Strategic Perspective of Ryanair Airline: Resource, Capabilities, and Competitive Advantage

Mid-Module Assignment
Strategy management
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Introduction
Ryanair was formed in the year 1985; it is the largest low cost carrier in European market
with 8500 employees. It aims to offer low fares to enhance passenger traffic with operating
efficiency (Johnson, et.al, 2017). Its key focus is on low fare, low operating cost,
commitment to safety and quality, expansion of ancillary services. This paper aims to present
strategic perspective of Ryanair airline, it include analysis on its strategic resource and
capabilities, its competitive advantage and sustainability. It will help in understanding its
present and future market position.
Strategic Capabilities analysis of Ryanair
Formal strategic analysis of Ryanair helped in understanding its basic and unique resource
and capabilities. Its threshold resource includes its flights as it is operating in airline industry,
office equipment, employees and online booking system. However, its distinctive resource
include leadership skills of CEO, he possess strong leadership style with key understanding
of Southwest airline business model that has been adapted and implemented. He is a skilful
advertiser and promoter of the company, Ryanair has always been talk of the town through its
actions. Company always used one time of airline that is Boeing 737 which helped in
providing unique and consistent service to all customers.
Threshold capabilities of the company include its online booking system, on time services
and delivery system and point to point routing. However, its unique capabilities include low
cost strategy. Success of Ryanair is dependent on its intangible resources such as processing
system that ensure low cost strategy and operational feasibility. Ryanair ensure to run direct
flight, there are one stop flights with less populated airports to achieve low operational cost.
Company ensure elimination of frills such as in flight services, food and drink. Actual service
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is very low priced by the company, however it offer wide range of ancillary services that can
be purchased at extra charge. Its ancillary revenue contributes 30 percent of its profit. Its
website is another core competency as it helps in reducing cost through online booking, web
check in, company ensure that flight capacity is reached, if it does not happen, it offer price
discounts to get sales (Cooper & Edgett, 2009).
Resources and capabilities competitive advantage
Organizational resource and capabilities are the foundation of its competitive advantage; it
helps in differentiating its offering than its customers. Key element of differentiation include
value, rarity, inimitability and organization support. Ryanair competitive advantage is its low
price cost conscious strategic approach. Ryanair fleet is made up of Boeing 737, it always
uses same fleet to ensure staff training and maintenance cost low (Lawton T. C., 1999).
Stansted and Dublin is two main hub of company operation, other than this it contract third
party services for ticketing, baggage handling and aircraft management. According to porter
generic framework on strategy, competitive advantage can be sought by maintaining superior
position rivalries for long period of time (Porter, 1991). Porter model suggest three key
element, presence of anyone help in gaining sustainable advantage in market, it include cost
leadership, differentiation or focus. In case of Ryanair, cost leadership is the strategy used, as
it is offering similar service as its competitors but at low price.
Primary goal of low cost airline is to provide no frill services as it helps in increasing
demand, lower cost. Competitive advantage of Airline Company is based on its profitability;
it must be more than average profitability of other airline firms in market (Jacob &
Jakesova, 2003). Ryanair is most profitable airline in the world in year 2009. Ryanair is
achieving strong profitability; in the year 2011 company operating profit was €516.2m.
Company adopted a cost conscious culture by implementing strategies to lower operational
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