Goals Ryanair plans to increase efficiency and lower costs even further in comparison to industry rivals. The company wants to become the 2nd largest international airline.
The Ryanair Marketing Mix - The Ryanair Marketing Mix T...
It benefits from the first mover advantage as it has implemented the budget model first in the European market by negotiating best rates possible with secondary airports. Ryanair has established a single type aircraft fleet that saves on training costs, point-to-point flights that enable fast turn-around times and flights to secondary airports that save airport fee costs.
All of them enable Ryanair to keep its operations extremely efficient. Furthermore, Ryanair sub contracts employees on temporary basis, which again saves the company huge expenses making it flexible and adaptable to environmental changes. Figure A2 illustrates all the key points as a summary see: Appendix.
Through ancillary revenues as e. In addition, the EU demands to refund air passengers in case of delays or cancelled flights. Also, the EU might increase the emission fees. Economical Ryanair saves costs by operating over secondary airports. In that way they avoid primary airport charges and extra costs.
The economics downturn in has shown that Ryanair as the leading budget airline can offer the cheapest flights attracting customers and still generate returns. As long as the low fares are guaranteed Ryanair will do well in comparison to its competitors. Failures in hedging, as it happened in year 6 8. Also exchange rates should be observed as they might lead to supply chain disruptions.
The poor working conditions cause legal and safety issues that can scare established and potential new customers away. Additionally, the provoking and misleading advertisements lead to a bad image of Ryanair from customer perspective. Those social factors should not be ignored, as customers are key for further growth and market expansion. Technological Ryanair has successfully demonstrated how to make use of modern technology in order to save costs. Besides, if technology such as on-board Internet connection and television are offered for a fee they can generate additional revenue on board.
Legal Ryanair is involved in a few legal battles with Stansted and Dublin airport that raise their departure duties. The poor working conditions and insufficient training might be an issue of labour law Ryanair Documentation, Youtube, Additionally, the poor working conditions lead to safety issues and can cause a bad image. All those legal issues are causing handling-, penalty fees and court expenses that should be limited. Ryanair is accused of unsatisfied working conditions such as long working hours, insufficient employee training and qualification, manipulation of employees to accept working conditions and low salary Ryanair Documentary, Besides, EU regulations regarding environmental awareness state that additional fees are applied if the CO2-limit is exceeded.
The entrants need high capital requirements in order to generate high economies of scale to compete in the European market. Besides, access to distribution channels is required. That means that the factor threat of new entrants is pretty low. The only significant threat is the train service because the other options are too expensive.
Even though Europe has a good train network like EuRail, the disadvantage of trains is the journey time. To conclude, the threat of substitute is low. EasyJet and Virgin Express. Especially, in a strategy of cost leadership each customer becomes important. Besides, an increasing problem is that more and more competitors start to offer cheap prices, as well. Supplier switching costs are high, as the pilots will need to be retrained and high capital investments must be made. But Ryanair can allow itself to change suppliers because of its healthy cash flow and because it has already tried to purchase Airbus aircrafts after the purchase of jets from Boeing got cancelled.
This might also be the problem for Ryanair and its expansion strategy. As the threat of entry is high the extent of rivalry stays as middle. Besides, Ryanair operates over airports which is the highest number in the budget airline industry. The Skytrax rating gives an overall evaluation rating for budget airlines.
Criteria of the evaluation are such as customer service and customer satisfaction. The range goes from 1, as the worst, to 5, as the best rating.
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Ryanair received a rating of 2, which is the lowest one in comparison to its competitors and which indicates a bad customer service and satisfaction. Scenarios are possible outcomes on how the external environment, that could harm or benefit the company, might change. According to those scenarios action plans are constructed on how to react to those changes. Scenario 1 see: Figure A8 As an economic downturn and fuel prices are major threats for Ryanair, Scenario 1 illustrates possible outcomes setting Economy according to the fuel price.
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Browse Essays. Show More. Consequently discounts will be removed and charges possibly increased. With a tight US gasoline market, low inventories and an upsurge in fighting in Iraq, oil prices look likely to remain high or rise Ryanair faces persistently high or rising fuel prices. Read More. Words: - Pages: Essay Perfect Holidays Tours And Travel Agency business, so it becomes all the more critical for them to create a good image in the minds of customers.
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In view of fact that accessibility of oil decreases, global demand increases, and the. Introduction The marketing mix is an essential perspective in both marketing research and implementation. As the most common concept of the marketing mix, the classification of four Ps Product, Price, Promotion and Place is generally considered the synonym of the marketing mix and has been used by marketers. In , Ryanair faced cash flow problem, and was going to be bankrupted.
However, it found the way to overcome this crisis by transform themselves from ordinary high-price airlines into the lowest price airline in the EU. They focused on 5 things to rebirth their company. Focused on cut down the costs: Ryanair aggressively cut most of its costs in many ways. Found the routes and airports. Political and Governmental Forces b. Economic Forces The political environment is quite favorable for the airline industry in Europe. The European Union has entered into various business and trade agreements with the rest of the world.
These agreements have greatly encouraged the import and export activities which form a significant portion of the airline industry's revenues.