Running Head: MANAGEMENT

Expansion in Foreign Markets

[Name of the Writer]
[Name of the Institution]

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Table of Contents
Introduction......................................................................................................................................1
Discussion........................................................................................................................................1
Low Cost Airlines........................................................................................................................1
Outlook of Asian Air Markets......................................................................................................1
Assessment of External and Internal Factors...............................................................................3
Market liberalisation.................................................................................................................3
Low Cost Airlines Competition in Selected Region....................................................................4
Market Entry Strategies...............................................................................................................6
Short Term Options..................................................................................................................6
Southwest Effect.......................................................................................................................6
Long Term Options...................................................................................................................6
Functional Strategies....................................................................................................................8
Positioning................................................................................................................................8
Pricing......................................................................................................................................8
Distribution...............................................................................................................................9
Promotion.................................................................................................................................9
Achieving synergies.....................................................................................................................9
Strategic Audit..............................................................................................................................9
Bargaining Power of Suppliers...............................................................................................10
Bargaining Power of Customers.............................................................................................10
Threat of New Entrants..........................................................................................................10
Threat of Substitutes...............................................................................................................11
Rivalry....................................................................................................................................11
Organisational Structure.............................................................................................................11
Implication for Management.........................................................................................................12
References......................................................................................................................................14

Management

Expansion in Foreign Markets

Introduction
The aim of this report is to assess the external and internal factors that influence the aviation
industry of Asian Pacific Region. It also explores best international expansion opportunities for
RyanAir. The Ryanair started in 1985. On start-up, it had only 57 members in its staff. It
emerged as the first airline of Europe and kept gaining the success with time. The company is
known for its competitive advantage by offering first low-fares, no-frills services. The company
has earned profits in times of economic instability. Ryanair considers the provision of good
services to its customers as its social responsibility (Wall & Rees 2010, pp. 49).
This paper explains the market entry strategies that Ryanair should follow in order to enter
selected international market. It also discusses the functional strategies as well as structural
demands of the foreign markets. China and India are the most suitable countries in which low
cost air travel can be expanded. The growth potential in these countries is huge (Keegan 2002,
pp. 14).

Discussion
Low Cost Airlines
The concept of low cost air services has grabbed major part of market share of the aviation
industry in lesser time. In Europe, the number of low cost airlines operating is 40. They cater to
38% of passengers of air traffic. They also account for 23% of IFR operations which are defined
as total instrumental flight rules. It is necessary to understand the services of low cost airlines.
The service idea initiated from United States and then spread in Europe and the rest of the
regions. They offer lower prices for air transport. They manage to cover the costs by eliminating
different services provided in traditional airlines. This air service is exceptionally adaptable to
the market. The model is based on eliminating unprofitable lines. In the place of un-necessary
services, newer one are offered that are important to every customer (Wall & Rees 2010, pp. 38).
The low cost airlines can be defined as the services that allow minimum costs and prices. They
offer maximum efficiency. These airlines use secondary and regional airports and have single
types of airplanes to avoid training and maintenance costs. They offer point to point network
only and have shorter flights. They offer direct services within the region. The costs are covered
with eliminating in flight services facility. These airlines use younger and more environmentally
friendly staff. The major thing that differentiates the two models is the network route (Quelch &
Deshpande 2004).

Outlook of Asian Air Markets

After recovering from the global recession, outlook of Asian airlines market is positive. This
shows the opportunities of fast paced growth in Asian Pacific region. It is expected that Asian
market tends to worlds largest aviation market in the future. This industry is expected to rise to
20 million approximately in the future. Contribution to GDP will be more than USD 1 trillion.

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The major forces that serve this growth is the trend of low cost air travel. Open skies agreements
also contribute in this factor as these agreements serve a long term growth for Asian markets.

Figure: World Traffic

Source: Airbus, Data Retrieved from https://www.google.com.pk/search?q=low%20cost
%20airlines%20asia%20pacific%20market
%20share&psj=1&bav=on.2,or.r_cp.r_qf.&bvm=bv.46751780,d.ZWU&biw=1280&bih=666&u
m=1&ie=UTF-8&hl=en&tbm=isch&source=og&sa=N&tab=wi&ei=Xx6dUbX-EcGSO7TgPgJ#imgrc=ba4kaD87srXFSM%3A%3BuGjXId7XT63_MM%3Bhttp%253A%252F
%252Fwww.airlinetrends.com%252Fwp-content%252Fuploads
%252F2011%252F12%252FAsia-Pacific_growth_2030.jpg%3Bhttp%253A%252F
%252Fwww.airlinetrends.com%252Fcategory%252Fformat-competition%252F
%3B986%3B736

