SWOT and PESTLE analysis for Ryanair

This report provides a detailed SWOT and PESTLE analysis for Ryanair, including its strengths, weaknesses, opportunities, and threats, as well as an analysis of the political, economic, social, technological, legal, and environmental factors affecting the airline. The report also discusses the problems facing Ryanair and provides solutions using management concepts and theories. Additionally, it includes a reflective journal on the experience of writing the report.

Context of
Business

Contents
TASK 1..........................................................................................................................................................3
SWOT and PESTLE analysis for Ryanair....................................................................................................3
TASK 2..........................................................................................................................................................5
Problems facing Ryanair..........................................................................................................................5
TASK 3..........................................................................................................................................................6
Solution to problems using management concepts and theories............................................................6
TASK 4..........................................................................................................................................................8
Reflective journal on experience in writing this report............................................................................8
CONCLUSION...............................................................................................................................................9
REFERENCES..............................................................................................................................................11

INTRODUCTION
Context of business refers to an understanding of those factors which can affect the
operations of a business (Aarup, 2017). They affect how decisions are made in the company and
detail the objectives which an enterprise is trying to achieve. They allow for execution of
strategies made by organizations to achieve their goals and targets. This assignment is based
upon Ryanair which is an Irish budget airline with its operational bases mainly at Dublin and
London. In this report, a detailed analysis will be made upon understanding of dynamic nature of
business environment, leadership, management and development of people. Additionally, study
of development of appropriate policies and strategies and discussion of designing and
development of organizations will be done in this project.
TASK 1
SWOT and PESTLE analysis for Ryanair
SWOT analysis is a strategic management tool which can be used by organizations to
find out their strengths and weaknesses which are internal in nature and opportunities and threats
which are external in nature (Bullough, Renko and Abdelzaher, 2017). A detailed SWOT
analysis in the context of Ryanair is as follows-
Strengths-
 Low-cost airline- Ryanair is a low-cost airline and this is its biggest strength as it can
easily penetrate the market which is price-conscious in nature. This will allow it to
expand its revenue by generating more sales.
 Strong customer base- Ryanair has a strong customer base to rely upon as it is a low-
cost airline. Its customers are its biggest strength and offer a chance of publicizing its
different schemes and offers.
Weaknesses-
 Low profit margin- Ryanair is currently operating on quite a low profit margin.
Therefore, in order to be more competitive and to get ahead of its rivals in the industry it
needs to raise its level of profits by targeting more customers.
 Under-penetration of global market- Ryanair has been unable to fully utilize the
potential offered by changing markets in the world due to advent of globalization. It still
is present if very few markets and has not been able to penetrate various markets in the
world.
Opportunities-
 Expansion in new markets- Expansion in new markets offers Ryanair an opportunity to
diversify its operations in multiple countries of the world. By doing so, the airline can
expand its customer base as well as increase its revenue growth which will enhance its
level of profits.

 More flyers- Flying is becoming a preferred choice of transportation among customers as
their level of income is rising which therefore offers Ryanair a good opportunity of
making good profits.
Threats-
 Competition- Ryanair is facing the prospect of increasing level of competition in the
segment with the entry of several smaller players into the low-cost segment of airline
business. This if forcing the airline to reduce its prices further due to price war prevailing
in the industry which leads to decrease in its level of profit.
 Tight government regulations- Ryanair is facing tighter government regulations
because of change in government policy which is leading to lower revenue because of
increased tax rates. This is affecting the profitability of airline.
PESTLE analysis-
PESTLE analysis refers to an analysis of macro-environment factors which affect
the working of any organization (PESTLE Analysis, 2016). Ryanair is also affected by
these factors which have an influence on its business model. A detailed PESTLE analysis
in the context of Ryanair is as follows-
Political factors- These are government policy, tax policy and various other
factors (Burgstaller, Steiner and Schrefl, 2016). Ryanair is influenced by them as they can
affect its level of profits.
Positive impact- If the government policy is in Ryanair’s favor then it will
positively influence its level of profits.
Negative impact- If the tax policy is not in Ryanair’s favor then it will negatively
impact its level of profits.
Economic factors- These are economic growth, exchange rates, interest rates etc.
They impact Ryanair as economic conditions determine the profits a business is going to
earn.
Positive impact- Booming economic growth gives Ryanair an opportunity to
diversify its business and earn substantial amount of profits.
Negative impact- Decreasing value of currency can negatively impact Ryanair as
it will lead to decrease in its revenues.
Social factors- These are population, health consciousness, cultural barriers etc.
They affect Ryanair both positively and negatively.
Positive impact- Changing lifestyle attitudes of people means they are preferring
to spend more and travel by air to save their time which is something positively
impacting Ryanair.
Negative impact-Cultural barriers in certain sections of society still prevent some
people from travelling by air which affects the business of Ryanair.

