Application of Porter's Generic Strategy and Bowman's Strategy Clock to Determine the Success of Ryanair Company

This report analyzes the success of Ryanair company by applying Porter's generic strategy and Bowman's strategy clock. It also provides recommendations for favorable changes to support the report.

BUSINESS
MANAGEMENT

Table of Contents
INTRODUCTION...........................................................................................................................3
MAIN BODY...................................................................................................................................3
1) Apply Porter's generic strategy and Bowman's strategy Clock to determine the success of
Ryanair company.........................................................................................................................3
2) Is Ryanair's new strategy sustainable......................................................................................6
3) Recommend favourable changes to support the report...........................................................9
CONCLUSION ...............................................................................................................................9
REFERENCES..............................................................................................................................11

INTRODUCTION
Business management encompasses functioning like planning, organising, directing as
well as controlling the resources in order to systematically perform activities and meet
predetermined objective successfully. It is basically used to build business strategies by carrying
out core practices and policies designed to satisfy the needs of prospectus and accommodate their
requirement successfully (Aithal, 2017). To better define the topic Ryanair company has been
selected that was founded in 1985 and provide airlines services between Ireland and UK. It is
one of the largest budget airlines that has gain immense growth opportunity by successfully
catering the needs of national as well as international customers. This report cover topics like
application of Porters generic strategy as well as Bowman's Strategy clock to gain immense
success. Analyse internal and external factors in order to prepare sustainable strategy and support
the functioning of company. Along with that recommendation to bring further improvement are
presented in report.
MAIN BODY
1) Apply Porter's generic strategy and Bowman's strategy Clock to determine the success of
Ryanair company
Why Ryanair has been successful so far
Porter's generic strategy: To investigate whether the strategy implemented by Ryanair
company leads to sustainable performance in future it is essential to determine the actual position
of firm. The initial position determined whether the performance of company is above or below
average and how effectively it can gain profitability in long run. Thus, Porter generic strategy
comprises of unique strategy that is implemented by an organisation in order to gain competitive
advantage. On the basis of predetermined objective like increase market share the company
selects desirable competitive strategy in order to overcome competitive pressure for low cost
carrier industry (Albort-Morant and Ribeiro-Soriano, 2016). Explanation of different strategies
in reference to Ryanair company are strata below:
Cost Leadership: By adopting cost leadership strategy the company set out its image as
low cost producer with the objective to cover wide market successfully. This strategy allow the
firm to pursuit the advantage of economics of scale to penetrate its operations and successfully
target to broad market at reasonable price range. Herein, Ryanair company can apply cost

leadership strategy where they cover the tourist by offering lowest price fairs in comparison to
other airlines of aviation sector. This leads to profit maximization as it strengthen the strategic
position by setting valuable image and deliver quality services at reasonable prices.
Within this strategy the firm set out unique position by differentiating its services from
other rivalry available in the market. As it focuses to offer additional attribute due to which
company can charge the premium prices for its innovation and desirable quality. In relation to
Michael O'Leary's who is the CEO of Ryanair company faces certain complaints from the
customer in terms to upgrade their services. To incorporate better position the company can
select differentiated strategy as it allow to enrich the position by adopting innovation. Therefore,
it can maximise the productivity as well as profitably margin of company.
Focus strategy: Within generic model, focus strategy target their operations to the
narrow market and deliver offerings at low cost. The company select either specific segment or
group in order to tailor innovative strategy and serve whole market effectively. It comprises of
either cost and differentiated focus that is determined below:
Cost focus: This strategy reflect that company delivers the product or services at low cost
for the confined geographical market. By deliver quality product business entity can strengthen
its position by securing its customer base for long duration (Cerchione, Esposito and Spadaro,
2016). Being cost focuser, Ryanair company can change its organisational culture by lowering
the cost of services in particular market like Ireland to gain competitive advantage. This attempt
to increase the profit margin by diversity productivity and managing low cost of operations by
eliminating unnecessary flight amenities to deliver the favourable rate of airport.
Differentiated focus: Based on differentiated strategy the company makes effort to
accommodate the requirement of narrow target market by delivering them the supreme quality of
services. Confined group is selected like high income group to whom prestigious services are
delivered by company without any delay and ineffectiveness. Herein, Ryanair company can
adopt this strategy to establish renowned position ion the market. Even the customer gets
opportunity to experience supreme level of services significantly.
Therefore, amongst different strategies Ryanair company can select cost leadership style
in terms to cover the need of broad target market by offering them the services at reasonable
range. This basically satisfy the need of different age group and enhance the engagement rate of
existing as well as potential customer. Along with that in 2014 the company launched three plan

