Strategic Analysis of Ryanair Airlines: Growth Strategy and Method

This report presents a suitable growth strategy and method for Ryanair Airlines to ensure long term growth and success. The growth strategy is evaluated using the SAFe model and its benefits and risks are assessed. The report recommends a new geographical market development strategy using which Ryanair can target Asian markets. The growth method suggested is a strategic alliance with Air Asia. The report concludes with the evaluation of the feasibility, suitability, and acceptability of the proposed strategy and method.

Running head: RYANAIR AIRLINES
RYANAIR AIRLINES
Name of the Student
Name of the University
Author Note

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Executive Strategy
The given report is based on the Strategic Analysis of the Ryanair Airlines based in England.
The report presents a suitable growth strategy along with a suitable growth method which can be
used by the Airlines in order to ensure long term growth and success. The report begins with a
brief introduction of the company`s current business model which is then followed by the
suggested Growth strategy. The Growth strategy has been evaluated using the SAFe model and
its benefits as well as the risks have been assessed. The same procedure is adopted with the
Growth method. A conclusion wraps the paper.

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Table of Contents
Introduction......................................................................................................................................2
Growth strategy to be adopted.........................................................................................................3
Evaluation of the method using SAFe Criteria............................................................................4
Benefits of the strategy................................................................................................................5
Risks associated...........................................................................................................................5
Growth method to be adopted..........................................................................................................6
Evaluation of the growth method................................................................................................7
Benefits of the method.................................................................................................................8
Risks associated...........................................................................................................................8
Conclusion.......................................................................................................................................8
References......................................................................................................................................10

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Introduction
Ryanair is an online carrier company based in England and its business model is fairly
popular for the Low cost carrier model which it makes use of and is popularly known as a budget
airline. This model of Ryanair is quite different from its British counterparts and competitors like
of the United, British Airways and the Etihad. Its model is primarily believed to be based on
Southwest airline model (Ryanair.com., 2018). The main reason why it is successfully able to
survive in this model is because of its use of a particular aircraft called Boeing 737. Moreover,
Ryanair maintains a cheaper maintenance procedure along with cheaper staff and crew. It flies a
point to point system and hence, just direct flights from areas like Europe to Germany are
available at large.
Figure 1: The point to point system used by Ryanair
(Source: Barney, 2017).
Ryanair has been fairly successful in its LCC model by not only charging for the meals
but also for the boarding cards in case where one does not carry a copy. It takes a majority of its

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booking through the company website which then cuts down middlemen cost. In addition to
this, Ryanair also makes use of a clever marketing technique whereby there are very few
television advertisements but more of website advertisements (Rothaermel, 2015). The main
aim of the report is to recommend a growth strategy and a growth method which Ryan Airlines
can make use of in order to expand its operations and earn a higher revenue.
Growth strategy to be adopted
As per the Ansoff matrix there are four basic growth strategies which can be adopted by
any business organization in order to ensure that they are able to successfully expand their
operations (Barney, 2017). The suggested growth strategy from the Ansoff Matrix for the
Ryanair airline has been chosen to be the Market development strategy.
According to…, a market development strategy involves selling the existing products
some new market or a set of new markets. In the market development strategy a firm decides to
ensure that as it has a certain set of capabilities, it makes considerable use of them and thereby
expand its operations by trying the same strategy and product in another market than the one in
which it has been operating. Ryanair can make extensive use of its capabilities in order to
engage in a market development growth strategy by following various techniques like capturing
new geographical markets which will thereby assist the airline company to sell the product to a
new region or a new continent. The primary risk as present in the case is whether the firm will be
able to achieve success in market channels or not. The next procedure is either engaging in new
product packaging whereby the appearance of the airline can change. Another popular method of
engaging in a market development strategy is to engage in new distribution strategies whereby
the manner in which the service appears to the customers undergoes a change.

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For Ryanair it has been recommended that it adopts a new geographical market
development strategy using which it markets the Asian markets. The Asian markets with
countries like India, Nepal, Bangladesh and Bhutan can be considered to be four new markets
which Ryanair can target with its low cost carrier model (Lasserre, 2017). However, conducting
this process is not easy and Ryanair would be required to ensure that the different departments
undergo a considerable change so as adjust to the Asian markets. This would require adequate
training of the employees so that they have the capability to manage the new markets.
Evaluation of the method using SAFe Criteria
The SAFe criteria is an evaluation tool which assesses the suitability, the acceptability
and the feasibility of a chosen strategy. The given section will be discussing the SAFe criteria for
the evaluation of the Market development strategy of Ryanair.
Suitability The market development strategy will be
highly suitable for Ryanair as the company
has been performing considerably well with
respect to its current operations and hence, as
the Asian market is growing considerably and
using suitable growth method Ryanair would
be able to perform well in the market.
Acceptability The proposed strategy is deemed to be
acceptable as it is performed in the interest of
the stakeholders (Wheelen et al., 2017). The
only risk involved is the risk of competition
which can be overcome easily. The returns

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achieved will be considerable as compared to
the risk involved.
Feasibility The proposed market development strategy
would work well for Ryanair due to its
performance in the British market and the
finance available for the growth. Training will
required to be provided to the different
employees in order to adapt to the market.
Benefits of the strategy
The benefits to Ryanair are as follows:
 Larger global market share: Ryanair will earn a larger global market share by investing in
the market development strategy.
 Brand popularity: The brand will be able to become considerably popular after its
expansion process.
 Revenue: It will be able to earn a larger revenue base with respect to its expansion
(Morschett, Schramm-Klein & Zentes, 2015).
Risks associated
The risks associated with the business are as follows:
 Competition: The competition from the company which already exists in the Asian
countries might appear as a risk to the firm.
 Investment costs: The investment costs of expanding the operations are considerably
high.

