Assessment of Ryanair’s launch strategy
Ryanair airline was founded in 1985 by Declan Ryan who worked for other airlines company for a long time. He invested a million of Irish Pound in launching Ryanair. This proved his ability to launch and run an airline company successfully.
In launching Ryanair, he made the company be unique in different ways and could be differentiated from other airlines. First, the employees of Ryanair were to focus on delivering first-rate customer services (Van den Steen 12). They also charged a single fare ticket with no restrictions. This was unlike its competitors. They also offered meals and other amenities that were not provided by their competitors. The aim of being unique in the industry was to attract more customers to their airlines and beat the competition in the market. Being a person who has worked in this industry for quite some time, elder Ryan understood what the market needed and also the kind of competition in the industry as well as how to handle it.
Before the period of Ryanair launch, most people preferred to use train rather than aircraft because it was cheaper. Ryanair then adjusted its air fare to be something almost close to what the rail and ferry were offering. It became a more flexible airline to use during traveling, and this made it overcome others in the market.
How do you expect Aer Lingus to respond? Why?
One of the responses expected from Aer Lingus is to lower their air ticket prices. Customers would not pay more fare for the flight plying some route with another airline that charges less and has better services also (Wąsowska 15). Ryanair lowered their ticket prices to a level of almost of rail and ferry and thus made people consider using airline instead of rail. This is one of the reasons that Aer Lingus will have no other option but to lower their fare in order not to make more losses.
Another expected response is that Aer Lingus will start offering similar services that are being offered by Ryanair such as the provision of meals and other amenities in the airline. They would also want customers to prefer their services and thus might look for even a superior service to offer to them as compared to those of Ryanair.
How do you expect British Airways to respond? Why?
British Airways are expected to respond to this scenario by expanding to other routes. Ryanair is already controlling the local market, and this may not go well with British Airways. Everything they do in the local market will look like a copy of what Ryanair are already doing in the market (Wąsowska). Due to their financial muscle, British Airways would expand to more international routes. Also, they will try to reach more customers in their new routes. They might use Ryanair strategies in their new routes so as to be leaders of such new market for their company. Also, they can come with other services to try and push Ryanair out of the market. Such strategy includes lowering their market prices than those offered by Ryanair. British Airways has government support, and this even gives them an advantage over Ryanair. They can use government policies to push Ryanair out of the market and take over(Wąsowska). They are also not afraid of losses, and this might make them even lower their prices even further to a level that Ryanair cannot sustain.
Part 2: Identify the Strategic Analysis – Staging, Differentiations, Arenas, Vehicles, Economic Logic from this case
Differentiation in Ryanair case
Differentiation in a market is the action of making a product or service unique from those that are being offered in the same market.
Some of the differentiations in the case of Ryanair are;
Ryanair introduced low-cost airlines in 1991; this was unique as no other company offered the same. They also offered meals and other amenities for their passengers which made their services distinctive from the services of their competitors. They also charged a single fare ticket with no restrictions on various routes.
This involves the speed of expansion and the sequence of initiatives. Ryanair was expanding slowly in the market, and they were currently contemplating having a base or launching a route in the Middle East countries. The initiatives to expand are well thought before execution. First, they reduced their air ticket; then they introduced better meals and amenities than offered by other airlines. These were flowed by expansion to other markets such as the Middle East.
Arenas inform the company managers where the firm will be short. Ryanair is expected to operate other larger jets for their routes. They will also expand to other markets in future.
These communicate how the strategies will get the company where they want to be in future. These vehicles will be new partners, strong financial muscles and skilled employees are what will take Ryanair to the next level.
Lowe costs are some of the economic logic in this case.