Competitive Strategy at Ryanair Essay Example
BACHELOR OF BUSINESS
STRATEGIC MANAGEMENT
Competitive strategy at Ryanair
By Nigel Evans and David Campbell
Critical Report
Executive Summary
This paper is based on the case study by Nigel Evans and David Campbell which analyses the early stages of development of Ryanair to its current market position, which is the most profitable low cost airline in the market. The case study focuses on the negative perception of the airline in relation to service quality.
Ryanair Holdings (Ryanair) is a low fare passenger airline, which serves short haul point to point routes between Ireland, the UK and Continental Europe (Datamonitor 2008, p.5) First established in 1985, it began operating on 23 May 1986. In 1990/91 a new management team under the leadership of Michael O’Leary aimed to make Ryanair profitable. O’Leary and team reinvented Ryanair by basing it on the Southwest Airline Model, which was the first leading low cost carrier in the world.
Ryanair has maintained its competitive advantage over its competitors, by offering a highly differentiated product, which is a continuous lower fare. Therefore Ryanair has achieved a sustainable competitive advantage.
A SWOT analysis of Ryanair (Datamonitor 2008, p.16) lists employee relations as a weakness. This indicates that weak employee relations may be linked to the poor customer service.
Ryanair may improve their customer service whilst still remaining competitive by:
• Designing a better service system which can keep costs low but deliver service
• Offer employees career development plans, which may contribute to employee morale
• Better training frontline employees to maximize their operational efficiency, in order to best handle service failure situations
• Monitoring what the target market needs, wants and values rather than making the assumption that offering the lowest fare is the only incentive
• Not taking advantage of the price sensitive consumer and instead embrace them (Gursoy et al
STRATEGIC MANAGEMENT
Competitive strategy at Ryanair
By Nigel Evans and David Campbell
Critical Report
Executive Summary
This paper is based on the case study by Nigel Evans and David Campbell which analyses the early stages of development of Ryanair to its current market position, which is the most profitable low cost airline in the market. The case study focuses on the negative perception of the airline in relation to service quality.
Ryanair Holdings (Ryanair) is a low fare passenger airline, which serves short haul point to point routes between Ireland, the UK and Continental Europe (Datamonitor 2008, p.5) First established in 1985, it began operating on 23 May 1986. In 1990/91 a new management team under the leadership of Michael O’Leary aimed to make Ryanair profitable. O’Leary and team reinvented Ryanair by basing it on the Southwest Airline Model, which was the first leading low cost carrier in the world.
Ryanair has maintained its competitive advantage over its competitors, by offering a highly differentiated product, which is a continuous lower fare. Therefore Ryanair has achieved a sustainable competitive advantage.
A SWOT analysis of Ryanair (Datamonitor 2008, p.16) lists employee relations as a weakness. This indicates that weak employee relations may be linked to the poor customer service.
Ryanair may improve their customer service whilst still remaining competitive by:
• Designing a better service system which can keep costs low but deliver service
• Offer employees career development plans, which may contribute to employee morale
• Better training frontline employees to maximize their operational efficiency, in order to best handle service failure situations
• Monitoring what the target market needs, wants and values rather than making the assumption that offering the lowest fare is the only incentive
• Not taking advantage of the price sensitive consumer and instead embrace them (Gursoy et al