Ryanair Success via Sales Maximization Case Study Solution
Promotion / Advertising at Ryanair
The company has reinvented short haul air travel all around Europe. The company has invested huge amounts in advertising campaigns in mass media for example:the daily adverts in the British tabloid press. The company used efficient way of advertisement, which highlighted weekly and daily specials by pointing out particular destination in combination with the extremely low prices in order to attract the price sensitive customers, hence increasing the market share and enjoying the first mover advantage. This advertisement has allowed the company to achieve the higher possible sales of the available seats, which has helped the company to maintain the brand awareness and to push the new product sales in following terms:
- Increased frequencies.
- New routes.
These advertising efforts have resulted in value creation, such as generated leads, increased profits, near term, long growth, and greater efficiency as well.
Distribution Channels at Ryanair
It wouldn’t be an exaggeration to state that the company is known for its internal factors, which in turn demonstrates its strengths that are also its key success factors.Some of them includes lowest fares, low cost, innovation in terms of effective strategies, and strong leadership, frequencies to destinations and increased routes as well.
The company has significantly pushed the concept of low cost further through a series of innovation that start from abandoning free catering, removing check in desks, installing non-reclining seats and moving away from travel agents to internet sales and putting advertisement on boarding passes.
The company has contemplated to rely entirely on the internet for travel information and bookings, in an attempt to bypass any travel agent. Not only this, the company has also reduced the service times and aircraft ground in order to increase or improve the fleet’s productivity. It can be stated that the innovation in distribution channel and product positioning has significantly contributed to the success of Ryanair, because the company has decided to use the cheaper cabin interior for instance; no entertainment monitors and no galleys for the purpose of ordering new aircrafts without sun protector and reclaimable seats.
Conclusion I
To conclude, the company has become synonym with the low fares of aircraft,and it has become one of the biggest low-price airline, which is able to leverage its size for the purpose of negotiating better agreement from its suppliers.The low cost base is well integrated strategy of the company that takes benefit of its low operation cost offering low airline fares, hence driving up revenues.
One of the notable strength of the company is that the company has established itself as the leading low fare schedule passenger airline,which has successfully enabled the company to generate increased passenger traffic, while maintaining the operational efficiencies and cost containment. Another strength of the company is innovative and creative approach of maintaining its growth and grasping the market share.
Conclusion II
To come to a conclusion,it can be stated that by reviewing the website or financial report for current year, Ryanair is Europe’s favorite airline. The profit of the company grow sat 10% (net margin 20%). It is considered as provider of no. 01 service. It has been strongly growing in the UK, Germany, Spain and Central Europe (Ryanair easily outperforms its rivals in adding customers, 2018).Currently, the business model of the company is based on the low cost services provided to its customer, while aligning the business strategy with the changing needs of the customer base.(ryanair financial report, 2018).
Appendix A
| Strengths | Weaknesses | Opportunities | Threats |
| Up to date fleet | Controversial advertising | High margined on flight sales | Rapid expansion can contribute to a burden on cash flows |
| Brand recognition | Poor CRM | Using their website for advertisements | Increase in fuel prices |
| Network | High level of innovation needed | Collaborative package of travel and stay for customers on their website. | Any new terrorist attack will put a question mark on their security. |
| Specialized Staff | Poor website and social media presence | ||
| First mover advantage in low-cost market | Seasonality | ||
| High operating margins | Limited landing slots | ||
| Additional revenues |
Appendix B
| Ryanair’s VRIO System | |||||
| Value | Rarity | Inimitability | Organization | Competitive Implications | |
| New Fleet | Yes | No | No | Yes | Temporary Competitive Advantage |
| Leadership | Yes | Yes | Yes | Yes | Sustained Competitive Advantage |
| War Chest | Yes | Yes | Yes | Yes | Sustained Competitive Advantage |
| Low cost culture | Yes | No | Yes | Yes | Competitive Advantage |
| No frills strategy | Yes | No | No | Yes | Temporary Competitive Advantage |
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