Today, most of the organizations quite advanced in involving multiple applications of strategic management. In this paper I have tried to describe an effective and working Ryanair’s competitive strategy, approach and factors have accounted for Ryanair’s success. I also analyzed what are Ryanair’s distinctive capabilities and how they are implementing various strategies to attract and retain customers.

1. 1
Ryanair’s competitive strategy
(2013, МВА Formative assignment)
1. Introduction to Ryanair’ strategy
Ryanair is established in 1985 and the most important in the company’ history was the
appointment of Michael O'Leary on the management in 1991 and since then the company has
shown strong growth among airlines. The Ryanair’ business model repeats the American low-cost
carrier (LCC) - Southwest Airlines (2013).
Company’s strategies could be seen from the following bases, Johnson et al. (2008 pp.227-230):
 ”no frills” strategy, combining low price and low perceived added value;
 hybrid strategy, which seeks simultaneously to achieve differentiation and prices lower than
competitors.
In fact the Ryanair’ strategy follows the same general principles as proposed by Porter
(1985, pp.29-39) for 3 generic strategies; a) differentiation, b) cost leadership, c) focus.
However, a direct copy of the model not always guarantees a success. Companies need to
take adequate offensive and / or defensive actions “to balance the five competitive forces”.
2. Analysis of the strategic position of the company
2.1. Industry (World and EU markets)
Figure 1. Passengers uplifted in 2011 (mln.)
RA has leading positions for passengers’
transportation among the world's carriers,
for example in 2011 it was 4-th and its
direct competitor in EU market EasyJet
company was 11-th among global
carriers. (UK Department for Transport
2011)
In EU market Ryanair is the largest LCC airline and the third by seats capacity among all airlines in
this market.
Figure 2, EU Airlines Seats capacity Source. (Centreforaviation, 2013)

2. 2
2.2. Industry (Competition)
The EasyJet and Ryanair did better than the market in current year Reuters (2013a).
However, EasyJet’ shares had better dynamics than Ryanair’. EasyJet is in the same “Industry
group” and is oriented to the same “Market segment” as a Ryanair, therefore its strategy and
performance require greater attention from Ryanair’ management. Johnson et al. (2008, pp.73-78.)
Figure 4. Market share price. Source: Reuters (2013a)
The “strategy canvas” (Johnson et al.2008, p.80.) is used to assess the factors valued by
consumer’s in LCC and compare competitors positions and their potential for services offering to
consumers,. It is presented on a basis of the Aer Lingus’ strategic canvas, the airline from other
“Industry group” as they positioning themselves Aer Lingus (2013).
Blue and Brown lines show the LCC service offerings and explanations below the table.
Figure 4. The strategic canvas. Ryanair vs EasyJet. Source: Adapted from Aer Lingus (2013)
Thus, for the consumers is difficult to distinguish two companies in the offerings, therefore in
most cases consumer’ choices are driven by company’s brand, complimentary products and
services or past experiences.
Before Flight
Departure
Airport
Inflight Product
Crew
&Catering
Arrival
Airport
Post Flight
Tickets
Resevation
Check in
Longes
Seating &
Comfort
Food &
Beverages
Jetways
Loyality&
Bonus
programs
Safety record Boarding Technology
Baggage
processing
Brand &
Reputation
High Ryanair
EasyJet
Low
The most The less
Rayanair
offer from own
website, online
notifications for
flight change
No difference for
secondary
airports
No difference
(seats and
spacing)
No difference (but
crew behavior to
be improved)
Core
competence
among LCC
No difference
(but advantage
is in free bonus
flight)
EasyJet
reputation
could be
damaged by
unproper
service from
third parties
who tickets
No difference for
secondary
airports
No difference
(seats and
spacing)
No difference To be improved No difference
Importance
Crew-
Passenger
ratio
Customerrating

3. 3
Two companies operate in the same market segment and last half of the decade their
competition is intensified in the development of the strategic capabilities and competitive advantage.
Johnson et al.(2008, p.96.). For example in a Fig.5 is shown that physical resources (fleet) is
increased 2-3 times since 2006 and at the same time human resources (labor force) is increased 2
times more. Intellectual capital (routes- in terms of experience and technology for flight support) is
increased from 2 to 5 times, more.
Figure 5. Ryanair vs EasyJet. Source: Companies Annual reports (2012)
Figure 6: Ryanair vs EasyJet. Adapted from (Airlines-
inform, 2013) and ( Flightglobal 2013)
EasyJet’ fleet has better performance
than Ryanair’ in fuel efficiency, Take-
off field length (TOFL) and range with
max payload.
First two are related to aircraft
manufacturer advancement, but last
to company’s management of
operations and strategy.
Figure 7: Ryanair vs EasyJet. Annual reports (2013)
Benchmarking provides valuable information
about overall company’s efficiency in a
business.
Considering fuel efficiency of the Boeing
737-800, would be relevant for Ryanair’s
management to consider fleet diversification
by more efficient aircrafts.
Moreover with airlines routes expansion the
shorter TOFL could increase the flexibility in
proper airports selection.
Ryaniar demonstrates core competence in
airport management in terms of fleet and
passengers services.
Ryanair’ strategy and its capabilities to respond to dynamic macro-external environment is
used the PESTEL framework.

