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Miriam Mennen An abstract of Ryanairs in unified outline Essay Document Nr. V145623 http//www. grin. com/ ISBN 978-3-640-56879-6 9 783640 568796 world(prenominal) incorporate scheme A fashion model topic on Ryan air power An Analysis of Ryanairs bodied strategy Executive Summary Ryanair was entraped in 1985 as a family barter that origin tout ensembley provided full portion stately schedu direct respiratory tract personal line of credit service amidst Ireland and the UK.The airline started to compete at heart the confines of the existing diligence by trying to steal nodes from their rivals, especi in ally the state monopoly carrier channelise Lingus, depict by Chan Kim and Renee Mauborgne (2004) as bally(a) or Red Ocean Strategy. Ryanair beted to fol belittled a me- to a fault scheme according to Osborne, K. (2005), they tried to be all things to all people. blush out they started restructuring their strategy was not enough differentiated and their damage favour was too hapless to be capitalmaking. In 1986, they got stuck in the middle, defined by gatekeeper (1985) as they had a limit address gain and no service advantage.Ryanair then created a competitive advantage finished the continuative of the three comp one and only(a)nts of line of work governances 1) Creating tops(predicate) hold dear for their nodes (outside perspective) 2) Supplying their superior encourage- s substanceing activities in an stiff and efficient manner (which jointly hammer the grade set up) 3) Possessing over the resourcefulness viewpoint required to perform the value-adding activities, (inside perspective) According to Porter (1987), corporate strategy is what makes the corporate whole add up to much(prenominal) than the sum of its phone line unit parts. It is seen to be concerned with the overall goal and scope of the organisation and to meet the expectations of major(ip) stakeholders. All aspects of Ryanairs value chain a r important to the compevery and their shareholders as Ryanairs decisions add value to twain. The come withing report outlines the three perspectives of shaping Ryanairs commerce system. The value creation dimension of Ryanairs agate line homunculus get out be adumbrate, escorting the theories of Porter and the more than recent authors Kim and Mauborgne (2004).Further, the linkages in the airlines value chain and their resource base get out be analysed, considering Hamel and Prahalads (1990) content competency model (inside-out approach path code). 1 world ample unified Strategy A illustration Study on Ryan crinkle In ingredient 2, the future contests of the airline are considered. Ryanairs strengths and weaknesses will be analysed, national value creating factors such as assets, skills or resources, to consider how the airline tin create alignment to its opportunities and threats, external factors.An unanimouser outside in address for Ryanairs future corpor ate strategy will be considered, applying Porters five intensitys model, placing the grocery, the competition, and the node at the starting point of the strategy process. I An evaluation of Ryanairs key strategic perspectives 1) Creating superior value for their customers The atomic reactorhearted damage trade part Ryanair has found a source of supplement a competitive advantage the k immediatelyledge about the opportunities associated with implementing the paltry cost strategy, which was created by Southwest zephyrlines.The Texas airline found a unique approach to the merchandise by dint of reconceptualisation of market segments. In 1990, Ryanair successfully applied their model in the European market, becoming a no frills airline, stress on short haul destinations and keeping its planes in the air as frequently as possible in a 24 hour period. The in the raw-made impression expense market segment, which did not exist ahead in Europe, could be described as the development of a blue oceanic, uncontested market space through the expansion of boundaries of the existing industry, outline by Kim and Mauborgne (2004).Ryanairs moo fares created withdraw, particularly from fare-conscious leisure and business travellers who capacity other(a)wise have used alternative forms of transportation or would not have travelled at all (Case Study, p. 3). The competition became less pertinent and al pocket-sizeed Ryanair to develop and sustain naughty performance in an overcrowded industry. Up to now he airline benefits from the early profitable and rapid harvest-home inside the blue ocean and successfully executes the utter cost business model, which became unmistakable when the airline announced that it has beaten its own downbeat forecasts to record a 29 % increase in pre-tax profits and 19 % passenger gain, having carried more than 27. 6 million passengers in the past financial social class (Jameson, A. , 2005). 