Our low fare customer friendly growth is being delivered in an environmentally sustainable way through investing in new aircraft and engine technology while adopting the most efficient operations and commercial procedures to minimise our impact on the environment. -Marketrealist.com, (2014). Change ), You are commenting using your Twitter account. Porter's Five Forces: Understanding Competitive Forces to Maximize Profitability. The other 30% is sold at a higher price. [online] the Guardian. In case of Ryanair Airlines the main product is the fleet that takes people to the desired destination. It forms the largest part of the Ryanair Holdings family of airlines, and has Ryanair UK, Buzz, and Malta Air as sister airlines. http://www.ryanair.com/en/news/ryanair-launches-ryanairtalk-smartphone-app The profitability of a segment is calculated as the number of people in the segment multiplied by the premium they are willing to pay. [online] Available at: https://www.bcg.com/documents/file129974.pdf [Accessed 8 Nov. 2017]. Threat of substitute products or services:  Threat of substitute products or services is low, as it is claimed that there is not a substitute product for high-speed travel since the high-speed trains are not fully developed yet and in most of the regions; the required infrastructure is missing. This report examines Ryanair’s current strategic environment, utilising a contextualised PESTEL, SWOT and Porter’s Value Chain to provide analysis. Ryanair SWOT analysis – Michael O'Leary's maniacal focus on being the lowest cost producer. Ryanair’s digital revolution makes booking easier The airline known for its hard-selling website is changing its digital strategy Thu, May 19, 2016, 07:30 Updated: Thu, May 19, 2016, 08:25 It is used to measure and provide feedback to organizations. -Mindtools.com. Product development- whats new and how has it helped? -Kilpatrik, R. (2017). 3.1 Product life cycle: Source: Product life cycle is a tool which helps to map the current state of the company, according to this cycle Ryanair approached maturity; as its industry life cycle curve became noticeably flatter and indicates slow growth. Available at: https://aviationvoice.com/eu-warns-airlines-about-post-brexit-access-201703231016/ [Accessed 8 Nov. 2017]. -SWOT & PESTLE.com. Section 5 discusses the sustainability of the Ryanair model in terms of its product, consumer attitudes, secondary airport acceptability, its low cost base, and some external factors. [online] Available at: https://www.investopedia.com/terms/b/balancedscorecard.asp [Accessed 12 Nov 2017]. In addition, the narrower the segment, the fewer the customers, but the greater the satisfaction and the greater the premium they are willing to pay (provided the segment has been correctly identified. In addition, through product development, with services such as on-board technology (Pay for WIFI and TV), Ryanair can see the profits from ancillary services rising since people want to stay always connected to the outside world. Low frequencies: Unlike the other competitors, Ryanair tends to offer low frequencies on its routes at very inconvenient times in order to keep the turnaround times and costs down (CAPA, 2013). Regarding economies of scale, the bigger the quantity of a product produced, the lower the manufacturing cost will be which can be almost impossible to be achieved by a new entrant. Human resources: Ryanair employs thousands of staff for numerous positions such as office staff, pilots, ground and cabin crew. The key issues faced by the Ryanair are a bad image to the company and most revolve around low costs, poor customer services and ecological damage to the environment. Instant Chat is available on Ryanair website for any enquires which customers have it is a 24 hour online chat where you have direct communication with an agent who will answer any of your questions. Design Engineer $68K. But there is also a more mundane explanation. (2017). Porter's Value Chain: Understanding How Value is Created Within Organizations. -McDonald, M. and Wilson, H. (2016). Business are likely to keep a close watch on their rivals, and Porter’s five forces tool encourages them to examine what other factors can impact the business environment by identifying the five forces that make up the competitive environment, and which can scour the business’ profitability (MindTools, 2017). Furthermore, the company has numerous firewalls in place to protect its customer data and keep up with the protection act while taking advantage of the social media and every publicity whether good or bad with minimal marketing costs. A segment must be measurable or definable, accessible, substantial, congruent and stable with the key criteria being accessibility, substance and measurability. Since its launch in 2014, Ryanair’s “Always Getting Better” programme has delivered for its people, shareholders and customers. Available at: https://www.ft.com/content/57c0c01c-ef9c-11e6-930f-061b01e23655 [Accessed 8 Nov. 2017]. The main issue is that the Ryanair made a massive mistake in the planning of pilot holidays and the fact that numerous pilots are migrating to Norwegian which has taken 140 staff this year already from the Irish company (Collinson.P, 2017). Some of Ryanair’s strategic objectives can by identified through the company’s visions and missions, SWOT analysis and Ansoff matrix. -BCG (2013). Opportunities. A PESTEL analysis is a framework or tool