SWOT and PESTEL Analysis for Ryanair

This report provides a SWOT and PESTEL analysis for Ryanair, evaluating its strengths, weaknesses, threats, and opportunities. It also proposes solutions to the main problems facing Ryanair using management concepts and theories. The main problem identified is the shortage of staff, which affects productivity and profitability. The proposed solutions include implementing behavioural management theory and the ERG theory to motivate and retain employees.

Context of Business
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INTRODUCTION...........................................................................................................................3
1. Perform a SWOT and PESTEL analysis for Ryanair.........................................................3
2. Main problem that is facing Ryanair that requires immediate attention and why?............8
3. Propose a solution to the problem you have identified using at least TWO management
concepts and theories that you have learnt during your course..............................................9
4. Experience in writing this report........................................................................................9
CONCLUSION..............................................................................................................................10
REFERENCES..............................................................................................................................11
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INTRODUCTION
Entities operate their business functioning in an environment that involves wide range of
elements. All these elements have significant impact upon business operations. This makes
organisation to have necessary information and understanding related to all the factors prevailing
in business environment as these negatively positively affect business activities. It further
benefits entities to ensure competitive strategic edge in marketplace (Dobson and Piga, 2013).
Present report has been made on Ryanair, this entity perform their business operations in airline
industry and offer low unit cost airline services to customers. Company is having it’s headquarter
in Dublin and is one of the largest entity in respective industrial sector. This report includes
discussions on swot and pestle analysis. Both of these evolution aid entity to evaluate their
strength and weakness and overcome threat by gaining advantage from prevailing opportunities.
Further in this report, discussions has been made on, main problems that are been facing by
company along with its solutions. Lastly, this report involve experience that have been gained
while writing the present report.
1. Perform a SWOT and PESTEL analysis for Ryanair
SWOT: SWOT analysis is define as a strategic tool through which organisation can
evaluate its strength, weakness, threats and opportunities that are prevailing in business
environment. This will benefit them to undertake strategies and proper measures through which
they can overcome weakness in well effective manner. It will further allow them to ensure long-
term sustainability in respective industrial sector. Mentioned below SWOT analysis in reference
with Ryanair is conducted:
STRENGTH:
One of the major strength of Ryanair is that it provides low unit cost airlines services to
other organisations in respective industry. It has been identified that company offer low cost in
terms of cost per passenger, cost per seat and cost per available seat kilometre. Further it has
been evaluated that, this entity offer low fare rates to its consumers comparatively to other rivals
in Europe. Most important strength that has been having by Ryanair is that it is having largest
short-haul network carrier through which they offer services with having 1600 routes in 3o and
more than countries.
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Illustration 1: Top 10 Airlines ranked by Seats Europe to Europe: 8 Sep 2014 to 14 Sep 2014
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WEAKNESSES:
Dispite of having leading position in airline industry short-haul network carrier is having
some major weakness that affects their business profitability index. It has been identified that
labour relation and employee compensation arrangements is some of the weakness that Ryanair
is facing. Along with this due to the poor performance in surveys, polls and awards Ryanair is
having weak brand perception.
THREAT:
Economy around the world is fluctuating along with this brexit also affect and pose threat
in front of Ryanair that restrict organisation to ensure high profitability. Major thread that
Ryanair is facing is due to heavy fluctuation in the prices of fuel. Along with this shortage of
staff also pose threat among business services of entity (Abdi, Elliot and Edalat, 2016). In
addition to this other low cost regional careers is also acting as threatening factor for company.
OPPORTUNITIES
Consumer relationship and low cost price develop maximum opportunities in front of
Ryanair. In this by maximizing interaction from customers with airline entity can effectively able
to identify actual needs of consumers and can serve them in best effective manner. This has been
evaluated that by re-designing official website page of company and adding fewer click methods
can improve their consumer services. Further by taking the opportunity from the initiatives like
single fee structure in which by offering different facilities like booking facility, fast lane
security and choice of reserved seating can increase significant opportunity for Ryanair.
