Inter-cultural Management: Diversity management between the business models of Ryanair and Air France-KLM

Thèmes abordés

Intercultural Management "Diversity management between the 2 business models of Airline companies"

Résumé du document

In this file, we will analyze a very important industry such the airline industry. In order to conclude on the main differences between the two different business model, the low-cost and traditional companies, we initially analyzed Ryanair's management style with a SWOT analysis spelling out the mains strengths and opportunities it offered. The low-cost Ryanair strategy is based on its differentiation and we analyzed the different elements composing it.
Finally, we analyzed the Air France-KLM management style which has been adapted to compete with Ryanair. We used the main tools of cultural analysis with Trompenaars and Hofstede matrix and tools for the cultures of the two countries involved in the Air France-KLM merger. Netherlands and France have mutual strengths and the complementary basis to reinforce their status.

Extraits

[...] Concerning the cultural differences between French and Dutch management styles, there is first the power distance factor. First concerning the PDI, power distance index, we can notice that Netherlands is lower than France. It means that the management style in France is more centralized and it works more by subordination. It means also that the hierarchy is much respected and employees are waiting for directives to follow. In Netherlands means that the factor of independence is very important. Employees are more easily able to takes initiatives. [...]

[...] It was launched many years after by Ryan Air in 1991[1]. It was after followed by subsidiaries created by huge companies as Air France which has to adapt itself with its own low-cost company “Transavia”. This model was improved by the deregulation. This explains the time between the American implementation and the European one. Southwest focused in a first time on a strategy based on the short flights by offering low prices compared to the competition but also flights with a high frequency. [...]

[...] Finally it will allow drawing up a cross-cultural profile through the customer targets of each business model. Aircraft transport's Overview Low-cost & traditional companies in opposition Companies low-cost: This model represents a network working with direct flights only with a high frequency and a low cost. The prices for passengers are low and there are no services free in board. Low-cost companies are represented by the American pioneer Southwest, but better known, Ryan Air which is the leader, Easy Jet Virgin and many others. [...]

[...] - Higher utilization rate of planes: Companies are using secondary airports as Beauvais the main one for Ryan Air[3]. Boarding is faster due to the non-attribution of seats). - A simple and unique tariff: There is a unique price at a precise time for a same flight. It is not as the traditional companies where the price is flexible regarding the product selected (economic, business ) and the time of the travel. - A simplified yield management: This strategy is made in order to offer the lowest price at the launch of reservations, and to increase progressively regarding the departure date. [...]

[...] The management of this company is independent from the Air France one. Production costs are in relation with the applied prices and benefits from the synergies in Netherlands. Therefore, its development has for strengths all the factors which made the success of the company in Netherlands in Amsterdam with a intensified communication. Conclusion Thanks to an analysis of the aircraft industry, we have seen that the competition is very high. Moreover, we saw that the low-cost companies are becoming a real danger for traditional companies. [...]