2 spherical Corporate Strate gy A Case Study on Ryan straining Ryanairs position at heart the industry However, blue oceans are not easily protected and Ryanair has been facing rivalrys that try to copy their misfortunate cost approach.Further, Ryanair has always been competing within the red ocean, by targeting a considerable range of customers, e. g. the business segment and stealing customer from rivals. This outlines that Kim and Mauborgnes strategy approach slewnot be seen as exclusive. Competing with impertinently entrants of competitors (and differentiators), Ryanair was able to launch an all out war, lowering termss and preserveing profitable whilst increasing the frequence of flights and establishing new routes (Case Study). According to Porter (1980, 1985), the relative competitive position within an industry lies at the core of success or failure of unattackables.He be two basics types of competitive advantage cost hold upership and specialization (and focus). Ryanair set out to be best in the cypher market segment, becoming the lowest cost airline in its industry (cost focus), e. g. no paper tickets, no passenger meals, no pre-arranged seating, enabling to cope and remain profitable, til now on low yields. The airline constantly strives to reduce or control four of the primary expenses involved in running a major scheduled airline their aircraft equipment cost, personnel productivity, customer service costs, airdrome access and handling costs.The airline deals successfully with competitive forces and is Europes leader in low fares by generating a superior double cover on investment (Osborne, 2005). This supports Mintzbergs argument of impairment lead cosmos more relevant to competitive advantage than cost leadership. Planning to second into a no-fares-airline by pipering flights for free (Case Study), Ryanair layabout be argued to watch over price leadership as one of the six ways to specialisation outlined by Minzberg.According to Mr O Leary (2005), new planes will enable him to beget down average fares by 5% a socio-economic class causation a bloodbath. We are going to show up in your market and trash your yields. (Ryanair rolls out plans for European domination, 2005). Differentiation through price outlines the superseding of Porters generic strategies by the resource/competence-based strategy frameworks. In addition to low prices, Ryanairs branding emphasises on punctuality and readiness, which is mainly achieved through operational from secondary airports.According to Ryanair, their success is not on the dot due to their low fares but also a winning faction of our No. 1 on-time record, our friendly and efficient people and our new Boeing 737-800 serial aircraft (Ryanair, 2005). It back tooth therefore be argued that in a globalized competitive environment, even cost leaders learn to differentiate 3 international Corporate Strategy A Case Study on Ryan Air their subject matter (hybrid strategy), contradicting Porters original idea of essentially different routes to competitive advantage. foreign expansion Ryanair further constantly created value for customers by following generic growth and internationalisation strategies they moved their trading operations into more and more countries, expanding the route system from its primarily Irish-UK emphasis to serve 86 destinations on 133 routes across 16 countries. According to Mr. O Leary (2005), they will behave 34m passengers from 12 European bases and have identified a further 48 potential bases. The airline expanded recently by placing an order for 70 more Boeing 737-800 aircraft to keep growing at 20% a year (Ryanair rolls out plans for European domination, 2005).Ryanair can compete on price, as the airline has besides its low cost product tenderiseing an natural process system and resource base that match the price positioning, opposite to traditionalistic airlines that seem to get stuck in the middle, as outlined by Porter, when undergoing severe cost cutting which affects their areas of specialty, e. g. Aer Lingus. 2) Supplying superior value-adding activities in an effective and efficient manner The Value Chain As Ryanairs low cost/price pproach leads to overlapping value chains, the company is a double-dyed(a) example of linking its opportunities, as outlined by Campbell and Goold (1998, in Meyer and de Witt, 2004). From a Value Based focussing point of view, Porters Value Chain framework can be seen as one of two dimensions in maximizing corporate value creation, outlining how well a company performs relatively towards its competitors (Relative war-ridden Position). horizontal Ryanair subscribes to a similar basic model compared to e. g. Easyjet, the airline has an entirely different value chain.Ryanairs low cost/price approach adds value to most of Ryanairs processes, e. g. clear corporate identicalness and brand image in addition to limited organisational complexity, increasing the preeminence towards their competitors. Ryanair maintains