Analysis of Business Strategy of Ryanair

This report analyses the business strategy of Ryanair, a leading Irish airline, by evaluating the impact of macro environment, internal environment and capabilities using appropriate frameworks such as SWOT analysis, VRIO analysis and McKinsey Strategy Framework. The report also includes a detailed analysis of Ryanair's mission, objectives, and strategic planning techniques. The report concludes with recommendations for Ryanair to improve its business strategy.

Business Strategy

Table of Contents
INTRODUCTION ..........................................................................................................................3
TASK 1............................................................................................................................................3
P1: Applying appropriate frameworks analyse the impact and influence of the macro
environment on a given organisation and its strategies..........................................................3
TASK 2............................................................................................................................................6
P2: Analyse the internal environment and capabilities of a given organisation using
appropriate frameworks..........................................................................................................6
TASK 3..........................................................................................................................................10
P3: Applying Porter’s Five Forces model evaluate the competitive forces of a given market
sector for an organisation. ...................................................................................................10
TASK 4..........................................................................................................................................11
P4: Applying a range of theories, concepts and models, interpret and devise strategic planning
for a given organisation........................................................................................................11
CONCLUSION..............................................................................................................................13
REFERENCES..............................................................................................................................15

INTRODUCTION
Business organisation is basically meant by entity established in order to regulate
commercial practices of buying and selling of products and services. For instance, these
activities are organised upon various purpose according to individual involved in carrying out
activities and operations. With the help of these strategies a company can do the market analysis
and enjoy competitive advantage over their rivals (Cavaleri,and Shabana, 2018). Efforts and
actions are initiated in order to achieve defined goals and objectives of respective organisation.
Business strategies are used by the organisation in framing the different guiding principle and
methods which ultimately helps them in maintaining and performing their work in proper way. It
facilitates in efficient decision-making processes as well as setting up of objectives. The
following report is based on Ryanair which is a well known Irish Airlines. The respective
company was founded in 1984 and the headquarter of the company is situated in Dublin Airport,
Ireland. The subsidiary companies of the Ryanair are alta AIR, Ryanair UK and Buzz. The
following report is going to cover the internal as well as external analysis of the chosen company
with the strategies in the organisation by applying porters generic and Bowman strategic clock.
TASK 1
P1: Applying appropriate frameworks analyse the impact and influence of the macro
environment on a given organisation and its strategies.
Macro environment is determined as aggregate of organisations and companies operating
in a business environment. In addition to that, different organisations and companies requires
different working areas and methods which in order to ensure success and achievement of
organisational goals. In order to maintain the flow of goals and objectives within the firm, major
strategy has been used by Ryanair according to mission and vision.
 Mission :- To provide airline services at low fare to their target customers in order to
attract and engage higher customer base towards services offered by company.
 Objectives :- To become a leading company or organisation engaged in providing
services in airline industry (De Spiegelaere, 2020).
Techniques used in strategic planning
 Benchmarking :- This strategic technique includes comparison of performance of
respective organisation with respect to other competitor brands in the industry.

 Business Analysis :- This approach includes identification and determination of needs of
a respective business organisation as well as developing strategies for the same.
Analytical approach which are used in macro environment
SWOT Analysis
SWOT analysis is determined as a strategic planning framework which facilitates in
identifying and analysing factors that results in being Strength, Weakness, Opportunity, and
Threat to respective organisation.
Strengths
 Low fares: The average fares incurred
for using airline services of respective
organisation is quite less as compared
to other primary competitors. In spite of
considering additional services, fares of
Ryanair is comparatively lesser than
major competitors.
 Enormous routes: Ryanair is engaged
in providing airline services over 1800
routes worldwide which results in being
a competitive advantage for the
company (Ford, 2020).
Weaknesses
 Inefficient reputation: Bad reputation
among customers resulted in being the
major weakness or barrier to company.
Referring to a survey organised in
December 2020, 6500 determined
respective organisation as “Worst
Airline service over Short Haul”.
 Strikes: A major part of unsatisfied
workforce involved in strikes over
insufficient compensation structure. For
instance, respective organisation was
unable to terminate and conclude the
particular scenario for about 48 hours
which resulted in a negative influence
over customers.
Opportunities
 New Aircraft: Ryanair has made an
announcement of order of a new
aircraft to be added in their list. In
addition to that, it could result in an
efficient opportunity of providing
higher quality services to target
customers.
Threats
 Travel restrictions: Pandemic phase of
COVID-19 has resulted in travel
restrictions over people with
unnecessary and casual travels. For
example, it could lead to a major threat
to respective organisation.

