Business Management and Strategic Management

This report performs the VRIO analysis, SWOT analysis, TOWS analysis of Ryanair to analyze strategic capabilities of the company. Further, this report will analyze the effective change management method and theories that Ryanair used to ensure transformational change and how Ryanair will succeed in overcoming all the barriers. This paper will also perform the ratio analysis to ascertain the financial performance of the Ryanair for the year 2011, 2012 and 2013. This project will also use the Kurt Lewin’s change management model to analyze the successful transformation of Ryanair.

Running head: BUSINESS MANAGEMENT AND STRATEGIC MANAGEMENT
Business management and strategic management
Name of the Student:
Name of the University:
Author Note

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Executive Summery
This report is prepared to perform the S.W.O.T Analysis of the Ryanair Airlines of Europe
and prepare the T.O.W.S. Matrix of the company based on the S.W.O.T. Analysis. Further,
this report will propose the Kurt Lewin’s change management model associated with the
company to transform the change in the existing strategies and business models of the
company. This paper will also provide some recommendations to Ryanair and evaluate such
recommendations in terms of suitability, feasibility and acceptability. Lastly, the paper
concludes that Ryanair is one of the biggest airline company of Europe and have more
opportunity than the threats. Company can easily develop the new profitable policies and
strategies by meeting their weaknesses.

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Table of Contents
Introduction................................................................................................................................3
Section 1.....................................................................................................................................3
VRIO Analysis.......................................................................................................................3
VRIO Analysis Matrix...........................................................................................................5
Financial Analysis..................................................................................................................5
Section 2.....................................................................................................................................8
S.W.O.T. Analysis.................................................................................................................8
TOWS Analysis...................................................................................................................11
Section 3...................................................................................................................................11
Change Management Model................................................................................................11
Kurt Lewin’s change management.......................................................................................12
Section 4...................................................................................................................................13
(a) Strategy recommendation..........................................................................................13
(b) Evaluation of recommendations................................................................................14
Conclusion................................................................................................................................15
References................................................................................................................................16
Introduction

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This report will perform the VRIO analysis, SWOT analysis, TOWS analysis of
Ryanair to analyse strategic capabilities of the company. Further, this report will analyse the
effective change management method and theories that Ryanair used to ensure
transformational change and how Ryanair will succeed in overcoming all the barriers. This
paper will also perform the ratio analysis to ascertain the financial performance of the
Ryanair for the year 2011, 2012 and 2013. This project will also use the Kurt Lewin’s change
management model to analyse the successful transformation of Ryanair.
Ryanair is an Irish company having head quarter in Sword, Dublin, Ireland. Ryanair
was founded in 1984 and started its operation in 8th July 1985.The Company is well known
for providing the low cost airline services to its customer in Dublin and London. The holding
subsidiaries of Ryanair are Lauda motion, Ryanair Sun and Ryanair UK (Ryanair.com 2019).
Ryanair was the largest European budget airline by the number of passengers flown in 2016
and carried more international passenger than any other airline. This company is identified by
its rapid expansion too. The deregulation of the aviation industry in Europe helps the
company to succeed in its low cost pricing model in 1997. Currently Ryanair is serving in
more than 37 countries in Europe, Israel, Jordon and Morocco and other countries of the
North Africa and Middle East.
Section 1
VRIO Analysis
This is the business analysis framework that analyses the strategic scheme adopted by
the company at the beginning. This framework performs the internal as well as external
analysis of the strategic choices made by the company for both business level and corporate
analysis and strategic implementation (Skar-Gislinge and Grønne 2016). The main objective

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is to perform the VRIO Analysis for ascertaining whether the available resources can be
translated into competitive advantages for Ryanair.
V- Value
This analysis will focus on whether available resources are being able to meet the
expectations of the customers or not (Krogstad and Rike 2015). Ryanair is able to deliver the
lowest price to their customers by combining the government subsidies, low price business
model and reductions in the airports charges.
R- Rareness
In the airline business, only Ryanair has government subsidies and reduction in
airport charges. The other companies present in the same industry like EasyJet, which is one
of the competitor of the Ryanair, do not have those resources. This makes Ryanair’s
government subsidies and reduction in airport charges rare and valuable (Meyer and Peng,
2016). The Ryanair gets these subsidies because their secondary route and ability to attract
customers helps to develop the secondary airports quickly and attract more customers to
consumption for the local government. Therefore, these resources is very rare and hardly
transferrable.
I- Imitability
The comparison of Ryanair with its competitors without considering the above
mentioned resources available for the company makes huge cost advantages for the company
(Kolb 2017). These resources are very hard to transfer or imitate.
O- Organization
The Ryanair makes the good uses of its available resources and successfully delivers
the cost efficient services to their customers. The strong management and effective executive

