for airplane sector. For that reason, the question of safety is urgent, and the companies should think about the clients at the first. It is the risks for all enterprises inside the market as the latter are interconnected. All in all, the airline industry has a severe competition. New companionships try to get in the market, that makes difficulties to existing firms in the market. On the other hand, the already established companies try to do the best to be the leaders in the market and restrict the entry for new participants. Generally, the airline industry has a very severe competition, and it is very hard to go in it.
- The driving force is the demand for tickets in the airlines industry. While dividing the clients at groups with different prosperity, we can see the major tendency of costs. For instance, the people with high income would now fly economically and vice versa. Following these calculations, the company chooses the strategy and the ways how to maximize its profit. The second driving force is tendencies in the market. As for different possibilities of the countries, their economic and social situations or the environment can be changed. The governments can restrict the flying above their territories or put a high fee for landings. The central problem is that they can do it temporary or unexpected. For instance, the airline plans to Asia through Russia, but it has suddenly restricted the area, and the plane needs to fly around the country. It will incur additional costs and need more time. The third driving force is the innovations. The progress is not at a stop, and scientists with machinists devise new ways of economy costs, increasing comfort and quality of the airplanes. For instance, new planes have economic engine system which does not consume a lot of fuel, contain a big number of seats and high load factor. First of all, the innovations are directed at the safety of people's lives. A lot of accidents show that the most of problems are in the plane's system. For that reason, scientists search how to increase the protection of the plane and minimize the possibilities of fatal outcomes. The next driving force is the profit enhancement. Every company wants to increase its revenues and to be the leader in the market. For that reason, it searches for ways to reduce costs, attract consumers, and get the maximum profit. The main way here is to enlarge the sphere of services and/or to think of something new that nobody has. Another way is to raise investments, but it is not the main way of profit improvement. Ecology is also one of the driving forces. The world is disturbed about the pollution, air pollution in particular. For that reason, firms need to use the latest innovation of ecology tools to better their performance and reputation. The frustration about our environment makes a positive impact on society and gains the clients to the company. Some appeals and events about ecology can play a great role for advertising of the companionship. Moreover, this activity can lead to increasing market share and devoting of some countries. The ecology situation is the sharp issue in the world, and we need to improve our performance and save the world from expiration.
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- One of the key factors that define the success in the industry is the profit. When the companies are profitable in their sphere, the industry works well and does not need to be rescued. Moreover, there exists the balance between demand and supply within the industry. It means that the desires of the clients are satisfied, the prices are affordable, and the companies make good profits from their activities. The other key factor is the technological progress. The companies optimize their occupation by the way of implementing new forms of work. For instance, online booking is the way of reducing costs on the salaries of the working staff. The key factor is also branding. In the airline industry, the most famous low-cost company is the Ryanair. It represents the industry in the field of effective reducing costs, maximizing profits, and satisfying its clients. The possibility of implementing technological know-how quickly is also the key factor. Due to this fact, the industry will lead among others in terms of the innovations and show the highest results in improving and easing life. In my opinion, it is the most important factor as it unites the other factors and leads to maximizing profit. It is the main motto of modern society to respond to new developments quickly and to have the possibility to accept them. The key factors can be different, but some of them are equal for all companies with different business strategies. For instance, high profits are the main goal of every firm regardless the strategies implemented. Everyone wants to spend minimal efforts and to have maximum revenues. For that reason, factors are the same, but the ways of reaching them are different according to strategies. A new company which comes in the market has the same key factors as an old one. This is the desire to expand its bounds and to be the leader. On the other hand, there are some different factors for companies. For instance, the low-cost company needs to conquer great number of clients and gross market share. The organization is directed to the luxury segment and makes everything to pleasure the respective customers with strategy focus. It does not pursue the goal of having the most market share. The possibility to determine the key factors and analyze them is the chief stream for the company. It should know the main and secondary goals of the competitive struggle. After that, the organization can forecast possible changes and be prepared for them.
