Ryanair Essay Example | Topics and Well Written Essays - 2500 words

Ryanair - Essay ExamplePorter suggests that a firm should follow either differentiation strategy or cost-leadership. They do not pass a mission or vision but they continue to be the largest cheap leader in the European air industry (Box and Byus 2007). This requires an absolute committedness to low-cost performance in every element of the value chain. Thus, they have quick gate turnarounds, non-union operations, their compensation plans are in the form of performance- plated incentives, and they fly to substitute(prenominal) airports which too results in cost savings. They have been successful so far because they could compete against the tradition carriers as consumers have become price-conscious. They are able to assert price advantage and they get most of their bookings online. They replicated the South West Airline model of offering no frills services and focused on the most price-sensitive department (Leavy 2003). Is Ryanairs strategy sustainable? Ryanairs strategy has bec ome questionable due to the impact of cost savings in every function. This can be better understood through environmental analysis. Michael Porter has developed a set of tools and framework for environmental analysis. ... Economical The economy of Europe as a whole is stable and the domination of Euro as the common currency adds to stability. The consumers in Europe too are stable so overall the economical factor in has low impact on the industry. However, outside Europe the market is undeveloped and these economies are unstable. Moreover, the economic crisis has impacted all low-cost carriers since 2008 which ash prompted stringent actions from the low-cost carriers (Dunn 2009). Social The airline industry depends on the changing consumer demand. Ryanair could succeed so far because of the price-consciousness of the consumers. However, consumer demographics keep changing and the airline has to be cognizant of the changing consumer preference. all the same a small price difference can change the mindset of the most loyal consumer. Thus the social factor has a high impact. scientific The technological factor has a low impact because Ryanair has invested in standardized but latest aircrafts. However, they do not use technology in employee transaction or in customer relationship management. Legal This has a high impact as they have been charged by the EU for receiving illegal subsidies for its base airport (OHiggins 2005). Its website also had several consumer complaints which prompted the airline to shut down the website (OHiggins 2005). The airline was also in a dispute against the British Airports Authority (BAA) for alleged monopoly villainy over fuel levies. Environmental This has a high impact because climate protection charge has been levied against the airline. Frequent landings and take-off on short-haul flights have high impact on the environment (OLeary 2007). PESTLE Evaluation The external environmental analysis suggests low impact