Introduction
The omnipresence of global trends and innovations debunk the idea of business monopoly and empire states. Today, the trends are set to maximize the potential of human powers by trivializing simple phenomena in order to fashion complex and subtle effects. In the minds of prominent sociologists and philosophers these trivialization of occurrences brought about by man’s deepest desire of uncovering the truth and meaning of life. However, our correspondence and connection with the truth is indirect and diluted which can only be accessible via representations and constructs. Hence, the necessity, though, not necessarily is, of excavating the truth embedded on phenomena became an ordinary human laborious pursuit.
Moreover, due to rapid changes on various aspects of human life our reactions vary depending on the way we perceive it, while forming effective and efficient mechanisms become a mechanical elocutionary act. This fact is paralleled with the nature and condition of business operations wherein technology dictates in setting the trends and innovations. Moreover, such despotic nature of technology invigorates the force and power of globalization to deeply penetrate all human spheres of interaction.
Strategy Clock
The strategy clock is based on the work of Cliff Bowman. This strategy is a suitable method to analyze company’s competitive position in contrast with competitors’ ways of competitive positioning. Using this model we can therefore examine the competitive advantage of Ryanair amidst the difficulties and problems it had in 2004. Like Porter’s Generic strategies, Bowman’s strategy clock offers effective framework to evaluate and determine the company’s competitive status by means of using various options. These options are classified into eight parts namely: low added value, low price, hybrid, differentiation, focused differentiation, increased price/standard, increased price/low value and low value/standard price.
Now, using this strategy let us examine the business environment of Ryanair Airlines in relation to its problem in 2004. The dramatic changes happening within Ryanair Airlines is due to executive strategic management planning. These dramatic changes flabbergasted Ryanair’s competitors. One of which changes was the rise of profitability within a short period of time. The effective implementation of low-fares strategy, no frills and punctuality in flight service brought a significant value on the growth of Ryanair Airlines and challenged its competitors.
The high level of competition between industries needs efficient strategic option in order to advance and at the same time generate higher profit and income. In particular, Ryanair utilized various options in Bowman’s strategy clock in order to maintain its business productivity and profitability. Options one to five in strategy clock were evident Ryanair business strategy wherein the emphasis on implementing low price value, low cost base products, and reinvestment in low price and differentiation.
Porter’s Generic Strategy
If the principal element of a company’s profitability is the magnetism of the industry in which it operates, an essential secondary determinant is its location within that industry. However, even an industry may have below average productivity a company that is optimally positioned can generate greater returns. Porter argued that a company’s strengths eventually plunge into one of two factors: cost advantage and differentiation. By applying these strengths three generic strategies produced: cost leadership, differentiation, and focus.
Low cost leadership strategy does not necessarily mean a low selling price for products and services. Since the pricing environment deteriorated, Ryanair has clearly prioritized the strengthening of its strategic location in the market over interim profit maximization. Ryanair is using its cost leadership position to push prices even lower so as to amplify the fiscal pain on higher cost competitors and most likely for as long as it takes to push a market streamlining that would facilitate a return to a more normal pricing environment.
The supply chain and changing decision frames of customers has a significant role in improving strategies with regards to differentiation. Each company within an industry applies and implements various ways of product differentiation. Ryanair breads the trend in the business. It makes price the big differentiator and it compensates for the fact that it flies from secondary airports to secondary airports that may be slightly further from main centers that the major airlines and major airports. It supports its price differential by chartering rather than owning its whole fleet, outsourcing many operational services and by being 100 % upfront with regards to customer services. This illustrates the significance of understanding the supply chain and the potential that can be ajar by looking at the supply chain in a different way. Moreover, Ryanair understood that there is a point at which travelers will trade off benefits for price. Given Ryanair’s seat-price, the lack of an assigned seat became a non-issue for the customer.
Ansoff Matrix
Igor Ansoff presented a matrix that focused on the firm’s present and potential products and markets. By considering ways to grow via existing products and new products, and existing markets and new markets, four possible product-market combinations can be used: market penetration, product development, market development, and diversification.
Borrowing these combinations, Ryanair seems to successfully attract and penetrate the markets by offering its products in a most affordable and reasoning price. The product here refers to its services offered in flights and the most significant of them offering a low-fare scheme. Since, Ryanair became the leading carrier across Europe, it forces itself to define further its development and its expansion made them known internationally, required divergence of employees and culture. Ryanair with its operations in various locations and destinations have diversified people and management in which they operate and the success of making them unite and one is a great factor to further penetrate and develop their products to existing and new markets.
Credit:ivythesis.typepad.com
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