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PESTEL analysis for Ryanair
Pestle analysis is defined as a framework that identifies macro environmental factors and
allows entity to gain strategic edge and manage their business operations while identifying
factors of political, economical, social, technological, legal and environmental aspects (Naletina,
Damić and Jabučar, 2019). With the help of this entity can effectively monitor every element and
can develop strategies and measures against it in order to increase business performance and
efficiency in best effective manner. Pestle analysis in context with Ryanair is define
Political Analysis:
This factor evaluates the extent to which government have influences over industry or
economy. In this it has been identified that there are different type of tax and duty imposed by
government of United Kingdom. It impact upon overall generating structure of Ryanair. In
addition with this trade tariffs, tax policies and fiscal policy are some of the political factors that
impact upon business environment of company at great extent. This has been determined in
context Ryanair with the increase in passenger tax rate from current low rate negatively affect
sales generation ratio of entity as due to this consumers might shift their interest towards other
transportation mode. However with the advantage of political stability in other countries can
increase Ryanair international market share holding.
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Economic Analysis:
Is this element factors related to determinants of economy is involved, all these factors
directly impact upon organisation and have long term effects (Ferro, 2018). This has been
evaluated that rise in inflation rate of any economy can affect company price of their services
and products. As Ryanair is operating their services worldwide thus it is essential for entity to
understand economic factors as it is having great impact upon consumer purchasing power.
Economic elements like foreign exchange rate, interest rates, economic growth pattern and
inflation rate affect business operations in number of ways weakening of pound affect Ryanair
marginal benefit. However with the assistance of economic opportunities like reduction in oil
price can benefit company to make significant increase in their profitability index.
Social Analysis:
Social factor include elements related to determinants like population analysis, cultural
trends, demographic aspects, community believes and perceptions. It has been identified that
trend in western countries like UK are mainly emphasise towards travelling. This provide
Ryanair with effective opportunity through which they can ensure maximum consumer holding
by offering them discounts and attractive facilities on short and long distance travelling distance.
Apart from this it is essential for Ryanair to evaluate dynamic change in travelling pattern of
consumers as any negligence impact upon Ryanair profitability in negative manner.
Technological Analysis:
Elements in this factor mainly pertain towards innovation in technology. This factor has
capability to impact overall operation of company in a significant manner (Angelopoulos and
Leivo, 2013). In this Ryanair is required to effectively engage in the process of research and
development in order to implement each and every technological up-gradation. Due to interest of
consumers towards internet and smart phone Ryanair can attract their consumers with social
networking at great extent. In this as to influence consumer behaviour company can offer them
services like, they can choose the movie they would like to play while travelling. However entity
is required to make sure that there internet payment and e-ticket booking system is secure and
does not any risk element as it can further impact upon over goodwill of entity.
Environmental Analysis:
This factor involved all the elements that are determined by environment surrounding.
This is one of the most important aspects of pestle analysis as it mainly affects industries like
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farming, tourism, agriculture etc. In this Ryanair is required to make sure that their business
operation does not affect geographical location, climate, environmental offsets, and weather in
any manner. Along with entity is required to make significant reduction in their carbon footprint
and any other harmful gases emission from their airline.
Legal Analysis:
This factor impact upon organisation operations internally and externally. There are
different types of law that affect business environment in particular country (Myro, Légidos and
Hernández, 2013). In this entity is required to effectively take account of all the related
legislations and laws such as safety standards, consumer laws, labour laws etc in order to
safeguard them from being get affected by any legal penalty obligation.
2. Main problem that is facing Ryanair that requires immediate attention and why?
By evaluating factors of pestle and SWOT analysis this has been determined that there are
some certain issues and problems that Ryanair is facing. All these issues require immediate
attention as it can further impact upon organisational profitability and revenue generation
capability in adverse manner. Further any form of delay can cause entity with their lower sales
ratio and affect their goodwill in marketplace. It has been identified that Ryanair is mainly facing
issues related to shortage of staff; this staffing problem decreases productivity and profitability
of company (Abeyratne, 2014). In addition to this brexit also create number of issues for Ryanair
as it decreases revenue generation capability and sales of entity. Main issue of staffing is also
caused by brexit as it restricts Ryanair to hire candidate from United Kingdom. Thus, in
accordance with the discussion this has been evaluated that Ryanair must take use of strategies
and effective methods in order to overcome all these issues in best effective manner. Company
must make sure that they do not delay to implement solution for all these issues as this will affect
company profitability and growth in direct and indirect manner.
