Comprehensive Business Strategy Analysis of Ryanair: A Report

This report provides a comprehensive analysis of Ryanair's business strategy, focusing on its operations within the aviation industry. It begins with an overview of Ryanair's strategic initiatives, including its 'Fly for Free' model and cost advantage strategy. The report examines the external environment, including industry trends and the application of Porter's Five Forces, assessing the bargaining power of buyers and suppliers, the threat of new entrants and substitutes, and industry rivalry. An internal analysis delves into Ryanair's core competencies, such as waste minimization and improved marketing, as well as its value chain, encompassing inbound and outbound logistics, operations, and service offerings. A SWOT analysis highlights the airline's strengths (low-cost carrier model, strong balance sheet), weaknesses (labor relations), opportunities (business expansion), and threats (COVID-19). The report further analyzes Ryanair's financial performance, providing recommendations for future growth, including expanding its business structure outside the European Union and improving employee relations. The report concludes with detailed references supporting its findings.

Running Head: Business Strategy
[Company name]
Business Strategy
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Business Strategy 1
Contents
Introduction................................................................................................................................1
Overview of Strategic Initiatives...............................................................................................1
Trends.........................................................................................................................................2
Porter Five Forces......................................................................................................................3
Internal Analysis........................................................................................................................4
Core Competencies....................................................................................................................4
Value Chain Analysis.................................................................................................................5
SWOT Analysis.........................................................................................................................5
External Analysis.......................................................................................................................6
Financial Performance...............................................................................................................8
Recommendations......................................................................................................................8
References..................................................................................................................................9

Business Strategy 2
Introduction
The purpose of this paper is to enlighten the reader with the information about the market
analysis and strategies implemented by the organization Ryanair in the worldwide
environment. The organization is present in the aviation industry and is an Irish budget airline
that was found in the year 1984. The organization is headquartered in Swords, Dublin and has
primary operational bases at Dublin and London Stansted airports. The organization is a part
of Ryanair Holding family of airlines. The organization was recalled as the biggest European
budget airlines estimated by scheduled passengers flown, and carried more international
passengers than any other airlines in the European in the environment. Further, the paper
highlight details about the internal as well as external environmental analysis of the company.
The latter part of the report highlight financial competency of the company and
recommendations for the organisation to grow in international environment. More details
about the report are mentioned below:
Overview of Strategic Initiatives
The business strategies of Ryanair works with a motive to ‘Fly for Free’ in the worldwide
environment. The company one of the largest airlines present in the European environment
that works to provide services that let the customers have a wonderful experience. The
organization has rapidly expanded its services in the worldwide environment and has about
1000 routes with 200 aircraft and 40 bases as well. The business model of the company is
based on a Southwest airline in USA. As the tagline suggests, the company makes use of cost
advantage strategy in the environment with no frills airline as well. The strategic initiatives
taken by the organization works on providing high degree of satisfaction of the customers in
the environment by providing them efficient services as well. Further, it should be noted that
the company is consistently performing well in the international environment but the

Business Strategy 3
occurrence of COVID-19 pandemic that affected the position of the organization adversely
people have stopped travelling. The European low cost leaders of the company helps the
business in strictly following the desired actions in the external environment while
considering the satisfaction level of customers. The company also earns competitive
advantage in the market of Ireland. Efficient price formation and implementation strategy of
airline helps the organization in achieving sales successfully. The customers also feel that the
company offer best price opportunity to them every time they book tickets from the Ryanair.
The company is a sophisticated brand that holds a differentiated brand value in the
international environment.
Financial Performance
Looking at the financial analysis of the company, it should be noted that the company
Ryanair Airlines is currently at a profitable position in the environment. The company has a
price to sales ratio of 1.4 and holds revenue of 5.6% in the year 2019. This means that the
organization attained an increment in the revenue of 5.6%. The net margin of the company is
12.14% and return on equity of 18.70%. Thus, it should be noted that the actions of the
company are helping the stakeholders to attain better position in the business environment.
However, trends show that profitability of the company has reduced as compared to previous
years. Therefore, there is still good scope for the organization to improve its functions and
attain satisfaction of the customers at a better pace (Morning Star 2020).
Industry Overview and Analysis
The aviation industry is growing with a rapid speed and the companies present in this
industry have started introducing such changes in their business so as to grow effectively.
The trends of aviation industry explains profitability because the e-commerce businesses

