Ryanair is an Irish air travel competing in the pretty recent development of the Western european budget flight industry. Ryanair was founded in 1985 by Tony Ryan. They started their plane tickets from Waterford and Dublin to London. Michael O'Leary is the current chief executive of the company who was the financial controller when company started their business. They can be one of the main element players within the marketplace as well as perhaps the most profitable.
Strategy
Ryanair's purpose:
Europe's leading low-fares planned passenger flight.
Situation analysis:
Market Segmentation.
Ryanair lay state to their market segment by stating these were 'Europe's first
no frills air travel'( www. ryanair. com). Ryanair have made strategic decisions based mostly on
increasing their competitive border, the primary one becoming involved with attracting
customers at both ends of the routes. Most experts support this by displaying that Ryanair key source of revenue from dating back to ten years ago has been around enticing people from France, Italy and Scandinavia. This has had the good thing about increasing their market show as well as the added bonus of creating a proper recognised brand name across Europe.
Prescriptive, Emergent or something unique?
'A prescriptive commercial strategy is one where in fact the target has been identified beforehand and the main elements have been developed prior to the strategy commences. . . . an emergent corporate and business strategy is one whose last aim is unclear and whose elements are developed during the course of its life, as the strategy proceeds'. Lynch (2000).
It is safe to recognise immediately that Ryanair will not take a seat uniformly with either strategy. However certain aspects or functions could certainly adhere to one or the other as they are sections that define the carrier as a whole and then for an organisation of Ryanair's size different parts could have different aims and aims underneath a primary umbrella strategy for the organisation. For example any planning undertaken by Ryanair for new routes or planes would follow the prescriptive model as the target would have been defined in advance and elements such as finance will have had to get been decided before any purchasing goes ahead. Ryanair, as already mentioned, follows neither tactical methodology religiously and owns a technique unique with their organisation, which includes determined their needs and targets. However their method of tactical management isn't unique in itself as the majority of organisations will tailor strategies to suit their business' own personality.
Competitive Advantages.
Their main competition are providers including EasyJet, BMI baby, FlyBe and ThomsonFly most of who try to attract potential customers by emphasising their low cost seat tickets. This makes your competition in this market segment fierce as to be able to offer the lowest fares, costs must be maintained to a minimum.
Strategy for reaching gaols and objective
Low fares.
Good customer services.
Taking good thing about internet.
Frequent plane tickets on brief haul routes.
Low operating costs, handling aeroplanes and equipment, personnel productivity, customer service costs and international airport access fees.
Commitment to safety and quality maintenance.
(www. ryanair. com)
Cost Decrease Strategy:
To achieve the purpose of Europe's leading low-fares slated passenger air travel and having a competitive position in the flight market Ryanair use cost decrease strategy. These cost lowering strategy continues to be good on five main things like airport terminal charges and route guidelines, commonality, contracting out services, supervised staff costs. For this company has used only 1 kind of planes which help in less cost for personnel training, facility of obtaining spares and maintenance services etc. Ryanair uses Boeing 737, which has given them possibility to gain capacity and reduce the average years of fleet.
The next thing or factor under the cost reduction strategy is contracting out services. Using this method aeroplanes handling, ticketing, managing and other functions are contracted to third functions by Ryanair. In order to limit their bills, engine motor and other heavy maintenance are also contracted out and the staff of Ryanair also holds out regular maintenance.
Another main point of cost lowering strategy of the business is in conditions of air-port charges and course guidelines. Ryanair has made a sensible choice of coping with extra and local airports where the traffic is not jammed and fees are comparably less. Since Ryanair is a true benefit for such air port the air travel company has a bargaining ability which allows it getting beneficial gain access to fees. Ryanair provides only a point-to-point-service so it does not have any cost concerning joining passengers. Also, the company pays special focus to promptly departures since it means maximising plane utilisation.
