Five Forces Model on Ryanair

Apart from analysing the macro-environment, the micro environmental factors must also be analysed. The Airline is one of the major industries in the world today and is greatly affected by Michael PorterпїЅs пїЅFive ForcesпїЅ model. These are internal factors that have a direct impact on the industry and a business has to understand the dynamics of its industries and markets in order to compete effectively in the marketplace. Porter defined the forces which drive competition, contending that the competitive environment is created by the interaction of five different forces acting on a business.

Internal Rivalry within the Industry

The central force of PorterпїЅs model is Internal Rivalry within the Industry. In case of the Airline industry, this is the most important force today, especially since the market is completely saturated.

First Mover Advantage

Ryanair were among the first movers because many пїЅcopycatпїЅ airlines have tried to follow suit. There are only two pan-European low cost operators where first mover advantage and scale and cost efficiencies gave the two largest players, Ryanair and Easyjet, a significant advantage.