Ryanair Vs Oticon
Essay Preview: Ryanair Vs Oticon
Report this essay
Introduction
Ryanair;
Ryanair is an Irish airline, established in 1985 in Dublin by Ryan family with a share capital of just Ј1. Ryanair is the first and largest low fare airline in Europe. It is one of the most successful airlines in the world, carrying 50m passengers through 559 routes across Europe.
In 1990, they decided to change their strategy and switched their strategy from being “high fare” airline to become low fare air line; they copied the successful Southwest Airlines low fares model. In 1991 the company for the first time made a profit despite the impact of the Gulf War. Now, they are the third largest airline in Europe in the passengers number. Recently IATA announced that ryanair has become the largest international airline. (Ryanair, 2007)
2.1 Oticon;
Oticon is a hearing aids company. In 1904 Oticon was founded by Hans Demant “driven by his desire to help his hearing-impaired wife and other people who suffer the same problems” (Oticon, 2007). From the beginning Oticons aim is to help people to have a better life.
Oticon continued to improve and to establish it self in the hearing aid industry. In the 1920s Oticon opened sales offices in different countries. In the 1940s during the World War II, it became difficult to import hearing aids, so the company started its own production. (Oticon, 2007)
Life was not always easy for Oticon, and in the 1980s they lost some of their market share and the company started to struggle. As a result, the company appointed Mr. Kolind as new CEO, who redesigned its organizational structure and replaced the conventional hierarchical structure to a new “flat” organizational structure known as the “Spaghetti-organization”. Know, the company is the second-largest company in producing hearing aids in the world, and won world wide recognition and became a model and successful example for the decentralized organization. (Boddy, 2005)
3.1 Objective;
This report is going to compare and contrast the two organizations competitive priorities, and how that their different priorities resulted in different methods for managing their operating systems and processes. Then, we will discuss marketing policies and techniques and the affects of their competitive priorities. After that, we will look to the different approaches of managing people between the two organizations.
2. Compare and contrast
2.1 Competitive priorities of the two Companies;
Ryanair first and most important priority is low price. The success and the fame of the company were built in their competitive prices. All the organization structure and their strategy focus on trying to reduce the cost of their operation to offer “low” air fare. Ryanairs second priority is on time-delivery. It is number one in Europe in punctuality. Consistent quality is Ryanair third priority, they must ensure that their prices remain competitive and the lowest, so they lunched a new campaign called “price guarantee” they ensure that their prices are the lowest. Also, they are working hard to keep their flights without delays and to maintain their good record, where they were in the top in the past three years. Volume flexibility become one of Ryanairs competitive priorities, they open new routes and bases regularly. They have 559 routes across 26 European countries. Product flexibility is one of Ryanair competitive priorities and it started to become more important year after year with the launching of Ryanair gaming and bingo. Also, they have different services such as car rentals, in-flight sales of beverages, food, and merchandise, sales of rail tickets, hotel accommodation and travel insurance, and charter services. (Datamonitor, 2007)
Ryanair
Oticon
Low price
High performance design
On time-delivery
Consistent quality
Consistent quality
Product flexibility
Product flexibility
Volume flexibility
Volume flexibility
Speed time delivery
Speed time delivery
Low price
High performance design
On time-delivery
On the other hand, Oticon charges a high price for its product, but it produces high-tech hearing aids products. The sensitivity of their industry and the importance of quality in this business made High design performance Oticon first priority. The second priority is consistent quality; they must maintain their quality at highest level to meet people expectations. So they have to focus on quality management which role is “”The QM group focuses both on establishing preventive measures for Oticons critical processes and fulfilling the fundamental requirements for external partners such as customers, various authorities and certification bodies etc.” Pernille Louise Vinten. Like any industrial organization flexibility is a key factor, so product flexibility is Oticon third competitive priority with constant improvement in their production line and in their technology. (Oticon, 2007)
We notice that the two companies have some similar competitive priorities. They both have consistent quality as one of their top priority to keep their existing customers and earn their trust. Also, both give importance to Volume and Product flexibility. To success in this kind of business you must have varieties in products and services to attract as much customer and to meet the different demand.
2.2 Operation system and process;
Ryanair first priority is low price, so they have adopted new ways to reduce the cost to enable them to offer low fares. On of their technique to reduce the cost is that their planes fast turnarounds; this enabled the company to keep their planes in air for longer time and generating more revenues. The first thing Michael OLeary did is replacing the entire fleet with a fleet of Boeing 737s, the use of one type of aircraft reduce the cost of the maintenance and training. Ryanair stopped serving free meals and beverages on flight, which enabled them to reduce the number of flight attendants from five to two (KUMAR, 2007). Also, the