Analysis of Ryanair's Business Environment and Management Strategies

This report assesses the business environment of Ryanair, the largest budget airline in the UK, and analyzes its management strategies. It includes a PESTLE and SWOT analysis, discussion on two management theories, and recommendations for resolving issues.

INDIVIDUAL REPORT
TABLE OF CONTENTS

INTRODUCTION...........................................................................................................................3
Task 1...............................................................................................................................................3
PESTLE and SWOT Analysis.....................................................................................................3
Task 2...............................................................................................................................................6
Analysis from task 1....................................................................................................................6
Task 3...............................................................................................................................................8
Two management concepts and theories.....................................................................................8
Task 4.............................................................................................................................................10
CONCLUSION..............................................................................................................................10
REFERENCES..............................................................................................................................13

INTRODUCTION
There are multiple internal and external factors present in the environment, which can
have an effect on the operations and functioning of a business organisation in the consumer
markets. These factors can both provide the business organisation with various opportunities in
the market to grow and expand their operations and threats to look out for which can pose a
danger to the business’s current operations (Hamilton and Webster, 2018). This report assesses
the business environment of the Irish budget airlines Ryan Air which was founded in 1984, 34
years ago. Ryanair makes up the largest part of a family of airlines under Ryanair Holdings
organisation and owns subsidiaries and operational sister airlines such as Ryanair UK, Lauda,
Malta Air and Buzz. It operates from its headquarters in Dublin and has grown to become largest
budget airline in the UK on the basis of scheduled passengers flown. Ryanair employs a total of
17,500 individuals and owns a fleet size of 287 for performing its operations and functions.
Task 1
PESTLE and SWOT Analysis
Pestle Analysis
It is a analytical tool which is used to evaluate and monitor external environmental
factors. The model is applied for Ryanair to analyse its external environment.
Political factors
Currently Brexit has led political instability by changing in policies, employment rate,
trade law and tax rate as well which directly led uncertainty in Ryanair business activities. Brexit
has raised passenger tax which is more than three time in the last 24 years on both type journey
i.e. long distance and short distance journey that directly impacted purchasing behaviour of
customers. Apparently for short journey, customer can prefer to go by bus and train instead of
airline services which could decline profit margin of company on ticket selling (Chen and Hitt,
2019).
Economic factors

Tax rate, changes in disposable income, unemployment rate, exchange rate of currency
etc. ate economic factors which has impacted organization performance. For example, recently
oil price has decreased which can maximize marginal benefits within company. Changes in
disposable income of customer due to unemployment rate reduces expenses on leisure travel
which will directly impact on Ryanair’s selling revenue (Ferdous, 2016).
Socio-cultural factors
British people show more interest in holiday travelling nowadays as compared normal
travelling. Such kind changing habits of British people can enhance short and long distance
travelling which directly can lead positive impact on sales increment. The reason behind is that
Ryanair is budget airline who offer low-cost flights in the UK. So, people are mostly preferred to
travel by low cost flights that will improve sales revenue of company.
Technological factors
UK is highly updated for technology so, people has highly attached with the internet,
mostly with social media which can help company to increase purchasing behaviour of
customers. So, company can offer mobile banking system to passenger where they can book air
ticket in advance and can payment as well. Even organization must offer display facility to
inform the passenger which movie and activities will play in travelling that keep excited
customer and inspire them to retake service.
Legal factors
Brexit has changed in policies and imposed several rules and regulation by UK’s
government. it has become very difficult for the organization to followed each and every law an
regulation according to country (Khorasani and Almasifard, 2017). In addition, it can be proved
quite expensive if they have mandated by authorities. In that state, company will unable to
continue low cost strategy which will directly impact on selling infrastructure of company.
Environmental factors
With rising environmentalist issues, UK’s government and people becomes more
concern. So government has implemented health and environmental safety policies. Second

carbon footprint has become highlighted point for public and government because it directly
impacts on global warming. Where European Union can restrict on carbon emission that can
directly impact on business operation for airline services. Thus, company can face difficulty
while operation business operation.
SWOT analysis
It is strategic tool which helps to analyse internal environment of business and helps to
identify capabilities, resources and challenges. SWOT analysis model is used to analyse internal
environmental of company which is described below:
Strengths
 Lowest cost: Organization is famous as budget airline company which offer travelling
services at lowest cost in the world. organization has lower production and traffic costs
which is quite lesser than other competitors which attracts people to buy services from
Ryanair.
 Lowest fares: Organization has lowest average fares in the Europe market estimates 37%
as compared other competitors. Even most of the airlines companies surcharges of the oil
tax and privilege services which allows organization to raise average fared in the few
upcoming years.
 Network: Organization has strong presence more than 1500 routes around 28 countries in
Europe and North Africa. It shows organization has strong network in various countries.
Weaknesses
 Seasonality earning: It is major weakness of the Ryanair because they easy to generate
high revenue in summer season but gets high loss in winter season because fewer
passengers like to go for short-term and long-term journey (Madar, 2018).
 Brand media or media perception: Organization is one of the weakest brand in Europe
aviation. In addition, public perception for the organization that it is uncaring and money
grabbing which directly impacts on ticket selling negatively.
Opportunities
 Market growth and Market share: Organization has opportunity to expand it’s business in
other countries because it sells airline services at lowest cost which attracts other

