Porter (1980) states that the interaction between five different forces acting on a business creates a competitive environment whereby the forces drives competition between firms. Thurlby (1998) firmly believes that comprehending the five forces provides business firms the necessary knowledge to formulate strategies that leads to competitive advantage in the market.
In the aircraft manufacturing industry, there are only two manufacturers - Boeing & Airbus. The existence of such duopoly market has increased the bargaining power of supplier, which signifies that both Boeing and Airbus sells aircrafts at a soaring price to every airline companies in the market. Boeing exclusively makes Boeing 737, which comprise of Ryanair's fleet (Basu, 2015). Therefore, this increases Boeing's bargaining power over Ryanair. However, Lavery (2003) reported that Ryanair committed and subsequently bought even more aircraft from …show more content…
Ryanair implements productivity-based incentive system to increase efficiency and control personnel costs. The incentives motivates efficiency for onboard sales and payments for pilots are issued based on the number of hours or sectors flown. Pilots in turn strive for knowledge to minimize fuel consumption, ultimately reducing fuel costs. Moreover, the cost for outsourcing ticketing are reduced at a discounted price as Ryanair successfully negotiated fixed price for multi-year contracts. With the unanimous effort in increased efficiency, Ryanair achieves competitive advantage. Customer service is a part of the value chain whereby Ryanair's strategy is based on the belief that low fares are prioritized by customers with additional services. This strategy differentiated Ryanair and gives competitive advantage, as the reinforcement of punctual time departures and arrivals and fewer bag lost compared to other
In the aircraft manufacturing industry, there are only two manufacturers - Boeing & Airbus. The existence of such duopoly market has increased the bargaining power of supplier, which signifies that both Boeing and Airbus sells aircrafts at a soaring price to every airline companies in the market. Boeing exclusively makes Boeing 737, which comprise of Ryanair's fleet (Basu, 2015). Therefore, this increases Boeing's bargaining power over Ryanair. However, Lavery (2003) reported that Ryanair committed and subsequently bought even more aircraft from …show more content…
Ryanair implements productivity-based incentive system to increase efficiency and control personnel costs. The incentives motivates efficiency for onboard sales and payments for pilots are issued based on the number of hours or sectors flown. Pilots in turn strive for knowledge to minimize fuel consumption, ultimately reducing fuel costs. Moreover, the cost for outsourcing ticketing are reduced at a discounted price as Ryanair successfully negotiated fixed price for multi-year contracts. With the unanimous effort in increased efficiency, Ryanair achieves competitive advantage. Customer service is a part of the value chain whereby Ryanair's strategy is based on the belief that low fares are prioritized by customers with additional services. This strategy differentiated Ryanair and gives competitive advantage, as the reinforcement of punctual time departures and arrivals and fewer bag lost compared to other