called 'Always Getting Better' under which it took effective practices in order to address the
queries of customer and make effort to reinvent its image. So by continuously improving quality
of services the company can effectively penetrate in the wide market and gain hufe success from
its low cost carrier.
Bowman's Strategic Clock: It is a model based on strategic positioning identifying a
pricing position suitable for company (Derr and DeLong, 2018). Ryanair can use it to find a
strategy which develops its value among customers.
Positions under Bowman's Strategic Clock-
Low Price and Low Value Added- In this position, the product isn't differentiated and
has low value for customer. Ryanair can use it by keeping prices lower than competitors.
Low Price- This position requires an organisation to keep as low price as possible by
using cost - minimisation techniques. Ryanair can use it by reducing cost through economies of
scale and keeping low prices.
Hybrid- In it, there is a mixture of low prices as well as product differentiation which
Ryanair can use by differentiating its offerings from competitors and keeping low price for
attracting consumers.
Differentiation- This strategy involves creating value in eyes of customer by providing
quality products which Ryanair can use by creating high-quality offerings and developing brand
image.
Focused Differentiation- This position differentiates customers by pricing products at
highest level possible which consumers buy due to their perceived value (Eckhaus, Klein and
Kantor, 2017). Ryanair can use it to earn high profits by creating best products having a luxury
value.
Risky High Margins- In it, a risk is taken by setting high-price for products and earning
more profits when consumers buy it. Ryanair can use it to increase the margin of profit if the
consumers find its offerings to be premium.
Monopoly Pricing- In this position, there is only one seller in market offering product
and any price can be charged from consumers. Ryanair can use this strategy if it is providing
such products which aren't provided by anyone in market.
Loss of Market Share- This strategy is not recommendable as in it a standard price is
set for product with low value. This is not recommended for a company like Ryanair.

Conclusion- The position which is recommended for Ryanair is Differentiation as it can
offer products which are different from competitors and create a perceived value in eyes of
consumers by building a brand image.
2) Is Ryanair's new strategy sustainable
External concept
Strategic Group Mapping: It is a technique which most businesses apply in order to find
out who are there competitors in market and how they can get ahead of their rivals (Evans,
2016). The steps involved in this process are knowing who are the competitors, finding out what
is driving firm's success and creating a diagram. Ryanair can use it to analyse the other low-cost
airlines which are operating in airline sector and analyse their strategy, to identify those factors
which drive its success such as low prices and finally to draw a diagram to compare costs with
rivals and finding ways to reduce costs.
Porter's five force model: This framework is used to determine the pressure of different
forces which can influence operations of Ryanair company. Based on external factor the
company investigate different strategies that can strength operations of low cost carrier industry.
Threat from new rivalry: Within aviation sector it is not easier for the new entrant to
enter within competitive market and faces immense competition. In addition to that Ryanair is a
part of low cost carrier because it has the advantage of economies of scale and have ability to
make high capital investment. This represent that the threat of new entrant is low because it take
time to establish the brand.
Threat of substitution: Due to the existence of strong competitors the threat of
substitution is high for Ryanair company. Generally, the customers does not have generated
loyalty for low cost carrier due to the differentiated strategy and complication addressed by
customer (Pfeifer, Šarlija and Zekić Sušac, 2016). Within Europe it fly for short haul routes
which local residence can cover from other mode of transportation as well as like cars, local
bushes, train and so on.
Existence of competition: Ryanair operate in highly competitive market which involve
both price and non price wars due to which the cost advantage of the particular airline can be
easily duplicated (Pando-Garcia, Periañez-Cañadillas and Charterina, 2016). But in relation to
the major airlines like Ryanair company and Easyjet usually experiences low competition as they
are the part of low cost industry and has selected diverse routines which are short flyer.

