Ryan Air

1. Executive Summary

To identify an appropriate strategy for a given industry one must look into the external and internal factors influencing the company. The following report will discuss these factors regarding Ryanair, which is one of the leading budget European airlines.

This report identifies important issues of Ryanair's environment which have been formed since the company's development. It also goes on to analyse the future opportunities and threats which Ryanair is likely to face in currently and in the future.

Ryan air have developed a cost focus strategy, where it focuses on reducing cost to obtain a competitive advantage. The following discussion will show just how efficient the company has implemented this strategy.

2. Introduction

In 1985 Ryanair was established by the Ryan family to provide travelers an airline service from Dublin to the United Kingdom. Ryainair's strategic model was built upon the successful Southwest Airline (based in Texas) which is to provide low costs and no frills. During its history it has undergone some criticism from opposition and consumers but this has not halted Ryainair's progression in the airline industry. It has now developed from a family run business to one of Europe's leading low fare airlines with more then 133 routes across 16 destinations.

3. Porters Five Forces Strategy

Porters Five Forces strategy is used to examine the environment of competition within the industry (Tutor2u Ltd n.d). The following will examine the competition of the five forces with regard to European airline industry especially Ryanair.

3.1 Threat of New Entrants

The threat of new entrants in the airline industry is relatively high but to be successful in the market is a different matter. The deregulation of airlines in Europe has allowed airlines to be "...free to negotiate their own operating arrangements with different airports, enter and exit routes easily, and to levy airfares and supply flights according to market demand." (AvationExplorer.com n.d)

Barriers of entry