 Assistance from government: The
respective organisation is among major
companies facilitated by central bank
of England. Moreover, these benefits
provided to respective organisation
will support in further growth and
expansion.
 Fluctuation in price of fuel: With
consistent fluctuations over prices of
fuel, Ryanair could face challenges in
determined strategic business model as
well as profitability.
PESTEL analysis :-
This is determined as a strategic tool which is used to identify and determine various
factors and aspects that affects organisation in some or the other way. The outcome of this
framework results in factors and aspects that could be considered in decision-making process. In
context to the Ryanair PESTEL analysis has been discussed below :-
 Political:- Being a leading company in the airline industry, respective organisation is
facilitate by efficient support from government authorities. The respective organisation is
among few organisation getting benefits from Central Bank of England (Helmold,
Terry,and Hummel, 2020).
 Economic: The primary effect upon Ryanair has been impacted by restrictions over
international travel due to pandemic of COVID-19. With the increasing income of
population in society, people can now afford more to travel as well as personal expenses.
Furthermore, these economic factors has resulted in impacting respective organisation.
 Social: With the increasing reasons to travel, rise in airline services has been observed.
For instance, it includes business travel, casual trip, unnecessary travel, etc. results in
providing additional value towards airline industry with increase in use of airline
services. Furthermore, the pricing strategy of respective company of providing quality
services at low fare price results in being a positive aspect towards growth of airline
industry.
 Technological:this factor is totally related to the innovation and digitalisation with in the
economy of the country. If the firms want to improve their sustainability in the market
then they have to adopt the technology within the organisation with the change in time. In
context to the Ryanair, different types of techniques has been adopted by them in order to

manage their all mobile application. Booking online from this application will facilitate
the customer in a very effective manner.
 Legal: Legal factor is one of the most important factor in the aviation industry. Any non
compliance in the company operational activity of Ryannair can impact the company's
reputation as well as can also result the major fines by the legal legislation. As the
mentioned company offers the services in the various part of the economies. Hence it is
important for the respective company to follow all the legal laws and regulation such as
labour laws, as well as complaint the rules of domestic market in order to eliminate the
risk. CAA is one of the main regulation that enforced on the aviation industry by UKI
government. As, any misconduct of laws can impact the overall operations of respective
company.
 Environmental: Environment factors are one of the major concern nowadays for
aviation industry. In order to reduce the impact on environment The respected company
implied several dedicated practices in their operations. Ryannair invested billion of
dollars in order develop the greener aircraft in their operations. They improvising their
operational technology as well as reviewed the route map in order to reduce the fuel
consumption (Henderson, and Hines, 2019).
TASK 2
P2: Analyse the internal environment and capabilities of a given organisation using appropriate
frameworks.
VRIO Analysis
It is determined as analytical framework that facilitates in evaluation and analysis of
company's resources as well as capabilities. Furthermore, it classifies resources in few categories
including Value, Rarity, Inimitable, and organised.
Resources Valuable Rare Inimitable Organised
Brand position Yes Yes - -
Financial
resources
Yes - - Yes
Customer Yes - Yes Yes

network and
loyalty
Human
resource/workfo
rce
Yes Yes - Yes
Valuable
 Brand position: Ryanair is one of the leading company in airline industry which
contributes in providing additional value towards company's growth. For instance,
leading brand position of company facilitates in attracting their target customer base
towards services provided by respective organisation.
 Financial resources: It includes essential financial practices which allows company in
maintaining stability in the organisation. Moreover, raising funds through issue of stocks,
shares, bonds, etc. and efficient allocation of funds further contributes in higher
profitability (Jeong, and et. al., 2018).
 Customer network and loyalty: Strong and efficient customer network and loyalty of
respective organisation facilitates in contributing additional value to company. In
addition to that, it allows company in retaining existing customers as well as attracting
new ones.
 Human resource/Workforce: Skilled employees or workforce engaged in carrying out
activities and operations of respective organisation ensures efficient completion of
assigned tasks. For instance, it results in achievement of determined organisation goals
and objectives.
Rare
 Brand position: With huge and wide existing customer base, brand position of Ryanair
is rare to be achieved by other competitors in the market. It allows company to maintain
higher market position in the airline industry over other major competitors engaged in
providing services in airline industry.
 Human resource/Workforce: The skilled and efficient workforce employed in
respective organisation results in being a rare resource which cannot be easily acquired