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level planning along with the effective operating and marketing strategy help the company to
build the competitive advantages (Grant 2016).
VRIO Analysis Matrix
Strategic
Capability
Resource or
Competency?
Value? Rarity? Inimitability? Organisational
Support?
Physical Resource ‘Yes ’ ‘no x’ ‘Yes ’ ‘Yes ’
Financial Resource ‘Yes ’ ‘no x’ ‘Yes ’ ‘nox’
Organizational Competence ‘Yes ’ ‘Yes ’ ‘Yes ’ ‘Yes ’
Technological Competence ‘Yes ’ ‘no x’ ‘no x’ ‘Yes ’
From the above analysis, it can be said Ryanair successfully uses its resources and
capabilities to maintain the cost leadership. It further provides the services to their customers
in the lowest cost that is also a competitive advantage for the company.
Financial Analysis
This report performs the financial analysis of the Ryanair by calculating and analysing
the various financial ratios. The ratios are:

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The Operating profit margin is a profitability ratio. It shows the percentage of sales
after allowing the variable expenses. Higher the percentage, higher is the ability of the
company to convert its sales to operating profit (Caridá and Bonizio 2018). Here, the
operating profit margin is increasing which means company is using its resources in the right
way to generate the profit for the company.
Net turnover ratio measures the efficiency of the management to use the available
asset to generate the sale. The high ratio does not always represent that the company is
performing well rather, small margin only represents small profit (Stalnaker, Usman and
Taylor 2016). Ryanair is showing the growth in the net asset turnover, which is good for the
company as the ratio increased from 0.5 in 2010 and 2011 to 0.6 in 2012.
Usually, the current ratio indicates amount of current asset for every € 1 of current
liabilities. The high ratio is consider as the good for the company. The current ratio of

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minimum 1 is considered as standard ratio (Myre 2015). Here, the company have the current
ratio as 2.0 in 2010, 1.9 in 2011 and 2.1 in 2012 which shows company have the good
liquidity position.
The earning per share ratio shows that how much of profit has been made by the
entity after paying the taxes for the each share outstanding. The investor to analyse the
financial performance of the company and to make decision whether to invest in it or not,
using this ratio. The high earning per share is consider as good and help the company to
attract the investors easily (Teker, Teker and Güner 2016). This ratio also shows the earning
capacity of the company as per share basis. Ryanair earning per share ratio is stand as 0.2 in
2010, 0.3 in 2011 and 0.4 in 2012. The earning per share of the company is constantly
increasing every year, which shows the growth in earning capacity of the company.

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Section 2
S.W.O.T. Analysis
Strengths Weaknesses
 Low costs
 Low fares
 Innovation
 Size
 Management focus
 Brand perception
 Seasonality of earnings
 Declining market shares
Opportunities Threats
 Improved customer services
 Business travellers
 New aircraft
 Accident
 Loss of focus
 Competitive response
Strengths
 Low cost - Ryanair has the lowest unit of cost of any other airline companies of
Europe. This is also one of the lowest of any airline of the world. Company’s traffic
cost and airport chargers are also very low compared to any of its competitors due to
the government subsidies (Wohlbrück 2017).
 Low fares - Low costs help the company to provide the services in the lowest price to
their customers. The subsidies received by the local government make the fares
lowest among the any competitors of the Ryanair (Simon and Fassnacht 2018).
Ryanair provides short haul services to its customers in a very low fare, which helps
company to attract the customers and rise the fare war in the airline industry of
Europe.

