A study on airline strategy: Comparing Ryanair and Lufthansa to determine the best strategy in the industry
Date
2014
Authors
Mack, Rachel
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Publisher
Bachelor of Commerce Best Business Research Papers
Abstract
While Porter’s generic strategies provide a look at five of the main business models that companies typically follow, two in particular stand out in the European passenger airline market: low cost leadership and product differentiation. Ryanair dominates the European market of price-sensitive consumers, while Lufthansa has long been regarded as one of the best quality airlines in the industry. While the question of which strategy is “better” is difficult to determine, what this paper aims to discover is how both companies have found such incredible success in the competitive industry of passenger airlines with their differing strategies and how these strategies have been the main contributors of said success. To fully examine the companies from all aspects, this paper will use McKinsey’s “7-S” Model to develop a better understanding of the two companies to understand their commitment in all areas to their respective strategies. Also included is a survey that I conducted to get a sense of which airline’s strategy “wins” in the eyes of customers. In the end, the results from the survey, as well as from all secondary research, show that despite Lufthansa’s current lead over Ryanair for largest passenger airline company, there is no clear winner between the two strategies. Rather, the “winning strategy” is a company’s complete commitment to one strategy as opposed to low cost leadership versus product differentiation.
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Citation
Mack, R. (2014). A study on airline strategy: Comparing Ryanair and Lufthansa to determine the best strategy in the industry. Bachelor of Commerce Best Business Research Papers, 7, 49–61.