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Ryanair's Competitive Advantage

Essay by   •  May 20, 2011  •  Essay  •  277 Words (2 Pages)  •  3,358 Views

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The competitive position helps to identify the benefits that the company is likely to develop according to its strengths and weaknesses. Therefore, a competitive advantage characterizes the high skills of key success factors. Ryanair's competitive strategy is based on several factors:

 The benefit-cost (by minimizing its total costs). To maintain this competitive advantage, Ryanair has set a process control of manufacturing, design, administration, equipment (one vendor allowing it to limit its expenses) and operating costs (almost all Booking is done on the Internet that allows Ryanair to make savings in terms of travel agencies).

 The frequent use of airplanes and high-density seats: This is directly related to serving second-class airports (less than airport charges). Ryanair does not use a business class, but its airplanes have a number of seats larger than the other companies, which allows it to fly a higher number of passengers per flight.

 Effective financial strategy with its stock performance : The market capitalization of Ryanair can fund its growth and minimize costs. To expand its coverage on the European market, Ryanair has heavily invested in following the example of Southwest Airlines. Indeed, the company reinvests its dividends in full to facilitate its development. Thus, this advantage allows it to be the leader among European airlines in terms of market capitalization.

 The importance of its secondary activities (their turnover is steadily increasing):

- Insurance flights

- Rental car

- Hotels

- Sale onboard

- Gambling

- Telephone, TV and Internet onboard aircraft

- Bookings

They generate large margins, and allow Ryanair to differentiate itself from the competition, giving it a competitive advantage.

The strong competitive position of Ryanair allows it to better develop its own skills, which are difficult to acquire, and not possessed by competitors.

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