Ryanair, a model of competitive advantage?

Extract

[...] ✓ The Management strategy Policy management is innovative and young. The company relies heavily on its workforce to develop its business and increase growth. Employees perform different functions in the goal to reduce employees' costs. Ryanair uses an extraordinary strategy: ← A selective recruitment: human qualities, motivations and character of candidates are judged by managers ← Methods of participatory management justified by the slogan “Sweat your assets” ← A policy of high interest in the results of the company ← A strong corporate culture ← Social policy maverick (intolerance of unions) The group's strategy aims to achieve the following objectives: ← Affirm and develop its cost leadership position due to the effects of experience and the ablility to achieve economies of scale ← Maintain its growing reputation and ensures a stronger image ← Strengthen the power of communication based on existing brand equity. [...]

[...] Main elements of Ryanair's competitive advantage Efficiency Quality Innovation, Responsiveness speed and to customers flexibility Competitive low-cost Consideratio strategy strategy n of airports as profit centres services distribution in new Boeing Europe Optional paid The youngest services fleet in Europe Recent fleet of Punctuality Cheap prices same planes A single ticket Diversification policy, free in services seating Management Short flights, Selective Selective strategy high rotation recruitment recruitment of planes, Participator simplified y management routes Airport Social agreements policy maverick Limited and Strong High flexible crew corporate interest in culture company's performances Strong corporate culture Financial Investment strategy of dividends in the company Marketing Simple Controversia Stronger image strategy advertising l advertising Conclusion: Does Ryanair create a competitive advantage? Ryanair is one of the largest low cost airlines. The company creates exceptional financial and operational performances, thanks to its policy of cost leadership. To consolidate its leading position in the market, the company followed a strategy of market expansion. However, this quest for unbridled growth could have exposed the company to many risks if the demand decreased. [...]

[...] But to keep this competitive advantage, the firm has to control its direct costs of manufacturing, marketing, distribution and financial and administrative operations. These costs saving are reflected on selling prices that pushes Ryanair to sell a lot to increase its activities. Intensive use of aircraft is a feature directly related to secondary airports and the organization of the company. Ryanair serves only small regional airports, cheaper (airport and fly taxes reduced) and less congested, which not only ensure punctuality, but also increases the rotation of aircraft. [...]

[...] Ryanair is one of the firms that used different core competences to be as competitive as they can. In a market where economic developments and international events have a major impact on the health of businesses (according to the International Air Transport Association, due to higher oil prices during airlines had closed between January and June of that year), Ryanair seized the opportunities offered by globalization, developed and continues to improve a specific strategy to fight with the severe competition. [...]

[...] To “stay in the part”, companies must develop strategies and actions giving them a competitive advantage and enabling them to survive and develop. According to Jones and George, there are four ways to create competitive advantage, also called critical success factors or core competences: a superior efficiency; quality; speed, flexibility and innovation; and responsiveness to customers. But how can organizations create, implement and manage a strategy like this? To answer this question, we will study the case of an Irish airline company. [...]