Ryanair and its operational excellence strategy

I’ve before mentioned the changes Michael O’Leary had to make to his company in order to transform it into a low cost player, leader in operational excellence.

One clear limitation Ryanair has is the physical constraints an airplane poses. They can’t squeeze more customers in there than they are squeezing today. But what if they could have standing passengers?

Well, now they are trying to assess public acceptance of this idea, through an online survey on their website.

Would you accept to stand for approximately one hour in order to fly for free/pay half of what seated passengers pay? You may want to participate in their poll…

Addition July 16, 2009:

The main message is:

A company with strategic focus has time/money/resources to push the boundaries in order to protect and improve its business model.

Ryanair exists to sell cheap flight tickets. Customer value = To pay very little (not 10% cheaper, but 80% cheaper). Ryanair didn’t start low cost, but was transformed in the hands of their CEO (Michael O’Leary). Flying from alternative airports; modifying internal space in airplanes (squeezing more people in); charging for several extras (allowing for upselling and scalable tickets); among other things…They are now questioning the so far accepted truth that a passenger shall travel seated in an airplane. With one single value discipline as focus, a company is able to direct the whole organization towards a common objective and is allowed to innovate.

Now, back to Telecom. Barthi is a good to mention example here. This issue of Ericsson Review comes with an interview with Sunil Mittal (Barthi’s CEO). Sunil talks about his enormous interest in MTN, willing to expand his company’s success based in scale, volumes, and extremely low prices to end users. Sunil also seems intrigued by the market nature in Europe (would it be possible to replicate Barthi’s business model in Europe?). Barthi’s strategic focus is beyond doubt an operational excellence one.

My intention with the post was really to exemplify an operational excellence strategy and the importance of having focus on one of the 3 value disciplines. More on strategy theory here, here and here