Company PEST Essay
1. Micro Environmental Analysis Ryanair’s main goal has always been to reduce all their company’s costs. Based on Porter’s five forces which were – customers, competitors, suppliers, substitutes, new entrants (short analyse Appendix 5) company realised the potential of their product and took full advantage of it. “…is to find a position in the industry where the company can best defend itself against these competitive forces or can influence them in its favour.
”(Competitive Advantage, Michael Porter, 2004) According to a study of Social Travel Report, by leading independent media agency Total Media it was found that almost 70% of consumers use the internet to book their holidays, compared to 23% by phone and just 8% in-store within travel agents. Consumers aged 35-44 were found to be most likely (74%) to book online. Price (80%) was cited as the main reason for using the internet along with information (53%) and convenience (50%).
This study confirmed that Ryanair made the right decision to make all their booking online and keep prices as low as possible. The grey market has been the driving force behind the social media travel revolution. A study by Total Media showed that 50% of travellers over 45 are using
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Even though customers have left many negative feedbacks about company on various website (e. g. I Hate Ryanair etc) customers were always looking for cheap transport alternatives and Ryanair’s services have proven irresistible because of the cheap airfare. Ryanair did not focus on quality but they promised to deliver which had attracted customers and made their business so successful. 1. Conclusion This assignment analysed the social and ethical issues of Ryanair in more detail than the customer’s behaviour because the customer’s satisfaction and safety should be the No. 1 priority for companies and not their profit.
Ryanair’s strategy has been to focus on providing a basic flight service for a cheap price but they have forgotten their customer’s safety and their comfortable travel experience from the booking to the flight. As their profit figures have continuously risen it showed that their price strategy has worked as the customer’s kept coming back as they have voted with their wallets even though Ryanair has had a negative customer satisfaction reviews. 1. Recommendations The airline industry is a very competitive industry especially in today’s economic climate.
The price-driven strategy has worked for Ryanair up to now as customers do not have as much money to spend because of the economic situation, but as the economy improves and customers may have more money to spend the appeal of low fares will be not as important as a pleasurable flight experience. Customers may go back to the airlines (e. g. British Airways, Virgin Airlines etc) that could provide the better quality of service at a higher price. In order for Ryanair to continue to grow in its success it has to have a loyal following of customers.
The company should focus more on customer’s satisfaction and listen to their complaints and needs to keep their customers loyalty. They could reward loyal customers by offering them Air miles as other competitors do. They should identify new routes in Europe and expand to new areas outside of Europe.
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