Ryanair’s operational model offered lowest fares and had a robust growth model because in the low

cost carriers segment of the industry , the competitors were finding it difficult to operate in a financially
feasible way , and thus the number of competitors against Ryanair were decreasing and it had a huge
opportunity to grow in this segment of ultra low cost carrier.Ryanair’s strategy of the low cost
Operational model was to create high barriers to new comers and reduce margins for existing players.

In the airline industry we had four segments, ultra low cost, low cost and two versions of legacy
carriers,since the switching costs for consumers are very low in this segment, thus , we need to ensure
to have a very clear positioning strategy by creating distinctive differences that will be noticed and
valued by the customers, and the growth of Ryanair is a testament that there was a huge market to
attract in this ultra low cost carrier segment, it’s somewhat closest competition (low cost carrier) had
also adopted its strategy by giving additional perks such as allocating seating and increased customer
focus, these benefits come at a cost i.e. higher prices, which means that now Ryanair was even more
differentiaed in offering low cost airline services.

Also, in trying to follow the blue ocean strategy, focusing on cost leadership and differentiation will
increase value but at the expense of costs, because both value drivers and cost drivers will work
accordingly. Since Ryanair can have a low cost model due to its economies of scale and learning curve
effects by oprating in this for years.

Thus, it is not always necessary to follow Peter drucker’s theory and porters theory to evolve and match
the customer needs and wants, maybe customers value one thing more than the other and even they
themselves are not sure about it, they could be highly sensitive to price. Thus, Ryanair shold not change
it current strategy of ultra cost leadership ad be a cost leader.