The first area recommended for Ryanair’s consideration is the pricing model for its services. The company has been successful in establishing the reputation of a phenomenally cost-efficient service by offering ticket prices 80 to 90 percent lower than those of their competitors. This was initially achieved through the removal of non-value-adding elements such as the use of major airports, assigned seating, and the inclusion of meals. Importantly, the model was later enhanced through the use of a direct-only distribution strategy. By providing their customers with the opportunity to order tickets online and eliminating intermediaries, the company was able to cut expenses while at the same time appealing to the individuals who prefer ordering tickets online. However, these actions also contributed to the situation where the bulk of the current customer base is comprised of price-sensitive passengers.
Thus, it would be reasonable to consider expanding into the new customer base by addressing the needs of the untapped population segment. The most evident way of doing this is to target business travelers. The representatives of this segment are less price-sensitive and, as a result, are not impacted by the key factor in the company’s competitive advantage strategy. At the same time, they have sufficient buying capacity and comprise a large proportion of the airline users. Importantly, while some of the business segment representatives order tickets online directly, the majority prefer dealing with distributors.
According to the current estimates, up to one-quarter of the current Ryanair’s customers travel for business purposes. It is also reasonable to expect this proportion to increase in the short term. Therefore, it is recommended to reach out to major distributors and thus establish its presence in the business segment.
It is also possible to strengthen the effect by expanding the list of routes to cover destinations used by corporate customers. In the current state, Ryanair is suitable for small- and medium-sized enterprises but offers no options for large companies whose members bypass the ticket ordering procedure and remain uninfluenced by the core strategy. Broadening the choice of options will have a positive effect on the strategic direction described above.
Another recommended direction of development is the improvement of the existing services, namely the resources responsible for the online interactions. Currently, the majority of ticket sales are conducted through the company’s website. This provides the company with the possibility to collect firsthand data from their customers and, by extension, better understand their needs and expectations. The customer-centric approach adopted by the company needs to rely on relevant information obtained through feedback mechanisms. However, the traditional methods of data collection align poorly with the seamless character of online services. The situation is especially apparent in the case of Ryanair since the company has recently conducted a major redesign of their site intended to simplify and streamline the ticket ordering process and make it more intuitive.
Thus, it is recommended to partner with companies that provide solutions for collecting demographic data. The goal of the partnership should be an algorithm or a standalone application integrated into the website’s services. The product will gather and process data that can be used to identify and address flaws in the current service design as well as provide insights on visitors’ online behavior. Once properly interpreted and applied, the information would allow for enhancements of the existing service and, by extension, increasing customer satisfaction rate.
