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Ryanair was the first Europe's leading budget airline and was founded in 1985 by Cathlan and Declan with the financial backing of their father Tony Ryan and it started their airline with just a share capital of $1, with a staff 25 employees. Ryanair was started passenger airline services between Waterford and London with the single 15 seater .Mainly Ryanair modeled was actually built on south west airlines after the highly successful U.S carrier in (Texas based operator).After the 15 years, the ryanair flown by a great deal of turbulence, in which company was looses there five chief executive. In the early 1990s ryanair was survive and successfully restyle itself as a role model of south west airline and become a Europe's first budget airline, with low fares and no frills carrier with two classes of seating , more than two types of different aircrafts and after that ryanair led by Michael 'o' Leary , appointed by Tony Ryan in late 1990's.Later on ryanair first floated on the Dublin stock exchange where it was admitted to the NASDAQ-100 in 2002. Subsequently ryanair's was started operations in 2006. In which Michael o' Leary implies many strategy to make there profit high while stick on the low fares. They uses many tactics like yield enhancing measures for passenger check in , using secondary airport for reduce the landing cost, switch on the new less fuel reduction aircraft, offering online tickets booking, discounts and on flight internet-gaming facilities.
Strategic capability and competitive advantages:
Michael 'O' Leary effectively make the European cheaper airline, ryanair was started with the very low share capial but after the few years ryanair was on top for there resources and capability. In 2006 ryanair aircraft was 103 which increased gradually (ryanair operating statistics). Ryanair assigned itself as the 'world favourite airline' on the background that it presumed that it would be carrying 42 millions passengers in 2007. In spite of ryanair announced that to flew out of 18 European bases with a fleet of 100 new boeing 737-800 aircrafts. Ryanair strictly on its policy to maintained the low cost airline policy. Ryanair replaced its fleet of previous aircraft, with the new, advanced eco friendly aircraft, which produced 50 percent less emission, 45 percent low noise emissions per seat and 2 percent reduced in fuel consumption. Further more ryanair launched European largest website www.ryanair.com in January 2000. In the period of 3 months the website recorded 50,000 online bookings per week 1.(Box, Byus et al. 2007) "ryanair is the southwest of europe and they continue to take market share at phenomenal place" says chrish lozier when the ryanair announced there order of 70 new boeing 737-800 aircraft.
Core Competencies and unique resources
In 2006 ryanair average staff was 3063 from 25 different nationalities which rose by 18 percent as compare to year 2005 and the average staff cost 53,306 euro(ryanair operating statistics).Core competencies of ryanair airline: Ryanair cut down the airport charges by avoiding congested main airports and selecting the secondary airports for instance ryanair uses Torp, which 100 kilometers away from Oslo. Ryanair flew for various destination and routes continued to be point to point only. Its low -fares policy attracted the customers with guarantee of that they do not impose any fuel surcharges on its customers. Ryanair is famous as a no frills airline in which there is no business class only single class aircraft polarization. Ryanair's was a Europe's biggest low fair airline and only ryanair was offering lowest fares in the whole European market.
Micheal o leary quote that any company can sell the low fares and lose money. The main thing is to sell the lowest fares and make profits, you can't lower your airfares or invest in new aircraft.(To quote Micheal o'leary). Constantly decreasing the cost of fare was ryanair's funda toatract the passengers which increase the market shares and leave the competator behind. Cost cutting method make the ryanair uniue with the other airlines , ryanair plans to close the check in desk to reduce the baggage handling charge by 50%. Now ryanair is currently negotiating with stansted owner BAA ltd for lowering the charges which forced by the operator.(Niththyananthan 2009). Ryanair controls its cost to fly point to point for one way, its make all booking separately no baggage transfer , even to its own flights. Quietly but tightly ryanair's warns the passengers on its official website that if they are taking a ryanair flight for its base and then taking the another ryanair flight onwards they should allow 3 hrs between the arrivals and departure and the passenger will have to collect their luggage and check in for the another flight. Like South west airline, ryanair offer free for all no seating no seating assisgnment.
Key success factors of ryanair's
To makes continues position in the market, as well as to maintain the low fares strategy. Ryanair started online booking by issuing the discount and cut down the distribution cost. In 2006 ryanair was claimed thet the ryanair official website the largest travel website in Europe and the 5th most recognized brand on google. In addition to sometime ryanair get the free publicity through the media. Michael O' Leary pulled there airline in an entertainment service in which they provide the internet facility and video games. New boeing aircraft which was the most successful key factor in the progress of ryanair airline. It reduces the fuel consumption and noise emissions per seat as well as the eco friendly aircraft. Mainly all the companies fully concentrated by trying the less prices fares. Even though ranair reduces the on board meals and drinks and its only concern to there features of market target like advance reservation, cargo safety and fast departures. Most and the main successive factor of ryanir was its punctuality and less loss of baggage which attract the customer to choose the ryanair low fare airline. In spite of these success factor if we talk about critical factor without which the ryanair fails was only one Michael o leary who make the dream possible to cheap fly, without Michael strategies and tactics the budgetary business module can't succeed.
