competition advantages‚ blue oceans should be different attached by low cost. However‚ the fact shows that innovations are expensive so it is difficult to maintain both creates and low cost‚ especially in the first period. (1) As a surprising success‚ Airasia achieved this and kept the sustainable development from launched to now‚ though aviation industry depends on a lot of objective factors such as the weather‚ airport conditions or petrol cost. Even though when the world has underwent a global economic
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Aviation industry plays a key role in economic development‚ growth of tourism and social development. The Indian Aviation industry has witnessed a turbulent phase over the last few years. In the recent years‚ the industry saw the emergence of the low cost carriers and liberalisation of government norms which impacted the global aviation industry. More recently‚ the global economic downturn of 2008 dealt a severe blow to the aviation industry the world over. The article gives a brief overview of the growth
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UNIVERSITY FACULTY OF BUSINESS & LAW Business Strategy Questions Section 1 To what extent has Ryanair’s strategic growth been internally or externally driven? Section 2 Referring to the Ryanair case‚ critically discuss the extent to which low cost competitive strategies are sustainable. SWOT Analysis: Firm’s strategy should take external opportunities and threats and internal strengths and weaknesses into account. This is done by SWOT Analysis. The SWOT-Analysis is an effective way of
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everyone can fly"‚ AirAsia became the first successful low cost and ticket-less airline in the Southeast Asian region. People can experience the flight with affordable price and it does not consider as an expensive choice of transportation‚ rather one of the economically justified ways of traveling to domestic and international destinations. It has been a great pride in the history of AirAsia that has overcome the difficulties to pave the way for low-cost aviation. Since December 8‚ 2001‚ when the company
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Threat of New Entrants is low The airline industry is so saturated that there is hardly space for a newcomer even to squeeze its way in. The main concern for this is the cost of entry. The airline industry is one of the most expensive industries‚ due to the cost of buying and leasing aircrafts‚ safety and security measures‚ customer service and manpower. Another major barrier to entry is the brand name of existing airlines and it is really difficult to lure customers out of their existing brands
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saturated. First Mover Advantage Ryanair were among the first movers because many copycat’ airlines have tried to follow suit. There are only two pan-European low cost operators where first mover advantage and scale and cost efficiencies gave the two largest players‚ Ryanair and Easyjet‚ a significant advantage. Since deregulation‚ of the 80 low cost operators that had begun operations‚ 60 had gone bankrupt. Large number of competitors The LCC market is highly competitive. There are more service providers
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Porter’s 5 Forces Low Threat of Entry Ryanair benefiting from large economies of scale and have massively reduced long run average costs. They have struck deals with Boeing and Airbus for reduced prices (1/3rd of listed price) on 737 aircraft in bulk buying therefore new entrants to the market will not get these reduced prices as they do not hold a similar relationship and they will not be able to order in bulk. Ryanair have struck deals with many local airports over flight paths and
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competitors to reduce their prices to match Southwest’s prices to stay competitive and has become known as the “Southwest Effect.” Because of the cost structure that was developed‚ Southwest did the opposite of what every other airline was doing. They don’t offer assigned seats or meals. They only fly one type of airplane‚ the Boeing 737. This gave Southwest a distinct cost advantage. Even when their competitors lowered their prices‚ they still could not make the same profit as Southwest. Customers see value
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which is being used by many other airlines. Besides that‚ air asia management team is also famous in strategy formulation and execution.The strategy thatthey have formulated at the beginnings was a clever blend of proven strategies by other low cost airlines is US and Europe. They are Ryanair’s operational strategy (no frills‚ landing in secondary airport)‚ Southwest’s people strategy (employee comes first) and Easyjet’s branding strategy (linking with other service providers like hotels‚ car
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the cost • Budget airlines sell directly to the public – no sale commissions • Budget airlines promote journey ‘legs’ separately • Budget airlines don’t reward frequent travellers with air miles The concept of budget airlines was developed in 1971 by Rollin King and Herb Keller. They set up a ticketless airline‚ the Southwest Airlines‚ which offered the lowest possible prices. (1) Looking at the definition of budget airlines above it may not be clear why the low cost carriers (LCC)
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