Strategic analysis of Rynair 
1(a) using appropriate models, analyse Ryanair’s business environment.
Porter’s 5 forces:
Threat of new entrants –in the airline industry is relatively high. Ryanair being Europe’s largest low-cost carrier, the largest airline in Europe in terms of passenger numbers and the largest in the world in terms of international passenger numbers; would deter anyone in entering in to a competitive industry
Bargaining power of buyers –is high as price sensitivity remains high. Buyers can either travel on legacy airlines such as British Airways or low-cost airlines such as Ryanair, this strengthens their bargaining power, however Ryanair can defend themselves by differentiating their services in several ways.
Bargaining power of suppliers – is high, due to lack alternative manufactures and substitutes. It is virtually impossible to find substitutes for the inputs required for airlines to operate. An airline must have an aircraft, a supply of aviation fuel and a sufficient workforce before it can offer flights. Unlike other modes of transport, airlines have no alternative source of energy; therefore supplier power remains high/strong.
Threat of substitutes –this can be seen as moderate, as substitute to air travel is road, rail and marine transport. Buyers do not only consider the cost of travel but also the time the journey will take. Consumers are now aware of the environmental impact on air travel, and are turning to rail travel instead. Ryanair are at an advantage, as their low cast fares can be booked well in advance, even though rail and bus travel may be cheaper, these services are more time consuming, which plays in Ryanair’s advantage.
Rivalry – this remains to be strong as Ryanair is vigorously trying to compete on prices, by keeping fares down. Ryanair biggest rival is EasyJet. EasyJet is the UK’s leading airline by number of passengers carried; however mentioned above, Ryanair is Europe’s largest low cost carrier, and Ryanair has took over Iberia in July 2010
Porter’s 5 forces:
Threat of new entrants –in the airline industry is relatively high. Ryanair being Europe’s largest low-cost carrier, the largest airline in Europe in terms of passenger numbers and the largest in the world in terms of international passenger numbers; would deter anyone in entering in to a competitive industry
Bargaining power of buyers –is high as price sensitivity remains high. Buyers can either travel on legacy airlines such as British Airways or low-cost airlines such as Ryanair, this strengthens their bargaining power, however Ryanair can defend themselves by differentiating their services in several ways.
Bargaining power of suppliers – is high, due to lack alternative manufactures and substitutes. It is virtually impossible to find substitutes for the inputs required for airlines to operate. An airline must have an aircraft, a supply of aviation fuel and a sufficient workforce before it can offer flights. Unlike other modes of transport, airlines have no alternative source of energy; therefore supplier power remains high/strong.
Threat of substitutes –this can be seen as moderate, as substitute to air travel is road, rail and marine transport. Buyers do not only consider the cost of travel but also the time the journey will take. Consumers are now aware of the environmental impact on air travel, and are turning to rail travel instead. Ryanair are at an advantage, as their low cast fares can be booked well in advance, even though rail and bus travel may be cheaper, these services are more time consuming, which plays in Ryanair’s advantage.
Rivalry – this remains to be strong as Ryanair is vigorously trying to compete on prices, by keeping fares down. Ryanair biggest rival is EasyJet. EasyJet is the UK’s leading airline by number of passengers carried; however mentioned above, Ryanair is Europe’s largest low cost carrier, and Ryanair has took over Iberia in July 2010
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