customer to buy airline from Ryanair. In addition, due to low production cost can become
market leader in airline industries which helps to gain the largest market share.
 Deal with Stansted with MAG: Ryanair has opportunity to buy Stansted Airport by the
help of Manchester Airport Group (MAG). Organization three quarter of seat capacity at
Stansted which is golden opportunity for company to cover large number of UK’s
passenger.
Threats
 Brexit uncertainty: Political instability gives negative impact on Ryanair operation due to
Brexit because organization unable to continue low cost strategy.
 Loss of management focus: Ryanair’s has strong track record of profitable growth instead
of focusing on management which can create threat for company. It can possible
organization have to face employee retention issue, conflicts issues etc. at workplace.
Task 2
Analysis from task 1
On the basis of above analysis finds out Ryanair gets positive impact on the business
operation but faces several difficulties due to several problems which are described below:
Brexit uncertainties: Organization have to face difficulties in business operations due to Brexit
because they lead change in policies. Due to this, company have to adapt different policies to
operate business operation legally. It directly impacts low cost strategy of Ryanair which reduces
ticket selling at workplace (Nordbø and Raza, 2016).
Increasing cost: It is another issue which is identified by political factors. Brexit increases
passenger taxes which increases three time last 24 years. It causes enhance cost of ticket that
decreases purchasing behaviour of customers.
Staffing issues: Ryanair focuses on sales growth instead of management which causes staffing
issues occurs within workplace. For example, management unable to understand staff needs for
the working place. Even they keep one-way communication where employees can’t direct
communicate with other employees and management about task issues and salary relevant, that

directly leads conflicts in staff for the management. Due to conflicts reduces employee’s
productivity at workplace.
Employee relation and conflicts: Due to one-way communication in the company reduces
employee’s wellbeing workplace. Management act as autocratic leader which causes easy to
achieve short term goal within company but unable to gain long-term goals due to less retention
of talented employee. Management avoids conflicts about salary and work pressure which causes
crisis takes place between management and staff.
Media perception: It is another reason which causes company unable to build good relation with
customer. For example, Ryanair is a weakest aviation in the Europe which causes people
perception is also not good for the company. They think Ryanair is uncared and money grabbing
company which causes people doesn’t prefer to take airline services from Ryanair.
To resolve overall issues takes several immediate actions because it helps company to
access in the airline market and leads profitability, productivity in the business operations. To
overcome Brexit uncertainty can keep flexibility in policies which helps company to comply
with policies and creates trust on brand among the public. To resolve staffing issues gives two-
way communication facility which helps employee to share their issues directly to management
and with their team member. It is not only maintaining their wellbeing within company but also
creates healthy working environment at workplace. manager can adapt democratic leadership
style which helps management to understand staff needs and expectation from the job and easy
to meet their objectives by offering desired facilities. By the democratic style can lead high
turnover of employee within workplace (Oberoi, 2016). Even management easy to build good
relation with customer which leads self-actualization for the job and in returns helps to meet
company from its goal. Company can adapt corporate society relationship which helps company
to change media perception for the company. These actions are required immediate to achieve
high profitability within company.

Task 3
Two management concepts and theories
There is two management theories Frederic Taylor (Theory of Scientific management)
and Henri Fayol (Administrative Management Theory) which is used to resolve problem.
Theory of Scientific Management
Scientific management theory is used to analyse workflow of working place. The main
aim of the management theory is to improve performance of workers and employees. It is based
on the four principles while adapting the scientific management theory such as Science, not the
rule of thumb is a basic principle of management. According to the principle decision making
process is taken by management which is scientific approach but use unscientific managerial
activities like involvement of employee in decision making process (Rizzetto, 2018). Thus, it can
interpret by principle that think before implementing or doing. Harmony, not Discord is the
second scientific principle which express that management and employees are the main
stakeholder of the company. Take and give relationship is conducted between management and
workers at the workplace. In other word, management gives incentives and privilege facilities to
those employees who give high efforts in business activity. Those employees who kills time but
doesn’t give productive performance doesn’t offers any type of services.
Co-operation, not Individualism is another principle which shows the significance of
management and employees for each other. for example, management offers rewards and
recognition to those employees who gives suggestion to expand business. On the other hand,
employees cooperate with management for improving business. Development each and every
efficiency and prosperity is the fourth principle which interprets that management provides
training class to staff in scientific manner so that they become trained employees within
workplace. Maximum, not Restricted output is last principle of scientific management theory
which helps to improve employee turnover within workplace. this management theory supports
company to resolve staffing issue within company (Su, 2017).
Henri Fayol’s Administrative management theory