their efficient, high quality and low cost services through operating from secondary airports and by exploiting the advantages of outsourcing, a strategic focus model, transferring the business processes of services to outside firms, e. g. passenger and aircraft handling, ticketing. This allows the 4 world(a) Corporate Strategy A Case Study on Ryan Air ompany to achieve competitive grade at fixed prices and to detain focused on its core competencies. Further, outsourcing can improve customer satisfaction (primary drill), mitigate risks, and add value to their personality, accessed skills and technology, increase overall visibility of accounting and performance (controlled infrastructure), and avoided capital investments. Their strategy is to regress the best customer service performance in its peer group, having well(p) six staff in their customer care department one for every two million passengers compared to British Airways whi ch has 10 times the coverage (Ryanair, 2005).Porters Value Chain unshakable Infrastructure Support Activities human Resource Management Technological Development Procurement M g ar in Primary Activities The technology of the companys meshwork reserve system allowed to capture more value from its operations, to improve its assemble with its customers (outbound logistics) and to increase control over the quality of their services. According to Mr OLeary (2005), Ryanair saves 15% on the price of every ticket by using direct booking through the internet.For the fiscal year ended March 31, 2004, Ryanair generated virtually all of its scheduled passenger revenues through direct sales (Ryanair, 2005). All value-creating activities that render the inputs into the final service of Ryanair are kept extremely lean. Ryanair does not link up its operations with competitors, avoiding costs of trough service and delays and their Human Resource Management is tailored to continually improvin g the productivity of its already highly-productive work force whilst controlling their labour costs. 5 M Logistics Logistics ar gi n InboundOperations Outbound Marketing & Sales Service Global Corporate Strategy A Case Study on Ryan Air Ryanair focuses on concentrate recruitment and training. In the year ended March 31, 2004 productivity mensural on the basis of passengers booked per employee continued to improve by 21% on the year ended March 31, 2003 (Ryanair, 2005). Ryanair emphasizes on modest base salaries and productivity-based pay incentives, including cares for on-board sales of products for flight attendants and payments based on the number of hours or sectors comen by pilots and cabin crew personnel.Employees can participate in Ryanairs stock option programs (worth up to 5% of the share of the company, Ryanair 2005). Ryanair even adds value to their low cost reputation through the refusal to recognise trade unions whilst having a competitive advantage over the heavil y unionised nature of commerce of the state owned Aer Lingus. (Ethical considerations, outlined in segmentation 2). Ryanair has extremely low airport access fees by focusing on secondary and regional airport destinations that offer competitive cost terms, e. g. ess expensive outdoor embarkment stairs, and allow for high rates of on-time departures, faster turn or so times, fewer close delays, which maximises aircraft utilisation, eases restriction on slot requirements and on the number of allowed takeoffs and landings, adding value to customer satisfaction. Ryanair further added value to their infrastructure, procurement and reputation through negotiating favourable contracts with Boeing (inbound logistics) companionship that is difficult to codify and replicate for competitors, as it is not only discernible facts or data but complex and difficult to specify (core competence).Ryanair is express to be paying less than half the Boeings list price of $66m apiece ( coin Telegrap h, 2005). The procurement with Boeing 737-800s allows the airline to benefit from synergies through fleet commonality, limited costs associated with training (Human Resources), maintenance efficiency, and greater flexibility in the scheduling of crews and equipment (inbound logistics). Again, the new aircrafts provide the newest technology blended winglets that reduce drag and drive down 2% of the fuel cost, driving down the average fares by 5% a year (O Leary, 2005).Ryanairs business model as a whole is distinct, having an entirely different configuration altogether, in relation to their competitors in the airline industry, increasing the barriers to imitation or substitution. According to Teece, Pisano and Shuen (1997, in Meyer and de Witt, 2004, p. 253), even if competitors are successful at identifying embedded competences and imitating them, the company with and initial lead can work at upgrading its competences in a race to stay ahead (Dynamic capabilities view).Ryanair seems to have outpaced their 6 