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Assessment of External and Internal Factors

The Asian Pacific markets should be carefully explored as they are highly influenced by
environmental, security, governance and market liberalisation factors. These key challenges
should be faced in order to fully tap the market potential. China is dominated by three main state
controlled airlines. Thus, domestic market is captured by the state. No low cost airline has
explored this country. In India, the aviation market is de-regularised. There are many domestic
and private carriers due to which competition of market share is tough. The national airlines of
Asian markets mostly fall in governmental ownership. There is subsidization and other market
distortions that lead to ownership (Hollensen 2003, pp. 12). Asian air travel market has to face
highly vulnerable fuel price hikes. There is economic and social level at massive level. These are
the basic reasons why industry is not profitable yet by foreign airlines. The factors highly affect
the demand of flying by reducing the travelling possibilities.
Though low cost airlines have not yet explored this region, there are many other brands that
should be considered while identifying opportunities and threats of operating in this region.
These airlines can be classified into four segments. There are market leaders like Cathay Pacific
and Korean Air that lead the region (Lee & Carter 2005, pp. 56). These airlines also lead in terms
of product responsibility and human rights. The followers are Asiana Airlines, Qantas, China
Southern Airlines, Malaysia Airlines, Thai Airways, and Singapore Airlines. The timid segment
has good performance on reasonable reporting, but they lack the issues of disclosures. This
segment consists of Air New Zealand, All Nippon Airways, Japan Airlines, Philippine Airlines,
Air China, China Airlines, China Eastern, Jet Airways, Hainan Airlines, and Eva Airways. Two
low cost airlines that appear in this segment are Virgin Blue and AirAsia. The laggard airlines are
those which have overall poor performance. These are Shandong and Shanghai Airlines and
Kingfisher Airlines. It also includes Tiger Airways which is low cost airline (Quelch &
Deshpande 2004).

Market liberalisation
Although Asian markets are considered as the most fast paced markets that have highest
opportunities of growth, strong regulation makes it tough for external forces to enter the market.
The bilateral deals of aviation are also restricted in the region. However if, the region has to
reach the targeted revenues from region till 2015, it is of concern that the activities in the region
are increased (Keegan 2002, pp. 15). The Asian market is also highly fragmented industry. This
is due to national ownership and state control guidelines that are required to be followed by
domestic airlines. These markets have no access to international capital markets. Due to this
reason, cross border mergers and acquisitions does not take place. The industry faces distortion
which is reflected by shape of industry though progressive liberalisation has made industry
expand to a minimum level (Quelch & Deshpande 2004).
There are other structural issues that cause poor profitability of the airlines industry. Thus, it is
highly appreciable that market liberalisation is addresses with proper actions. Only this can help
in meeting demands and challenges that hinder the evolution of this industry. If newer routes are
opened in the secondary destinations comprising of China, India and Southeast Asia, then there
will be a principal influx of new passengers (Wall & Rees 2010, pp. 51). The open skies
agreement for ASEAN takes the similar initiatives. This agreement was signed by Southeast
Asian countries in December 2009. 10 member countries if ASEAN have reviewed the deal that

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allows the regional markets to be open for maximum competition till 2015. Under this
agreement, the intra regional tourism will be boosted. The newly entered airlines will gain
benefits by the expansion of routes and travel. A report by the Sydney-based Centre on the
outlook of Asia Pacific region for Aviation expansion expects that as the competition is
increasing, many smaller players will either merge or close down. This will result in reorganisation of the industry in the near future (Stonehouse et.al 2004, pp. 144).

