Business Context of Ryanair Airlines

Context of Business

Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
P1 Application of PESTLE and SWOT analysis...................................................................1
TASK 2............................................................................................................................................5
P2 Identification of problems from PESTLE and SWOT......................................................5
TASK 3............................................................................................................................................6
P3 Application of management theories to address the issue.................................................6
TASK 4............................................................................................................................................7
P4 Sharing of experience of writing assignment....................................................................7
CONCLUSION................................................................................................................................7
REFERENCES................................................................................................................................9

INTRODUCTION
Business context refer to the factors and elements that plays a major role in impacting the
function and growth of business. The report is revolving around the business context of Ryanair
airlines. Ryanair is an Irish airline headquartered in Swords, Dublin. It was incorporated in the
year 1985. The report covers the impact of external factors on the growth on the business along
with the identification of company strengths and weakness. Further the report includes the
recognition of problems in business. Moreover the report also contains the solution of the
problems. Lastly the report covers the short article on experience in writing this report (vom
Brocke, Zelt, and Schmiedel, 2016).
TASK 1
P1 Application of PESTLE and SWOT analysis
Growth of the company is mainly influences by the external factors such as government
policies, gross domestic product rate in the economy, inflation rate, cultural acceptance, income
distribution, population growth rate, climate and law and order. Firm needs to take into account
the following factors while implementing any decisions regarding growth of the business.
Success of the business is contingent upon the way company leverage opportunities and
overcome threats of macro environment.
PESTLE Analysis
PESTLE Analysis is a technique used to study the impact of macro environment on the
growth of business. PESTLE stands for political, economical, social, technological, legal and
environmental. These are the major components of macro environment. PESTLE analysis of UK
and its impact on aviation company Ryanair is given below:-
Political factors: Government of UK is now imposing strict rules and regulations on the
functions of aviation industry because of risky nature of pilot job. Air travel is vulnerable to
accident and crashes which is a major concerned for the government. In the first decade of the
century industry faces several terror attacks which shock the entire country. The major terror
attacks industry counter is the infamous aviation disaster of 2001 and 2005 in US and UK
respectively. These disasters create political instability and imbalance. Customers loosed faith in
airline industry. Thus government is forced to enforced strict safety laws that could make flight
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less prone to accident and customers regain confidence in travelling by air. Even product and
price of aviation companies are regulated by government. Open skies are not some adopted by
some firms thus it creating partiality among aviation companies in the industry. Ryanair is
required to comply with all safety laws proclaimed by the government. It has to make sure the
flight is safe and there is no loophole in safety standards (Saidani, Rolland, and Nurcan, 2015,
January).
Economical factors: Since the ancient era United Kingdom is a wealthy country. It is a
fast growing economy but Britain exit from European Union make pound weaker. This
encourages many citizens of other country to study and work in Britain. Ryanair will earn profit
from large number of immigrants from developing countries. Inflation is increasing with a
moderate pace. Economic scenario of the country is somewhat perfect for growth of any
business. Service sector is prevalent in the country which renders highest job opportunities to
citizens. Although overall economy is good but country experience decline in growth rate of
GDP due to Brexit. After UK exit from EU the country faces several reservations such as
increase in import price due to decline in value of pound sterling. Rise in import price eventually
create product expensive which increased financial burden on the final consumers. It also
negatively influences the profitability of big companies. Brexit made overseas trade complicated
which earlier very smooth.
Social factors: Population growth rate of the country had been increased in recent years.
Citizens of the country are modern and open minded. Tourism sector is a noticeable contributor
in the gross domestic product of the economy. People are fond of travelling due to which all the
businesses related to tourism such as hotels, restaurants, airlines, railways and other transport
services earns immense profit. Population is not young therefore tourism and medical industries
take advantage of this fact. Middle age people have more money to spend on vacation and old
age people are more vulnerable to diseases. UK is famous for giving priority to education
therefore literacy rate is remarkable (Wang, and et. al., 2016).
Technology: Rise in internet and smart phone user open door of several opportunities.
Everything is becoming digital and more convenient. Citizens are becoming habitual of ordering
food and other commodities online. People book railway and airline ticket online. Technology is
becoming more advanced due to which life of citizens is becoming comfortable. Companies are
developing futuristic technology in order to attract and convince customers to buy their products.
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