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Ryan Air Case - Study
Transcript of Ryan Air Case - Study
Le Seigneur 1990 http://www.youtube.com/watch?v=g3so6AJe4UQ (cc) image by anemoneprojectors on Flickr Ryanair adopts Southwest Airline low-cost model and develops its new strategies. Introduction of Internet Booking Four Actions Framework for Ryanair Thank you! Breaks the duopoly on Dublin - London route (Aer Lingus / British Airways) Exploits with the competitive advantage. Lim Ping
Lim Chin Kin Alejandra
Forero Karol Wu Ryanair acquires Buzz which gives immediate access to eleven new French regional airports 1995 1986 1996 Paradigm Shift for the
whole industry 2003 2006 Introduction of Online Check-in What`s next???? Lowering Operating Costs Low Fares Point-to-point short-haul routes Choice of routes (secondary airports) Maximising the use of Internet Commitment to quality and safety maintenance Ancillary services Focused criteria for growth Lowering Operating Costs Ryanair decides to limit its fleet to a single aircraft type. Low Fares Through the reduction of operating costs and increase in ancillary services’ revenue Target price conscious travellers and travellers who are using other modes of transport such as coach or trains Not going head to head with the national flag carriers who offered the best routes Reduce costs associated with airport check-in, IBM worked with Ryanair to introduce one of the world’s first implementations Chip-and-PIN-enabled airport kiosks Eliminate the need of connecting hubs and providing in-flight services No free meals and beverages Passengers travelling with carry-on baggage only Ryanair overtakes Aer Lingus and British Airways to become the LARGEST passenger airline on the Dublin - London route. Ryanair becomes the first low fare airline to operate a domestic route in the UK with low fare flights from London. Ryanair recognizes the challenge but is unclear about how to proceed, due to limited resources and lack of key skills and experience. Reactive firm Ryanair senses the need of change and is highly capable in implementing new strategies. Strategic firm Creative firm Ryanair operates on international knowledge, exploits technological and market knowledge.
"REWRITE" RULES ! Point-to-point short-haul routes Choice of routes (secondary airports) NO prime airport slots to reduce administration costs. The use of secondary airports to open up new links to new cities routes. Ryanair acquires Buzz, which gives immediate access to eleven new French regional airports as well as making Ryanair by far and away the largest airline operating at London Stansted Airport. Maximising the use of Internet Booking of tickets and issuing of boarding cards online thus eliminate the necessity of travel agents, which leads to the reduction of operation cost Ancillary services Hotel and hostel reservation, car rental, travel insurance, online casino on Ryanair website Advertising space such as on board display, boarding cards, company website and inflight magazine. One of these partnership is with a London-based company to advertise on the boarding card. KEY CONCEPTS QUESTION 3 Discuss how RyanAir applies the Four Actions Framework (Figure 3, page 114 Blue Ocean Strategy, Kim & Mauborgne) to the industry strategy canvas (Figure 2, page 111 Blue Ocean Strategy, Kim & Mauborgne) to create blue oceans. Blue Ocean Model Explain how Ryanair took over other airlines and why its actions caused disruptive innovation in the airline market using Figure 5.3 (page 238) – The Pattern of Disruptive Innovation. QUESTION 4 Explain Ryanair’s process/service innovations in reference to the Abernathy and Utterback’s model of innovation life cycle QUESTION 5 Internet booking accounts for 98% of total bookings 2000 http://www.blueoceanstrategyaustralia.com.au/what-is-bos/red-vs-blue/ 2004 2010 Ryanair Passenger growth in Millions Describe Ryanair new strategy innovation to take over the European market using the 4P model QUESTION 1 Innovation Incremental Radical Product/Service Providing low cost fares
Point-to-point short-haul flights Process Internet booking No frills, No meals, No entertainment
New routes to secondary airports Position Switching from regular airline to low cost model Paradigm Incremental Radical Incremental Radical Switching from regular airline to low cost model based on: Incremental Radical Reducing operating costs·
Ancillary services (car rental, hotel booking, etc.)· Secondary revenues (advertising, partnerships, etc.) http://www.youtube.com/watch?v=6c7bnTb0nYo