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 Innovation - None of the European airline has made any changes in the nature of the
short haul than Ryanair except EasyJet. Ryanair started the low cost revolution in the
European airline industry by adopting the business strategies of Southwest Airlines,
butafter this initial act of the limitation, innovation became the key to successes of
Ryanair.
 Size - Ryanair is present in more than 30 countries operating more than 1,600 routes
and 186 airports across the Europe and North Africa. The company has largest short
haul network compared to any airline of Europe. This was the number one airline
company of Europe in terms of carrying passengers.
 Management - The management of Ryanair shown a strong focus on what the
company does best, keeps the cost and fares as low as possible. It does not mean that
company is afraid of innovation, because innovation are required to find the new ways
to reduce the cost of the company. For example, to reduce the handing charges
company introduces the bag charges, which reduce the number of checked bags.
Effectively handling charges are reduced.
Weaknesses
 Brand perception - Ryanair has shown its success by providing the services to their
customers as per their need, like safe air travel at low cost with the high level of
punctuality. However, in last few years the performance of the Ryanair was very poor
as per the polls, survey and awards. Apart for that, company has a brand image of low
cost service provider, which also affect its image in terms of luxury services.
 Seasonality of earnings - Same like the entire airline industry, Ryanair’s earning is
also highly seasonal. The profit of the company increases in summer while company
suffer loss in winters. This pattern of seasonality has become serious concern for the

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company as company suffer losses in at least one of the winter quarters, while making
profit in all four quarters in last 10 years.
 Declining market shares - The market share of the company is decreasing day by
day as the industry is growing faster than the company is. The brand perception also
affecting the market share of the company.
Opportunities
 Improved customer services - The company trying to enhance the quality of the
customer’s interactions with the company. For this, company redesigns its website
with more attractive look and with simple process of booking, a new mobile app,
relaxation of the baggage restriction, reintroduction of the allocated seating and
reduction in boarding pass charges and making changes in bookings.
 Business travellers - To improve the customer services, Ryanair has also launched its
business traveller product. This is a brunch of services offers together in the single
fee.
 New aircraft - In 2014, company placed the order for 100 Boeing 737 MAX200
aircraft and signed the agreement for the further 100 aircraft. This will increase the
seating capacity as well as the fuel efficiency of the aircraft.
Threats
 Accident – Till date, the company has strongsafety record, although there are many
suggestions that as the company is cost efficient it may cuts corners from safety.
However, any major accident could be harmful for the reputation of the company.
 Loss of focus - Any distraction in the management’s attention apart from its core
competence of providing safe and punctual short haul air travel at low cost could
harm the image of the company as the world’s most consistently profitable airlines.

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 Competitive response - Apart from the price, company have to face the many other
competitions from its rivals like frequencies, quality of airport network and level of
satisfaction.
TOWS Analysis
Internal Factors
External Factors
Strengths Weaknesses
Opportunities
 Ryanair can take share
from the Charter Market
 Can add frequency in the
existing operational routes
 Can expand the existing
routes in Europe
 Can expand the business
into Central and Eastern
Europe
 Ryanair can adopt the latest
technologies and can operate fully
online
 Company can also focus to increase
their Ancillary Revenues
Threats
 Ryanair can continue its
strategy to provide
services to its customer at
cheapest cost
 Can continue its focus to
reduce the cost of
operation
 Ryanair can develop its smaller
operating bases present in Europe
 Can focus to provide the quality
services to its customers in over haul
 Company can also implement the
TQM
Section 3
Change Management Model
The concept of change management is a familiar one in most of the businesses today,
but how business manages change is important as per the nature of the business and people
involved in it. One of the most effective change management model is Kurt Lewin’s change
management model and theories (Angwin and Cummings 2017). Therefore, this report
proposed the Kurt Lewin’s change management model to ensure the transformational change
of Ryanair management, based on analysis showed below:

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Kurt Lewin’s change management
This change management model includes the followings three stages:
Unfreeze
This is the first stage of change, in this stage Ryanair need to accept that the change is
necessary to run the business in the near future. Ryanair needs to identify and frame the
points, which are the cause of the decline revenues, customer satisfaction, market shares and
suchlike (Hayes 2018). This helps Ryanair to change the things in such a way, which can be
easily understand by everyone. The company need to challenge its attitude, values, beliefs
and behaviours. This can be difficult for the company to cutting down the way things are
usually done till now.
Change
After identifying the points in the unfreeze stage, Ryanair needs to start the resolving
such point by finding the new ways for the cost reduction, customer satisfaction and to
increase the revenues (Doppelt 2017). This cannot be done overnight, Ryanair need to find all
the other ways and deeply understand the each possible way in terms of the future
possibilities and changing environment of the business. To implement the successful change,
company needs to understand how can be this other ways will benefit the company. The new

