- Critical Evaluation of Ryan Air's core competencies
Critical Evaluation of Ryan Air's core competencies
The business environment of a firm consists of all the external
influences that affect its decisions and performance. These can be
categorised as Political, Economic, Socio-cultural and
Technological factors, and fitted into a framework called the PEST
analysis (Grant, 2001). Let us now conduct a PEST analysis for Ryan
Air in the market environment it operates in.
The PEST Analysis identifies a number of key environmental
influences that are, in effect, drivers of change (Johnson et al,
2001). The political, economic, socio-cultural and technological
factors that influence the market development are listed
systematically and assessed. It offers a checklist that enables
market entrants and participants to consider and assess the
external risks and opportunities the particular market is exposed
to and to implement the adequate strategies and measures to hedge
or harness them respectively.
Differentiation - This translates to making one's product or
service sufficiently different from competing product offerings,
such that customers are willing to pay a premium for the
differentiated attribute of the product (Williams, 2004). This
strategy is a useful shield for organisations from competitors and
substitute products, as it enables them to retain existing
customers and protect them from being acquired by competitive
product offerings. An example of a product that uses the
differentiation strategy is the HBO premium subscription channel.
While its main line of business is buying the rights to movie
channels and then broadcasting them like its competitors, it also
differentiates its product offerings by broadcasting homemade
productions, soaps and mini-series. This ensures that the
differentiated product offering from HBO is preferred by the
subscribers, giving it a bulk of the premium channels market.
Focus - Focus strategies draw upon concepts of positioning and
addressing the needs of niche markets with a product using a
specific attribute or a set of attributes. Here, organisations
typically conduct detailed research into desirable attributes in a
product, and the market segment that prefers these attributes. Once
it sees a market that is large enough to cater to, so as to ensure
it breaks even and makes desirable profits, it goes ahead and
applies this strategy. To illustrate, Rolls Royce focus on the
exclusive segment of car purchasers and cater to them, Dell focuses
on the direct selling market to sell its products, etc.