3. Propose a solution to the problem you have identified using at least TWO management
concepts and theories that you have learnt during your course
Ryanair conduct their business operations as Irish low cost budget airline service, this
company offer different type of services to customers at low-cost comparatively to other
organisation in respective industrial sector. This has been identified that entity is currently facing
issues related to staffing (Noe, Gerhart and Wright, 2015). It is one of the most important
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challenges that are required to be deal by entity in time effective manner. As any negligence and
delay affect company adversely and can impact upon their long-term profit generating capability.
In context with this it has been evaluated that management of Ryanair is proposing different
solutions strategic, measures and practices in order to resolve issues of staffing in best effective
manner. In relation to this different type of management theories as well as concept is being
imposed by management on organisational workplace structure. Main aim of this is to increase
efficiency of behavioural characteristics of employees and fulfil their demand and needs in best
effective manner. Main aim of this is to retain experienced and talented employees in entry
workplace structure for long duration of time. By undertaking information and knowledge
related to behavioural pattern Ryanair can effectively motivate their employees with full efforts
and can further ensure accomplishment of corporate objectives in well define manner. In addition
to this company can also empower behaviour of employees and further persuade them to stay in
entry for long duration of time. This effectively resolves staffing issue of company in best
effective manner:
Behavioural Management Theory
Behaviour management identify human dimension within an organisational workplace
structure. In this entity management have intend to acquire knowledge related to behavioural
pattern as well as employees characteristics in order to further developed strategies as to further
encourage them in well define manner (Buttle and Maklan, 2019). With the use of behavioural
management theory Ryanair can effectively able to evaluate employee’s behaviour and can direct
them towards organisational goals. This has been identified that after recognition of employees
performance and behavioural pattern respective airline entity can implement different motivation
strategies in order to effectively deal with stuffing issues and can you further decrease labour
turnover rate.
ERG Theory
This theory is mainly associated with 'Maslow's Hierarchy Needs' and 'Alderfer'. Both of
this theory are collaborated with each other and direct towards fulfilment of individual needs.
According to the theories it is essential to fulfil need of employees in accordance with hierarchy
levels which is further segregated into three categories that include Existence, Relatedness and
Growth.
Existence needs:
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Existence need mainly drive from safety and psychological needs, according to this need it
has been evaluated that it is hard to drive employees behaviour until and unless organisation
fulfil their safety and psychological needs like food, shelter, clothes ,security etc in best effective
manner. Further in terms of psychological is this has been evaluated that it is mainly associated
with employee’s basic needs of food, house, water etc. Apart from this safety needs are mainly
concern with employee security in workplace structure. In this it is essential for Ryanair to
effectively fulfil existence need of their employees in a well defined manna by introducing
provisions related to attractive allowances, medical insurance facility, life insurance and more.
Relatedness needs:
Relatedness mainly falls under second need that mainly state towards the need of
belongingness and love (Smircich, 2017). In this it has been identified that an individual or
employee seeks towards a friendly and positive working environment in organisation. As with
the assistance of positive and better relationship with employer, management and colleagues
employee can effectively able to accomplish their target with more efficiency. With the absence
of friendly and positive atmosphere there may be a chances of conflicts among employees and
superiors that significantly lead decreases overall level of performance of an employee. In
context with this it is essential for Ryanair to emphases upon offering a positive and healthy
workplace structure to employees in order to provide them motivation and further boost their
withdrawal towards accomplishment organisational goals in best effective manner.
Growth need:
This need is crucial factor in accordance with Maslow's and Alderfer which is mainly
concerned with self actualization and self esteem. In this it has been identified that employees
can effectively motivated by recognising their hard work. In this it is essential for entity to
appraise performance of employees by offering them good appraisal and respect. Along with this
it is important for Ryanair top level management to fulfil the need of employees as negligence of
this may create a sense of non satisfaction with employees.
