Internal and External Analysis of Ryanair

The provided assignment is an in-depth analysis of Ryanair's business environment. It includes a thorough examination of the company's internal factors such as its structure, size, scope, and purpose. Additionally, it considers external factors like changes in environmental conditions, interest rates, tax rates, and exchange rates. The report also takes into account Ryanair's strength as a low-cost airline with a large market share and its potential opportunities for growth in short-haul routes.

BUSINESS AND THE BUSINESS
ENVIRONMENT

CONTENTS
INTRODUCTION...................................................................................................................................1
PART – 1 (LO1 & LO2)..........................................................................................................................1
Purpose of different types of organizations.........................................................................................1
Background informations about the three organizations.....................................................................2
Inter-relationship of functions of Cancer Research and how they related with the structure..............3
PART– 2 (LO3 & LO4)...........................................................................................................................5
Positive and negative impact of macro-environmental factors using PESTEL model........................5
SWOT analysis of Ryanair..................................................................................................................6
Interrelationship of strengths and weaknesses with macro-environmental factors in the context of
Ryanair.................................................................................................................................................6
CONCLUSION........................................................................................................................................7
REFERENCES........................................................................................................................................8

TABLE OF FIGURES
Figure 1: Organization chart of Cancer Research..................................................................................4

INTRODUCTION
Today’s business environment is very dynamic and competitive and in such a scenario
the sustenance of the organization is strongly dependent on the level of understanding of
micro as well as macro environmental factors. UK’s exit from European Union has brought
many uncertainties in the business environment which needs to be studied for effective
functioning (Palmer and Hartley, 2006). Concerning this, the main aim of the current research
report is to evaluate the business environment of private, public and voluntary organisations
and their relative purpose, structure size and scope of the business. With this regard, Cancer
Research, Ryanair and National health Service is being taken into consideration. As a trainee
business analyst of a consultancy firm, emphasis will be given on how functions of the
organizations relates to its objectives and structure. The final part of the report will include
internal and external environment analysis of Ryanair.
PART – 1 (LO1 & LO2)
Purpose of different types of organizations
Talking in relation with organization, it is defined as an entity that significantly
encompasses different people with a common goals and connection with the external business
environment. There are different types of organizations such as private, public and voluntary
and each have their own purposes and structures. In this current tasks Cancer Research,
Ryanair and National Health Service organization of UK is being taken into consideration
and their respective purposes are being defined below:
 Cancer Research – It is a cancer research and awareness charity in UK with a main
vision to beat the cancer together (Cancer Research UK Centre, 2018). It is a
charitable organization with the main purpose to help people in understanding cancer
and working in partnerships so as to fight against the cancer. Further, they want to
improve the lives of all people and thereby helps the society considerably.
 Ryanair – It is an Irish low cost airline being founded in the year 1984 in Ireland. The
main purpose of the company is to become low cost leader in the European airline
industry. Further, there main focus is on earning higher amount of profits without
placing too much emphasis towards society (Ryanair returns to profit, 2010).
 National Health Service – It is a public health organization of UK, engaged in
offering range of health services for people of the country. It provides service at
nominal prices to resident of UK and even some of the services are exempted from
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the charges as well. Thus, there concern is to earn profit but supporting and helping
the community is also their priority (NHS, 2018).
Background informations about the three organizations
Description Cancer Research Ryanair National Health
Service
About the firm
It is a charity
organisation which
was founded with
the merger of
“Cancer Research
Campaign and
“Imperial Cancer
Research Fund” in
the year 2002
(McPherson, 2003).
It is an Irish low cost
airline being
founded in the year
1984 in Ireland. The
company is
operating more than
400 Boeing aircrafts
and is been
characterised by
their rapid expansion
NHS is the name
being used for all
public health
services in United
Kingdom. It is
affiliated with
Health and Social
Care (HSC) in
Northern Ireland and
founded together in
the year 1948.
Size The size of the
operation of the firm
is quite large
The size of the
operation of the firm
is also large
The size of the
operation of the firm
is medium
(Morrison, 2012)
Scope Inter-national Global National
Type Charitable
organization
Private organization Public Organization
Vision
The main vision of
the firm is “together
we will beat cancer”
