Professional Documents
Culture Documents
net/AntonWischnewski/ryanair-term-paper-upload
https://prezi.com/kf0udhsh2gnq/ryanair-the-low-fares-airline-future-directions/
https://www.scribd.com/doc/47646350/Ryanair-Case-Study
https://www.scribd.com/document/291060129/Ryanair-Case-Study-Analysis
http://www.slideshare.net/puya455/newanalysis-of-ryanairs-competitive-advantages
Critical Issues
Problems :
Pestel :
1. Political :
a. European Union affects Ryanairs strategy and operations by
establishing regulations and restrictions in the airline industry :
demands to refund air passengers in case of delays or cancelled flights
, EU might increase the emission fees
b. Ryanair should be aware of regional distinctions as the Irish tourist tax
and national government laws acting in favour of national airlines that
increase Ryanairs costs, e.g. national employees contracts in other
countries have different terms and conditions that must be applied and
are more expensive.
c. airport and handling charges increased by %, slower than the growth in
passenger numbers, reflecting a net reduction in costs from deals at
3. Social
a. Customers perceive Ryanairs customer service as poor, as the
passengers expect to be compensated for cancelled and delayed
flights.
b. The poor working conditions cause legal and safety issues that can
scare established and potential new customers away.
c. Additionally, the provoking and misleading advertisements lead to a
bad image of Ryanair from customer perspective
4. Technological
a. Ryanairs online check-in policy and marketing on Ryanairs website
demonstrates how to make use of the Internet technology avoiding
expenses of travel agents and excessive advertising
5. External / Environmental
a. Labour Unions such as British Airline Pilot Association (BALPA)
challenge Ryanairs business culture and do not accept the poor
working conditions of their employees. Ryanair is accused of
unsatisfied working conditions such as long working hours, insufficient
employee training and qualification, manipulation of employees to
accept working conditions and low salary
b. EU regulations regarding environmental awareness state that
additional fees are applied if the CO2-limit is exceeded
c. Contributing Global warming - though Ryanair contribute to the global
warming up to some certain they have introduced new aircrafts that
reduce fuel burn in 45%.
d. Noise level controls - Also they have lower the noise emission in 45% in
their new aircrafts
6. Legal
a. Ryanair is involved in a few legal battles with Stansted and Dublin
airport that raise their departure duties
b. Ryanairs misleading and provoking advertisement assault media law
and civil law resulting in high penalty fees. ( Allegations of misleading
advertisement - Ryanair accused it of misleading passengers on its
website by exaggerating the prices of its competitors in making
comparisons )
c. the poor working conditions lead to safety issues and can cause a bad
image. All those legal issues are causing handling-, penalty fees and
court expenses that should be limited.
Cost reduction strategy :
secondary airports
fleet commonality
maximize aircraft utilization
cheaper product design
minimize personnel costs
airline industry the market contains the potential to grow. This might also
be the
problem for Ryanair and its expansion strategy. As the threat of entry is
high the
extent of rivalry stays as middle.
Most cost advantages can be copied immediately - However if any
company does choose to race on the same basis as Ryanair there will be
heavy pressure on prices, margins and hence on profitability
Low frills and low price - Ryanair has a benefit over other airlines because
their policy of bundling low frills and low prices together means that they
are competing for the more price responsive customer.
SWOT
Strenghts
-
point-to-point flights
young, uniform aircraft fleet
cheap labour (outsourced)
strong marketing model
innovator in cost reduction
strong brand image
strong bargaining power in airport deals
aggressive and innovative leadership
established market share
Weaknesses
-
Opportunities
-
Threats
-
EU regulations
National governments laws
Substitute transportation
Budget airline criticism
Legal issues
Fuel price fluctuations
Competition domination (alliance/mergers between competitors)
Terrorism
Impending legislations for environment protection
Positioning strategy
Price -> Leader Premium competitive
Features -> original customized basic
Quality -> excellent average acceptable
Support -> comprehensive standard minimal
Availability -> restricted selective universal
Reputation -> prestigious respected functional