Diagnosing strategic capability:
Strength and weakness analysis
About strength and weakness of ryan air. They has an unique capability of optimizing there production cost efficiency and consequencing maintains the leading position among the European low cost airline and reduced the landing fees by avoiding the congested airports, choosing secondary regional destination airport and avoid the competition with big network carriers.(Mayer 2008). Low aircraft acquisition costs has make the ryanair low cost airline. Ryanair low aircraft acquisition cost has the main factor of its low price policy. Ryanair's purchased 21 second hand aircraft (737-200s) which were cost ranged between $5 and $9 millions with a comparison of $30 millions for new 737-800s. After that Michael O' Leary were conducted the ryanair's operation in 2006, in which ryanair replaced its old aircraft with the new more eco friendly which reduce the 45 percent noise emission and also reduce the 2 percent fuel consumption . Ryanair's reduces there distribution cost which means no travel agent, no commission. About 48 percent of ryanair booking directly through the official sites and offering 5 percent discount for the online customers which cut down the travel agent commission around 7.5percent. they reduces its crew members or flight attendants while they using 130 seater aircraft, whereas in big carriers only five employees.(Sophister) Ryanair's was famous for there entertainment service by issuing rent game and internet services on flight. Ryanair has the outstanding record in punctuality and lost of luggage which gives a good image of the company reliability. Ryanair has developed the low fares product with the high employees productivity.
Many weakness which make precived ryanair as an arrogant airline. Ryanair's was always surrounded by the issues which media make higher in the news and the rivals take the benefits of it. Major weakness of ryanair is poor management and lack of attention towards the customers. Bad industrial relations with there staff mainly there pilots. For example company banned there employees for charging there mobile phones because of electricity bills and the pilots gave extra money for there training on new aircrafts. Roudly behaviour towards the government policy, ryanair were against to pay any refund which were arising due to the cancellation or delaying. Using of secondary airport or advertised destination sometime make the customer big inconvenience and the main weakness that has to be stressed out its fully focus on regional airport not congested airports, which may result in a less ability to be a focus for certain customer
Analyzing the aspects of case study. Ryanair as a low cost fuel aircraft and low cost fel supply also embraces the airport authority contracts and ryanair's has a warm relationship with there suppliers. Ryanair has a outstanding record in punctuality for take off which make a prestigious in the airline industry. Ryanair luggage service providing towards the customer were also best as compare to other airline and they also provide may entertainment amenities during on flight which makes passengers attract and helping to switch on the ryanair airline. Some famous incident make the ryanair unique value or frame in the market through the free media publicity . through the survey passengers rated no. 1 airline on the prospects of there low fare, punctuality and less loss of luggage and also no. 1 for European routes (149) and bases (11).(O'Cuilleanain, della Falle et al.). ryanair scored highest across all categories in its earning to revenue ratio. In creating wealth ryanir was second to united parcel service based on net return productive assests copare to all airline companies. It remains our medium-term view that there will only be one or possibly two large low-fare airlines; we are determined that the biggest and lowest-cost of these carriers will be Ryanair," say company of offical
In ryanair, there is no need for comparing with the rivals and start changing the strategies. Ryanair act as a market leader in the sector of European low fare airlines. All ryanair aircraft is advanced with the high capacity, low noise emission, eco friendly and less fuel consumption. In addition to ryanair has a maximum numbers of skilled employees, low fare charges and online booking discount. All these quality make the ryanair unique with the other and give an advantage to compete with there rivals
Culture and structure:
In conclusion, the uses of internal methods and models like value chain, resources and capability, action plan give us understandable view of industry. Furthermore the bases of implies the theory effectively offered more chances for growth and improvement of the airline. Continuous study and analysis of the internal factors, can help the organization , for struggling competion and economic growth. ryanair implies the cost reduction method to make there business budgetary model which restructed the European airline industry. The low fare airline which exploit the cost budgetary strategy to make a competitive place as well as build up Its core competencies and capacity to boost performance that help ryanair to get its major success. Thus, the competitive advantage and core competencies of the ryanair make its competitive position in the cheap airline industry.
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