To become a low
cost leader in the
European airline
industry
To deliver better
health, care and
value
Mission Mission is to reduce
the number of death
from cancer
To offer low fare to
public to increase
the traffic
To offer quality of
care to each and
every person
everyday
Legal structure Sole proprietorship Sole proprietorship Partnership
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Stakeholders
The main
stakeholder of the
company are
employees,
customers, suppliers,
funding
organizations
The main
stakeholders are
employees,
customers, suppliers,
shareholders
(Creaton, 2007)
The main
stakeholders are
employees,
customers, suppliers
Inter-relationship of functions of Cancer Research and how they related with the structure
Each and every firm has their own way of carrying out activities, possesses different
functions, size, scope and structure. Even organization belonging to the same industry have
some or the other differences. These variations are mainly caused from their organizational
structure and functions. Then current business environment is very complex and competitive;
however there functions such as marketing, finance, human resource and research and
development are generally similar (Burke, 2002). Companies get their foundation from its
structure. A proper structure being adopted by the company will help in reaping out better
level of performance. There are mainly three kind of organizational structures i.e. functional,
divisional and matrix. Focusing towards the functional structure it supports the organization
by categorizing it as per functions being carried out by them such as sales, operations,
marketing etc. On contrary, the divisional structure divides the responsibilities of the workers
as per the projects and plans. Finally, in matrix structure, the accountabilities are categorized
according to both functions as well as products. It is being referred as one of the most
complex structure wherein the authorities which controls the activity are different. Thus, it
can be attributed that it is vital for the organizations to choose appropriate structure according
to the type of industry they fall into (Craig and Campbell, 2012).
Cancer research is a research and awareness charity in UK with a main vision to beat
the cancer together. It is a charitable organization with the main purpose to help people in
understanding cancer and working in partnerships so as to fight against the cancer. Cancer
research, UK also carries out functions being described above such as marketing, research
and development, finance and human resource and all of them shares relationship with each
other. Delinquency in one department will influence the other one (Robert, 2006). Though the
function being performed by them have a common pre-determined objectives i.e. satisfaction
of the patients, maximum awareness and achieving growth and success.
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Figure 1: Organization chart of Cancer Research
(Organisation Structure, 2018).
Cancer research organization is quite known in United Kingdom. They have also
carried out numerous world class research activities in various universities, hospitals and
institutes all around the UK through their own workers and by grant funded researchers.
Other than this, awareness in regards with the disease is also raised by making use of
effective advertisement as well as campaigns. They have achieved recognition on a global
level majorly with the support of the marketing and research and development function.
Seeking help from these functions, the firm was able to research different aspects of cancer
and death causing bacteria by employing more than 4000 researchers in almost 42 UK
universities (Worthington and Britton, 2014). With these elaborative researches, the
operations department of the cancer research was able to diagnose the best suited treatment,
symptoms and other major aspects of curing the patients suffering from cancer. Even the
marketing department was also involved significantly, as the firm has initiated numerous
campaigns to aware people about the deadly disease. This has certainly helped the
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organisation to raise donation and money which was further utilized in research purposes and
treatment of the people. Consequently, it can be attributed that functions of cancer research
are inter-related with each other. Further, with the proper structure, coordination in the
activities of functions was also made possible within the firm (Smith, 2007).
PART– 2 (LO3 & LO4)
Positive and negative impact of macro-environmental factors using PESTEL model
 Political – The political system of the nation and their inter-relationship influence the
airline industry in a greater sense. The uncertainty over Brexit was considered as a
challenge for the business environment. Further, terrorist’s attacks in Europe will
impact the demand of air travel. Increase in the rate of tax by the government will
influence the demand pattern of the business of Ryanair.
 Economical – Oil prices are expected to remain around $40 a barrel which will help
the firm to have more operational margins. Because of the weaker GBP post Brexit, it
will put pressure on fare prices. An increase in the inflation rate will increase the
expense of the business and ultimately the products and services will be priced higher.
This again decrease the purchasing power of the people (Baron, 2012).
 Social – In this current era, consumers are now preferring high speed rail over airlines
on short haul routes. In addition to this, they are also willing to pay more on
ancillaries if ticket cost is less. This can be an opportunity for Ryanair as they are low
cost airlines.
 Technological – Because of the enhancement in the digital platforms such as mobile,
smart phones, websites etc. the experience of the customers have improved a lot.
Pertaining to this, people are more willing to travel on a regular basis.
 Environmental – The regulation of European Union in regards with the emission for