Managing personnel cost and production is another factor used for lowering cost for Ryanair. In this manner the company pays off its personnel on modest salary but has made a performance related pay style which hunger employees to increase the amounts of industries flown daily, this way Ryanair regulates both the production and keep staff cost down. In the long run managing marketing cost is another factor which makes an organization reduces its costs. Ryanair mainly advertises in its website using its logo 'Ryanair. com, the Low-fare Airline' (www. ryanair. com). It also advertises in UK and Irish newspapers, on television and on radio.
Key Success factors of Ryanair:
Supplier Boeing special discounts.
Successful advertising.
European union scattering out.
Michael O'Leary as Backbone.
Core Values of Ryanair:
The main value of Ryanair is to reduce the price only they can so that customer may easily buy it. Fundamentally Ryanair believes in 'NO frill strategy'
Conclusion:
Ryanair is the other term for success. Ryanair is providing low fares to its customer without transferring any petrol surcharges to its customer but it should also think on offering quality value to its customer.
Strategy Planning of Skybus
Introduction:
Skybus was founded in 2004 in USA. Skybus strategy was model identical to highly successful, super low-cost European flight Ryanair. Ken Giles and John Weikle were the main founders of Skybus. Ken Giles has also worked for Southwest Airlines as Director of Procedures. Skybus commenced their flights in May 2007 once they had received endorsement from US Department of Transportation and National Aviation Administration (FAA). Skybus first plane tickets were from Columbus AIRPORT TERMINAL.
Information: Picture of aeroplanes N522VA, leased from Virgin America by Skybus Airlines. Picture considered March 23, 2007.
Author: Derek Rust.
Source: www. flickr. com
Strategy
Skybus strategy was to perform low cost service providers in USA. Skybus presented a no-frill business design which was slightly just like Ryanair. They sold seat tickets on very low prices only $10 each way but messengers must pay for any extra comfort like goal seats, food or drink, checked out baggage etc. Skybus markets no frills policy as a customization opportunity: customer can 'control just what they pay for. You can customize your experience and journey how you like'
Eliminating extras is not only way to spend less, however Skybus uses a number of other strategies to keep costs and price down. Skybus automate everything including ticketing and check-in at the air-port to spend less on employees, travel agents, and other operational expenses. They don't even acquired any customer support number everything is done online. Skybus uses secondary airports to keep planes running on time for significantly less.
Even though reducing costs on airline and at the airport are advantageous but the biggest expense for just about any airline is its fleet and if indeed they can control and take care of that expenditure then there are very good likelihood of success. Skybus fleet when they start was made up of 7 Airbus A319 and 65 airplane order (total retail value of $3. 7 billion) which was to be sent in next one to two years.
SWOT Evaluation:
SWOT analysis is used to find out the Strengths, Weakness, Opportunities and Risks involved in any business strategy and its business.
SWOT Evaluation of Ryanair:
Factors
Ways which factor pertains to RyanAir
Strength
The low cost leadership.
Very much intense pricing strategy.
Pioneer in the low cost airlines.
Advantage in the gain of market share.
Strong reputation in public.
High weight capacity aeroplanes.
Weakness
Employee relation is very poor.
Customer relation was volatile.
Total reliance on the CEO Michael O'Leary.
Tied up cash with the purchase of new airplane.
Opportunity
Possible new routes.
EU enlargement.
New promotional strategies.
Can go internationally.
Threats
Competitors- BMIbaby, Easyjet, ThomsonFly.
Economic crunch.
Entry of new players in the industry.
Increase in fuel costs.
SWOT Examination of Skybus:
Factors
Ways in which it influence Skybus.
Strengths.
First mover in market.
Competition is low.
Experienced Directors and staff.
Weakness.
Very heavy opportunities.
Less attractive employer.
Customer relationship was volatile
Over self confidence.
Opportunities.
Can lead the marketplace.
New promotional plan.
Possible new routes.
Threats.
High fuel prices.
Volatile dynamics of flight industry.
Unmanageable debt.
Increased competition can lead to price wars.
Less personnel retain capacity.
