UK -- none
b. Europe
c. Driving holidays
d. High- speed trains
e. No loyalty of customers (Ryanair, 2009)
B. Ryanair - Value chain analysis
Cost-containment is the focus of the low cost airline and includes the following:
Cost containment realized through spending as little money possible for advertising with all marketing identified as 'in-house' marketing to customers to increase turnover;
Cost containment realized through turning the costs of food and drinks on a flight into a revenue stream through making drinks and a selection of food available at a reasonable price;
Cost containment realized through creating additional revenue through such as car rental, travel insurance and travel reservation services;
Cost containment realized through exploiting the lack of provision of airport air bridges;
Cost containment realized through enforcing strict policy that is a 'no refunds' policy;
Cost containment realized through maintaining a homogenous fleet that results in maintenance efficiency and lowers pilot/employee training costs;
Cost containment realized through not selling tickets for connecting flights; and Cost containment realized through primarily flying to secondary airports offering lower landing and handling fees. (Ryanair, 2009)
C. Ryanair -- SWOT Analysis (Strengths, Weaknesses,
Opportunities & Threats)
This strategic plan addresses the following key strengths, weaknesses, threats and opportunities which apply to Ryanair Airlines now and in the foreseeable future:
1. Strengths
Low cost leader
Innovative cost reduction
First- mover advantage
Established market share
Substantial growth
High load factor
Established image
Established routes / network
Major earning from innovative ancillary scheme
Single model of aircraft reducing training, maintenance and supervisory costs
High turnarounds resulting in maximum aircraft utilization
100% e-tailing eliminating intermediaries and distribution costs
Lowest labour costs due to non-unionized labour forces....
Weaknesses
Poor employee relations
Volatile customer relations
Antagonistic relationship with competitors
Uncharacteristic management expansion
Dependence on Michael O'Leary
Negative press reports
Long distance of its airports from city centers
High sensitive to any taxes that may be imposed
Continued sustenance of cost-based business operations in a dynamic market. (Ryanair, 2009)
3. Opportunities
Further growth
Advanced cost reduction
Offering free flights
EU expansion
Expansion of ELFAA
Merger / acquisitions could be a way to stretch its operations to popular business routes and leisure destination
The U.S.-European "open skies" agreement could be source for increased routes and passenger traffic inwards
Plan to expanding operations into non-European markets in the near future (Ryanair, 2009)
4. Threats
Increased competition;
New entrants;
Alliances / mergers between competitors;
Industry criticism;
Antagonistic attitude of EU commissioners;
Non-expansion into new EU states;
Trade unionism;
Substitute transportation, cars trains; and Traditional airlines are also cutting fares and costs which could affect the market shares of Ryanair;
Limited or no slot availability at major airports could be a hurdle to expansion plans. Impending legislations for environment protection and customer compensations will increase service costs. Additional fleet may require new terminals and secondary airports which mean Ryanair would need to bear higher costs; and a low cost image that has become its brand name tag will be difficult to erase when it wishes to move up the value chain. (Ryanair, 2009)
Bibliography
Ryanair.com
Industry Competitors
Rivalry among Existing Firms
HIGH
Suppliers' Bargaining Power
LOW
Buyers' Bargaining Power
LOW
Threat of Substitute Products
MEDIUM
Threat of New Entrants
MEDIUM
