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Ryan Air Case Study - Ryanair tries to minimize the competitive force in route selection (Ex 8), due
Course: Strategic Management and Business Policy (MAN 4720)
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University: Florida State University
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Case Study: Ryanair Business Strategy
Analysis
Ryanair is an Irish low cost airline headquartered in Dublin founded in 1985. It operates 181
aircrafts over 729 routes across Europe and North Africa from 31 bases. Ryanair has seen
large success over the recent years due to its low-cost business model and has become the
world’s largest airline in terms of international passenger numbers. Taking Porter’s generic
business strategies into consideration, Ryanair operates a cost-leadership strategy to drive
itself into achieving its mission of being the leading European low-cost carrier (LCC).
Throughout this essay the business strategy of Ryanair will be analysed and the sustainability
of their model evaluated.
Ryanair’s objective is to firmly establish itself as Europe’s leading low-fares scheduled
passenger airline through continued improvements and expanded offerings of its low-fares
service. Considering their objectives and mission, Ryanair’s decision on their cost-leadership
strategy was based on a few main factors which are discussed below.
A major influence was the deregulation of the airline industry in 1978 which removed
government intervention within the European continent. Under the new rules, routes and fare
decisions were made by individual airlines which meant that they could compete on other
factors besides food, cabin crew and frequency. As a result of deregulation, a large number of
new airline start-ups emerged within the EU and competition among airlines increased
dramatically resulting in downward price pressures. Ryanair was established to take full
advantage of these market conditions. By offering low prices, Ryanair entered a huge and
virtually unlimited market.
Having seen the major success of the low cost carrier Southwest in the United States, Ryanair
decided to follow in their footsteps by establishing a LCC for the European continent that
targeted fare conscious leisure travelers and regular low cost business travelers. By doing this