How It Works
- The Ryanair business model and strategy are successful. The first fact is that it is the leader in the airline industry in the low-cost segment. It reduces costs and implements new innovative ideas to keep the prices at the lowest level in the market. Moreover, it cooperates with other companies of different services to improve the interaction with the clients and satisfy their desires. The active position in the market plays a solid role for the organization. The common booking on the website along with other possibilities attracts the consumers to choose this company. The capacity to fly cheaply and quickly is the head requirement of most citizens. Certainly, it has some disadvantages like the absence of pillows and frills during the flight. On the other hand, it is not so necessary to use such luxury items. People may recognize the company and choose it instead of others because of good advertising strategies and different meetings. Moreover, the transportation to regional and secondary airports gives the possibility for passengers to go directly to the place of destination. Further, this capacity saves the money because the fees in these states are not so high in comparison to cities with over a million dwellers. The company's business model is well written, and all the parts are in the agreement. Furthermore, the strategy and the case are interconnected. They help to gain the aim of the organization and optimize its work. They are the framework of the organizational process for every firm. For instance, targeting the low-income passengers causes minimal prices, so it requires the low-cost strategy. Moreover, the usage of the aircrafts plays a key role with the huge quantity of the seats. The firm can save money on the flight according to extensive amount of seats and does not set high prices for such flights. The brochures and advertisements of other service companies can also help the organization reduce costs and make a profit from it. These companies pay for arranging their advertisements. Thus, the Ryanair makes an excellent reputation among clients, and other companies make efforts to become known through this organization. There is also a feedback. These companies advertise the Ryanair as the best airline in saving money and getting wherever you want in quick and easy way. Furthermore, the process of booking is easy even for a child. All in all, the business model and strategy perfectly coordinate with the activity of the company and makes profits of it. Moreover, it is important to be up to date because the world does not stop, and everything changes all the time.
- The key resource of the Ryanair is the profit. The company makes profits and divides them within the organizational needs. Another resource is the money from other companies' advertisements. Such firms dispose their adverticements inside the Ryanair's planes, and the company makes a benefit from it. The chief competitive capability is a low price for tickets and a public booking process. Moreover, there is the possibility to fly at secondary airports. For doing this, the company makes agreements with third parties at the airports. It extends the amount of services for passengers and increases the level of service facilities. Due to this fact, the organization enhances the number of clients and has the biggest market share. One of the competitive liabilities is the price. The company should also look for the market and control the opponent's motions and effectively react to them. The Ryanair's strategy is the leading in the low-cost market, so it is the main weakness of the firm as it can be exceeded at a moment. The problem is also with the service. The rival can create an excellent service with low prices and the clients would go to it. The principal source of weakness is the revenue mostly from the sales. It can be a problem when the demand for company's services will fall, and even the shareholders cannot stop it. The Ryanair has an opportunity to increase the quality of its service and attract more clients. Another opportunity is buying new ecology aircrafts. First of all, it will decrease the costs of the fuel and saves much money. The other benefit is an ecological component, which can draw new passengers. The next opportunity is growing in the airplane industry. The expansion to North Africa opens new possibilities for the company. It will speed the world market share and attract new clients and investors. On the other hand, this idea has some risks. New area needs new aircrafts, staff, and agreements. It can cost a lot, so the company can increase the price for the flight. It may have adverse effects on the strategy. Moreover, after the increased number of terrorist attacks, the airlines need to introduce stark security measures. There is also an issue about fuel costs. They have increased a lot, but the company does not advance the price for flight. It can damage the economy of the organization. On the other hand, if the enterprise increases the price, it will not be the most low-cost company. The danger can be from the competitors. If the governments provide some aids or subsidies for opponents, they can decrease the price and outrank the Ryanair.