by other competitive organisation in airline industry. Furthermore, it facilitates in
enhancing overall productivity in organisational operations carried out in the workplace.
Inimitable
 Customer network and loyalty: Existing customer base and loyalty of Ryanair is
inimitable as it could not be easily achieved by other companies engaged in airline
industry (Kembauw, and et. al., 2019). For instance, respective company operates with
efficient strategies that allows company in retaining existing customer base.
Organised
 Financial resources: Financial activities and practices regulated within respective
organisation has resulted in sustainable financial position. Therefore, these financial
practices are determined at enhancing profitability in carrying out company's core
operations and activities.
 Customer network and loyalty: Ryanair is aimed at increasing existing customer base
to a higher extent in order to expand services provided by respective organisation. In
order to maintain customer loyalty, various efficient strategies have been implemented
including customer service, interaction or connecting with customers in flight, low fares,
etc. Therefore, it facilitates in retention of customer loyalty towards services offered by
respective organisation.
 Human resource/workforce: The respective organisation has implemented strict rules
and regulations over working practices and workplace culture in order to promote
discipline and formal approach. Furthermore, efficient and strategic human resource
management facilitates in completion of task in an organised manner as well as reducing
overall cost incurred in carrying out operations and activities (Kerzner, 2019).
McKinsey Strategy Framework
This strategic framework is taken into consideration in order to determine success factors
of a company with reference to 7 aspects of the company. For instance, factors and elements
involved in this framework are internal to respective organisation that supports success and
growth. These elements are determined as follows:
Hard Elements Strategy: The strategies of respective organisation are clearly defined and determined to
employees and other stakeholders of the company. Moreover, Ryanair operates with a

strategy of providing higher quality services at low fare or fees in order to increase
customer customer base. Therefore, clarity in defining strategies to be implemented
allows management to maintain performance and contributing guidance to workforce in
carrying out operations and activities. Structure: Ryanair has implemented flatter hierarchical organisation structure in
company's workplace which involves fewer level of workforce engaged in carrying out
operations and activities. For instance, It facilitates in efficient coordination and
collaboration of different departments with few or no barriers to communication among
employees and management at different levels.
 System: The primary and major systems defined in respective organisation includes HR
management, operations, public relations, strategic planning, etc. Moreover, there are
various tools and methods are introduced in order to monitor and control these systems
organised in order to achieve defined goals and objectives of company (Konovalova, and
et. al., 2020).
Soft Elements Shared values: Core values determined and defined in Ryanair plc includes creativity,
transparency, quality, accountability, etc. All these values results in development of
efficient and productive corporate culture which facilitates in enhancing overall
productivity in carnying out tasks and operations. Style: Leadership style implemented in respective organisation is determined as
participative leadership style. In addition to that, it facilitates in encouraging and
supportive organisation culture with consideration of ideas and opinions of workforce
engaged in carrying out operations and activities of the company (Lopes, and et. al.,
2018). Staff: Ryanair has a adopted systematic structure for identification and determination of
needs of employee's capabilities in the organisation. For instance, being a leading
company in airline industry, respective organisation has employed enormous number of
skilled workforce. Therefore, respective company encourages and promotes diversity in
their workforce globally.
 Skills: Workforce engaged in Ryanair is highly skilled and capable of carrying out
activities and operations in an efficient manner. In order to manage skills and capabilities

of employees, regular workshops and training programs are organised. Furthermore, it
will facilitate in providing competitive advantage to respective organisation.
TASK 3
P3: Applying Porter’s Five Forces model evaluate the competitive forces of a given market
sector for an organisation.
Porter's five forces model
It is determined as framework that is used to analyse competitive business environment.
For instance, it results in identification and determination of current scenario of business
environment as well as company's competitive position.
Competitive Rivalry – High
In the current business environment, there are various airlines offering quality services at
low fare prices. Moreover, these competitive companies are also engaged in providing services
upon similar routes and paths as Ryanair. Furthermore, higher competition in the market results
in shift of customer base towards services offered by other competitive organisations and
companies operating in airline industry.
Threat of New Entrants – Low
Airline or aviation industry is one of the most expensive industry in order to establish a
business unit. It facilitates in lowering down the risk or threat of new entrants into this industry.
Therefore, threat of new entrants to Ryanair is low as it incurs a huge amount of investment and
cost in order to establish a business unit in same (Mączyńska, and et. al., 2019).
Bargaining Power of Suppliers – High
Airline industry is comprised of limited suppliers of aircraft including Airbus and
Boeing. As a result of limited suppliers and higher number of organisation in airline industry,
there is a high bargaining power of suppliers. Furthermore, Ryanair purchases aircraft from
Boeing which allows higher bargaining power to supplier in purchase of aircraft.
Bargaining Power of Buyers – High
In order to maintain customer loyalty towards services provided by respective
organisation, various strategies are implemented by organisation to retain existing customers. For
instance, customers always look out for most suitable and lowest fare available for using airline
services.

