Essay Sample on The Rise of Ryanair: Europe's First Low-Fare Airline

Introduction

Back in the early 1990s, Ryanair introduced herself as European's first low-fare airline (Alamdari & Fagan, 2005). Before their low-cost strategy, Ryanair started in 1985 operating as a full-service carrier flying primarily between Ireland and the UK (Ryan, 2020). Due to disappointing sales and the lack of significant profits in the earlier years, Ryanair's new CEO Michael O'Leary introduced the Southwest Airline Low Cost Leadership model to the company (Alamdari & Fagan, 2005) This model contained low fares, high frequencies, ticketless distribution, single-class flights, single type airplanes, secondary airports, short length flights and high productive staff (Alamdari & Fagan, 2005).

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In order to continue operating in the competitive environment, the Company must incorporate a number of strategies. One of the major reason for the company undying spirit to work in the airline industry which is competitive is their mission and vision statements which all workers in the company bear in mind in every activities that they are undertaking (Ryan, 2020). For instance, the vision of the company is to establish the company as the leading scheduled passenger airline in Europe through expanded offerings and continued improvements of its low-fares service (Madar, 2018). The vision statement has been a motivation to a number of workers in the organizations thus making them to work great and smart for the company to achieve their objectives. The mission statement of the company is as well another vital motivator to the company and the customers (Ryan, 2020). The mission states that "The Company aims to offer low fares that give rise to increased passenger traffic while affirming a constant attention on operating efficiencies and cost containment".

Ryanair is the favorite airline in Europe that carries 119 million passengers per annum on more than one thousand eight hundred flights from eighty-six bases, connecting over two hundred destinations in thirty-three countries. It has a team of highly skilled professionals in aviation who deliver the best on-time performance in Europe (Ryan, 2020). Nevertheless, the airline business is becoming so competitive and if measures are not taken by the company they may lose the customers to more competitive airlines (Madar, 2018). There are thus, a number of strategies that should be put forward by the companies to help in dominating the market as one of the low-cost airline within Europe in the coming years. Ryanair in this connection have to come up with strategies of stay in the market which will be the scope of the paper. With the increased competition in the airline operations, Ryanair has no reason but to ensure that they come up with sorts of operation strategies that would help them to continue dominating the market (Madar, 2018). This paper will thus seek to find these strategies by, identifying the management problems and how they can be eliminated, and doing analysis of both the external and the internal environment of the business.

Management Problem

Just like other companies, Ryanairs is as well faced by a number of management problems that needs to be handled appropriately in order to achieve their goal of maintaining the market for the coming years (Goncalves, 2018). One of the strategies that the companies needs to consider is the problems in the management because that is the position where it all starts, if the management is in shape then the company is said to be in a position of dealing with the problems that they faces. From the case study presented, there are a number of management problems that has been identified that can help in the generation of the operation strategies (Ryan, 2020).

The first problem is the exponential growth of the airlines in the same strategic group with similar strategic characteristics within the same industry. Having same strategies in the same market makes the business to be vulnerable to any changes that are likely to take place in the market (Goncalves, 2018). For instance, when all the companies are using the low price strategy, in change that is taken by the competitor will automatically eliminate the competitors out of the way. Thus, Ryanair, needs to come up with some new strategies that are not used by the competitors (Ryan, 2020). The unique strategies would make the company to operate uniquely in the organization.

Another problem that Ryanair needs to deal with is the need to stand out in the saturated market. Market saturation possess a problem to the organization in that they have to find a way through which they can come out to be strongest in the market. With an aim of remaining on top of the Europe airline Ryanair is required to develop strategies that can help them solve this problem (Goncalves, 2018). Some of the possible ways that the company can use to help in solving this problem is improving their services so that despite the saturation they are still the most preferred in the market. They as well needs to have the customers at hand can help the organization to stand out among the competitors as depicted by (Goncalves, 2018).

The changes that are taking place in the internal environment and external environment of the organizations as well creates a real challenge to the organization management. Internally, the organization have to deal with the operation models which may pose difficulties to employees who are not yet aware of how the models operate (Temming, 2018). Thus, the Company would have to take employees through trainings that in order to adapt to the changes. Externally, the company is faced by changes such as the increased use of technology which they need to acquire and implement in their daily activities.