4. 4
3. PESTEL and SWOT Analysis.
PESTEL concept is referring to the macro-external environment, which is a combination of the
factors on the macro level that are beyond the direct company's control. The degree of such
influence could be identified via “SWOT” analyses (Figures 7-10):
Figure 7. PESTLE Analysis. Source: Adapted from Johnson et al.(2011, p.51.)

5. 5
PESTLE findings shows that on a macro level the company is exposed to wide range of the
forces. Porter’s five forces analysis enables to assess the Ryanair’s competitive environment
(Porter, 1985):
Threat of substitute products and services
Ryanair is working in a transportation market where a different transport mode is: Road, Rail,
Pipeline, Inland waterway, Sea, Air (Eurostat 2013). Direct substitutes, for airlines are short haul
railways, passenger cars, buses and motor coaches. The threat of substitutes to Airlines in the
transport market is declining from year to year, except for passengers cars, which shows steady
growth.
However, statistics shows elastic demand during 2008 world crisis to the Air transport in
comparison with ground transports lines. Thus, would be possible to consider that Ryanair’s
performance is more espoused, than ground transport, to the macro-environment factors.
Figure 8: Volume passengers transport relative to GDP (Eurostat 2013)
Threat of entry of new competitors
The threat of entry of new competitors into the LCC segment is high. Segment is requires
significant capital investments for aircrafts and exceptional marketing and management skills to get
access to the appropriate airports. LCC branding also is quite difficult in terms of resources and time
in a routes where well known LCC feel themselves masters and enjoys success.
However, lack of airport capacity forecasts reduction of around 134,000 departures (1.2% off
total growth over 7 years) Eurocontrol (2013c)
Intensity of competitive rivalry
The intensity of competitive rivalry in the LCC is extremely high and which makes the firms to
maintain their prices at same level. One of the widely used differentiation strategies by LCC is the
cost of the ticket depending on the period of booking - the sooner this is done, the cheaper the ticket
will cost. Another differentiation service offering, for example around 20 % of Ryanair’s revenue
recent years was from “ancillary” incomes (Ryanair 20F 2013c), and where Easy Jet has just around
less than 2% of non-seat revenue. (EasyJet 2012)
Bargaining power of buyers
The bargaining power of buyers is fairly high. Internet services like a screensrapers for most
of the transport intensifies customers power and which is followed by low switching cost and easy
switching from one transport mean or brand to another. Ryanair maintaining a policy to protect
screensrapers and sells tickets only at own website, which is make possible to retain a customer by
limiting the options to compare rival’s fees.

6. 6
Bargaining power of suppliers
The bargaining power of suppliers is fairly high and especially in fuel, airport and handling
services, labor cost. Also, in terms of ticket taxes and airport charges company is able to
differentiate strategies to improve financial performance, for example UK and Ireland airports have
lowest score by such parameter at WEF rating (WEF 2013).
SWOT - analysis is prepared on the basis of the findings of PESTEL-analysis and Porter’s
five forces.
Figure 9. SWOT quantitative analysis. Source: Adapted from Russian Business Consulting (2012a)
Figure 10. Field of the problems. Source: Adapted from Russian Business Consulting (2012b)
R
A
N
K
I
N
G
Fuel prices
Seasonal
demands and
higher airport
charges
Preferential airport
rights for some carriers
R
A
N
K
I
N
G
National growth rates
Unemployment
increase (in terms
skilled personnel for
of aviation)
Rise in travel
by elderly
SCORE 5 3,5 3 4 3 2,5
Boeing 737-800 performance in
comparison with Airbus 319/320
5
25
(To derersify a
fleet with more
efficient
aircrafts)
17,5 15 5
20
(Ryaniar have responded to
it by purchasing new fleet
in coming 2 years)
15
(enables to set up
higher standarts for
staff selection)
10
Membership policy (pricing
strategy)
4 20 14 12 4
16
(Make sofisticated
customer retention strategy
by offering new services)
12 8
Company’s debt increase 3 15 10,5 9 3 12 9 7,5
SCORE 5 3,5 3 4 3 2,5
Flights turnover rate 5
25
(To derersify a
fleet with more
efficient
aircrafts)
17,5 15 5
20
(Strategy to increase in "S"
coud match the "O")
15 12,5
Fuel efficient engines & aircrafts 5
25
(To derersify a
fleet with more
efficient
aircrafts)
17,5 15 5
20
(to reenforce IT inovative
products offering to the
customers to meet with "O")
15 12,5
Core competence (online
registration service, security check
technologies)
4 20 14 12 4 16 12 14
Strengths(S)
FIELD of the PROBLEMS and ACTIONS
Threats (Т) Opportunities (О)
Weaknesses(W)

