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Ryanair Case Entrance Strategy Analysis

In: Business and Management

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Yahuan Chen Przemysław Czerklewicz Concepción Rodríguez Vázquez Emre Vatansever Haojun Zhu Ryanair: brief analysis of its entrance strategy. As we all know, from the perspective of time, Ryanair entrance to British market was only just a beginning of its story of success and its path to an incredible leadership. This, however, was not that clear if we consider the company’s situation in the very moment when it all started. In this brief work we will try to analyze Ryanair’s strategy, disposing only of the data that was available to the company back then and we will try to estimate if this strategy is going to be successful. In order to do that we will describe the industry using Porter’s five forces and generic strategies framework. Industry examination: Suppliers: The importance of suppliers in this industry is huge due to a limited number of possible solutions that in some cases is close to a monopoly. Main suppliers are fuel and oil providers, unions of staff and pilots, airports, companies that lease aircrafts and specialized personnel like technicians or engineers. Most of them are unique and work with major airlines and a small airline, operating in one connection has no power to negotiate any conditions. The only way for an airline to dispose its self of their influence is backwards integration. New entrants: Airline industry is a particular case in which we can observe some really strong barriers of entry. On one hand, the cost of an air fleet, though planes can be leased, and salaries of the crew are very high. On the other, the cost of change, from the psychological perspective, was relevant back then, when this industry had just been deregulated. Also strict legal regulations and contracts that need to be undersigned with every airport pose a significant obstacle for new entrants and make an entrance time-consuming and difficult. Competition: In late 80s…...

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