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- The low-cost strategy is a very dangerous issue. The top managers should always be on pins and needles. The competitors will try to copy your company's achievements and to use them. For that reason, I would recommend managers to keep an eye on the market atmosphere and search new ways of minimizing costs. It can be achieved by reducing old assets and equipment. The innovations appear in the modern world every day. These innovations can be implemented in the airline industry. Moreover, the management team can make a new agreement with new third parties at the airports. It can low the costs at some kinds of services and broaden the amount of clients. The low wages are not the way to minimize costs. As you load the pilots and reduce working staff according to online booking, you can increase the salary for pilots. They are many sources of work, so the risk of dissatisfaction also exists. This situation can lead to different strikes and stops of the working process. Therefore, I would recommend to increase the salary for pilots to a sufficient level. It is a perfect idea to expand the flights to North Africa. Naturally, this idea has some threats and risks, but it would open new horizons for the Ryanair. On the one hand, it requires a lot of costs and can be seem too unprofitable. On the other hand, the increase in customers will mitigate the costs. Furthermore, the firm will extend the market share and fortify a position in the airline industry. The managers should also pay attention to the advertisement strategy. It is the main driving force of the brand visibility. The company should create an efficiency and bright publicity. It is necessary for people to see the colorful and easy to remember banner. In this case, the peripheral vision works, which is the best way to memorize something. Moreover, the company can lead some sales or bonuses. It is a great chance to show the possibility of the firm in order to take care of the constant clients and give them opportunity to save money. The bonuses always attract people, and the latter always choose the capability to get something free or with a big discount. The company can also lead some prize drawings. It can be some small presents like cups, clocks, or T-shirts with the firm's logo. The theme of the lottery can be the number of tickets on the flight, or the millionth client. It is not so expensive way to draw attention to the company and make the logo known. All in all, these steps can improve the organizational activity of the firm, catch more clients, and introduce new horizons for the Ryanair.
The central dilemma of the company is connected with its low-cost strategy. Instead of advantages, this strategy also has disadvantages. The low prices require the large quantity of the clients because of low margins. For that reason, the managers need to watch out the price in industry and adapt it. It is a very significant issue because the low-cost leader has the biggest market share and an extensive range of services. The managers should also follow the demand and make a forecast for the confidence of setting right prices. The other dilemma is the competition in industry. The competitors do everything to copy your benefits or to outstrip them. Moreover, their active policies will make efforts to outrun the Ryanair in the way of decreasing prices or having better services. It will affect negatively the firm as the less amount of clients will bring less money. In this way, the company will not have enough money to implement some innovations and realize an active policy. The result will be the liquidation of the firm after some time. The problem can also be with the innovations. The company needs to follow the last know-how technologies to be the leader in industry and try to reduce costs. On the other hand, it can go for expensive, and the Ryanair will have some problems with the money. All in all, these problems can be solved in a speedy fashion. The main goal is monitoring the market and industry. According to this information, the top managers should reach decisions about the strategy and the ways of its following. Consequently, the chief dilemma is the interconnection between the price and the number of passengers.
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According to the execution strategy, I would recommend the management team to have a meeting at least one time per two weeks. On these assemblies, they can discuss the real situation in the company, in the market, and in the aircraft industry as a whole. Moreover, they can make a decision of improving the organizational process and forecasting future actions. These meetings can be also led at the low organizational level with working staff. The managers can name the general goals for the next period to be reached. According to SWOT analysis, the firm can also make some improvements. First of all, it is the expanding of new markets. It can be an expensive idea, but that is worth the effort. Naturally, you need new working staff, airplanes, and contracts with the government. On the other hand, it is a large opportunity to expand the market shares and consolidate positions in industry. Developing the product and process innovations is essential part of organizational work. You can buy the planes with the fuel economy and bigger amount of comfortable seats. It will help to reduce costs and have higher profits. You can also increase the efficiency of the organizational process by the way of pushing the wages to sufficient level. The managers should also monitor the competitive methods of low-cost strategy. The opponents are always likely to copy the leader's actions. The price is the base object of the supervision. It is the most influential factor in industry according to the strategy, so managers need to keep on controlling this statement. The managers also need to reconsider the BCG matrix. The times change and people need something new. According to Ryanair's strategy, the cash flows will increase with low-priced tickets. The other factors will change, and the managers need to renew them to make a profitable organizational process.