It is another management theory which is based on the fourteen principles of
management. It helps organization build good relation with employees and customers and raises
good will of company in the business market. Ryanair company uses administrative management
theory to resolve issues which is identified through analysis. It is described below:
Division of work is primary principle of the theory which helps management to understand
priorities of task within workplace. by the principle assigns job task in specific group of
employees by management so that get high achievement in the company. Equity helps
management to keep balance between reward and management (Rothaermel, 2016). For
example, management organizes skills and development classes for employees while they give
high attendance and learns new tactic to improve their skills. Equity practices builds trust
between management and employees. Discipline is third principle which is practisize by the
management to control on employees’ activities within workplace. Initiative is fourth principle
which is practisize by management to create creativity within company which leads effectiveness
in employee’s performance and gains desirable prospect within company. Authority and
responsibility are fifth principle which helps management to handover overall managerial
responsibility well form so that easy to manage staff at workplace along with different
operations. Subordination of individual interest and general interest is another principle
which helps management to understand individual employee interest which can lead future
profit. Stability of tenure is another principle of management theory which helps management
to keep access on business operation by changing strategies time to time so that company can
long in the airline industries. Remuneration is important principles which plays essential role in
both group management and employees. Management offers salary to customer without any
discrimination at workplace which inspires employee to give honest performance within
company.
Unity of direction is practisize by management to guide staff within company so that
gives their efforts toa achieve common goals. Centralization can be defined as the procedure in
which overall activities encompasses planning and decision-making within business.
Management follows this principle in their practices and conducts strategically so that expected
result within company. Scalar chain is another principle which helps management to inspire
employee to work in team and motivates other team member to give high feats in in their

performance so that become part of rewards. Unity of command is last but not least principle of
management theory which is followed by management to implement decision and command staff
to give their performance in defined direction which leads profitable outcomes within company
(Šomodi, 2017). Ryanair’s management follows this strategy to build good relation with
employees and reduces staffing issues. Even the management principle helps company to
improve productivity, performance and its operation. Ryanair gets effective outcomes by
following both management theories within company.
Task 4
Writing this report, proved to be a great learning experience for me as I had little
knowledge of the airline industries within UK and also helped me improve my researching skills
as I had to research on many topics related to the airline industries, their business environment
and the operations and issues currently plagued by Ryanair airlines. I ended up learning a lot
about the multiple social, political, economic, technological, legal and environmental factors
which affect the operations of business organisations and Ryanair in the airline industries (Eling
and Schaper, 2017). From my research, I also learned about the relative strengths and
weaknesses of Ryanair airlines and the multiple opportunities that are present to them in UK’s
airline markets to expand and grow their operations and functions in addition to the threats that
are also present in the airline industries which can have a negative impact on Ryanair’s
performance, efficiency, productivity and profitability in the consumer markets. My analytical
skills were also improved from writing this report as I had to assess the main problem that
hampers the operations of Ryanair and deserves their immediate focus and attention for
successful operations (Gaganis, Pasiouras and Voulgari, 2019). Finally, in order to address the
prior problem and recommend a viable solution to Ryanair’s problems I researched, learned and
applied Herzberg’s motivational theory and how its implementation effectively increases
workforce motivation in an organisation in addition to the Scientific management theory, which
was a very positive experience for me and added to my professional development.

CONCLUSION
Based on this report, there exist multiple internal and external factors in the business
environment in which Ryanair operates in, which provides it various opportunities and threats.
This report first performs SWOT and PESTLE analyses for Ryanair to assess these internal and
external factors which can have an effect on Ryanair’s operations. Then the report evaluates the
main issue that Ryanair’s operations face in the airline industries and why it demands the
immediate focus. The report then recommends a solution to the discussed issue by making use of
Herzberg’s motivation theory and the Scientific Management theory. Finally, the report reflects
on the writer’s experience of making the report.

REFERENCES
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