Research Question

The question that the company seeks to find solution to is "what strategies should the Company put in place to help them dominate the market or rather remain number one low cost airline within Europe in the next five years?

Literature Review

Based on the research question "How could Ryanair remain their number one Low-cost airline within Europe for the next five years," the literature will focus on how the company can be more strategic in their operations to achieve this goal. In that context, it is imperative to understand in the first place, what "business strategy" means and the current business model Ryanair Holdings is currently using to help focus on how to be on the right track for future advantage. Business strategy is a plan designed to give a direction and a vision for the organization. A Business plan is crucial since it helps all the organizational players to set clear goals, follow the set directions, and achieve the desired vision (Dyer & Singh, 2001). That will also help the organization workers to develop a positive culture not to lose sight of the company's dream. Ryanair's current business model is the "Low-cost Model," which the company borrowed from Southeast Airlines in the U. S. (Ryanair, 2017). The company's current business model will help the company to offer cheaper travel options and target customers looking for alternative transport modes and those not willing to travel at all.

Ryanair is a one business unit, and there needs to be further advice on the business level strategy to enable the company to maximize effective corporate and functional approach. First, it is imperative to recognize that customers are the essence and foundation that will inform the development of the most effective business-level strategy. The most effective strategy Ryanair will develop is to focus on consistently executing a comprehensive unit strategy to guide the company on how to create consistent value to the airline customers. Developing a business level strategy will focus on how to make consumer services better than other competitors in the market. Developing a customer-oriented business-level strategy would the surest approach to help Ryanair Airlines to meet its ultimate goal of "remaining number one Low-cost airline in Europe for the next five years."

Dyer & Singh (2001) emphasize how organizations can make dedicated and strategic alliances at work to achieve a competitive advantage in the market. According to the researchers, a strategic alliance is an effective method of being flexible to access and utilize the skills and complementary resources that exist in other organizations. In that context, Ryanair Holdings will adapt the strategy of liaising with other airline companies and best practices in matters of low-cost flights to beat its competitors in the market. In the same light, Ryanair management will be careful not to engage in failing alliances.

Pate & Bermount (2006) focus on the interplay of business strategy and Human Resources to maintain the European low-cost airline industry. The researchers focus on multiple research studies concerning how to be strategic in low-cost airline services versus the global airline industry. Investigating the previous growth in low-cost airline services will be a crucial tool in integrating the inter-related themes of human resource and business strategy. In that context, Ryanair will remain resolute in integrating the previous growth strategies and how to apply them to stay relevant in the low-cost flight industry in the European market.

Schneider (1994) brings a vital aspect of corporate human resource management by addressing how organizational culture is a crucial element that is achieving business success. According to Schneider, good management ideas sometimes fail because organizations neglect the power of organizational culture. Therefore, Ryanair will focus on building a positive employee culture of aligning with the organization's goals through thinking, self-direction, and taking responsibility. Fostering the right corporate behaviors, leadership, traditions, and management approaches will be a priority for Ryanair to answer its competitive advantage in low-cost air services. As Groysberg et al. (2018) put it, there must be strategic management approaches to prolong an organization's life and be sustainable.

O'Conell & Williams (2005) stress how to prioritize consumer perceptions and how to align such perceptions to inform the business strategy. According to the researchers, there is stiff competition between full-service airlines and no-frills carriers across the globe. There is evidence to prove that most passengers prefer selecting low-cost carriers than full-service airlines. In that regard, Ryanair's strategic management will stick to its current model of focusing on customer-oriented services with affordable costs to maintain its competitive advantage in the future. On the same note, Malighetti et al. (2009), the Ryanair case study points out why it is necessary to adopt the strategic pricing of low-cost airlines. The study indicates that there are correlations between the average fares for each route and the frequency of flights operating such routes. In that regard, it will be positive for Ryanair to adopt this low-cost model as a pricing policy to increase the number of flights the company makes on different routes every day. That will answer the question of the sustainability of the low-cost business model the company is applying. According to Ryanair (2012), the low-cost strategy is what will make the company the world's leading airline in the market since consumers love what is friendly to their pockets as well as regular and timely services.

Ryanair (2017) provides a SWOT analysis that highlights the company's strengths, opportunities, weaknesses, and threats in the flight market. According to the study, the low-price model is the primary point of strength for the company, and working with new ideas in the industry will provide more opportunities in the market. Being...