Ryanair (0704007 business ??? ) their strategy Ryanair's strategy is to offer their services with cheap price. So their competitive advantage is "Cheaper price" than other rivals. To maintain cheaper price than other rivals, they faces several problems. facing problems There were several challenges faced by low cost carriers in Europe like rising aviation fuel costs, ensuring staff productivity and maintaining a large fleet for expansion. 1. There are lots of airways which is provide cheap fare of flight such as easyjet, Virgin express, Air Berlin and so on.
As minor airways use the same routine, minor airports get a purchasing power from the airlines competition. It is hard situation for Ryanair to minimize the fare. 2. The aviation turbine fuel costs fluctuated as economic and political situation changes and increasing demand of fuel. Also, the fuel should be paid by US dollars, so change of exchange rate affects to the fuel cost. Ryanair had not added surcharges like other airlines so that they could maintain lower fares.
But increasing fuel cost makes hard to maintain lower price for Ryanair. 3. As I mentioned earlier, there are so many airlines offer cheap fares in Europe. The major competitors of Ryanair were easyJet, bmibaby, Air Berlin, SkyEurope, Wizz Air and Aer Lingus. Also, there were other low cost substitutes like train and tram services in Europe. 4. Ryanair want to expand their business in the European continent as it was becoming popular tourist destination. Also it is planning to expand its network to North Africa.
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It requires more aircraft, human resources, and agreements with airport authorities and governments. But the incidents of terrorism in UK and Europe, requirements from airport authorities and governments is hard for them. providing solutions 1. As there are quite lots of airlines which offer low fare of flight, they can be united and make a union of lower fare flight. Then they can have a purchasing power to local airports. 2. When the CEO judges the fuel cost goes up and thinks the time of low cost of fuel, CEO can make a long term contract with oil supplier.
At this strategy, CEO's judgement is really important. Also, the company can do Forward Trading of oil. 3. Customers choose some airlines by fare and service. As the automatic devices are developed fast, they can reduce the cost by replacing from human resources to automatic devices. But the part of offering services, employees should be focused. 4. Do negotiation with the countries such as North Africa, US etc , then try to be liberalization. After the negotiation, business expansion will be easier.
on Ryanair’s Strategic Issues and Suggestion
The critical strategic issues faced by Ryanair can be identified as follows based on analysis; Poor Customer Service where the customers are unsatisfied and face episodes of dissatisfactions due to the poor services provided by the unfriendly staff of Ryanair has been identified as the critical issue that can be identified by reading the case.
The study consists of the initial Environment Analysis conducted on Ryanair prior to the elaborate strategic analysis that will be conducted in the hereafter in order to supply the company with strategic recommendations for the hereafter.
SWOT Analysis farther confirms that and besides points out the failings such as hapless client service and inefficient human resource patterns which may finally turn out to be dearly-won for Ryanair and impede the effectivity of its competitory advantage.
However, yet Ryanair is successful in maintaining its market share. Its punctuality, efficient cost cutting strategies is the main critical success factors. By looking at the external environment, it has opportunities to expand by having a strong financial reserve and brand name.
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