Global Corporate Strategy A Case Study on Ryan Air competitors through upgrading its resources, activity system and product offering more rapidly, as outlined by Gilber and Strebel (1989). Ryanairs unique firm resource their knowledge of demand for the low cost airlines, made it possible to implement their strategy before others and to benefit from first proposer advantage, outlined by Lieberman and Montgomery (1988). ) The resource base required to perform the value-adding activities Ryanairs resource heterogeneity In general, the airline industry is characterised by supply side similarity (Kay, 1993, in Meyer and de Wit, 2004), as only marginal differences between air carriers can be displayed, particularly in a deregulated environment. Ryanairs business model was designed to challenge the limitations of these constraints. The airline focuses on value-adding process or resources, which give them a superior position relative to its competitors and which se ems most appropriate to draw boundaries in the airline industry.Ryanairs internal characteristics are most relevant in achieving prolong competitive advantage, outlined by Barney (1986, 1991). In contrast to Porter, Barney assumes that firms within an industry or group may develop long superior resources that can be protected in their mobility across firms by some form of isolating mechanism. According to the resource based view already outlined by Edith Penrose (1959, in Meyer and de Wit, 2004) and extended by Wernerfelt (1984, n Meyer and de Wit, 2004), Ryanair can be argued to have a free burning competitive advantage, as their competitors in the resembling segment are unable to duplicate the benefits of their strategy. The winner-takes-all dynamic (Case Study, p. 15) in the low cost segment, seems to have only worked in combination with this first mover advantage. Ryanairs assets, e. g. their capabilities and attributes, are not successfully implemented by any current or pote ntial competitor, e. g. negotiation for airport deals, employee contracts and fleet prices.Budget airlines that act to enter Ryanairs market segment baffled money or were taken over, e. g. Gos foray into Dublin (Case Study). Their main competitor easyJet has carefully differentiated by focussing on different geographic markets and higher value through better transfer situations of main airports, addressing the business segment. However, Ryanairs external environment, e. g. a saturated market and ever-changing customer demands, can threaten Ryanairs future growth (outlined in section 2). 7 Global Corporate Strategy A Case Study on Ryan AirRyanairs Core Competence Approach Ryanair can be argued to follow the core competencies model of Hamel and Prahalad (1990), (inside-out perspective), as they build their strategy around their strength of distinctive competences, which offers an attractive base of competitive advantage, e. g. secondary airport approach. Ryanair competitiveness der ives from an ability to build their competences at lower cost and more strongholdily than competitors. The real sources of Ryanairs advantage are to be found in OLearys ability to consolidate corporate-wide skills into competencies.Ryanair has strong relationships with their suppliers and a strong corporate identity. The airline can be argued to follow a strategic stretch as they are overall resource led and create new opportunities, e. g. ancillary services. well-setly focussing on their core competences allowed for high strategic capability and potential access to a wide variety of markets, making a significant contribution to the perceived customer benefits of the end service and limiting the risk of imitation. The corporate centre tightly controls and co-ordinates by enunciating the strategic architecture that guides the competence skill process, e. . outsourcing. Ryanairs resources allow in all means at the disposal for the performance of value-adding activities, e. g. thro ugh the acquisition of hum in 2003 (Case Study, p. 5), the airline gained a range of resources, e. g. know how, outlined by Preece as learning. The airline benefited from increased infrastructure and value-chain activities (leaning), integrated operations (leveraging), closer co-ordination of their vertical activities (leaping), expanded market opportunities and reduced competitive draw (locking out). Resources consist of tangible assets, e. g.Ryanair owns all of its aircraft and holds net cash of 286 million euros (Money-telegraph, 2005), jumper cable to the advantages that huge firms have from large volumes enabling them to spread their costs (economies of scale), and intangible asset assets, e. g. the human capital skills, competences and capabilities. Ryanairs resource heterogeneity towards their competitors hinders other firms to take and implement the cost focus strategy, as outlined by Barney. Ryanair takes advantage of leveraging its resources, e. g. relationships and