Strategic management ryanair

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Text of Strategic management ryanair

  • 1. Ryanair The Low Fares Airline
    Strategic Management
    Team members:
    Ivan Martinov
    Sabbir S. M.

2. Agenda
Company Overview
1
Strategic Analysis
2
3
Strategy Formulation
4
Organizing for Strategy
5
Conclusion
3. Company Overview
1985, first route with daily flights on a 15-seater Bandeirante aircraft,
In 1986 launch fare of 99 return, less than half the price of the BA/AerLingus lowest return fare of 209. First European fare war
In 1990, losses of 20m. Adopt Southwest Airlines low fares model.
In 1997, Ryanair launches its first four European routes
By 2009, traffic grew to 14% compare to 2008, resulting 66.5m passengers in response of reduced of just 35.
Covering 44 bases, 27 countries, 160 airports with 254 Boeing 737-800s
4. Agenda
Company Overview
1
Strategic Analysis
2
3
Strategy Formulation
4
Organizing for Stratgy
5
Conclusion
5. Porters Five Forces - Supplier

  • Boeing is main suppliers

6. Only 2 possible suppliers of planes Boeing and Airbus 7. High switching cost 8. Price of aviation directly related to the price of oilThreat of
Entry
Buyers
Suppliers

  • Regional Airports depends on one airline

9. Bigger airports have competitors of Ryan AirRivalry
Substitutes
10. Porters Five Forces Threat of entry

  • High capital investment

11. Restricted slot availability makes it more difficult to find suitable airports 12. Immediate price war if encroaching on existing LCC route 13. Need for low cost base 14. Flight AuthorizationThreat of
Entry
Buyers
Suppliers
Rivalry
Substitutes
15. Porters Five Forces - Buyers

  • Customers are price sensitive

16. High Switching tendency 17. Customers know about the cost of supplying the service 18. No loyaltyThreat of
Entry
Buyers
Suppliers
Rivalry
Substitutes
19. Porters Five Forces - Substitutes

  • No brand loyalty of customers

20. No close customer relationship 21. No switching costs for the customer 22. Other modes of transport: Eurolines, ferries etc.Threat of
Entry
Buyers
Suppliers
Rivalry
Substitutes
23. Porters Five Forces - Rivalry

  • The LCC market is highly competitive

24. Most cost advantages can be copied immediately 25. the two major low-cost airlines have avoided direct head to head competition by choosing different routes to serveThreat of
Entry
Buyers
Suppliers

  • Following Ryanair strategy will create heavy pressure on prices, margins,

26. Price is the main differentiating factorRivalry
Substitutes
27. SWOT Matrix
28. PESTLE Analysis
Legal
Social
Political

  • Emission constraints

29. Corporate Lawsuits 30. Strong Political Environment 31. EU Expansion 32. Trade Union Pressure 33. Global Carbon TaxChanges in demographics and consumer preferences
Frequent short-term trips
Threat of terrorist attacks
Increased environmental awareness
Technological
Economic
Environmental

  • Rising fuel prices

34. Weak US dollar 35. Global crisis 36. High rates of unemployment 37. Global warming and CO2 emissions 38. Noise pollutionNew aircrafts; with much more efficient engines -> reduced CO2 emissions and fuel consumption
Internet
High speed trains
39. Conclusion of PESTLE Analysis
Conclusion:
Positive sociodemographic factors supported by strong technological innovations
Bad legal and environmental aspects
Mixed political and economic environment
Result of analysis:
The Macroenvironement is contradictory
40. High
Keep satisfied
Key players
Power
Minimal effort
Keep informed
Low
Low
High
Level of Interest
Stakeholder Mapping

  • NGOs

41. Shareholders and Investors 42. Creditors 43. Government 44. Customers 45. Employees 46. Competitors 47. Local communities