used by marketers to analyse and monitor the macro-environmental (external marketing environment) factors that have an impact on an organisation. Ø  Daily Point-to-point flights on short-haul destinations, Ø  Commitment to quality and service maintenance. Threat of new entrants: The threat of new entrants for Ryanair is low, due to significant entry barriers for the airline sector which include; economies of scale, capital investments and access to distribution channels. Thus, the competitive rivalry is high (Dudovskiy.J, 2012). Ryanair reports first … The main strategy that Ryanair uses and made the company successful in the past years is cost leadership. However, in order for a segment to be successfully exploited, it must fulfil certain requirements. That is the result of its strategy which is based on a ‘no frills’ service in order to offer the lower prices. Objectives can be company visions, values and goals, specific to a division or department or individual employee expectations. The internal processes of the company are also of vital importance and their optimizations are crucial for the success of the business. Moreover, Ryanair is developing “Related diversification” because its strategy development is “beyond current products and markets but within the capabilities of the value network of the organisation” (Johnson et al., 2010) and applies both vertical and horizontal integration. According to Jim Blythe, the main purpose of segmenting is to enable the companies to concentrate their efforts on pleasing one group of people with similar needs, rather than trying to please everybody and probably ending up pleasing nobody. -Corporate.ryanair.com. Ryanair has ordered a further 75 Boeing 737 Max planes worth up to $9bn (£6.7bn), defying aviation industry pessimism over coronavirus and … ( Log Out /  Thus, the airlines have to seek an alternative strategy to adjust to the climate change. (2017). The normal Ryanair economy seat is in a 3×3 configuration with blue faux-leather upholstery, no ability to recline, and limited legroom. Available at: https://www.theguardian.com/business/2017/sep/23/ryanair-losing-height-cancellations-staffing-crises [Accessed 8 Nov. 2017]. Over the years the company got bigger and on 1993 the airline company carried more than a million passenger in a year. About 16% of profit is made this way. However, this gives an advantages to Ryanair to understand its customers in a deeper level in the road to meet their requirements (Accenture, 2017). https://www.bcg.com/documents/file129974.pdf. Overall, the marketing mix is the set of controllable, tactical marketing tools that a company uses to produce a desired response from its target market. By clicking “Yes, I agree”, you agree to Ryanair using cookies to improve your browsing experience, to personalise content, to provide social media features and to analyse our traffic. Bibliography. Porter’s generic strategies are used by organisations in order to create and maintain competitive advantage. Furthermore, even though Ryanair has one of the most fuel efficient aircraft fleet, there is a rising concern regarding low-cost airlines contribution to carbon emissions (Perkins and Varinsky, 2017). Ryanair established in the European market share. The result of which is used to identify threats and weaknesses which is used in a SWOT analysis. Not only the company can expand in the Middle East and North Africa (where Ryanair would be competing on each own on short-haul routes) through market development and market penetration, the company can be benefited if it offers concierge services such as a loyalty card and air miles scheme, as customers nowadays are paying a premium in order to feel valuable and more comfortable. Besides the actual tickets that Ryanair sells, a huge part of the revenue comes from ancillary services such as car and hotel rental, and on-board food and drinks as it does not offer them free of charge. https://aviationvoice.com/eu-warns-airlines-about-post-brexit-access-201703231016/, http://marketrealist.com/2014/09/changes-crude-oil-prices-affect-airline-fuel-costs/, http://www.businessinsider.com/airplanes-grounded-heatwaves-climate-change-2017-7, https://www.investopedia.com/terms/b/balancedscorecard.asp. There is no free food or drink onboard. http://www.ryanair.com/en. Such an approach, however, will not be possible in the Middle East, where policies differ strongly from Europe. In addition, significant capital investments are required such as physical facilities and attracting qualified workforce. Ansoff Matrix – Strategic Direction for Ryanair Products Existing New Market Penetration & Consolidation Product Development - This should be (and is) one of the - Ryanair’s expansion into Ancillary Existing key strategic directions for products is a good strategic fit M Ryanair, that is consolidating A existing routes and increasing R market share on existing routes K E T Market Development Diversification S - … -Davies, R. (2017). Ryanair rolls out new product aimed at business market. Processes:  With Ryanair, there is not check in neither the customers can select the preferred seat. Moreover, they are responsible for the safety of the passenger and the ancillary services. Market penetration tells us about increasing Ryan’s sales and profit in the existing market by acquisition and low fare. The research and development department of Ryanair Holdings plc is classified in this category.