reputation, which are not readily transferable.They are inheritably attributed to OLeary and his squad and are influenced by the airlines culture and governance. Ryanair possesses over a range of funny value-adding stories which defined their past, e. g. how Mr OLeary went to war, driving in a military jeep to his competitor (Case Study). Personal involvement in battles of OLeary against lobbying politicians, EU commissioners and competitors are part of the company culture and invoke their aggressive 8 Global Corporate Strategy A Case Study on Ryan Air low cost image.Ryanairs reputation for commitment to Safety and Quality Maintenance, not having a single resultant involving major injury to passengers or flight crew in its 20- year operating history (Case Study), is another value adding aspect. Ryanairs distinct activity system provides the base for competitive advantage and raises the barriers to imitation. In conclusion, Ryanair does not follow a linear inside out or outside in approach. On the one hand, the airline continual upgrades its unique resources on the other hand, it occupies specific market positions to emain competitive, creating superior value by closely suit their services to customers needs and focussing on a relatively limited set of businesses and markets (narrow competitive scope). Ryanair increasingly focuses on exploiting market opportunities in their business environment though, e. g. expansion and horizontal integration, leaving their original organic growth model and benefiting from all aspects of the framework of international strategic alliances, outlined by Preece. External forces, e. g. he industry deregulation in 1997 that allowed the airline to go continental and the technological advancement of the internet, also strongly influenced the airlines success story (external value adding activities). Ryanir can be argued to have a discrete organisation perspective, emphasising on competition over co-operation, having high nego ciate power and a highly independent approach with distinct firm boundaries. The airline has an essentially logical structure, characterised by planning and control, prediction and forecasting.Especially in relation to the dynamic hostile environment, the airline has a relatively weigh strategy that is based on rational thinking. The limited complexity of the system is characterised by few organisational levels and centralisation. The airline benefits from the entrepreneurial spirit of O Leary who seemed to clear the activities that are likely to have a significant impact on Ryanair and that build valuable internal linkages within the boundaries of their business model (organisational leadership perspective). So far, he was highly successful in understanding the low cost attributes that made Ryanair unique. Global Corporate Strategy A Case Study on Ryan Air II An evaluation of the future strategic direction of the company The sustainability of a firms competitive advantage is sai d to be threatened by the development in the market. node needs and wants are in constant flux. The SWOT analysis of Ryanair, a tool for analyzing the internal strengths and weaknesses and the external opportunities and threats (see addendum), outlined the paradox for Ryanair of creating alignment all from the outside-in (market-driven strategy) or from the inside-out resource driven strategy). So far, Ryanair has been strongly focussing on their core competences. Considering their environment, opportunities and threats, as the starting point when determining their strategy (outside-in perspective), is crucial though to re-check the fit between their competitive advantage and the environment, as outlined by Rumelt, (1980). The model of environmental consonance seems of great enormousness to the airline, outlining the requirement of continual adaptation of the business system to the demands and new opportunities in the market place.As outlined by Leonar-Barton (1995), Ryanairs co re competences seem to be simultaneously Ryanairs core rigidities, locking them out of new opportunities (in Meyer and de Wit, p. 253), e. g. Ryanairs Dublin saga, the fight over the desired second low cost terminal at Dublin airport instead of considering the creation of a new lucrative base in continental Europe, threatening easyJets. Ryanair should consider market development, outlined by Ansoff, e. g. Greece and Turkey, which have a combined population of around 70 million people and offer extremely profitable market opportunities through year-round and holiday flights.The airline should further set forth additional routes from the U. K. or Ireland to other locations in continental Europe that are shortly served by higher-cost, higher-fare carriers. Market opportunities of new domestic routes within EU countries, especially new member countries, and increased frequency of service on its existing routes will allow Ryanair to remain focussed on low cost/price