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Ryanair Porter’s Five Forces Analysis

In: Business and Management

Submitted By jasontangjt
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Boeing has been traditionally Ryanair’s main supplier, however, there are reports that “Ryanir is interested in Comac’s planned C919 aircraft, which is being developed to rival the Boeing 737 and the Airbus A320, the dominant players in the commercial aircraft market” (Milmo, 2011, online). Comac, Chinese jet manufacturer, is attracting Ryanair’s interest due to grater amounts of seats within its planes, as well as increased level of efficiency associated with energy consumption (Cliff et al, 2011). This fact signals about Ryanair’s increasing bargaining power towards its main supplier, Boeing.

However, the supplier switching costs for Ryanair is extremely high due significant amount of expenses involved associated with pilot retraining needs. Moreover, “airline pilots have a strong bargaining power in the airline industry” (Pelapu et al, 2007, p.48), because there is no abundant supply of highly qualified and experienced pilots. Nevertheless, Ryanair enjoys rapidly increasing power towards a different category of its suppliers. Specifically, as Walsh (2011) confirms, highly intensified level of competition among airports has significantly increased the bargaining power of airline companies in their business relationships with the local airports.

New Picture 52 Ryanair Porters Five Forces Analysis

Bargaining power of customers

Bargaining power of customers can be explained as “an advantage that comes from gathering together to put collective pressure on producers to lower prices or improve quality” (Business Dictionary, 2012, online). Ryanair customers enjoy high bargaining power because switching to another airline is simple and not associated with additional expenses. However, it has to be mentioned that only for Ryanair, but for airline industry in general “the bargaining power of buyers is relatively high and increasing, since most airline companies…...

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