681- W5 Case Review

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Founded in 1985 with its headquarters in Dublin, Ireland, Ryanair began flights between Ireland and the UK and later launched services on the lucrative Dublin-London route. As a result of severe financial losses in 1990, Ryanair changed its strategy, adopting the Southwest Airlines business model and becoming the pioneer of low fares in Europe. The next two decades showed growth from 745,000 passengers in 1990 to 73.5 million in 2010. Key to Ryanair’s low cost-advantages is cost cutting in the five value chain activities of operations, human resource management, customer service, use of the Internet, and ancillary revenues. Based on passengers carried, the airline is now Europe’s largest low-cost carrier and second largest airline.
CASE DISCUSSION QUESTIONS
1. From an industry-based view, assess the strength of the five forces and determine the extent to which Ryanair is positioned against those forces.

2. From a resource-based view, what explains Ryanair’s success?

3. From an institution-based view, assess the opportunities and threats presented by the current and future institutional environment (both formal and informal). How should Ryanair respond?

4. What is your evaluation of the proposal that Ryanair offer free flights in perpetuity? Draw on the three views in your answer.

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