Essay --

Main Problems Ryanair is the leading carrier by passenger numbers and market capitalization in Europe by 2010. The challenges Ryanair is faced with could be divided into two areas. Macroeconomic Environment The unfavourable economic conditions in 2008 limited Ryanair’s opportunity to raise fares, in the event of continued global recession, Ryanair’s passenger volume growth would be restricted: Passengers would reduce the spending on leisure and business travels for saving money. Also, the cost of aviation fuel is another element would effect Ryanair’s profitability. In view of fact that accessibility of oil decreases, global demand increases, and the unpredictable exchange rate, the Ryanair model, i.e., to be as low-cost, would be difficult for Ryanair itself. Furthermore, the controversial advertisements of Ryanair besmeared the firm’s reputation. Ryanair reduces it advertising costs and relying on cheap PR. Because it used a photograph of Spanish Queen Sofia without authority, the firm was forced to pay a fine to the Queen and made a public apology. These controversial advertisements were beneficial to the expansion of the brand at beginning, however the offensive theme would subsequently risky to the company’s image. Interior of Ryanair The relationship between employees and Ryanair was negative. Ryanair providing humble working conditions for employees and refuse to recognise unions. According to the case study, the Irish High Court ruled Ryanair had bullied pilots to accept new contracts in July 2006. The pressures come from pilots over their desire for higher wage and better working conditions. In 2009, only 11 out of the 64 pilots who decided to stay with the company. Thus, Ryanair would struggle to avoid recognisin... ...ative feeling of ‘from nowhere to nowhere’. For services of the value chain, the cost could be saved by becoming a no frills and low fares carrier. However, the low quality services might destroy Ryanair’s public reputation. Under primary activities-marketing & sales and support activities- the technology development, Ryanair spreads accommodation as well as car rentals news through its official website. In 2010, its website ranked 12th by number of visits for e-tailers in the UK. The cost of travel agents and advertising could be kept in a minimum level. However, the heavy dependence on the official website might be a potential risk for Ryanair. As a consequence, the value chain helps Ryanair to think of itself in terms of sets of activities, to identify its particular competitive advantages and weaknesses thus enhance value or decrease cost in value activities.