Business Strategy 4
have started facing the pressure to transport their goods through airlines medium (Breen, et.
al., 2016).
Further, due to the pandemic situation of COVID-19 occurring in the world, the organization
is currently working at its 1% capacity in Ireland. This situation has made it extremely
difficult to manage profitability because people are scared to travel to different nations and
the only people who are travelling are those who were stuck due to lockdown and are going
back to their native state. Ireland is a north-western European nation and COVID-19 is
growth with a rapid speed in European nations, therefore, it is expected that the economy of
these nations would fall in the subsequent years. Efficient use of technology has made it
easier for the organizations to provide services to the customers and for the customers to
attain those services from the organization as well. Thus, it can be said that digital
distribution is a powerful tool that would bring bright future for the organizations in the
international environment (Morgenroth, and O’Malley 2017).
Industry Life Cycle
The airlines industry is currently at the maturity stage. Analysis of the given industry, it can
be clearly said that the industry is seen as fairly concentrated through past years and entry of
new competitors is extremely low. Thus, it can be said that the industry is matured currently
and has approached the decline stage as well.
Industry Demand Determinants and Profitability Driver
 Fuel Price
 Interest Rate
 Currency Rate
 Economic Capacity of Consumers
 Global Events

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 Government Policies
Porter Five Forces
Bargaining Power of Buyer: the airlines industry has two groups of buyers that are individual
flyers and agencies and companies. The individual flyers are more diverse; these people
travel due to business as well as personal reasons. While the agencies purchase the tickets to
provide it to other customers in the environment. Therefore, it can be said that there is low
degree of power vested in the hands of buyer (Osborne-Kinch, Coates, and Nolan 2017).
Bargaining Power of Suppliers: Boeing and Airbus are two major suppliers present in the
aviation industry. Due to less number of suppliers, they hold high degree of power in the
given industry. These two organizations could anytime change their decisions and the
companies have to accept that because they are the only players who could provide them
resources (Meier 2019).
Threat of New Entrants: there is low degree of threat of new entrants in the environment
because high capital is required while entering in industry.
Threat of Substitution: there is low degree of threat of substitution in the environment
because if a consumer wants to travel to a far off location and want to reach there on time,
then they need to take flight only. There is presence of substitute in the environment like car,
bus, train etc. but based on the destination, flight services has become more prominent in the
society.
Industry Rivalry: there is extremely high degree of rivalry in the industry because all the
companies provide similar services at similar rates in the environment. All these
organizations has premium brand image that increases the level in the environment (Skelly
2019).

Business Strategy 6
Internal Analysis
Core Competencies
Core competency of an organization helps them in analysing their capabilities by interacting
with the resources and implementing effective combination for the success of the business.
Assessing the core competencies of the company Ryanair, it should be noted that the
organization makes use of waste minimization technique in the environment. Waste
minimization technique refers to the technique that helps the organization to optimally make
use of available resources (Caputo, Borbély, and Dabic 2019). This strategy helps the
organization to increase organizational efficiency by reducing the use of resources and
producing better services in the environment. The company initiates careful planning that
helps them to succeed in the worldwide environment. Another core competency is improved
marketing technique of the organization that helps them in attracting the customers in a better
way. Improved marketing strategies would help the organization in truly expressing the
organizational culture to the customers (Graham 2016). Improved marketing provide real
time experience to the customers with the support of the employees and the management.
Thirdly, the organizational structure of the company is the biggest core competency of the
organization. Organizational structure of business is the system that outlines the direction of
the business and the structure of the company along with their roles and responsibilities
(Caputo, and Borbely 2016). Organizational structure of Ryanair is difficult to copy for the
management resulting in which they attain an upper hand in managing it. The roles of
employees, ethics and cultural values makes the company different from others in the
environment. This culture of the company cannot be copied by any other organization due to
which it makes them core competency of the company and provide them differential
advantage in the environment as well (Borbély 2016).

Business Strategy 7
Value Chain Analysis
Value chain analysis refers to a strategic tool that helps the organization to evaluate the
internal activities of the company. This strategy helps in analysing the aspects that are most
valuable for the organization. The primary activities of the company Ryanair explains that the
providing efficient services to the customers in the environment. Inbound logistics of the
company makes use of efficient raw material that helps them in delivering services to the
customers in an effective manner. Operations of Ryanair involves making use of resources in
most efficient manner so as to increase the productivity of the business (Rothaermel 2016).
Service operation is the most important function of the company. Automation technique helps
the customers to book the service easily by using online automation technique of the
company. The company does not offer onboard meals and entertainment but in exceptional
situations, the company is willing to provide additional assistance to the customers. Outbound
logistics states that the company use direct marketing approach to sell tickets in the
environment as they do not take help of any other agency. Ryanair service offering is based
on adherence to set schedule at all times. Low cost model helps the company in ensuring to
provide best services to customers at economic rates in the market. Supporting services of

Business Strategy 8
Ryanair involve handling the aircraft, baggage’s etc. and providing third party assistance to
the customers. Thus, it should be noted that low cost service providing scheme of the
company helps them to provide best services to the customers’ at most economic rates in the
environment (Caputo, and Borbely 2016).
VRIO Analysis
Bases Valuable Rare Imitable Organized Competitive
Advantage
Financial
Resources
Yes No No Yes Sustainable
competitive
advantage
Brand
Image
Yes Yes No Yes Holds high
competence
Human
Resource
Yes No Yes Yes Temporary
advantage
Location of
Airport
Yes Yes No No Average
Marketing
and online
Presence
Yes No Yes Yes Temporary
advantage
Relationship
with
customers
and other
stakeholders
Yes Yes No Yes Sustainable
competitive
advantage