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Growth method to be adopted
The growth method can be essentially described as the method which shall be adopted in
order to pursue the growth strategy of the organization. A growth method assists a firm in
ensuring that the firm is successful in carrying out its operations using a specific procedure
(Meyer, Neck & Meeks, 2017). The growth method which Ryanair can adopt to achieve its
market development strategy is the Strategic Alliance.
The strategic alliance can be described as an agreement between two or more parties to
pursue a given set of goals and objectives. A strategic alliance is usually formed between
different companies whereby one of them has an advantage of assets and expertise over the other
which can then assist them to ensure that they are able to achieve those objectives and engage in
long term benefits as well as innovation. There exists a sense of mutual benefit when the
companies tend to form an alliance with each other.
There are various types of strategic alliances which exist with respect to resources,
channels, funding and expertise (Hill, Jones & Schilling, 2014). The alliance often involves
technological or resources transfer which may assist the business.
It is suggested that Ryanair engages in a strategic horizontal alliance with one of the
companies in the same field named Air Asia. Air Asia is a company based in Malaysia which has
its operations in India, Nepal, Bhutan as well as other countries. Hence, if Ryanair is able to
engage in a horizontal strategic alliance with Air Asia then it will be able to benefit in a twofold
from this (Ginter, Duncan & Swayne, 2018). Firstly, Ryanair will be able to access the tangible
resources along with the routes used by Air Asia and on the second hand, it will also be able to

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associate itself with the brand name of Air Asia which is a low cost carrier just like Ryanair and
widely popular in Asia.
Along with making use of Air Asia`s normal routes, Ryanair can also make considerable
use of the new routes which have not yet been captured by the former. In this method, the
airlines will be successfully able to grab a larger market share and also ensure that it is able to
expand its own revenue as well (Hitt & Ireland, 2017). This can be considered to be a first step in
the strategic growth of Ryanair airline whereby if it gains success in this domain, it can look out
to expand in other domains as well and in other countries also.
Evaluation of the growth method
The SAFe method will be used in order to assess the feasibility of the growth method
which Ryanair wants to adopt in Asia.
Suitability The strategic alliance strategy with the Air
Asia company can be deemed to be
considerably suitable for Ryanair because
its business model is very suitable to that of
Ryanair and it already has a wide presence
which would then assist the firm to ensure
success (Ethiraj, Gambardella & Helfat,
2018).
Acceptability The proposed strategy is will be acceptable by
the different investors of Ryanair because
Asia is already a growing market and an
expansion plan there would be beneficial for

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the firm.
Feasibility The proposed growth method is feasible for
the company and with a little investment in
training and resources, the firm will be able to
attain wide range success.
Benefits of the method
The following method will be beneficial to the Ryanair in the following manner:
 It will help them to expand in the Asian market with the help of a strategic backup from
Air Asia
 It will contribute towards increasing their revenue and market share (Doz, 2017).
 It will assist them as Air Asia is already a popular brand.
Risks associated
The risks associated are as follows:
 The different routes are already taken up by other competitors and hence, this strategy of
Ryanair might not workout
 In case of a misunderstanding, resources and time of the firm would be wasted.
Conclusion
Therefore, from the given analysis it can be rightfully stated that Ansoff`s matrix serves
as a useful tool in order to ensure that any firm can adopt a considerable growth strategy. The
given case was that of Ryanair airlines and its expansion opportunities. The market development
growth strategy was adopted as a suggested strategy which was followed by the brief description

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and evaluation of the plan. This was then followed by the evaluation and explanation of a growth
method or Ryanair. The growth method of a Strategic Alliance with Air Asia was planned to be
adopted. If it undertakes effective training and planning, Ryanair would benefit greatly from this
strategic implementation.

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References
Barney, J. B. (2017). Resources, capabilities, core competencies, invisible assets, and knowledge
assets: Label proliferation and theory development in the field of strategic
management. The SMS Blackwell handbook of organizational capabilities, 422-426.
Doz, Y. L. (2017). Strategic management in multinational companies. In International
Business (pp. 229-248). Routledge.
Ethiraj, S. K., Gambardella, A., & Helfat, C. E. (2018). Theory in strategic
management. Strategic Management Journal, 39(6), 1529-1529.
Ginter, P. M., Duncan, W. J., & Swayne, L. E. (2018). The strategic management of health care
organizations. John Wiley & Sons.
Hill, C. W., Jones, G. R., & Schilling, M. A. (2014). Strategic management: theory: an
integrated approach. Cengage Learning.
Hitt, M., & Duane Ireland, R. (2017). The intersection of entrepreneurship and strategic
management research. The Blackwell handbook of entrepreneurship, 45-63.
Lasserre, P. (2017). Global strategic management. Macmillan International Higher Education.
Meyer, G. D., Neck, H. M., & Meeks, M. D. (2017). The entrepreneurship‐strategic management
interface. Strategic entrepreneurship: Creating a new mindset, 17-44.
Morschett, D., Schramm-Klein, H., & Zentes, J. (2015). Strategic international management (pp.
978-3658078836). Springer.
Rothaermel, F. T. (2015). Strategic management. McGraw-Hill Education.

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Ryanair.com. (2018). Book direct for the lowest fairs. [Online]. Available at:
https://www.ryanair.com/gb/en/ (Retrieved from: 17 Oct. 2018).
Wheelen, T. L., Hunger, J. D., Hoffman, A. N., & Bamford, C. E. (2017). Strategic management
and business policy. Pearson.