Low Cost Airlines Competition in Selected Region

The low cost airlines are also known as budget airlines or no frill airlines. The competition in this
sector is growing at a faster rate. In major developed regions of the world, four out of every five
airlines are offering budget airlines services. The assessment of Asia Pacific region low cost
airlines services of data generated in 2009 showed that the financial crises have affected the
region. Traditional carriers are still struggling to come out of those crises. Many airlines have
faced bankruptcy after those crises. This shows that region is highly vulnerable to economic
crises. Japan airlines, Singapore Airlines and Thai Airlines have incurred excellent losses
(Stonehouse et.al 2004, pp. 141). On the other hand, the region has seen that low cost airline
services have availed the crises as the opportunity to increase their businesses. Many low cost
airlines such as Tiger Airways has earned profits and profited though stock exchange listings.
The low cost airlines account for 15% of regional aviation airlines according to 2009 reports.
The increase from 2001 to 2009 is commendable as it was 1 % in 2001 (Lee & Carter 2005, pp.
54). This accounts for lesser than one in every six seats sold in the region. The region has also
seen the introduction of long haul routes by the Malaysias Air Asia in 2009. They were thus able
to gain premium airline charges.
The LCC airlines in the region have rigid fixed-cost structures. They are holding high debts. The
airlines are trying to cover the debt by the lowest airport handling fees. This is achieved by Tiger
Airways by eliminating on-board meals and ticketing counters. They also offer unbundled
products and services. Through this offer, passengers can choose how much they can pay and
what is their need. The airlines in this region charge for up-front seats and flight insurance
services. They have shorter routes of fewer hours which enables them to manage the return flight
same day with the same staff. Thus, it leads to avoidance of extra staff and expense of crew
members (Hollensen 2003, pp. 12). The region also consists of subsidiary carriers within carriers
approach. Thus, it allows lower unit costs charged to the parent company. Korean Air offers Jin
air and Qantas offers Jetstar which are subsidiary services. Asian markets have also witnessed
newer travel destinations. The travelling needs of residents have increased significantly (Wall &
Rees 2010, pp. 43). The region has made the models and standards of disclosures. This has been
seen in Air Asias annual report. Minimization of negative environmental impacts has made the
business cost effective. The fleets are modernized. The efficiency is increased by maximizing
seats capacity and greenhouse gas emission is reduced by following unique airport structure.

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External Analysis
Internal Analysis

Country Comparison

- Firms human
resources

Macro Environmental Factors

- Financial Forces

- Management
Competences

- Political Forces

- Differentiation

- Legal Forces

- Structure

- Technological Forces

- Staff

- Socio-Cultural Forces

- Skills

Direct Environmental factors

- Population size
- Age Distribution
- Urbanization

Entry Strategy Target

Market

External Analysis selected country

- Entry Mode Decision

- Attractiveness Segments

- Marketing mix

- Market Channels

- Influence digital out-of-home market

- Approach Market
Channels
- Implementation
Figure: Assessment of Environment for Entering Foreign Market
Source: http://businesscasestudies.co.uk/united-airlines/responding-to-a-changing-externalbusiness-environment/assessing-the-external-environment.html#axzz2U3L8oQIf

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Market Entry Strategies

The entry barriers are low in the ASEAN markets with the initiation of aviation deregulation.
The previously protected markets face high competition. Ryanair should focus on the main issues
in entering the foreign market which in this case is the absence of secondary airports (Hollensen
2003, pp. 12). The key cities in this region serve only national carriers with same airports.
Surface travel options are limited to KualaLumpur-Singapore where express buses offer a timecompetitive option.

Short Term Options

The deregulation will be a short term opportunity to lower the entry barriers. The options
available to address these barriers are the price match and lowest costs in the region.

Ryanair can offer a fast aircraft turnaround. It can also get support from fleet
commonality and maintain high seat density to gain cost advantages. These factors are
not readily adopted by national carriers. National carriers try to retain the hub and full
network services by having mixed fleets so that they can go for the long haul flights.

They alternate strategy to enter the foreign markets for Ryanair is to adopt the mixture of
premium and flexible fares. They can also offer constrained fares to gain the extra value

The low cost airline in discussion can also opt for launching a stand-alone low-cost
subsidiary. This helps the airline in maintaining full service network offerings in the
selected markets. This model has been successfully been implemented by Singapore
Airlines (Tiger) and Qantas (Jetstar/Jetstar-Asia).

The airline can also ask for state protection which will limit the traffic rights for newer
market entrants (Lee & Carter 2005, pp. 57)

The model proposed by Mitra and Golder in 2002 can be availed by the company management to
learn about the predictions in entry decisions. These decisions highly influence the performances
of newly entered airlines in foreign markets. The similar research has been done by Gielens and
Dekimpe in 2007. In this study, the researchers have discussed the cross-effects of new entrants
in a national market and the resulting effect of competition in other countries located within the
similar region (Bass et.al 2002, pp. 67).

Southwest Effect
The airline can understand the entrance possibilities in foreign markets by studying the wellresearched phenomenon of Southwest effect that is applicable in the air transportation industry.
The effect of entering is two folds. It increases the number of passengers and decreases the
average fare paid by travelers in the market.