Technological factors- These are technological incentives, level of innovation,
change in technology etc. They affect Ryanair as the whole industry is affected by them.
Positive impact- Development of new technology enables Ryanair to reduce its
costs so as to increase the level of profits.
Negative impact- Lack of investment by the airline in R&D activity leads to it
not being able to adapt to new technology quickly which significantly impacts its level of
profits.
Legal factors- These are discrimination laws, employment laws and other rules
and regulations framed by the government from time to time (AugustDavis,
2017). They affect the business environment of any business enterprise including
Ryanair.
Positive impact- If the rules and regulations are in Ryanair’s favor it can use
them positively to its advantage.
Negative impact- If the rules and regulations of government are not in Ryanair’s
favor then it will adversely impact its profit.
Environmental factors- These are weather, climate, and policies related to
environment etc. They impact the business operations of Ryanair.
Positive impact- If the government’s environment policies favor Ryanair then it
will lead to increase in its revenue growth.
Negative impact- If the government imposes strict environmental policies then it
can impact Ryanair’s business.
TASK 2
Problems facing Ryanair
There are multiple problems facing Ryanair which are threatening to disrupt its business
model. These problems need to be given immediate attention so that they don’t affect business
operations of the airline. Also their addressal will make sure that the airline’s earning capacity
increases. Some of these problems are-
Tighter regulations by government- Ryanair is being affected by tighter rules and
regulations being framed and implemented by the government. These rules and regulations
threaten to impact the business model of the airline and ultimately its level of profit (de Waal and
Frijns, 2016). Tight rules and regulations can be in the form of permissions required for
expansion and other strict requirement that airlines have to comply with.

Rising fuel prices- Ryanair is affected by the rise in fuel prices as it impacts its earnings
by increasing its burden of expenses. Also the government does not grant airlines any subsidy for
the fuel which further compounds the problem. Also because of increasing level of competition
in the market the company is unable to increase prices and thus the impact is seen in the form of
lower level of revenue, earnings and profits.
Competition from Charter services- Increase in charter and private jet services is
giving tough competition to business of airlines like Ryanair. Offering seats in charter plane at a
competitive price also takes away substantial base of customers of airlines (Fasone and Zapata-
Aguirre, 2016). Thus on short-haul routes the airline is facing loss in certain segments due to
competitive prices offered in chartered planes.
Lack of efficiency- Ryanair is lacking in efficiency due to unproductive working of some
of its employees. These workers are not skillful and trained enough to provide satisfaction to the
customers by timely resolving their problems and grievances which is why the airline is
constantly losing customers to its competitors.
Lack of implementation of new technology- Ryanair’s reluctance to implement new
technology is costing it big time. While there are new planes available offering more features and
reduced fuel consumption the airline is not purchasing them. This makes it behind in the race to
offer new features and technology to the customers in the segment and also increases its fuel cost
at a time when it is already expensive. Also, it is failing to attract new customers due to its
reluctance which is affecting its plans to maximize its overall returns and increase the level of
profits.
Lack of customer satisfaction- There are some customers which are dissatisfied with the
services of Ryanair because of poor behavior of its employees, lack of effectiveness in dealing
with issues, complaints, problems and queries. This affects the prospects of the airline in the
long-run as it may lose many of its customers to competitors (Pushpa, 2016). The customers are
also facing issues due to policies of airline in charging of more fees for extra baggage, lack of
facilities in aircrafts according to price charged, poor ground handling etc. Also the lack of
innovativeness and creativity of company in its services gives poor review. A customer who is
not satisfied will also negatively review the airline which can create bad impression in minds of
prospective customers. Thus, these problems have to be given immediate attention or otherwise
the airline may risk going into losses.
TASK 3
Solution to problems using management concepts and theories
For solving of different issues and problems faced by it Ryanair should use the problem-
solving theory and performance management theory. Application of both of them will help it in
solving these issues and attaining its various goals.

Problem-solving theory-
This theory is used in order to follow a step-by-step approach and solve the issues and
problems (Susomrith and Suseno, 2017). Ryanair can use it to get rid of its issues which are
intervening in its attempt to maximize its profits. The steps of this theory are as follows-
Problem identification- The first step in this theory is to identify the problems which are
faced by the business. Ryanair needs to find out its problems in different segments of company
so that a solution can be found.
Problem verification- The next step is to verify the problem identified in the first step.
Ryanair must verify the issues and problems it has found out in the first step so that an effective
solution can be found for them.
Problem definition- Once the problem has been verified the next step that is required to
be taken is defining the nature of problem. Ryanair needs to define the category of its problems.
Root-cause analysis- The next step after identification of problem is to analyze its root
cause (Torres and Sidorova, 2019). Ryanair has to find out the root cause of its issues and
problems and needs to identify why the problems are recurring again and again.
Generation of alternatives- After the root cause of the problems has been identified the
next step to be taken is to generate alternatives for solving them. It is important for Ryanair to do
so because it will ensure that one of the alternatives will work for resolving the issues.
Evaluation of alternatives- Once the alternatives have been identified it is important for
organizations to evaluate their usage in the next step. Ryanair must evaluate the alternatives so
that its problems can be solved.
Implementation- After the alternatives have been evaluated they need to be
implemented in the next step. Ryanair needs to implement its alternatives so that problems can
be solved.
Review- After the implementation, the next step involves reviewing of performance after
the above steps. Ryanair has to do this and if it finds out that the problem is till unsatisfactory
then it needs to reformulate its strategies for countering the issues and problems.
Controlling- After review, the next step is controlling so that the problem or issue which
has been solved should not recur again (Tung, 2016). Ryanair must also establish a controlling
procedure so that its efficiency and effectiveness is maintained so that it can achieve its short-
term and long-term objectives.
By using this theory, Ryanair can resolve its problems of tighter regulations by
government, rising fuel prices and competition from charter services.

