Analysis on Ryanair Business Strategy

An aviation company, Ryanair was founded in 1985. Initial effort of Ryanair was as a low-cost carrier which is first at Europe in 1995. Ryanair act as a substitute of the monopoly, Aer Lingus in providing services between Ireland and UK. Later, it has benchmarked the business model of Southwest, a successful Texas based airline service provider.

According to Porter's Generic Strategies, Ryanair is adopting a cost leadership strategy while at the mean time eliminate those 'no-frills'.

Focused cost leadership strategy being adopted as Ryanair only targeted at specific market segment, to who are extremely price sensitive. They do not care on what services they'll get, but just the fares they're going to pay.

To make known to public, Ryanair convey its objective into a message.

''Ryanair is all about getting you from A to B as cheaply as possible which is no frills," says Danny Rogers, editor of PR Week magazine

Being a low cost provider whilst continuously "no frills" in order to stay competitive. Operating process effectiveness and cost containment are the main focus of Ryanair.

For it to sustain its low fares despite new regulations, taxes and EC airport charge changes which increase cost.

Generally, the essential essence of its strategy is low cost and no-frills.

Seeing this, Ryanair has taken relative measures to match its aims. Its base fares are priced relatively low because of its aim to be the cost leader in the industry. If there's competitor threaten its cost leader position, it will match and further cut down its price.

To be continually leading in the industry in terms of cost, Ryanair put lost of efforts in it.

They adopt online booking, check-in system to and cost-ticketless boarding save time and cost. For example, ground desk staffs no longer needed.

Ryanair passengers are allowed only one piece of carry-on luggage, there're charges for checking baggage and massive extra charge for extra luggage.

Moreover, in view of increasing in fuel price, Ryanair hedge against the fuel risk to eliminate the effect that potentially inflate its cost base.

The policy of using secondary regional airports and fast turnaround time for its operations helps to keep costs lower. Chances of delays, traffic congestion will also be reduced in conjunction to it as it means maximise the utilisation of aircraft. Special promotion in off-peak time to increase the load factors (few empty seats) is the means to further reduce the costs per revenue passenger kilometre.

Another cost reduction measures are new aircraft of Boeing 727 being bought to reduce necessary maintenance cost and Ryanairs own staff take up the