7. 7
As a result of SWOT analysis would be possible to consider in Ryanair strategy some revisions:
- considering fleet with shorter Take-off FL increasing flexibility of airport selection(see Fig. 9);
- to reinforce IT innovative products offering to the customers to meet with opportunities;
- to diversify a fleet with more fuel efficient aircrafts (see Fig.9)
- set up higher standards for staff selection;
4. Competitive strategy and Critical Success Factor (CSF)
According the statement in the Ryanair 20F (2013a): “Ryanair’ objective is to firmly establish
itself as Europe’s biggest scheduled passenger airline, through continued improvements and
expanded offerings of its low-fares service.” As per Ryanair’ statement the company is most
advanced in lowest prices, fair policy for flight cancelation, flight change notifications and check-in of
the passengers, Ryanair (2013a)
Statistics of ELFAA (2013) shows that, Ryanair’ performance on short-term perspectives is
maintained on advanced level in EU airlines market and among LCC, as well. Currently company is
most efficient in labor utilization, fare, lost bags ratio and schedule on time.
Figure 3. Key Performance Indicators. ELFAA (2013)
Airline has unblemished 29 year safety record with no a single crash, which caused the
death of passengers.
5. Distinctive capabilities and competitive strategy sustainability
Companies in the same market niche often compete “head to head” which could lead to dramatic
consequences when company’s gain is achieved at another company’s loss. Such stoked price wars
which mostly leads to low profit margins and bankruptcies is called “Red ocean strategies” Kim
and Mauborgne (2005)
Noteworthy to see the Ryanair’ Chief Executive Michael O’Leary statement addressed to the
shareholders, explaining first profit loss in 2004 year which was a result of EU price war: “We have
responded to this competition in every market by opening more routes, lowering our fares, carrying
more passengers and building a substantial presence in most European countries.” Ryanair (2004)
Thus, the company's strategy over the past year was mostly “Red ocean”, but not a “Blue
Ocean” thinking that is more efficient in creation new markets spaces and avoids competition.
Johnson et al. (2010 стр 76)
In terms of “Blue Ocean thinking” Ryanair is advanced in technology and IT innovations for
customer services. In 2006 Ryanair moved to charge passengers for airport check-in (driving them
to online check-in), enabling Ryanair to reduce overheads. (Ryanair 2006, p20), then at 2010 all
check-in desks were closed. “Account transactions were done online and customers left bags at bag
drops”. (Ryanair 2010, p32)
However, the front line staff has some cases of the rudely behavior to passengers. In 2008,
the Economist wrote that Ryanair’s ‘cavalier treatment of passengers’ for accusing the Ryanair’s
staff of “using foul and offensive language and attempting to grab a boarding card from a passenger”
Ryanair (2008, p.26 )
Ryanair has first-mover dominance in a point-to point flights, and peripheral airports had
effect of “strategic lock in” to other airlines. Johnson et al. (2008, p. 235)

8. 8
Aggressive Market penetration strategy (offering low fares and sophisticated services)
coupled with a Market Development strategy (opening new routes), enables for the company to
sustain competitive advantage. Kotler et al. (2006 pp.102-103).
Evidently Ryanair’s dynamic capabilities and “complexity” are superior in terms of the number
of the strategies used in a LCC market:
Customer acquisition strategy is based on a featured web site which has on a top
advertising of the lowest flight fee, easy accessible links to the most valuable services for the
travelers (flight info, tracing a baggage, renting a cars and hotels).
The website is designed for 25 languages, but EasyJet only for the 19-th. So, the cost for
creating this element is minor but effect is enormous.
Customer retention strategy is oriented to keep passenger by offering membership in a
bonus programs, Moreover each time a passenger is able to check where or not any fee are
changed via easily accessible link “Fees” and “How Do I Avoid Paying Optional Fees?”
Customer extension strategy is developed by arranging an action like -”Ryanair Gift
Vouchers”, when once tried flight experience enables to attract new customers.
At Ryanair’ website has a “Feedback” feature with published passenger’s opinion. Probably they
are selected in order to make impression, but not to present real environment (Ryanair 2013).
Nevertheless, the EasyJet do not have such or just collecting it for marketing purposes.
6. Conclusion
Ryanair’s competitive strategy is developed and leading by unique and talent Michael
O'Leary, for years. Currently it presents the synergy and combination of the traditional techniques,
even as the marketing mix, and modern ones which are adopted and modifying in respond to the
inner and outer environment forces. However in this study were found some areas to be
reconsidered in Ryanair’ strategy: fleet’s fuel efficiency, fleet diversification and staff coaching.
In overall, current companies capabilities and competence enables for the company to
sustain competitive advantage.

9. 9
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10. 10
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