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Trabajo Final Global Strategy
Trabajo Final Global Strategy
From a industry-based view, asess the strength of the five forces and determine the
extent to which Ryanair is positioned against those forces.
1. Competitive Rivalry: Ryanair has an advantage over different rival airlines because of
the low rates offered to the consumer, as customers usually choose cheap flights.
The main competitors of Ryanair are: Low fare (easyJet, Air Berlin, Germanwings)
Traditional (British Airways, Lufthansa, and Air France) Charter airline (Monarch
Airlines and Titan Airways.)
Those airlines compete in certain aspects such as: Compete on fare, time and
frequency of services, service quality (ontime departures and arrivals, frequency of lost
baggage, and frequency of involuntary denied boarding), amenities such as frequent
flyer programs and reputation.
4. Bargaining power of suppliers: Ryanair had a good relationship with its main supplier,
Boeing. Due to the fact that the model of aircraft that it acquired gave it control of
costs such as: minimization of training and maintenance of costs, efficient
management of spare parts inventory and programming of flight crews.
That is why Ryanair hired a large volume of Boeign aircraft, where he could negotiate
prices.
The use of the unique aircraft model (the Boeing) is the primary method of cost
control, minimization of training and cost maintenance, efficient management of the
inventory of spare parts and programming of flight crews.
5. Bargaining power of customers: Ryanair has a reputation for poor customer service
and this is a weakness for the company. They prefer less services and additional fees as
needed for meals and other items in exchange for low rates.
Due to this Ryanair has implemented its strategies to attract customers, such as more
friendly websites and fewer fines for excess weight. This would be a start to win
passengers from other, more expensive airlines.
Figure 1. Porter forces
2.Threat of
new
competitors
4.Bargainin 5.Bargainin
1.Competiti
g power of g power of
ve Rivalry
suppliers customers
3.Threat of
substitute
products
Elaboración propia.
Table 1. Resources
Resources Capacities
-Airports, aircraft fleet, headquarters -Low rates, brand recognition
Elaboración propia.
C. From an instituiton-based view, assess the oportunities and threats presented by the
current and future institutional envirotment (both formal and informal). How should
Ryanair respond?
Opportunities Threats
-The success in the service offered can -Increase fuel costs, without notice.
lead the company to venture into new -In the future, the legislation will require
markets working with complementary airlines to pay around 1,400 million
companies. euros for carbon dioxide emissions that
-Penetration of markets other than will increase to 7,000 million euros by
Europe. 2020
-Extend your service line as: repair of -Increase in competition by providing a
aircraft and flight training workshops for better added value.
operations outside the company.
-Growth of the population, which would
lead to reach new customers.
Elaboración propia.
D. What is your evaluation of the proposal that Ryanair offer free flights in perpetuity?
Draw on the three views in your answer.
La inestabilidad del mercado, como las aperturas de otros alrededor del mundo,
Ryanair como propuesta de negocio no ha descartado la posibilidad de ofrecer viajes
gratuitos a los clientes, como un medio estratégico y lucrativo, generando ingresos
complementarios.
Ryanair tiene éxito en las innovaciones de negocio que ha planteado en su servicio de
aerolíneas, y está llegando a ser el líder del sector, pero la propuesta de ofrecer viajes
gratuitos es un paso arriesgado que puede traer grandes pérdidas, y para un resultado
positivo o negativo Ryanair tiene que estar listo. Y podemos señalar ciertas situaciones
que no beneficiarían a la empresa, por ejemplo:
Ryanair debe trabajar primero en su situación actual y las críticas que enfrentan
debido a estos costos. Se encuentran en una muy buena posición con sus recursos y es
posible que quieran aprovechar la oportunidad para reforzar estas fortalezas.
En términos de sus puntos de vista basados en la industria y la institución, necesitan
trabajar sobre las amenazas que enfrentan desde las regulaciones formales, así como
las críticas desde sus prácticas "no éticas".