Long Term Options

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The airline on starting its international business will have to gradually change its entry mode
decisions. It should work on choosing the options that provide the greater control over foreign
marketing operations. In order to achieve this target, RyanAir should commit more resources to
foreign markets. This at the same time produces greater risk on the company. There are various
long term options like licensing, joint venture, exporting or direct investment (subsidiary, joint
venture). These options are highly dependent on external and internal environment assessment of
the selected markets (Bass et.al 2002, pp. 71).

Licensing
RyanAir can enter the foreign market by licensing. In that case, domestic companies will become
licensors and they will offer their intangible assets like patents, trade secrets and market knowhow to foreign companies which will be a licensee in this case. Ryan Air will get these services
in return for payment. This option is of exceptional advantage to RyanAir as it eliminates the
import barriers applicable on foreign airline in the form of tariffs or quotas. It is also the effective
solution to minimize the transportation costs. Another significant advantage of this option is the
reduction in risk (Deresky 2003, pp. 59). The lose in the worst case are must fewer than that of
other entry modes such as with a subsidiary. However, in order to avail this option, RyanAir
should make sure that it has right set of technology, brand name and trademarks that is attractive
to the potential licensors in the selected markets. The disadvantage of this option is that the size
of income is lesser than that of export or investment option. The performance of RyanAir will be
dependent on the knowledge and capabilities of the licensor.

Franchising
It is another option which can be classified as a type of licensing. Ryanair can give its property
rights to a franchisor and become a franchisee. The franchisor then carries out the business
operations in its own ways under the trade name. Ryanair will be liable to pay fees or royalties to
the franchisor (Deresky 2003, pp. 57).

Joint Venture
This is the best possible strategy for RyanAir. It allows companies to gain ownership enterprise
in the selected markets or countries. This option is best availed after following a license strategy.
The control over a joint venture is lower than over a sole ventured, but on the other hand it
allows greater market knowledge as the interest of RyanAir and the local company will be same
(Deresky 2003, pp. 58).

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Figure: International Planning Process

Source: http://globalmarketingtoday.wordpress.com/about/global-marketing-management/

Functional Strategies
The sales performance of RyanAir in the foreign market is highly dependent on the entry mode
option and the marketing approaches. Although the basic functions of the company will remain
same, but adaptability to local market is necessary. The functions in international and foreign
markets differ to some extent as the environment is uncontrolled due to many external and
internal factors. These functions are the availability of distribution channel, product
specifications, dissimilar promotional mix and a distinct cost structure. These factors are
influences by the type of entry option that the management chooses. The marketing mix of any
company is a set of strategic decisions based on these five forces: Product, Price, Channel,
Promotion, and Distribution (Bass et.al 2002, pp. 69).

Positioning
As Ryanair expects the Asian Pacific Markets to be highly competitive, it is essential to carefully
create the perception of the company in the customer mind. By this method, customers are able
to differentiate the airline with the global and local competitors. RyanAir should focus on
positioning itself as the lowest fare airline with short-haul flights that have a higher frequency. It
should also perceive itself as a point-to-point carrier in the Asian Pacific region that offers best
services and is fun to fly. It should be able o make place in minds of customers despite the
absences othe first classss and in flight services (Mellahi et.al 2011, pp. 129). This helps in
minimizing the per head costs. RyanAir can also follow the strategy offered by Southwest where
the travel service is flexible according to the demographics and ticket fare. They have made it
exceptionally simple for passengers to understand how much and why they have to pay. The
airline should focus on becoming the favorite airline of the region. This helps by making
customers the frequent flyers.

Pricing

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The RyanAir should offer the lowest price in the low cost airlines sector. This enables the
company to achieve profits in the selected region. But the company should closely monitor other
sources of transportation in the region. They should discuss the alternative ways of transport that
can hurt the business. If the airline enters the newer market with lower process, then the traffic
increases due to undercut prices (Gatignon & Kimberly 2004, pp. 104). When Southwest entered
a new market in which 8000 people used to fly, on cutting off the prices it was able to increase
the demand by 26000 passengers. This is an effective way that traditional airlines are also not
capable to follow. If they cut their prices by this much amount, then they will incur heavy losses.

Distribution
The distribution strategy is also important to be analyzed before entering the selected region. It
should be decided that either direct or indirect approach will be used. Travel bookings can take
place by a number of methods like a phone or internet. The involvement of middle man should
be evaluated. Ryan Air can attract the target customers by using the ticketless travel method. In
this method, the airline offers that passengers do not need to print and process the paper ticket
together. This method can be best applicable to manage risks due to computerized reservation
systems. Thus, customers do not need to show the confirmation number and can bypass the
reservation system easily. The decrease in paperwork results in cost savings and it also has a
positive impact in foreign market (Keegan 2002, pp. 12).

