Strategic Management of Ryanair Case Study Example | Topics and Well Written Essays - 2500 words

Strategic Management of Ryanair - Case Study ExampleThe increased competition betwixt rivals in the budget skyway industry may point to price wars which give greatly benefit the customers only. This is why Ryanair has an advantage over other airlines because their policy of bundling low frills and low prices together means that they be competing for the more price sensitive customer. (Sean Brophy and Dominic St. George, 2003)The demand for short haul flights is ever increasing in Europe. Hence it became important that Ryanair had to take all the benefits of the foremost promoter advantages, since there are many airlines trying to copy the services being provided by Ryanair. Davy (2003) believes that there are only two pan-European low cost operators where first mover advantage and scale and cost efficiencies gave the two largest players, Ryanair and Easyjet, a significant advantage. The fact remains that after deregulation almost 80 airlines started operating at low cost in th e similar lines of Ryanair and 60 of them have since become bankrupt.According to Michael OLeary, Ryanair need not bother about the competitory rivalry since harmonise to him at the lower end of the market Easyjet and Go dont really compete with Ryanair. Ryanair had a distinct competitive advantage in being the cheapest no frill carrier in the Europe. It was possible for the airline to have the lowest costs as they drove down costs in every possible area.In the matter of competitive rivalry Ryanair has taken away large amount of market share from the rivals Aerlingus and British Airways and to some extent from other airlines. According to Reuters (11th February 2005) Ryanair similarly announced it would endure 2 million free seats, a move designed to pressure full-service airlines such as British Airways whose fuel surcharges have widened the gap on fares between budget and traditional airlines. Ryanair is fully hedged until the end of next March and has refused to impose a fuel surcharge, betting that low fares and even free tickets will draw passengers away from rivals. These strategic moves of Ryanair keep a check on the competitive rivalry. Michael O Leary saidThe more we can put pressure on pricy airlines, the more we can convince them theres no point competing with us (on short-haul European routes),Bargaining Power of CustomersThe customers for the airline industry especially in the budget airline are highly price sensitive.Switching to another competitive airline is relatively easier and simple thanks to the presence of internet and online booking facilities. The switching also does not entail a higher cost.The budget airline cannot