Performance management theory-
This theory focuses on identification of various types of ways and means through which
organizations can make their employees understand the importance of achievement of strategic
goals. Ryanair should focus on them so that it can achieve optimum performance and bring
efficiency in its operations. The different theories under it are as follows-
Goal-setting theory- It states that for achieving the goals and objectives of the
organization it is required that simplified tasks must be given to workers. This will improve their
performance as they will achieve small goals which will enable them to achieve higher
organizational goals. Ryanair needs to set goals for its employees and should simplify them into
smaller tasks for achievement of better results.
Control theory- It states that feedbacks must be obtained from the system so as to
achieve optimum performance by removal of defects, deviations and variances. Thus, Ryanair
needs to focus on feedbacks obtained from the system and must optimize its performance for
maximizing its level of profits.
Social cognitive theory- According to it, motivation of workers is derived by three
factors namely work environment, their own thinking and their actual output (vom Brocke, Zelt
and Schmiedel, 2016). Therefore, Ryanair must focus on positive aspects which can influence
and motivate the employees to perform their tasks effectively and efficiently so that the
performance is not affected.
By applying this theory, Ryanair can get rid of its issues of lack of efficiency, lack of
implementation of new technology and lack of customer satisfaction.
TASK 4
Reflective journal on experience in writing this report
When I was given the assignment on writing a report based on the case study on Ryanair,
initially I was a bit apprehensive that whether I would be able to complete this project on time or
not. There were initially some problems and issues which I encountered while completing this
report.
However, I resolved these problems and issues quickly. As Ryanair is a low-cost airline
offering its services to its clients at low fares I had to research about low-cost airlines.
The first task of the project was to prepare a SWOT analysis and PESTLE analysis for
Ryanair. As SWOT analysis is a strategic management tool which offers insights into the internal
environment of a company it was prepared by me after analyzing the operations of Ryanair. All
the strengths, weaknesses, opportunities and threats were detailed. After that PESTLE analysis
was done which details out external environment factors affecting operations of an organization.

For it, I studied out in detail about factors in the analysis so as to get a detailed knowledge on
them and the positive and negative impact each one of them can create for the airline. I did a
detailed analysis specifically mentioning every factor and the impact created by them. For this, I
had to link each and every factor with the airline and how it can affect its operations. A deep
study had to be done for performing this analysis.
` The second task of the project was the problems which the Ryanair is facing currently. I
analyzed the problems which a low-cost airline can face and linked them with Ryanair. Doing so,
I found out different issues which can affect the performance of an airline. These can be issues
related to policies of government, increasing costs, inefficiency of staff etc. These problems
affect the overall performance of the airline and also decrease its chances of maximizing its
profits. Also because of these issues a negative image of the airline is being created in front of a
customer that hurts its prospects of getting new customers. Furthermore there has been negative
media coverage about the airline due to the staff’s behavior with clients. I realized that the
identification of these issues is quite necessary so that a solution can be found out for them. Also
the department-wise segregation is essential so that the root of problems can be found out. It is
important for finding out a resolution.
The third task was finding of solutions to the problems by using management theories
and concepts. As the problems faced by Ryanair were pretty complex in nature I had to think
hard about the theories which I could use. After a bit of research on theories and concepts of
management, I found out that problem-solving theory and performance management theory are
suitable for this purpose and can be applied in Ryanair’s context. In my opinion, using problem-
solving theory the airline can adopt a step-by-step approach to address its issues. Also, by use of
performance management theory it can set specific goals and targets for its workers by their
segregation in small tasks which can be achieved effectively and efficiently by employees. I
believe that by using this theory motivation and morale of the employees can be increased which
will help them in attaining organizational objectives.
Therefore, I can conclude from my reflective statement that making a report on case
study of Ryanair was a new learning experience for me as everything had to be done from the
point of view of an airline. This was a new challenge for me that I accepted and completed it
after encountering initial problems and issues. Thus it was a great learning experience for me and
I look forward to many such experiences in the future.
CONCLUSION
From the above report, it can be concluded that context of business involves a study on
different factors which may affect a business. These can be internal and external in nature.
SWOT analysis can be done to analyze the internal environment of the enterprise. PESTLE
analysis can be done to effectively study the external factors affecting a company. Also, different
problems are being faced by Ryanair which is affecting its overall performance. Solutions have

to be found out for these issues and problems so that the airline can achieve its goals and targets
and attain sustainable growth in the future.

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