and prolong its unp recedented and high levels of growth without jeopardising their core competences. Rivalry among existing players could be reduced by damaging the pile tourism industry, e. . Thomas Cook, Lunn Polly and Neckerman (Porters 5 forces). Further acquisitions should be considered in the long-term. Ryanair seems to have enough power to counter ease the demands of buyers and suppliers, to outperform rival airlines in their market segment, and to discourage new firms from entering the business. Their main 10 Global Corporate Strategy A Case Study on Ryan Air challenge will be threatening easyJet in its home market, presently serving Athens, and to fend off the Value for money segment that threatens to make out Ryanairs services (Porters 5 forces).The industry attractiveness for long-term profitability, outlined by Porter (1985), will have a strong influence on Ryanairs profitability. Porter had ignored the aspect that differentiation strategies can be used to increase sales volumes rather than to iron heel a premium price. With negative forecast for the low price market, with growth rates of no more than 20 to 25 % of the sum up market, market saturation is said to be not far off for budget airlines in Western Europe (Ottink, 2004). Instead of the lowest price, the optimal balance between service and price is seen to be the growth market of the future.Value market share will eventually hover around 60 % of the total market (Ottink, 2004). Regarding this threat, the main challenge will be to respond to changing demands and at the same time to ensure consistency, effectiveness and the coherence of Ryanairs low cost strategy. At this stage, Ryanair should not compete on service advantage by entering the value market, turning into a portfolio organisation. They should so far seek for other niches, than compromise their low cost approach by reactively adapting to the unpredictable development in the current market.Retrenchment involves cutting back to focus on your bes t lines, often referred to this as sticking to the create from raw stuff. Ryanair should consider the mistakes of their competitors entering new market segments, e. g. Lufthansa by offering profoundly discounted flights to Mallorca and Nice, standing up to easyJet. Ryanair should therefore further engage in market penetration and strengthen their market development approach, rather than diversify their services, as outlined by Ansoff (Product Market Framework).However, Ryanair should be aware that its knowledge is a fluid mix of framed experience, values, contextual information and expert cleverness that provides a framework for evaluating and incorporating new experiences and information, as outlined by Davenport and Prusack. Even the companys formula has been highly successful in the dwell decades Ryanair has to check whether their organisational routines are still valid in the new markets (double or tripleloop learning), e. g. the way Mr OLeary aggressively promotes the low c ost strategy.Especially in the new EU member countries his practices, which are said to threaten industrial heartsease and put EU ministers at unease, need to be revised. 11 Global Corporate Strategy A Case Study on Ryan Air The self interest of Ryanair might be best served by create attitudes to ethical issues before they become acute, as the airline is especially penetrable to hostile campaigns (Value Chain). Ryanair should consider ethical corporate behaviour and social responsibility, currently facing the paradox of profitability (shareholder value perspective) and responsibility (stakeholder value perspective), e. . policies regarding handicapped passengers, employee rights and environmental standards. At the moment, the simplicity inside the company does not seem to match Ryanairs complex environment. Ryanair has to differentiate its message to fend off competitors, e. g. the airline should consider the co-operation with environmental organisations, offering passengers the possibility to pay the price of competitors in the value segment and paying the difference to the original Ryanair price to an organisation that invests in solar energy to reduce the world emissions.Ryanairs Boeings could be green and the message should be flying cheap and doing advanced. Customers that might otherwise have switched to the value segment do not mind the voluntary environmental charge and are likely to call for more difficult transfer situations for the feeling of doing good. This differentiation aspect will add value to the companys reputation and usual relations. Ryanair can become the first mover in an industry that will sooner or later need to address the issue of emissions. creative thinking and radical innovation are a strategic orientation to sustained competitive advantage.Ryanair should further consider the involvement of employees in the search for insatiate customer demand, as outlined by Kim and Mauborgne (2004). separated exchange and flow of informa tion will foster new creative knowledge and facilitate the airline to continually transform itself, e. g. the contact between flight attendants and management should be increased to foster a climate of openness and combining and to capture opportunities. The concept of organisational learning, as outlined by Senge (1990) and extended by Pedler, Bourgoyne and Boydell (1991) and Wang and Ahmed (2003), is crucial to nurture new and expansive patterns of thinking. 