Ryanair's Successful Low-Cost Business Model: Uncovering its Strategies - Essay Sample

Introduction

Ryanair's business model is the leading low-cost model copied from the Southwest U.S airline. The model is straightforward to offer lower air transport prices targeting customers who are fare-conscious. This involves those customers who might either use other transport modes or fail to travel. Ryanair's business strategy seeks to maintain low costs by receiving discounts and reductions from distributors like Boeing. The model focuses on operating a specific aircraft type to simplify maintenance and reduce the costs of buying plane spares in bulk.

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The Ryanair industry applied an approach of "innovation by subtraction" which interrupted corporate practices in the industry and gave room for the company to outdo its competitors in terms of cost (Giaretta, F. 2016). The model operates from the airports, point-to-point directions, delivery, work costs, and standard fleet. With the emerging competitors and the new trends globally, other airline industries are trying to emulate the Ryanair's model thus posing a great competition to Ryanair in terms of size and choice. Additionally, the EU regulations, the uncertainty of the European economy as well as the auxiliary transport are becoming a great challenge to the Ryanair airline.

The business model involves low price offers which in turn create huge volumes thus strengthening the industry's model of operation. The huge volumes benefit the firm by promoting better terms with the suppliers and protecting great fleet operation. Additionally, since the model bases are- operation on low pricing, it gives the customers the least quality expectation. Thus, the company does not provide food or free checked-in stuff. The outcome significantly reduces prices and costs.

Diaconu, L. (2012) in his article "The evolution of the European low-cost airline" describes that the key determinant was the deregulation of the airlines. This allowed most airlines to expand methods and develop better strategies to encourage more profits. The original operating model was therefore altered to generate new forms. Ryanair became the first to implement the low-cost strategy thus terming the company as "the low tariffs' leader."

Currently, Ryanair is aiming at strengthening its strategy by improving the industry's customer service and focusing on business travelers. The purpose is to adjust the operating model to create a better working environment. In conclusion, the investment of proper management and effective strategies pays off in any industry. Ryanair exhibits a true value of success through the application of the Ryanair business model operated by a successful management team. The airline is, therefore, an example of a well-strategized industry with effective planning and management. I recommend the airline to consider an extension of its operations to other continents especially to the East which has the least endpoints.

References

Ahmed, J. U., Khan, M. M., Sultana, I., Ahmed, A., & Begum, F. (2019). Ryanair: A low-cost business model in the european airline industry. SAGE Publications: SAGE Business Cases Originals.

Giaretta, F. (2016). Changing business model. The Ryanair case (Bachelor's thesis, Universita Ca'Foscari Venezia).

Nowak, C. R. (2019). Are African low-cost operators on the trail of Ryanair? How is their business model structured with regards to costs, connectivity, and fleet structure? (Doctoral dissertation).