Promotion
RyanAir should develop a deep understanding of the customer insights in order to gauge the
customer benefits. These benefits should then be converted into the services. The company
should contribute in the foreign media to create awareness of its services. These promotional
activities can be print or electronic. They can set up a website that encourages people to find the
best deals for them.

Achieving synergies
It is of note for any traditional or low cost airline to work for diversication and infrastructure.
Though this method, RyanAir can achieve cost synergies and effective time control quality. It
also helps in transferring the learning in a right way. By expanding in Asian markets through
subsidiary network, RyanAir can develop better management skills. These skills can be enhanced
on a corporate level rather than a divisional level by permitting job rotation. The airline can offer
terminal services for the people of the selected region (Quelch & Deshpande 2004). Subsidiary
can be operated under the same management philosophy and culture that emphasizes costeffective service excellence. But it should also be quoted separately in terms of market share.
The outsourcing should be avoided in order to support peripheral services. It is due to reason that
it can affect the value offered at subsidiary and parent company.

Strategic Audit

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Bargaining Power of Suppliers

There is a dearth of alternate suppliers present in the market, which means that there is a dearth
of substitute parts or products which makes the bargaining power of the existing suppliers quite
high.
Other suppliers for the industry are fuel suppliers. Fuel costs are increasing which means that the
industry has suffered a set-back in terms of costs. So much so that now, International Air
Transport Association (IATA) estimates that the proportion of fuel costs in overall operating
costs is 29 per cent. In addition to this, there are a truly few companies that supply aviation fuel
to Airlines, and this increases their bargaining power considerably. Even though Airlines hedge
against the rising prices of fuel, there still is high volatility and high dependence on a few
suppliers. (Marketline, 2012, p. 14)
Ryanair uses specific types of models of Boeing aircrafts to standardize operations. This
standardization is essential because it reduces the cost of the operations of the airline. In this
scenario, Ryanair has only one supplier, and this allows Boeing more power as Ryanair is
dependent on it (Box & Byus, 2007, p. 67).

Bargaining Power of Customers

The airline industry has many customers while these can be companies and governments;
majorities are individual customers who purchase tickets from the airlines directly. There are
other channels for purchasing tickets and these include travel agents and aggregator sites.
Moreover, customers in this day and age are technologically savvy and have various options.
Each of these categories has many competing firms who are all fighting to attract customers
through their feature offerings, their reasonable costs, or the choice of their destination. These
features mean that there is a high level of sensitivity to prices of tickets as there is much higher
awareness of prices and comparative features than before. This means that buyer bargaining
power in the market is quite high.
Technology is another factor that has enhanced the value of customers. There are many
aggregator websites that do price comparisons and give customers information and in turn
increase competition (Anon., Outlaw.com, p. 9348).

Threat of New Entrants

Creating trust among customers and sales of tickets are also difficult as thy have to establish
relationships with dealers and travel agents to reach their customers. In addition to appealing to
the customers, airlines also need to coordinate with airports where air traffic is on the rise. This
means that the availability of time slots for the arrival and departure and the arrival of new
aircrafts will be limited (Marketline, 2012, p. 17).
Airlines that already have a developed relationship with airports will be able to negotiate a
suitable slot that is more attractive to travellers. On the other hand, a newly established company
will not have this say. This is the reason why the market will be difficult for new airlines, and
there is a few threats of new entrants (Marketline, 2012, p. 17).

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Threat of Substitutes
The substitutes of travelling via airlines are roads, railways and ships. Customers have to weigh
in options of the time taken, the convenience of travel, and the price, in order to choose which
form of travel to undertake. Have said so, travelling considerable distance via sea, and the road
has become uncommon today as the prices of air travel have been considerably lowered.
However, it is the short distance that faces the highest threat of substitutes, especially when time
is not a highly crucial consideration (Marketline, 2012, p. 18).
Leisure travellers who want to enjoy the scenic beauty over shorter trips would choose between
railways and buses, and Europe tends to have a particularly well-developed network of both
forms of transport (Marketline, 2012, p. 18).
Domestic travel in European countries is only one third of the volume of the European air
industry. This is because domestic travel is substitutable by land and rail networks. There are
high speed trains such as the Eurostar which makes travel from UK to France much shorter by
travelling through the Channel Tunnel. In addition to this, this journey is much cheaper than
travel by air (Marketline, 2012, p. 18).
There are many excellent bus services such as Eurolines and National Express that allow for a
leisure visit, and go to nearly 40 cities in the region. Therefore, long-haul routes are not
substitutable by any other means domestic or interregional travel has a high number of
substitutes (Marketline, 2012, p. 18).