2 Global Corporate Strategy A Case Study on Ryan Air References Barney, J. (1991). 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London Thomson Learning. 14 Global Corporate Strategy A Case Study on Ryan Air Appendix SWOT- Analysis Strength Quality processes and procedures features important to the clientele, e. g. punctuality, few cancellations, few lost bags, frequent departures, baggage handling and co nsistent on-time services. low cost low fares approach (differentiated service) Low aircraft equipment costs Lower maintenance costs and low depreciation costs due to ownership of aircrafts Fleet commonality emphasis on low cost alternative airports low airport access and handling costs Low customer service costs Internet booking system avoiding costly systems, commissions and sales headcount Low selling costs Revenue enhancing and cost-cutting features, e. g. no seat pockets to allow faster thong times Relationships to suppliers strong dicker position with respect to aircraft procurement, e. g. argain price of Buzz acquisition, airport deals and staff recruitment Concentration on core business through outsourcing Low labour cost through performance link up pay structure high personnel productivity / staff efficiency ratio Overall high value and profitability Location of business focus on Europes largest airline market the UK, in particular the London Area change magnitude take-off and landing slots trough acquisition of Buzz, KLM subsidiary Increased number of seats per plane, enabling lower individual fares but higher per plane income Short turn-around times increasing the uncommitted operational hours per plane. Strong brand and low fare reputation -foreign exchange hedging in transactions involving the euro, UK sterling and the US$ Weaknesses falls in fare yields dispatch situations from Airports reputation no non-essential extras falling load factors due to continuing refuse in unit costs change magnitude frequency of flights due to need for high load factors, reducing business travel climate defend charge on aircraft taking off and landing in the EU, environmental fee might double no-frills operators fares, disproportionately greater effect on budget airlines Ethics and Corporate companionable Responsibility 15Global Corporate Strategy A Case Study on Ryan Air Opportunities initiating additional routes from the U. K. or Ireland to other locations in continental Europe, currently served by higher-cost, higher-fare carriers Developing European market for budget sector with large population base / expansion into 10 new EU states modernistic domestic routes within continental Europe. Strongly moving into intercontinental business using the principle of simplification and cherry picking increasing the frequency of service on its existing routes considering possible acquisitions that may become available in the future, e. . Lufthansa connecting airports within its existing route network -Exploiting profitable destinations with both a tourist as well as business segment Conversion from low fares to a no-fares airline Fall in average ticket price and increased threat of entry for competitors loosening of regulations Decreasing competition Increased ancillary service revenues Increasing in-flight sales on longer flights employee loyalty focus on environmental issues innovative trade for d ifferentiationThreats Limited market in the North of Europe resulting in low occupancy levels and efficiency of usage of planes Tougher competition from the traditional and charter airlines which offer cheap hard to beat all-in holiday packages in continental Europe. New competitors in home market Adaptation of Ryanairs business model by competitors and innovative substitute services Incumbent airlines selectively copy the tactics of Ryanairs on competition routes small potential markets high speed trains, subsidised by the state in GER and France, high speed rail plan in Benelux region -good highway connections in the major market around cities in the Middle and Southern Europe scarcity of appropriate located, low cost airports around major cities / decreased bargaining power of airlines Price war increasing landing charges Dependency on world jet fuel prices war and terrorism epidemics EU commission decisions lobbying politicians formation of a trade union for pilo ts the weakness of sterling against the euro Mergers between competitors, e. g. Air France and