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identified ways are also have some drawbacks that must be avoided by the entity (Cameron
and Green 2015). Time and communication are two major component of the change, as
people need time to understand the change and they also need to be connected with the
organisation though out the transition period.
Refreeze
As the changes started taking the shape and people become familiar with the new way
of working, Ryanair need to refreeze. The ideal time is to refreeze is when the organizational
chart of the company become stable, every people have consistent job description and so on
(Cummings, Bridgman and Brown 2016). Further, Ryanair needs to make sure that the
changes are must be used all the time and properly implemented in the everyday business
operation. After the successful implementation of the change, people will feel new sense of
stability, confident and comfortable with the new ways of working, which help the company
to increase its revenue, customer satisfaction, market shares and other factors (Bridgman
2016).
Section 4
(a) Strategy recommendation
Based on S.W.O.T. and T.O.W.S. Analysis of Ryanair, this report would recommend
some changes to Ryanair’s strategy. The recommendations are:
 Improve Customer perception - One of the key strategies of Ryanair is to provide
the low price services to their customers, which is also a brand identity of the
company. This strategy was reasonable as the Ryanair is the first mover but as the
competition has increased, customers could switch to another airline for slightly more
price because of Ryanair perceived poor customer service policies.

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 Marketing of ancillary product - Ryanair’s approach of hard selling of ancillary
product during the flight might have a push back from frequent fliers. Company must
adopt the strategy to soft sell the ancillary product during flights (Schlierer and
Brinkmann 2017). Ryanair can use this website to sell and advertise their ancillary
products more than the in flights sell.
 Improve oil hedging and currency trading practices - The international oil market
and currency market is very volatile market. There could be huge spikes in oil prices
in the event of political issues arose in the oil producing country as well as the event
of the terrorist attack. Ryanair need to develop the strategy, which helps them to
manage the hikes in oil prices. Secondly, the international oil markets are trade in US
Dollars while the company earns its income in Euros. Company can take advantages
by buying the US Dollars to pay for its fuel charges by improving its policy.
 Succession planning - This analysis does not show any succession planning after
Michael O’Leary leaves the company. Therefore, the company need to develop a
succession planning strategy for the future performance of the company.
(b) Evaluation of recommendations
The recommendations are fully based on the S.W.O.T. and T.O.W.S Analysis of the
company. The recommendations are necessary for the company to profitably operate its
business in long run (Mangundjaya 2015). The world is changing day to day for competing
with this continuous changing world every business need to keep changing their strategies.
Recommendations can be evaluated as per below mentioned three aspects:
Suitability
The recommendations are suitable for the company as these recommendations never
suggest adopting a very new strategy to the company, it only suggests to improve the existing

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policies of the company. This helps the company to easily adopt the recommendations.
Further, all the recommendations are made to maximise the profit of the company and to
prepare the company to compete with its competitors to continue its operations hassle free.
Feasibility
The recommendations are highly practical. Ryanair can easily start working on these
recommendations without putting any extra effort on it. The recommendations are too
practicable and profitable for the company (Dwyer 2019). The recommendations suggest the
best ways to improve the existing policies of the company for operating business in a
profitable way.
Acceptability
The recommendations are very simple so anyone can easily understand these
suggestions, which shows the high acceptability of the recommendations. Secondly, this
recommendation does not suggest any major changes, which effect the current operation of
the company. Therefore, Ryanair can easily accept these suggestions.
Conclusion
The Ryanair has built a low cost culture in the airline industry of Europe by enjoying
the government subsidies. The company have much strengths including cost efficiency, low
fares, and wide presence in Europe, but company needs to improve its customer satisfaction,
to change the brand perception and to develop a new strategy to compete with the other
airlines present in Europe. If company is able to fix their weaknesses, then company can
easily develop their business as company have more opportunities then the threats. Ryanair
also need to adopt the change management model of Kurt Lewin to make the required
changes in the business to run the operations effectively. The company also need to focus in

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developing the existing policies, which can help the company to increase the profitability,
customer satisfaction and performance.

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