airlines might increase the costs for the Ryanair. This will again distress the customers
due to availability of products and services at augmented prices. Furthermore, there is
strong focus being made by the government of UK for environmental initiatives.
Ryanair is also focusing towards environment and which is in turn helping them to
stand out as a socially responsible brand (Weatherley and otter, 2014).
 Legal – Because of Brexit, the firm is required to comply with dual regulations i.e. of
UK and EU. Other than this, Ryanair is also subject to lawsuit European commission
for getting help from the state at certain airports in Europe. This will help in
increasing the revenue of the firm.
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SWOT analysis of Ryanair
Strength
 The company has strong balance sheet
and constant returns of shareholders
 Larger market share covering more
than 200 destinations
 Low cost base is the competitive edge
of the firm
Weakness
 The business of the company can be
impacted by labour relation and
alteration in the employee
compensation arrangement
 In the near future Aggressive expansion
of fleet might result in over capacity in
the near future
Opportunity
 Ryanair can avail the opportunity in the
declining segment of charter flight
 The company can emphasize on
customer experience by always getting
better program
Threats
 The profitability as well as business of
Ryanair can be affected by fluctuation
in the fuel prices (Palmer and Hartley,
2011)
 High level of competition from other
low costs airlines
 Rise in the Irish corporation tax rates
Interrelationship of strengths and weaknesses with macro-environmental factors in the
context of Ryanair
The strength and weakness of Ryanair being identified above has inter-relationship
with the external macro-environmental factors. Taking support from the strength and
opportunities, the company can determine the level of risk revolving around in the market
and thus, they can create efficient strategies and plan considerably. With the help of PESTEL
analysis, the company was in a position to determine that they will face numerous challenges
or threats such as rising level of competition, increasing tax rates and fuel prices etc. All this
can be mitigated by focusing towards the major strengths of Ryanair and development of
structured plans on the basis of that. Furthermore, the management of the firm performs
comparison of their strength with macro-environmental factors such as social, political,
environmental etc. and accordingly the plans, policies and strategies are being formulated.
For instance, if there is alteration in the environmental factors than business decision will be
affected (Pandey, 2013). Further, the effects of change in the interest rates, tax rates and
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exchange rate can be minimized if the firm has strong financial conditions and sound assets.
Additionally, Ryanair is a low cost airline and have larger market share, this strength can be
used as a proactive tool for all these economic aspects. Moreover, the strength of Ryanair is
generally based on social as well as economic factors and thus, the main opportunities for the
firm might be to grow in the short haul routes which are not yet captured by any airline.
CONCLUSION
Consequently, it can be said that the present research report has put emphasis on
structure, size, scope, purpose of different types of firms and has significantly evaluated that
each and every firm’s purpose of carrying out business is quite different. Further, there
activities are dependent on the priorities of the business. In addition to this, the external and
internal analysis of Ryanair being conducted revealed that all these factors affects the
operations and functioning of the firm considerably.
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REFERENCES
Books and journals
Baron, P., 2012. Business and its Environment. 7th ed. London: Prentice Hall.
Burke, W.W., 2002. Organization Development: Principles & Practices. Boston: Little,
Brown, & Co.
Craig, T. and Campbell, D., 2012. Organizations and the Business Environment. 2nded.
Routledge.
Creaton, S., 2007. RYANAIR: The Full Story of the Controversial Low-Cost Airline. London:
Aurum Press Limited.
McPherson, M., 2003. The size of voluntary organizations. Social Forces, 61(4), pp.1044-
1064.
Morrison, J., 2012. The International Business Environment. Basingstoke: Palgrave.
Palmer, A. and Hartley, B., 2006. The Business Environment. 5thed. New York: McGraw-
Hill.
Palmer, A. and Hartley, B., 2011. The Business Environment. 7th ed. Maidenhead: McGraw-
Hill.
Pandey, A., 2013. Economic and Business Environment. Vision: The Journal of Business
Perspective, 17(1), pp.85-87.
Robert, H., 2006. Roller, Strategy formulation in non-profit social services organizations: A
proposed framework social services organizations. Non-profit Management and
Leadership, 7(2), p.137.
Smith, M., 2007. Fundamentals of Management. Glasgow: McGraw-Hill Education.
Weatherley, P. and otter, D., 2014. The Business Environment: Themes and Issues in a
Globalised World. 3rded. Oxford: Oxford University Press.
Worthington, I. and Britton, C., 2014. The Business Environment. 7thed. Harlow Pearson.
Online references
Cancer Research UK Centre. 2018. [Online]. Available through: <https://www.icr.ac.uk/our-
research/centres-and-collaborations/strategic-collaborations/cancer-research-uk-centre>.
[Accessed on 19th November 2018].
NHS. 2018. [Online]. Available through: <https://www.nhs.uk/>. [Accessed on 19th
November 2018].
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Organisation Structure. 2018. [Online]. Available through:
<http://www.fastman.manchester.ac.uk/About/Organisation-Structure >. [Accessed on
19th November 2018].
Ryanair returns to profit. 2010. [Online]. Available through:
<http://www.guardian.co.uk/business/2010/jun/01/ryanair-returns-to-profit>. [Accessed
on 19th November 2018].
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