Rivalry
Rivalry in the market is high as there are many airlines competing in the market. Many
traditional airlines are also competing in the low-cost carrier segment, and this has made the
market compete heavily in terms of prices as well as features. Additionally customers can easily
switch airlines especially if prices are not as desired or if time slots are different. Therefore, the
amount of rivalry in the industry is quite high. (Marketline, 2012, p. 19)

Organisational Structure
There are many internal factors of the company that can affect the internationalisation process.
RyanAir should define its internal weaknesses and threats before entering selected markets. It is
also dependent on the type of entry mode chosen by the company. Ryanair should understand and
evaluate its ability to change in order to face internationalisation. Three key factors serve this
purpose (Gatignon & Kimberly 2004, pp. 101). These are the companys human resource and
core competences. If the company has well developed human asset in all the field of operation
and sales, then the entry options in foreign markets are enhanced. However if, the company has
limited and incapable resources, then entry modes are lesser. In the case of RyanAir, it has the
most effective human resource in the aviation industry. It should carefully assess its
organisational structure. RyanAir has high management capacities that allow more willingness of
the staff to commit them to foreign market development. A high degree of commitment means

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that managers will select the entry mode for a target country from a wide range of alternative
modes, compared to managers with low commitment.
The operational structure of RyanAir can be country based or service based. The domestic
operation can be set up in order to monitor foreign market functions. A global approach can be
implemented by employing foreign manufacturing and a sales force that can work in the global
market. A more complex but organized approach is to handle the operations in one company
where manufacturing is done in another country. The structure of organization for this approach
should be geographically-dispersed, but they should act as interdependent units (Wit &Meyer
2005, pp. 93). It is also the duty of management to determine if the company will follow
centralized or decentralized approach. The marketing operations can be conducted from a
centralized location. This location acts as the headquarters where decisions are taken and
implemented in foreign market. The other way RyanAir can adopt is a decentralized approach.
The foreign office can be set up in the selected market and the decisions of manufacturing,
distribution and sales take place within that region. This helps in making better decisions if the
management has knowledge of local markets (Wit &Meyer 2005, pp. 95). If RyanAir follows
centralized approach, then it will need strong communications and solid organizational processes
that can successfully disseminate information across regions. RyanAir has well developed
communication channels within UK, but it should evaluate the feasibility in international
markets. The goals and objective of achieving significant market share can be slowed down if
there is lack of communication of company policies and goals. Decentralized approach provides
more localized solutions to the structural problems of the region. They are country-specific, and
the decision-making and message modification can be done on the basis of cultural attributes like
affluence or literacy. The disadvantage of this approach is that it can lead to brand fragmentation
(Wit &Meyer 2005, pp. 94).
The organizational structure at Asian market can be developed in such a way that it is known for
its functionality. By using three layers of management, the structure can be made rigid and
effective. It should be kept in view that every employee should be aware of the core values. The
company should aim for quality, reliability, action, informal communication and feedback in its
structure. For low cost airlines, job specialization should not be implemented (Wit &Meyer
2005, pp. 92-100).

Implication for Management

The strategic implications suggest the focus on competitive timing and organization size versus
strategic initiatives. The management of Ryanair should understand the low cost competitors that
are entering the respective markets. They should work on increasing the sales post entrance in
the market. It is therefore crucial to find out and recognize the type of increase that the market
can face after entrance. The managers should also understand the capacity of increase that the
company can bear. It is essential to identify the increase in level of customers before entering the
market in order to retain the performance benchmarks (Deresky 2003, pp. 55).

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Figure: Strategy-structure-performance paradigm

Source: International Journal of Logistics Management, Data Retrieved from
http://www.emeraldinsight.com/journals.htm?articleid=1529151&show=html

Managers should also understand the decrease in prices they will face after entering the market.
A low cost airline when enters into a new market that is highly competitive, then the airline faces
the decrease in average sale fare. Thus, managers should realize the competition in the region. If
the airline has to follow low cost strategy, then the overall price of air services in the market will
fall. This would demand higher efficiencies in the market. They need to be price competitive
regardless of overall positioning.

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