The Resource Based View
The resource-based view stems from the idea of gaining a competitive advantage over the opposition through the use and allocation of the firm’s available resources. Ryanair’s low cost strategy has proven unique in the sense they have managed to continue to provide the cheapest flights while still remaining profitable. This was especially commendable/effective during the global economic crash. Applying the VRIO framework, it can be presented that Ryanair’s resources are valuable, rare, inimitable and organized (Lin, 2012). Ryanair have managed to develop a solid competitive advantage/position over their opposition through the use of successfully allocating resources based on the knowledge of the customer’s wants/needs. …show more content…
W., 2014) following the success of SouthWest Airlines in the United States. Ryanair was foirst to adopt the low cost strategy within the European airline industry giving it a first mover competitive advantage over other traditional carriers British Airways and Air France (Peng M. W., 2014). Chief Executive Officer (CEO) of Ryanair Michael O’Leary believed flyers would choose to endure discomfort and indgnity as long as they arrived at their destination on time at a cheaper price than what other airlines were offering (Peng M. W., 2014). Initially customers looking to subistitute Ryainair for another carrier would have been limited with substiture options, and the substitution would incur them a significant increase it price paid. Also because Ryainair had a first mover advantage in the industry, it gained a large market share of customers who hadn’t been given a low cost flying option previously.
Bargaining Power of Suppliers:
Ryanair’s success can also be attributed to the minimisation of its price costs to suppliers, both in the ordering of planes, and the cost of Airport use. Ryanair’s low prics are incentives to travel to secondary air ports, and by using secondary air ports Ryainair payes significantly lower fee’s than if they were to use primary airports, reducing variable costs immensly (Malighetti & Paleari, 2009). Secondly Ryainair maximise their bargaining power with boeing, the supplier of their …show more content…
While examples of new competitors following low-cost models such as Virgin Airlines, and EasyJet, neither were able to really enter into the same market as Ryainair. Ryanair leveraged its control over secondary airports to continue to provide its customers with lower cost options, therefor while threats existed, they could not simply enter the market and specifically emulate Ryanair’s strategy (Pitfield, 2007).
Rivalry among
The resource-based view stems from the idea of gaining a competitive advantage over the opposition through the use and allocation of the firm’s available resources. Ryanair’s low cost strategy has proven unique in the sense they have managed to continue to provide the cheapest flights while still remaining profitable. This was especially commendable/effective during the global economic crash. Applying the VRIO framework, it can be presented that Ryanair’s resources are valuable, rare, inimitable and organized (Lin, 2012). Ryanair have managed to develop a solid competitive advantage/position over their opposition through the use of successfully allocating resources based on the knowledge of the customer’s wants/needs. …show more content…
W., 2014) following the success of SouthWest Airlines in the United States. Ryanair was foirst to adopt the low cost strategy within the European airline industry giving it a first mover competitive advantage over other traditional carriers British Airways and Air France (Peng M. W., 2014). Chief Executive Officer (CEO) of Ryanair Michael O’Leary believed flyers would choose to endure discomfort and indgnity as long as they arrived at their destination on time at a cheaper price than what other airlines were offering (Peng M. W., 2014). Initially customers looking to subistitute Ryainair for another carrier would have been limited with substiture options, and the substitution would incur them a significant increase it price paid. Also because Ryainair had a first mover advantage in the industry, it gained a large market share of customers who hadn’t been given a low cost flying option previously.
Bargaining Power of Suppliers:
Ryanair’s success can also be attributed to the minimisation of its price costs to suppliers, both in the ordering of planes, and the cost of Airport use. Ryanair’s low prics are incentives to travel to secondary air ports, and by using secondary air ports Ryainair payes significantly lower fee’s than if they were to use primary airports, reducing variable costs immensly (Malighetti & Paleari, 2009). Secondly Ryainair maximise their bargaining power with boeing, the supplier of their …show more content…
While examples of new competitors following low-cost models such as Virgin Airlines, and EasyJet, neither were able to really enter into the same market as Ryainair. Ryanair leveraged its control over secondary airports to continue to provide its customers with lower cost options, therefor while threats existed, they could not simply enter the market and specifically emulate Ryanair’s strategy (Pitfield, 2007).
Rivalry among