Threat of substitutes – Low
There is a low threat of substitutes to respective organisation due to the purpose of using
airline services by customers. Being a mean of transportation, airline services are used for
travelling longer distance in lesser time. Whereas, other means of transportation incurss huge
time as compared to airline services which facilitates in lower threat of shift of customers
towards other available substitutes.
TASK 4
P4: Applying a range of theories, concepts and models, interpret and devise strategic planning
for a given organisation.
Porter's generic strategy
This strategy determines how a company or organisation will achieve competitive
advantage while operating in chosen marketplace. For instance, it involves strategies to be
implemented which facilitates in further growth and expansion of respective organisation. These
competitive advantages are determined as follows:
 Cost Leadership: This strategy is taken into consideration by business units in order to
serve a higher number of customers with reduction in price of the product or service
offered in consumer market. In addition to that, lower price of product or service is
driven by lower cost of production incurred in manufacturing these products and services.
Furthermore, this strategy is implemented by business organisation in order to acquire
higher overall profitability in serving customers in market with products and services
(Moşteanu, Faccia, and Cavaliere, 2020).
 Differentiation: This strategy recommends introducing differentiated and distinct
products and services into consumer market in order to retain existing as well as attract
additional customer base. It includes identification and determination of various
dimensions that are generally appraised by customers. For instance, these determined
dimensions and aspects could be further considered in strategic planning in order to fulfil
customer demands by carrying out activities and operations.
 Focus: This strategy determines a specific segmentation of customers to be focused upon
in designing and developing strategies to be implemented. Furthermore, it is comprised of
two variants of including cost focus and differentiation focus. Consideration of strategy

among these two variants depends upon the target segment or group of customers
determined by management. Cost focus strategy looks out for cost advantage in serving
their defined target audience. On the other hand, differentiation focus strategy looks out
for serving differentiated products and services to their defined customer base.
Differentiation Focus strategy is recommended to be implemented in the respective
organisation as it will result in serving higher number of customers. For instance, Ryanair
could introduce a luxury segment of airline services at higher fare prices which will facilitate
company in attracting business class passengers for using respective company's airline services.
Bowman strategic clock
Bowman strategic clock is determined as framework and strategic tool which results in
providing choice of positioning within a particular market. For instance, application of this
strategic tool results in identification and determination of competitive position with reference to
other competitors in the market (Sitepu, and Ompusunggu, 2020).
 Low price & Low value added: This strategy is meant by selling products and services
at lower prices in order to increase overall sales. For instance, it involves practice of
offering products and services in bulk.
 Low price: This strategy includes lowest profit margins as it recommends providing
products and services at lowest price in the marketplace.
 Hybrid: It determines a balance between cost and differentiation in order to maximise
both aspects altogether in carrying out operations and activities.
 Differentiation: It recommends introducing new and differentiated products into market
place in order to attract additional customer base.
 Focused differentiation: This strategy includes providing higher value at higher prices
in order to acquire higher profit margins.
 Risky High margins: This strategy involves setting up higher prices without offering
much of additional services.
 Monopoly pricing: This strategy includes setting up prices in order to acquire maximum
profits from the same.
 Loss of market share: This strategy is primarily considered in the worst situation of
business environment. For instance, it includes selling out market share and moving out
to different market.

Referring to above analysed Bowman's strategic clock, Focused differentiation has been
considered as most suitable and appropriate strategy to be implemented in respective
organisation. Therefore, it will facilitate respective organisation in serving a new and defined
segment of customers in society which will result in increasing overall sales of company.
Strategic plan
 Situation analysis: Being a leading organisation in airline industry, primary strength of
company has resulted in low fares and enormous routes offered in respective
organisation's services. Focus differentiation will be facilitated by huge customer base of
company in introducing a premium segment of airline.
 Vision: To become a global leader providing airline services to maximum number of
customers. For instance, it will include both premium segment of airline as well as
quality services at low fare prices.
 Mission: To offer quality services at low price and increasing customer base to
maximum extent as well as retaining existing customer base (Wang, Cheng, and Deng,
2018).
 Objectives: To become leading organisation engaged in providing airlines services in
Europe with continuous improvements and enhancements.
 Strategy: The strategy taken into consideration is to introduce a premium segment of
airlines in order to serve higher class of society which will result in increasing customer
base.
 Monitoring and Controlling: The strategy recommends consistent improvisations and
efforts towards enhancement of operations in order to increase overall productivity.
CONCLUSION
From the analysis and evaluation conducted in the above report, it can be concluded that
strategy of an organization plays a very important role in order to lead it to success and enable it
to perform effectively in the competitive market. The report have focused over the macro and
micro environment of the company in order to gain understanding of the development and
changes required. Moving along the capabilities and competitiveness of the organization is
analysed with the help of several techniques. A new strategy which is suggested to the entity is
of Focus differentiation through which it can grow and move to offer better services to the

customers gaining productive results and growth. Lastly, a strategic plan is also developed for
showcasing the implementation of the chosen strategy and active planning.

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