Bargaining power of supplier: Ryanair company to systematically maintain its
operations formulate systematic relationship with the vendors due to which the the bargaining
power of buyer is high. The company generate its order mainly from Boeing and has undergo
deal with them to supply the planes from 2019 to 2024. This can laid to the growth and
expansion of company by diversifying its routes and deliver significant amount of services to
local residence (Kétyi, 2016).
Bargaining power of customer: Usually most of the customer within airline sector are
price sensitive so with the help to internet they access prices of different airlines and according
makes decision. Especially the low cost carrier doers not experience any loyalty from the
traveller which determine that Ryanair compare experience high bargaining power from
customers in terms to establish desirable strategy.
Therefore, on the basis of five forces it is essential for Ryanair company to remain
updated about competitors strategy and accordingly carry out operations. Along with that
customer plays an essential role to enhance the profitability of firm. So company need to upgrade
its services and effectively accommodate their requirements.
Strategic group mapping: This technique is used by business to examine the role of
other competitors within similar type of business (Matheson and Sutcliffe, 2017). It leads to
effectively carry out the research based on which operations are performed and issues are
rectified for desirable functioning.
Internal concept
Resources and Competencies: It means using the resources and competencies optimally
so as to become efficient and effective which give a competitive advantage. It is necessary if
firm has to get ahead in market and sustain itself. It is also important for comparison. The steps
in this process are identifying the key resources and capability, transferability and replicability.
Ryanair can use it to identify the strengths and weaknesses of its resources, to analyse the extent
to which they can be transferred and mobilised and how to channelise them for achieving
maximum efficiency, effectiveness and productivity.
SWOT analysis: Ryanair company has experienced various fluctuation in terms to
effectively carry out its operations. As in 2013 the company experienced criticism due to
inflexible baggage policies, hefty cancellation charges and inconvenience of sitting space due to
which it was rated as 100th worst brand of UK in terms to delivering services. Later on company

took various actions in terms to bring revolution by conducing internal analysis which is the part
of SWOT analysis and is determined below:
Strength
 To enhance the image and better
deliver desirable customer experience
Ryanair company form agreement to
purchase Boeing 737MAX aircraft.
This accelerated the growth and help to
resolve dissonance by delivering high
quality seats and space for convenience
of customer.
 The company bring innovation in the
airline sector by deliver low cost
services and short haul flying due to
which it gained immense customer
base. This assist to attain the milestone
by carrying more than 10 million
customer within specific month
(Mendling and et.al., 2018).
Opportunity
 Enrich customer services is the
opportunity for company like in 2013
the manager of company took effort to
enhance the online interaction by
redesigned their existing website to
make it appealing as well as launched
mobile application. Apart from online
services company reintroduce the
effective allocation of seating which
were more space and relax the customer
from levying printing charges and
offered relaxation on restriction of on
broad as well as checked baggages.
 The Boeing MAX200 aircraft has the
capacity of 197 seats which will be
delivered to the company from year
2019 to 2024 and is dependent upon
innovative fuel efficiency technique in
terms to improve the customer and
enhance profit margin.
Weakness
 Generally the earning of Ryanair
company is highly seasonal so it only
earn maximum business during the
peak season. Whereas, in winters the
company has consistently made losses.
 Ryanair company has set its brand as
low fare which is highly punctual but in
Threat
 Increase in the taxes as well as fuel
prices of air travel affect demand of
customer which further affect the
overall profitably of firm.
 Existence of the wide customer and
fluctuation in prices affect the low cost
strategy of Ryanair company. Like, if

recent years it is not performing
effectively due to low flexibility and
poor deliver of customer service. So
even after bringing changes it is not
easy to bring desirable changes.
the other airline during off-season cut
down their prices then Ryanair
company too need to lower down their
price which restrict their margin (Suša
Vugec, Tomičić-Pupek and Vukšić,
2018).
3) Recommend favourable changes to support the report
 The CEO of Ryanair company should maintain long term relationship with customer by
focuses on their grievances and handling them adequately. As along with nominal
charges customer prefer to get desirable quality of amenities and sitting arrangement. All
the modification needs to be made by sharing suitable relationship with their supplier that
is Boeing.
 The company should form strategic alliances with other flyers in order to expand their
route of operations which can help to establish the global image. Additionally, this
expansion strategy helps in generating enormous revenue.
 Moreover, to improve profitability margin Ryanair company should associate the
ancillary fees with their overall cost as it is an effective way to lower down the ticket fare
and balance it by generating revenue from other ancillary services. These ancillary
services include delivering refreshments in flights, baggage handling and so on. To
initiate these activities the company can either involve the participation of partner or self
conduct the activities.
 Company should retain large market share as with the help of new jets offered by Boeing
the company is able to increase the market demand. So the internal manager should
effective manage the cash flow. In addition to that it is recommended for company to
explore potential renters of the aircraft during off-season or winters.
CONCLUSION
From the above report it has been determined that business management involve the
preparation of effective strategy in order to carry out sustainable performance. There are certain

framework such as Porter's generic model which is used by company to determine the pricing
strategy in order to gain organisational success. Along with that internal and external factors are
analysed to gain core competencies and perform smooth operations.

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