Ryanair Strategic Management & Marketing Strategy

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Information about Ryanair Strategic Management & Marketing Strategy
Business & Mgmt

Published on February 24, 2014

Author: joostnarraina

Source: slideshare.net


Ryanair Strategic Management
Includes company introduction, marketing stratagy etc.


Presentation outline 1. 2. 3. 4. 5. 6. 7. Company overview Strategic analysis (External and Internal) Key Elements of Strategy Marketing Strategy Revenue model Is the strategy sustainable? Concrete recommendations

Company Overview Low budget airline Started in 1985 160 airports, 27 countries 1,300+ routes 1,500+ daily departures Fleet of 275 Boeings (Newest fleet (3yrs)) 5 main bases:  Stansted (London)  Charleroi (Brussels)  Marseilles  Madrid  Bremen

Company Overview Leader Michael O'Leary Ryanair, CEO

Strategic Analysis

What is a strategy ? Corporate strategy is the set of explicit or implicit decision rules that determines what business(es) a firm will be in and not be in. Business strategy is how a firm develops and sustains a competitive advantage within an industry. Functional strategy is the set of decisions made in marketing, operations, finance, research and development, and human resources that supports the business strategy. (Faculty, Darden, 2012)

External Analysis

PESTEL-Analysis Political Strong Political Environment Open Sky Agreement. Social Economic environment customerUnemployment in January 2012 was 14.2%, Consumer travel lifestyle and demographics Environmental Controlling noise pollution Carbon footprint & Global warming concerns . Economical Uncertainty of fuel cost. Economical Recession in favor of Ryanair . Technological Internet adaptation/Check-in Energy efficient engines will increase Use of Trains Legal Corporate lawsuits Misleading advertisements

Internal Analysis

Vision Become Europe’s leading passenger carrier

Objectives of Ryanair’ Strategy Establish itself as Europe’s leading low-fares scheduled passenger airline Through continued improvements and expanded offerings of its low-fares service. Ryanair aims to offer low fares that generate increased passenger traffic Through maintaining a continuous focus on cost-containment and operating efficiencies.

The Key Elements Low cost -Core of business modelStimulates demand, particularly from fareconscious leisure and business travelers who might otherwise have used substitutes of Transportation Ryanair sets fares on the basis of the demand for particular flights How ? Maintain focus on cost-containment Maximise ancillary revenue

The Key Elements Low Operating Costs Ryanair strives to reduce or control four of their primary expenses: Aircraft equipment/Fuel Personnel productivity Customer service costs Airport access and handling costs NO FRILLS STRATEGY

Graphical Analysis of Ryanair costs EUR million Fuel Airport & Handling Charges Route Charges Employee Depreciation Materials, repairs Aircraft Rentals Other Total Expenses 2013 1,886 612 487 436 330 121 98 198 4,166 Change vs FY2012 18,3% 10,4% 5,7% 5,0% 6,6% 16,1% 8,3% 9,9% 12,4% % of 2013 total 45% 15% 12% 10% 8% 3% 2% 5% 100% (Source: https://www.ryanair.com/doc/investor/present/Half_Year_Results_2012.pdf)

The Key Elements Customer Service Deliver the best customer service performance in the low-budget airline Industry Ryanair has achieved better punctuality, fewer lost bags and fewer cancellations than all of the rest of its peer grouping in Europe. How? Ryanair achieves this by focusing strongly on the execution of these services and by operating from uncongested airports

The Key Elements Frequent Point-to-Point Flights on Short-Haul Routes Frequent point-to-point service on short-haul routes to secondary and regional airports Short flights + Frequent service  eliminating the necessity to provide “frill” services Non-stop routes and avoid the costs of connecting passengers, baggage transfer, transit passenger etc.

The Key Elements Focused Criteria for Growth. Additional routes from the U.K. or Ireland to other locations in continental Europe/USA Increasing the frequency of service on its existing routes Starting new domestic routes within EU countries; establishing more new bases in continental Europe.

The Key Elements Taking Advantage of the Internet January 2000, Ryanair launched new reservation system: Flightspeed Make and pay for confirmed reservations in real time through Ryanair’s Ryanair.com website. Ryanair has heavily promoted its website through newspaper, radio and television advertising. (96% of all reservations online)


Publicity Marketing Deliberate controversial statements, to gain media attention.

MARKETING STRATETGY “We want to offer the lowest fares while keeping advertising costs to a minimum” Michael O’ Leary

Ryanair Revenue Model “Any fool can sell low airfares and lose money! The difficult bit is to sell the lowest airfares and make profits.” Michael O’Leary 0% Subsidies 20% Core revenues 58% Ancillary revenues 22%

Ancillary Revenues Hotel reservations Excess baggage fees Car Hire: Hertz Onboard sales of beverages, food and merchandise. Internet Income ……………….

Is the Strategy sustainable over the next five years ?

Boston Matrix-model High Stars Question Marks New Destinations such as USA, Croatia,etc. Market Growth Cash Cows Unknown airports/destinations Unfrequently used. Morocco. Poor Dogs Top Destinations – London, Madrid, Brussels ,etc. Really unfrequently used destinations. Low High Market Share Low

Concrete Recommendations Increase Flight Frequency of Routes Open New Routes in EU Strategic Alliance Seek to protect themselves from oil prices Investigate Load Factors Exploit tourism Trends

Thank you for Listening!

Any Questions ?

Sources http://www.ryanair.com/doc/investor/Strategy.pdf http://www.ryanair.com/en/investor/statement https://flightfox.com/tradecraft/polyester-airlineseurope-vs-america http://www.theguardian.com/business/ryanair http://www.slideshare.net/kevinconstant96/pptryanair2 http://www.docstoc.com/docs/23288365/RyanairCase-Study---PowerPoint

Sources http://faculty.darden.virginia.edu/bourgeoisj/files/chapter% 205.html http://www.air-scoop.com/downloads/In-Depth-AnalysisRyanair-Business-Model-Air-Scoop-Nov2010.pdf Anon., n.d. Ryanair. http://www.ryanair.com/en/about/ryanair-and-theenvironment Aviation, C. C. (2011, May 25). CAPA Centre for Aviation. http://www.centreforaviation.com/analysis/ryanairearnings-up-26-but-change-in-tack-for-2012-52109 BBC, 2012. Ryanair 'sexist adverts' banned after complaints. [Online] Available at: http://www.bbc.co.uk/news/uk-17036830

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