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The Bus in the Sky: Ryanair and Disruption
- 26 Jan 2017
I was flying on Ryanair a few months ago when my seatmate referred to the plane as a “bus in the sky.” I'd never heard such an accurate description! If you haven’t flown Ryanair, let me describe it to you. My round-trip flight was $30 and included two carry-on bags. But, that is where the perks stop. You have to pay for everything else - and I mean everything. Forgot to print your boarding pass out at home? You pay for it. Want a drink on the plane? You pay for it. Want to recline your seat? That isn’t even possible. And I wish I was kidding about that last one!
Despite the drawbacks, I have flown Ryanair numerous times and will continue to fly them. Why? Because I can fly to three different places, on three different weekends, for the same amount of money as one ticket would cost me flying to any one of those places on another airline in Europe. And I’m not the only one who flies Ryanair.
So, looking at this from the lens of disruption, where does Ryanair fit? By addressing overserved customers with a low-cost business model, it fits under the “low-end” disruption category. But, it also has made flying possible for many people who couldn’t afford to fly to these places. While they had the same job-to-be-done as the more affluent market - i.e., getting from point A to point B - these consumers would normally take the bus, train, or rent a car. This approach to non-consumers in the airline market also causes it to fit in the “new-market” disruption category.
That Ryanair was low-end disruption was fairly obvious to me, but the new-market disruption was something that only clicked when I thought about Ryanair as a “bus in the sky.” Ryanair isn’t just competing against other airliners; the bus, train, rental car, and non-consumers are also its competitors. Former non-consumers in the airline market now have an opportunity to fly to their destination instead of a different, generally cheaper means of transportation previously used. Given the option of an overnight bus ride to Paris from London or an approximately 1.5 hour flight for a similar, if not cheaper price, which would you prefer? That’s what Ryanair was banking on.
As Scott Anthony explains, what's even more impressive is that Ryanair has succeeded in a market that's typically tough to crack. It has learned how to make a profit by keeping ticket prices low, flights full, along with a whole host of other cost saving strategies as outlined in the article. Legacy carriers in the airline business can’t/won’t compete with its prices, and its competitors in other transportation markets can’t compete with the luxury of flying, thus Ryanair succeeds.
I know that for a cash-strapped student living in Europe, Ryanair has opened up the continent for me. I’ve done overnight buses, 37 hour train rides, and rented cars because they were cheaper. But with Ryanair I have been able to avoid many of those “great story” experiences and truly enjoy vacation, thanks to their disruptive strategy.
About the Author
- Case Studies
Strategy & Execution
Ryanair Strategic Positioning (B): Always Getting Better
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Product Description
Publication Date: October 23, 2017
Source: IMD
By 2013, after over near 30 years, Ryanair has become the largest airline in Europe in terms of passengers flown internationally. It outperformed its low cost rivals on most operational dimensions. It was unambiguously positioned as the lowest cost of the low cost airlines. Its success, however, came at a price. Ryanair was far from loved. Its operational model, which enabled such low cost flying, had as a side effect service that was seen as far below industry norms. In 2013 its outspoken CEO, Michael O'Leary, came under increasing pressure to tone down the macho image he had cultivated and enhance service levels. To do this he would need to adapt the successful operational model. The A case asks whether such an adaptation make sense. The B case documents the evolution and implementation of Ryanair's response, a change program called "ALWAYS GETTING BETTER" (AGB). AGB encompasses a digitalization program that chief marketing officer Kenny Jacobs believes can enable Ryanair to become the "Amazon of Travel in Europe." The B case asks whether this is a realistic ambition. Learning objective: The case allows for an exposition of several related strategic concepts: Business system alignment, strategic positioning, market evolution (and response), customer centricity and innovation. Four specific learning objectives are particularly well addressed: (1) Understanding customer centricity. (2) Understanding strategic alignment. (3) Understanding whether and how successful incumbents can embrace change. (4) Understanding how incumbents can best embrace digitalization.
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Case Flash Forward: Ryanair
By: Baker Library
Each Case Flash Forward provides educators and students with a brief update of key changes at a particular company covered in a related case study. It is a compilation of publicly-available content…
- Length: 4 page(s)
- Publication Date: Oct 16, 2015
- Discipline: Strategy
- Product #: 8557-PDF-ENG
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Each Case Flash Forward provides educators and students with a brief update of key changes at a particular company covered in a related case study. It is a compilation of publicly-available content prepared by an experienced editor. This Case Flash Forward provides an update on Ryanair, including significant developments, current executives, key readings, and basic financials.
Oct 16, 2015 (Revised: Aug 4, 2022)
Discipline:
Geographies:
Northern Ireland, United Kingdom
Industries:
Aerospace sector
Harvard Business School
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- June 2000 (Revised October 2000)
- HBS Case Collection
Dogfight over Europe: Ryanair (B)
- Format: Print
- | Language: English
About The Author
Jan W. Rivkin
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COMMENTS
Abstract. Examines the valuation of an Irish airline that reported its first decline in net income in 2004 and saw a 30% stock price drop on the news. Ryanair is a low-cost, low-fare airline headquartered in Dublin, Ireland, operating over 200 routes in 20 countries.
The learning objectives for the case include the following: Identify the main characteristics of the European airline industry and its macro environment. Diagnose the sources of Ryanair's superior performance and performance threats. Critically analyze and trace the evolution of Ryanair's business model.
For the first time, Ryanair will face formidable competitors such as Aer Lingus and British Airways on a major route. Students are asked to assess Ryanair's entry and anticipate the response of incumbent carriers.
I was flying on Ryanair a few months ago when my seatmate referred to the plane as a “bus in the sky.” I'd never heard such an accurate description! If you haven’t flown Ryanair, let me describe it to you. My round-trip flight was $30 and included two carry-on bags. But, that is where the perks stop.
For the first time, Ryanair will face formidable competitors such as Aer Lingus and British Airways on a major route. Students are asked to assess Ryanair's entry and anticipate the response of incumbent carriers.
The B case documents the evolution and implementation of Ryanair's response, a change program called "ALWAYS GETTING BETTER" (AGB). AGB encompasses a digitalization program that chief...
It is a compilation of publicly-available content prepared by an experienced editor. This Case Flash Forward provides an update on Ryanair, including significant developments, current executives, key readings, and basic financials.
Publications. June 2000 (Revised October 2000) Supplement. HBS Case Collection. Dogfight over Europe: Ryanair (B) By: Jan W. Rivkin. Format: Print. | Language: English. | Pages: 4. Email. Abstract. Supplements the (A) case. Keywords. Competition; Market Entry and Exit; Service Operations; Air Transportation Industry; Dublin; London. Citation.
Harvard Case study solved || Business Strategy Part 01 - YouTube. This video describes Ryanair's case study in details.
The case of the Irish airline Ryanair has presented different challenges over the last few years in relation to its stakeholders, who are shaping the sustainability of the current era of air...