The Economic Environment of Business - Essay Example

This paper aims at indentifying the structure in which Ryanair operates while addressing how it has adopted its market strategies to gain entry into new markets. Also the regulatory issues that it has had in regards to the existing market will be discussed. Lastly, the paper will consider the directions it is taking in terms of international expansion, capital acquisition and challenges faced. In order to understanding the airline industry it is important to understand the customers first. The airlines on the other hand are customers to airline manufacturers like Boeing and Airbus (Palmer & Ponsonby 2002).

The governments and the global economic structure are the other factors that highly affect the airline business. It is important to appreciate however that despite the industry having many players and obstacles, it is ever growing in terms of companies expanding while others coming up. The airline business has enhanced international trade and investment for many years thereby taking a huge stake in encouraging globalization (Gregory & Marilyn 2004). This means that many other industries in the global economy highly depend on it.

The airline industry has been on a steady growth of about 7% for the past decade in respect to expansion moves but not necessarily profitability. However, business and tourism travel hugely increased over the same period owing to the increased liberalization of the world trade (Nigel et al. 2003). The European tourism market is shifting to Eastern Europe to destinations that were not considered for tourism there before. The IATA predicts that the airline business will grow tremendously by about 5% to 8% in the coming decade having grown at a rate of 5% this past one (Miriam 2010).

However, the same body predicts that the industry will generally grow at a lower pace in America and Europe. The basic reason behind this arises from the fact that these respective industries are already fully developed.