Management Strategy of Ryanair

Running head: MANAGEMENT STRATEGY OF RYANAIR
Management Strategy of Ryanair
Name of the Student
Name of the University
Author’s note

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Executive summary
The aim of the report is to analyse the management strategy of Ryanair airlines . For analysis
of the management, strategy of the company different tools of management strategy has been
discussed in this report. The first part contains the VRIO analysis, which gives a detail idea
about the resource utilisation capacity of the company. in the second part the report contains a
detail discussion of SWOT and TOWS analysis of the Ryanair airlines ltd. In the last part of
the report recommendation is given regarding the feasibility acceptability and suitability of
the strategies of Ryan air.

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Table of Contents
Introduction................................................................................................................................3
VRIO analysis of Ryanair..........................................................................................................3
Analysis of the profitability ratio, liquidity ratio and efficiency ratio.......................................4
Swot analysis of the company....................................................................................................7
Tows analysis of Ryanair.........................................................................................................11
McKinsey 7s model..................................................................................................................12
Strategic recommendation from VRIO analysis......................................................................14
Recommendation on the SFA analysis of the Ryan air............................................................14
Conclusion................................................................................................................................16
References................................................................................................................................17
Appendix..................................................................................................................................20

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Introduction
The strategic policy of Ryanair consists of VRIO analysis swot analysis and the tows
analysis which gives an idea about the performance of the company and how it competes
with the competitors. VRIO analysis gives an idea about the relative importance of the
resources of the firm. From the swot analysis it can be ascertained the strength weakness and
the threat and opportunity of the company. TOWS framework on the other hand is just the
opposite of the swot analysis.
VRIO analysis of Ryanair
VRIO is the resource-oriented analysis of Ryan air airlines plc. The VRIO analysis is
based on the presumption that the strategic resources of the company will opportunity to
build a sustainable competitive advantage over the rivals of the organisation. The resources of
an organisation can be classified in to two categories tangible and intangible resources. The
tangible resources of the company include lands buildings plant equipment inventory and
money. Intangible resources are the brand names, goodwill, intellectual property rights
copyrights, trademarks, and relationship with the supply chain management.
The four components of VRIO used in Ryanair holdings plc analysis are
Value
In this component, it is analysed that whether a particular class of assets are valuable
to the firm or not. it has been observed that the following class of assets are valuable to the
organisation these are financial resources human resources marketing expertise and operation
management.

4MANAGEMENT STRATEGY OF RYANAIR
Rare
In this component it is analysed that the resources are rare or not in comparison to the
competitors of the company. if the resources of the company are not rare in comparison to the
resources of the other companies then it will become a threat for Ryanair to sustain in the
airlines industry.
Costly to imitate
In the current market situation all, the companies of the airlines industry are facing the
problem of disruption. The core business of Ryan air is difficult to intimate as they have
reached a level of standard that make them pioneer in the industry which will be impossible
for the other companies to imitate.
Organisational competence and capability for optimal utilisation of the resources
It measures the capacity of the company to utilise the resources efficiently. It is
observed that the company has successfully utilised all the resources that is available to it and
managed to reduce the wastage of the resource. The capacity of the company is higher in
comparison to the other competitors.
Analysis of the profitability ratio, liquidity ratio and efficiency ratio
Analysis of the profitability ratio, liquidity ratio and efficiency ratio of Ryan air has
been made to understand the financial strength of Ryan air airlines plc
Liquidity ratio
To understand the liquidity position of the company the quick ratio of the company
has been calculated (Sanidas 2017). The quick ratio measures a company’s ability to meet the
short term obligation with its most liquid assets. The formula of the ratio is
Total current assets – total inventories /total current liabilities

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The quick ratio is more efficient than the current ratio as it excludes inventories from
the current assets. A decreasing trend in the quick assets ratio indicates that the company is
over leveraged and it is struggling to maintain growth rate of sales, it also shows that either
the company is paying too quickly or the company is collecting receivable too slowly. On the
other hand, high or increasing quick ratio stipulates that the growth rate of the company is in
an uptrend, the company is able to convert its receivable in to cash and easily able to repay its
obligation. The higher the quick ratio the better it is for the company. The quick ratio of the
Ryanair airlines in the last three years is shown in the table
The quick ratio of Ryanair airlines indicates that the liquidity position of the company
is strong enough to meet the short-term obligation of the company. The ratio is more than 1
which shows that the company has been able to manage the current assets efficiently and at
the same time it makes timely payment of the short term obligation (Pereira 2017).
Profitability ratio
Operating profit margin is the ratio of operating income divided by the revenue of the
organisation.
Operating margin=operating income / revenue
The operating margin ratio is the indicator of the profitability capacity of the
company. a company with higher operating margin is considered as the most efficient
company in the industry.