Ryanair Case Study

How did Ryanair move from the brink of bankruptcy to become one of the most profitable airlines in the world?

The launch strategy suffered from serious problems of:

Going head-to-head against competitors in a provocative way with a me-too strategy, undermining

industry structure

Offering full amenities but attracting customers on the basis of low price and

Failing to anticipate and defend against retaliation

INCONSISTENCY.......

Differently from the launch strategy, the current strategy delivers a decent service desired by a

substantial customer segment at very low costs.

The incremental Ryanair customer generates almost no new costs (but positive marginal

revenues....). Difficult for competitors to compete head-to-head on price.

Reinforcements and Value Loops?

What are the most serious threats that Ryanair faces in 1999? In particular, how serious is the challenge posed by Go?

Imitation and slack. The major imitators are mentioned in the case.

Most imitators are suffering. By the end of the case, Debonair is out of business. Go

is sustaining large losses, and Virgin Express’ profits are plunging. EasyJet seems

the best.

A look at the detailed choices made by the others suggests that they are not fully

reproducing Ryanair’s approach. Rather, they are making choices that are different

in subtle but important ways.

For instance, they are flying to primary airports, accepting unions, taking on

upscale catering, and so forth.

Which of the would-be imitators worries you the most? EasyJet and Go? Debonair

is inconsistent. EasyJet is a competent low-cost player. There seems to be plenty of

room for easyJet and Ryanair to coexist in peace.

What is British Airways trying to do with Go—make money on a standalone basis

or drive others out of business?

Price wars among low-cost carriers undermine the profitability of Go itself and draw

business away from British Airways toward the low-cost sector.

Internally, Go’s strategy suffers from deep...