Business Strategy 9
SWOT Analysis
Strength: the biggest strength of the company is its business model of low cost carrier service.
The company was established in the European market and covers more than 1800 routes with
200 destinations. The company has a strong and efficient balance sheet in the environment
and the shareholders return is also consistent for the organization. This shows that the
employees are highly satisfied with the functions of the company. Low cost structure lets the
company to attract the customers and retain them in the business environment as well. This
feature provides key competitive position to Ryanair in the airlines environment. The
company is also known as Europe’s most cleanest and greenest airlines in the environment
(Madar 2018).
Weakness: weakness of the company is that they face problems in labour relations, as the
business is unable to manage strong relations with the employees. Changes in employee
compensation affect the business strategy of the company adversely. Resulting in which,
dissatisfaction of employees increases in respect of the company.
Opportunities: the company has a good scope of increasing revenue in the environment by
expanding the structure of the company. The company has scope of expanding the business
structure outside the environment of European Union. This diversification would help the
company to increase profitability by making customers happy in different parts of the world
(Ahmed, et. al., 2019).
Threats: weaker position of the company with the introduction of Brexit in the environment.
This global impact started putting pressure on the functions of the company. Also, fluctuation
in the fuel pricing of the company would ultimately affect profitability of the business.

Business Strategy 10
External Analysis
PESTEL Analysis
Political: the political environment of Ireland states that the environment is stable and the
country utilize parliamentary democracy with a written constitution. The prime minister is the
head of government who is appointed by president. The country shares open borders with
Northern Ireland that is a part of UK. Also, Brexit has affected free movement of goods in the
society (McGrath 2016).
Economics: the country has highly profitable GDP in the environment due to which people
live a sustainable living in Ireland. The economy of the nation has witnessed high degree of
growth in recent years. However, the economy of the nation is still small if considered
against other European Union and global giants. People of this nation have enough power in
hand to purchase economic and premium products in the environment which increases
attractiveness of the nation.
Social: Dublin is the capital of Ireland and it is one of the cosmopolitan cities present in
Europe. The people of this nation likes spending time with their family members. Also, they
love to travel to different locations in the world. People of this nation hold polite nature and
are flexible in their working style as well (Laffan 2018).
Technological: the companies present in the nation make proper use of technology in their
business. Also, the nation has strong ties with European Union due to which technology is
easily availed by them. The IT industry is also booming in the Ireland environment that has
increased the competence of the companies.
Environmental: there is presence of beautiful scenery in the environment of Ireland that
increases the aspect of tourism. This also increases the advantage of the aviation industry as

Business Strategy 11
people travel more because they want to visit the beauty in Ireland. However, UK has
declared climate emergency in the nation because of its depleting weather (Karaman, A.S.,
Kilic, M. and Uyar 2018).
Legal: these factors of the nation explain that the country has adequate rules and regulation to
satisfy the interest of employees in the business environment. The companies need to follow
the legal requirement of the nation because it would ultimately affect position of the
company, as it would impose strict penalties on them (Howard 2019).
Recommendations
Thus, it is recommended to the company Ryanair that they should implement diversification
strategy in the worldwide environment. This strategy would help the organization to increase
profitability of the company while providing satisfaction to the customers. Low cost carrier
strategy would let the customers attain better services at economic rates in the market. Also,
the company should focus on its financial position in the environment and manage to upraise
it. the company should align ties with other organizations from different segment so as to
help the organization increase their scope of action. Ryanair should enhance their business
structure by expanding the business and introducing more product range in the environment
of Ireland. Lastly, the company should also strengthen their ties with suppliers because they
are the two owners in this industry.

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References
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business model in the european airline industry. SAGE Publications: SAGE Business Cases
Originals.
Borbély, A., 2016, June. The Firm’s Strategy and its Negotiation Capability: the Ryanair
Case. In Paper presented at the 16th European Academy of Management Annual
Conference (Vol. 1, p. 4).
Breen, R., Hannan, D.F., Rottman, D.B. and Whelan, C.T., 2016. Understanding
contemporary Ireland: state, class and development in the Republic of Ireland. Springer.
Caputo, A. and Borbely, A., 2016. The firm’s strategy and its negotiation capability: the
Ryanair case.
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Briarcliff Manor, NY 10510: Academy of Management.
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the firm: evidence from Ryanair. Journal of Knowledge Management.
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Karaman, A.S., Kilic, M. and Uyar, A., 2018. Sustainability reporting in the aviation
industry: worldwide evidence. Sustainability Accounting, Management and Policy Journal.

Business Strategy 13
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