Ryanair Case Study

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Ryanair Case Study

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Abstract

Ryanair was founded in 1985 by Tony Ryan and family (with a share capital of only £1 and 25 employees) in Ireland.
The company is essentially dedicated to medium haul flights for the European continent (26 European countries are served by Ryanair) and the nearest areas like the Maghreb.

This company followed the low-cost trend which began in the United States with the first airline company adopting a low-cost policy (Southwest).
Ryanair progressively acquired a great reputation across Europe thanks to the low fares of its flights and became one of the biggest airline companies in the world.
It is even the first carrier in Europe in number of passengers per year (more than 40 million in 2007).

Nevertheless, it remains that some people are not sure of the quality of the company (its low cost strategy) and wonder how the passengers can be in safety if the tickets are so cheap.

The airline is indeed in a very specific market where customers really give importance to safety (the terrorist attacks of 9/11 reinforced this attempt).

Moreover, Ryanair has the reputation of having an anti-social attitude with its employees and a lot of people do not agree with this social policy.

Business model
1. Mission statement
2. Business concept
3. The importance of E-Business in the business model
E-Business and the Ryanair's growth
1. Different aspects of E-Business
2. Impact on the Ryanair's growth

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Extract

[...] Ryanair has indeed different partnerships with Hertz (Ryanair's client can rent a car in the city where he wants to Cendent (Ryanair's client can rent a room in a hotel) and with the airports where Ryanair is present (Ryanair's client can book a place in airport parking). These partnerships are very profitable for Ryanair because it allows the company to have a commission on the sales (around 14%). II) E-Business and Ryanair's growth Different aspects of e-business The upgraded Supply Chain management An effective supply chain management participated in the reducing of costs operated by Ryanair. [...]

[...] allows Ryanair to prove to the customers that they are in safety in recent planes, even if the ticket is very cheap. Moreover, this strategy turned out to be very good for the company because it led to the support of shareholders who invest increasingly in the company. We will see the importance of the e-business in Ryanair's strategy and how it participated for the great success of this company. Business Model Mission statement Ryanair is the business of providing low-cost medium haul flights across Europe by offering to the customers the fairest price according to the day on which they buy their ticket. [...]

[...] In million passengers have indeed flown in Ryanair and it had represented a growth of 22% when compared to 2006. So this huge expansion tends to prove that the passengers are very pleased by the added value of Ryanair which is in one term: low price. We will indeed see that Ryanair's strategy is successful in terms of revenue and also in terms of quality of service. Impact on the revenue According to Ryanair's annual report, the revenue of the company in 2007 reached billion against almost 1.6 billion in 2006. [...]

[...] Nevertheless, Ryanair could progressively develop its presence in the airports and keep in the same time important advantages for on-line sales in order to maintain these kinds of sales. Ryanair's goals in terms of e-business should be to improve the communication in order to attract more potential customers. The company has to concentrate its efforts on advertising which is maybe the weaknesses of the brand. Moreover, Ryanair could largely communicate about the safety and the quality of the services in order to convince the people who still have doubts. [...]

[...] III) Recommendations Negative aspects Even if the business model has been very successful, Ryanair has had to indeed face some critics concerning its e-business strategy: The sale of tickets via Internet is a problem for some people who like to go to the agency to have a concrete ticket and to speak with a real person The price announced on the offer is not the real price because the passengers also have to pay the airport taxes and the additional services. [...]

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