Group Members -:-
1. Mr Olayinka Oladeji Omojayogbe
2. Mr Abdueraouf Ebhialil
3. Ms Laura Lucbert
4. Mr Reaz Ahmed
5. Mr Mohamed Mifras Mohamed Zain
Strategic ManagementGroup no: 10
INTRODUCTION
Founded in 1985 by the Ryan family
Currently headquartered in Dublin, Ireland
Michael O’Leary took over in 1991
Currently the largest European airline, and the sixth largest airline in the world.
Started with two classes of seating, which are business class and economy class
The company changed its business model dramatically in the 90s, implementing
cost-leadership strategy, utilizing disruptive innovation outsourcing strategy, and
market segmentation focus
Operate under its own new single fleet of Boeing 737-800 model type planes to
keep aircraft maintenance cost low
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Critical Success Factors (Activity Map) (2)
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Critical Success Factors (Activity Map) (2)
Limited passenger amenities – Reduced leg room, limited passenger’s luggage
weight and have to pay for in-flight services.
Frequent reliable departures – Averaged 1270 per day in Sept 09.
Lean productive ground and gate crews – Ticketing and check-ins mainly
online.
High aircraft utilization – 2009, load factor averaged at 85%.
Low ticket prices - on the basis of the demand, selling 70% of seats at the
minimum available fare assigned for the route.
Short-haul, point-to-point routes – Flying frequently to secondary and regional
airports, with an average flight duration of approximately 1.2 hours.
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Ryanair’ sustainability
Ryanair focuses on three areas:
High volume : filling as many seats as possible. Michael O’Leary, CEO says “ buy more and sell it at low prices” (Felsted, Nov 2003)
Load factor : number of seats sold as a proportion of those seats available on each flight. Ryanair flew 11.3 millions passengers in 2003, 45 % up on 2002.
Reducing every cost : booking via internet (less administration costs), aircraft operated on tight schedules (every 25 minutes) allowing more
flights a day. Passenger Traffic 2002/2013
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Ryanair’s Cost Savings chart
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Competitive advantages
Traditional cut fares on short haul flights
Scrap conditions on short haul flights
Decreased cost on domestic flights :
Larger aircraft, 1 passenger class
Reduced in-flight service, internet booking
Low fares subsidiaries
Mixed model : full service vs. low cost Focuses on low cost.
Revenue Generation Ancillary services : car rental, travel insurance,
accommodation
In-flight services (captive audience) : online shopping, food & beverages, alliances, magazines
Online bookings Ticketless boarding One class travel Unallocated seats Flying to the secondary airports Point to point flying In house marketing No frills Reduced turnaround times No refund policy Corporate partnerships No cargo service Bargaining power New aircrafts Owns own fleet Operations denominated in euro Hedge fuel risk Highly successful ancillary
service offering Outsourcing of services at
international Airports 6
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Value Chain
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EXTERNAL ANALYSIS : Porter’s 5 forces
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Strategic Positions
Ryanair's strategic activity map.
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Strategic Trajectories: Generic Strategies
Cost Leadership:Lowest Cost
airline in Europe
Uniqueness:Low cost full
service airline. Innovative and
focused.
Focus:Niche market/
focus
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Red Ocean & Blue Ocean Strategies
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Ryanair Blue & red ocean Strategy Matrix
Compete in Existing Market
Beat the Competition
Create and Capture New demand
Break the Value-Cost trade off
Align the whole System of the Company’s activities in pursuit of differentiation & Low-cost
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Innovation strategy
Drop Cost Structure
Lifts Buyers Value
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Key strategic trajectories
1985-1995
Low fare
Rapid Expansion
Investment Efficiency
High frequency flight Formula
1996-2004
Rapid growth in UK market
No 1 European Airline
Europe’s largest booking website
Complete Travel package (e.g. Ancillary, Hotel Accommodation; Travel Insurance; rail services)
Customer Satisfaction (e.g.
Punctuality, Fewer flight cancellation; Less lost baggage; Stuffing and Control)
Beat the competitors (e.g. Lufthansa)
Use of Massive media
Internet possessions
2004 to present
Rapid Expansion in Europe
Sales and cost control
Profit maximisation
Passenger growth
Acquisition of new Boeings
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Conclusion
Ryanair is Europe’s only ultra-low cost carrier (ULCC), operating more than 1,600 daily flights (over 500,000 per year) from 57 bases, across 1,600 low fare routes, connecting 180 destinations in 29 countries and operating a fleet of 303 new Boeing 737-800 aircraft.
Low cost, frequent flights, and other strategic innovation has helped the company to becomes Europe’s the largest airline service provider.
Strategy, innovation and business model is the key to Ryanair's success.
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