abhishreshthaa
Abhijeet S
The Babcock & Wilcox Company (B&W) is a U.S.-based company that provides design, engineering, manufacturing, construction and facilities management services to nuclear, renewable, fossil power, industrial and government customers worldwide. B&W's boilers supply more than 300,000 megawatts of installed capacity in over 90 countries around the world.[1]
During World War II, over half of the American US Navy fleet was powered by Babcock & Wilcox boilers.[2] The company has its headquarters in Charlotte, North Carolina with operations in Lynchburg, VA; Barberton, Ohio; West Point, Mississippi; Cambridge, Ontario, Canada; Mount Vernon, Indiana; Oak Ridge, Tennessee; and Euclid, Ohio.
Internal Rivalry within the Industry (High)
In the airline industry where the market is highly saturated, the rivalry between existing airlines is one of the strongest forces. Ryanair has a first mover advantage in Europe, however, today there are many existing low-cost carriers across the region. The low-cost carrier market is highly competitive. The major competitor of Ryanair in the low-cost arena is Easyjet which also shares a first-mover advantage. Despite increasing competition from new players, Easyject and Ryanair avoid direct competition by choosing different routes to serve. The competition in the budget sector is very high as all airlines has the same ‘no frills’ philosophy. Price is the major differentiating factor in the low-cost carrier market.
Buyers’ Bargaining Power (Medium)
In the low-cost carrier market, airlines are competing for the same market segment. The bargaining power of the consumers is increasing as the supply exceeds the demands. The consumers are price sensitive. One of the challenges that Ryanair must face is the lack of customer loyalty in the low-cost carrier arena where passengers easily switch to airlines that offer lower fares. Buyers have no loyalty in low cost airlines such as Ryanair as the trip is purchased according to price.
Bargaining Power of Suppliers (Low)
Suppliers offer fuel, labor, airport and security services – all with changing prices. Changes in the prices of supplier’s products and services affect the rates of Ryanair’s fares. Ryanair has no influence of fuel price. Regional airports on the other hand, have low bargaining power as they are heavily dependant on airlines. Ryanair chooses suppliers that have low bargaining power.
Threats of New Entrants (Low)
Barriers to entry make it more difficult for new entrants to enter the low-cost carrier market. Infrastructure constraints pose as a formidable entry barrier. Because of the intense price war, a new entrant will find it almost impossible to offer rates that are lower than Ryanair’s or Easyjet’s. The airline industry is highly capital intensive. New entrants are challenged by expensive aircrafts, high cost of operation and war for talents. New entrants also find it very hard to look for suitable airport as airport slots are reserved for established airlines.
Threat of Substitute (Medium)
Customers have no brand loyalty. Customers decide based on the price that airlines offer. Ryanair is unable to build relationships with passengers as service quality is not given priority by the company. Customers can easily switch to another airline with lower costs. Other modes of transport in Europe are very efficient as well. Rail poses the biggest threat to airlines because it offers an excellent continental service around major cities in Europe. Rail is also more accessible than Ryanair. Technological advances can also lessen the number of passengers for Ryanair. Video conferencing make travelling to meet business associates abroad unnecessary.
During World War II, over half of the American US Navy fleet was powered by Babcock & Wilcox boilers.[2] The company has its headquarters in Charlotte, North Carolina with operations in Lynchburg, VA; Barberton, Ohio; West Point, Mississippi; Cambridge, Ontario, Canada; Mount Vernon, Indiana; Oak Ridge, Tennessee; and Euclid, Ohio.
Internal Rivalry within the Industry (High)
In the airline industry where the market is highly saturated, the rivalry between existing airlines is one of the strongest forces. Ryanair has a first mover advantage in Europe, however, today there are many existing low-cost carriers across the region. The low-cost carrier market is highly competitive. The major competitor of Ryanair in the low-cost arena is Easyjet which also shares a first-mover advantage. Despite increasing competition from new players, Easyject and Ryanair avoid direct competition by choosing different routes to serve. The competition in the budget sector is very high as all airlines has the same ‘no frills’ philosophy. Price is the major differentiating factor in the low-cost carrier market.
Buyers’ Bargaining Power (Medium)
In the low-cost carrier market, airlines are competing for the same market segment. The bargaining power of the consumers is increasing as the supply exceeds the demands. The consumers are price sensitive. One of the challenges that Ryanair must face is the lack of customer loyalty in the low-cost carrier arena where passengers easily switch to airlines that offer lower fares. Buyers have no loyalty in low cost airlines such as Ryanair as the trip is purchased according to price.
Bargaining Power of Suppliers (Low)
Suppliers offer fuel, labor, airport and security services – all with changing prices. Changes in the prices of supplier’s products and services affect the rates of Ryanair’s fares. Ryanair has no influence of fuel price. Regional airports on the other hand, have low bargaining power as they are heavily dependant on airlines. Ryanair chooses suppliers that have low bargaining power.
Threats of New Entrants (Low)
Barriers to entry make it more difficult for new entrants to enter the low-cost carrier market. Infrastructure constraints pose as a formidable entry barrier. Because of the intense price war, a new entrant will find it almost impossible to offer rates that are lower than Ryanair’s or Easyjet’s. The airline industry is highly capital intensive. New entrants are challenged by expensive aircrafts, high cost of operation and war for talents. New entrants also find it very hard to look for suitable airport as airport slots are reserved for established airlines.
Threat of Substitute (Medium)
Customers have no brand loyalty. Customers decide based on the price that airlines offer. Ryanair is unable to build relationships with passengers as service quality is not given priority by the company. Customers can easily switch to another airline with lower costs. Other modes of transport in Europe are very efficient as well. Rail poses the biggest threat to airlines because it offers an excellent continental service around major cities in Europe. Rail is also more accessible than Ryanair. Technological advances can also lessen the number of passengers for Ryanair. Video conferencing make travelling to meet business associates abroad unnecessary.