4. Experience in writing this report
If it is talked about experience that has been acquired by me while writing the present report,
it has been identify that there are number of factors that affect me in negative and positive
manner. In this has been determined that starting stage of project required evaluation of accurate
information and data of respective entity. As swot and pestle evaluation are required to be
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conduct in context with Ryanair business operations and services. By collecting and gathering
necessary information and data related to political, social, economical, technical, legal and
environmental aspect this report assure accuracy. Strategic analysis of swot and pestle is done in
well effective manner. Along with this most important experience that has been gained by me
while writing this report is collecting accurate and correct information. In this I undertake use of
different journals, website and magazine of organisation that has been issued by them on
periodical time basis. In addition with this I also undertake use of statistical and pictorial
information in order to increase efficiency of present report. However there was certain difficulty
that has been faced by me while writing this report. It has been identified that most crucial
experience that I have gained while writing the present report in this my lot of time has been
invested in order to allocate information and data from different books, website, and journal of
entity and organisation website page. This increases my research efficiency. Most essential
experience that I have gained while writing the report is conducting strategic analysis such as
pestle and swot in best effective manner. It helps me to evaluate each and every factor in
effective way. By taking assistance of all the experience there is significant increase in my
knowledge level that further benefit me in both personal and professional manner.
CONCLUSION
As per according to the above mentioned report it has been concluded that an entity operate
their business functioning in a business environment that include different form of factors and
elements. These factors significantly affect entity operations in positive and negative manner.
Thus, it is important for company to evaluate each and every element and develop strategic
measure against it as to overcome negative influence in best effective manner. By taking
assistance of swot and pestle evaluation entity can take and acquire formative insight about all
the factors that have capability to affect organisation activities. This will further aid entity to
ensure their long-term sustainability in respective industrial sector and increase their profit and
revenue generation capability in best effective manner.
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REFERENCES
Books and Journals
Dobson, P.W. and Piga, C.A., 2013. The Impact of Mergers on Fares Structure: Evidence from
European Low‐Cost Airlines. Economic Inquiry, 51(2), pp.1196-1217.
Abeyratne, R., 2014. Market Based Measures. In Aviation and Climate Change (pp. 69-81).
Springer, Cham.
Myro, S., Légidos, B.R. and Hernández, P.I., 2013. Effect of low cost airline companies on
international tourism in Spain. Estudios Turísticos, (198), pp.61-79.
Abeyratne, R., 2014. The Challenge Faced by ICAO. In Aviation and Climate Change (pp. 83-
105). Springer, Cham.
Angelopoulos, P. and Leivo, P., 2013. Drivers and barriers for relocation of freight operators to
smaller airports-A case study at Jönköping airport (Axamo).
Naletina, D., Damić, M. and Jabučar, A., 2019. Customer Satisfaction with Services of Low-Cost
Carriers at Pula and Zadar Airports. InterEULawEast: journal for the international and
european law, economics and market integrations, 6(2), pp.71-97.
Ferro, F.I.V., 2018. Equity research-Ryanair Holding PLC (Doctoral dissertation, Instituto
Superior de Economia e Gestão).
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Abdi, M.R., Elliot, L. and Edalat, F.D., 2016. Strategic Business Plan Based on Total Quality
Management for Property-Marketing Small Enterprises in UK. In Handbook of Research
on Entrepreneurship in the Contemporary Knowledge-Based Global Economy (pp. 509-
527). IGI Global.
Smircich, L., 2017. Concepts of culture and organizational analysis. In The Anthropology of
Organisations (pp. 255-274). Routledge.
Shields, J., Brown, M., Kaine, S., Dolle-Samuel, C., North-Samardzic, A., McLean, P., Johns,
R., O'Leary, P., Plimmer, G. and Robinson, J., 2015. Managing employee performance &
reward: Concepts, practices, strategies. Cambridge University Press.
Buttle, F. and Maklan, S., 2019. Customer relationship management: concepts and technologies.
Routledge.
Noe, R.A., Hollenbeck, J.R., Gerhart, B. and Wright, P.M., 2015. Human resource
management. Gaining a Competitive.
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