fees Game Theory application for Strategic Analysis In Ryans’ case‚ the company should understand the market environment. Based on Game Theory‚ the best decision is depends on how competitors response to Ryans’ moves with strategic interactions. Aer Lingus and British Airways had two choices‚ either maintain the price or start a price war with Ryanair. Both of their cost structures were very hard to cut. However‚ if they did not reduce prices‚ they would lose customers. The purpose of this executive
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1) Do you believe Ryanair’s entry into Dublin-London route was successful? Yes‚ Ryanair’s entry into Dublin-London route could be counted successful. Ryanair‚ which has been operated since 1985‚ is a small and rather domestic company compared to Aer Lingus and British Airways (BA). They will operate a turboprop that contains 44 seats‚ that takes 4 round trips per day. Unlike the two giants‚ Ryanair is not under the restrictions from the government‚ and have single fare for ticket. Therefore‚ the main
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quickly gain market share. Last but not least important‚ thanks to his father’s money‚ they had sufficient financial resources to maintain their prices. 2. How do you expect Aer Lingus and British Airways to respond? Why? The entry of a new competitor represents an entry price below the market’s price. Aer Lingus and British Airways had two different choices to react: maintaining their current level of prices‚ or start a price war with Ryanair. But both companies have a significant disadvantage
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Market ShareMARKETGROWTH Stars -Ancillary products like in flightshopping‚ non-flight scheduled services etc. offers a very high margin Question Marks -Ryanair’s investment in Aer Lingus stock could loose money for it‚ as Aer Lingus has all the problems of a legacy carrier with very less benefits of a large legacy carrier (e.g. economics of scale) Cash Cows -Lucrative short hop
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BACKGROUND ANALYSIS In 1986‚ upstart airline Ryanair proposed to expand its business to the London-Dublin route‚ in direct competition with British Airways (BA) and Aer Lingus (AL). While BA focused primarily on business passengers‚ and was profitable on the London-Dublin route relying on travel agents being responsible for 83% of its scheduled revenues‚ AL was loosing money and was in business primarily due to Irish government support. However‚ international routes accounted for 2/3rd
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In April 1986‚ the Ryan brothers announce that Ryanair will offer service between Dublin and London‚ a route dominated by Aer Lingus and British Airways. AL and BA offer a range of tickets with varying restrictions and varying classes of service‚ but the least expensive‚ unrestricted round-trip fares were priced at IL208‚ far higher than the IL98 that Ryan Air announced. Ryanair’s strategy to launch a single far no restriction ticket at such a low price will gain market share quickly as well as possibly
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was a close flight and it was within the financial capabilities of the company to operate the flight for a profit. It also created brand awareness for the company which is very important when a small company like RyanAir is entering a market where Aer Lingus and BA pretty much own the market. 2. How do you expect the incumbents to respond? Why? I would expect the incumbents to lower their prices for tickets for the London-Dublin route to try and keep RyanAir from gaining a significant portion of
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company faced large losses. Another reason was due to Ryanair ’s expansion‚ and deregulations in Europe. It expanded its routes‚ and some of those were Aer Lingus ’ existed routes. This crash led to price war. As Ryanair tried to keep its price 10% lower than its competitors‚ it suffered even more loss. Although the Irish government separated Aer Lingus and Ryanair routings‚ Ryanair still lost its money until 1991. However‚ by the end of 1999‚ Ryanair was become one of the most profitable airlines
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What are the strategic choices for Ryanair? a) The choice of business positioning relative to competitors. b) The choice of strategic directions to pursue. c) Evaluate the reactions of key stakeholders regarding the strategy of Ryanair bid for Aer Lingus. -The business report should be précised. - Length is 2‚000 words (1‚800 to 2‚200) plus 10% deviation. Too brief or too long will be penalized. You need to indicate the words count at the front page of your report. - Use tables & diagrams should
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increasing fuel cost makes hard to maintain lower price for Ryanair. 3. As I mentioned earlier‚ there are so many airlines offer cheap fares in Europe. The major competitors of Ryanair were easyJet‚ bmibaby‚ Air Berlin‚ SkyEurope‚ Wizz Air and Aer Lingus. Also‚ there were other low cost substitutes like train and tram services in Europe. 4. Ryanair want to expand their business in the European continent as it was becoming popular tourist destination. Also it is planning to expand its network to
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