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Ryan Air case study - Essay Example

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The internal situation of Ryan Air based on the TOWS analysis highlights its leadership in the low cost strategy which was the result of its cost reductions schemes. The additional revenue from various ancillary services was also a plus. However, the reliance of the…
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Download file to see previous pages This antagonism caused criticism from the industry tarnished the image of the organisation (Using TOWS Matrix, 2009; Case Study).
The threat of substitute transportation and the entry of other competitors who could deliver better the gaps that Ryan Air left behind, along with its failure to rectify its weak spots and problematic areas could propel the company to face some serious problems in the future. But then again, the continuous expansion of EU and the burgeoning of the budget sector seeking low cost services provided excellent opportunities for further expansion and rapid growth.
Using Porter’s Five Forces, the rivalry within the industry is very high. This is characterized by the number of competitors servicing the same market within EU with easyJet, AirBerlin, Aer Lingus, FlyBe among others not to mention the long haul carriers (Appendix).
On the other hand, both the threat of potential entrants and the threat of substitutes are within the medium range. Barrier to entry is high because of the low cost strategy but switching cost of the customers is low. Terrorism threat which required stricter rules in airport which resulted to additional inconveniences could drive customers to switch to trains while the rising popularity of low fuel consumption cars posed as substitute threats to airlines with short haul service (Case Study).
The bargaining power of buyers is on the medium scale as switching cost is low. Because of the size of the market, customers could also easily choose which type of service to avail depending on needs and preferences. At the other end, the bargaining power of suppliers’ ranges from medium to high depending on given scenario. It is especially high with regard to fuel suppliers as petroleum prices are dictated by the world market (Hunger and Wheelen, 1996).
Ryan Air’s competitive positioning was based on capturing a segment of the market, focusing on it with a strong ...Download file to see next pagesRead More
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