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Strategy - Ryanair

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Strategy - Ryanair
Global MBA Strategic Management
Formative Assignment - Dec 2011

Z0928183

INTRODUCTION
Ryanair was founded in 1985 with only two aircrafts and a single Dublin-London route . By 2010 Ryanair had transformed itself into Europe 's leading low cost airlines with 232 aircrafts flying to 153 destination. Ryan Air 's strategic objective has been to offer the lowest possible air fare to its passengers and strive towards becoming europe No.1 Low Cost airlines. In this paper we will explore and analyze Ryanair 's competitive position, strategic capabilities and sustainability of its strategies.

COMPETETIVE POSITIONPORTER 'S FIVE FORCES FRAMEWORK;
Threat of New Entrants: LOW

High entry barrier due to large capital requirement, longer procurement and marketing period. Restricted airport slots availability.

Threat of Substitutes: MEDIUM

Threat of alternative mode of transportation like high-speed train and ferries within Europe. Customers can easily switch to driving.

Buyer 's Bargaining Power: MEDIUM

Customers are price sensitive. No customer loyalty as customers can easily switch to another airline offering lower price

Supplier 's Bargaining Power : HIGH

Entire fleet is made up of Boeing aircrafts. Fuel prices are fluctuating. Regional Airports can increase the fees.

Internal Rivalry : HIGH

Highly competitive Low Cost market with Easyjet, Aer Lingus,etc. Easy to imitate the Low Cost model by a Full Service airline.

PESTEL ANALYSIS;
Political: HIGH Political stability within europe but risk of tighter regulations. Airport Security restriction and enhanced passenger screening measures. Risk of labour law changes. Airport subsidies dependent on regional/local government.

Economical:HIGH Eurozone financial crisis, economic downturn. Rising and uncertainty in fuel cost. Falling US Dollar. Social Cultural: LOW Change in consumer travel lifestyle and


References: About Us. (2011), Available at: http://www.ryanair.com/en/about , [Accessed on 11 November 2011]. Johnson, G., Scholes, K. & Whittington, R., (2008), Exploring Corporate Strategy, Eight Edition. Prentice-Hall.
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