Ryanair S Strategy
Ryanair’s Strategy
Introduction
Ryanair is an airline company, which is well known for its low cost airline service across Europe. Christy Ryan, Liam Lonergan and note Irish businessman, Tony Ryan, founded the company in 1985 in Ireland (with a share capital of only £1 and 25 employees according to Business-market.com). Ryanair was restructured in 1991 by Michael O’Leary. He reported revenues of €3,629 Billion for the fiscal year of 2011, bringing profits of €374,6 Million, leading Ryanair as on the oldest and most successful low-cost airlines of Europe.
The airline started to compete within the confines of the existing industry by trying to steal customers from their rivals, especially the state monopoly carrier Air Lingus, outlined by Chan Kim and Renée Mauborgne (2004) as “Red Ocean Strategy”. Ryanair seemed to follow a “me-too strategy”; according to Osborne, K. (2005), they “tried to be all things to all people”. Even they started restructuring; their strategy was not enough differentiated and their cost advantage was too low to be profitable. In 1986, they got “stuck in the middle”, outlined by Porter (1985) as they had a limited cost advantage and no service advantage.
This company followed the low-cost trend, which began in the United States with the first airline company adopting a low-cost policy. Then Ryanair acquired a great reputation across Europe, leading low-fares scheduled passenger airline through continued improvements and expanded offerings of its low-fares service as ryanair.com states. Currently Ryanair is one of the biggest airline companies in the world and according to Business-market.com it is even the first carrier in Europe in number of passengers per year (more than 40 million in 2007). In a few decades Ryanair has became the number one in terms of Traffic, Coverage (1,611 Routes from 57 bases) and Customer Service: most on time flights, fewest mishandled bags and fewest cancellations.
The major vision of the company is to be the
Introduction
Ryanair is an airline company, which is well known for its low cost airline service across Europe. Christy Ryan, Liam Lonergan and note Irish businessman, Tony Ryan, founded the company in 1985 in Ireland (with a share capital of only £1 and 25 employees according to Business-market.com). Ryanair was restructured in 1991 by Michael O’Leary. He reported revenues of €3,629 Billion for the fiscal year of 2011, bringing profits of €374,6 Million, leading Ryanair as on the oldest and most successful low-cost airlines of Europe.
The airline started to compete within the confines of the existing industry by trying to steal customers from their rivals, especially the state monopoly carrier Air Lingus, outlined by Chan Kim and Renée Mauborgne (2004) as “Red Ocean Strategy”. Ryanair seemed to follow a “me-too strategy”; according to Osborne, K. (2005), they “tried to be all things to all people”. Even they started restructuring; their strategy was not enough differentiated and their cost advantage was too low to be profitable. In 1986, they got “stuck in the middle”, outlined by Porter (1985) as they had a limited cost advantage and no service advantage.
This company followed the low-cost trend, which began in the United States with the first airline company adopting a low-cost policy. Then Ryanair acquired a great reputation across Europe, leading low-fares scheduled passenger airline through continued improvements and expanded offerings of its low-fares service as ryanair.com states. Currently Ryanair is one of the biggest airline companies in the world and according to Business-market.com it is even the first carrier in Europe in number of passengers per year (more than 40 million in 2007). In a few decades Ryanair has became the number one in terms of Traffic, Coverage (1,611 Routes from 57 bases) and Customer Service: most on time flights, fewest mishandled bags and fewest cancellations.
The major vision of the company is to be the
References: Ryanair (2005). History of Ryanair (Online) (Accessed on February 7, 2005). Available from: http://www.ryanair.com/site/EN/about.php?page=About&sec=story Journal of Air Transport Management (2009). Pricing strategies of low-cost airlines. (Online) Available from: http://www.esi2.us.es/GT/explotacion/articulos%20demanda/Pricing%20strategies%20of%20low-cost%20airlines-%20The%20Ryanair%20case%20study.pdf The Sydney Morning Herald (2013). Ryanair’s new strategy: be nice to customers. (Online) (Accessed on September 23, 2013). Available from: http://www.smh.com.au/travel/travel-news/ryanairs-new-strategy-be-nice-to-customers-20130923-2u8v1.html An Analysis of Ryanair’s Corporate Strategy (2005). Business economics –Marketing, Corporate Communication, CRM. (Online). E-book available from: http://www.grin.com/en/e-book/145623/an-analysis-of-ryanair-s-corporate-strategy