. To position itself in the marketplace, the company focused on driving down its airfare costs to the lowest possible yet profitable. Even though Ryanair is able to easily convince more people to use the services offered by the company, the risks associated with cutting down the market prices of airfares remain inevitable (West, 2007).
Since the air travel in Europe has been deregulated (Kangis & OReilly, 2003), Ryanair’s marketing approach in capturing a larger market share is to deliver the best quality service to its customers aside from offering travellers the opportunity to travel at a relatively low price. . To make the company’s goal possible, the airline company adopted a cost reduction strategy by offering Ryanair’s employees with less attractive salary combined with a performance-related pay arrangement which aims to maintain the quality performance of its employees.
With regards to the main goal of Ryanair, the market- and organization-related problems that the company is currently experiencing particularly when it comes to the negative consequences of implementing a cost reduction marketing strategy will be identified and thoroughly discussed. In the process of going through the discussion, ways in which unfavourable business conditions could either temporarily or permanently harm the profitability of the business will be tackled.
The problem will be analyzed by ranking the identified market and organizational problems associated with this type of marketing strategy in terms of urgency such that the most urgent problem will significantly influence the strategic decisions made in this study. Given that the market and organizational problems are often connected with one another, a problem map will be provided to illustrate the inter-relatedness of the identified problems. Prior to conclusion, alternative solutions that will effectively counteract its negative impact on Ryanair’s business performance will be provided.