Leadership and Strategic Development Processes at RyanAir

This article analyzes the leadership and strategic development processes at RyanAir, including the identification of resources and capabilities, VRIO analysis, and critical evaluation of the framework. It also suggests ways to overcome limitations and gain competitive advantage.

THE LEADERSHIP AND
STRATEGIC DEVELOPMENT
PROCESSES WHICH OPERATE
WITHIN THE INNOVATIVE
CONTEXT AT RYANAIR.

Table of Contents
INTRODUCTION...........................................................................................................................1
MAIN BODY..................................................................................................................................1
Identification of Ryanair’s distinctive resources & capabilities and analysis of those resources
using VRIO framework for determination of organisation’s competitive advantage.................1
Critical evaluation of VRIO framework and discussion of which other model or framework
could be associated to VRIO to overcome its limitations............................................................3
CONCLUSION................................................................................................................................5
REFERENCES................................................................................................................................6

INTRODUCTION
Strategic development can be defined as a kind of process of researching and identifying
strategic options and selecting most appropriate resource that can be used by them to achieve
their main objectives. For strategic development of an organization it is extremely important for
organizations to analyse their resources and capabilities that can be used by them to gain
competitive advantage (ERGASHEV and Ravshanov, 2021). This assessment will lay emphasis
upon analysing and evaluating leadership and strategic development process of RyanAir on the
basis of RyanAir case study. For this, this assessment will focus upon identification of resources
and capabilities of RyanAir, analysis fo those resources and capabilities using VIRO framework
for determining competitive advantage, it will further focus upon critical evaluation of VIRO
framework that can be used for identifying ways in which limitations of RyanAir can be
overcome.
MAIN BODY
Identification of Ryanair’s distinctive resources & capabilities and analysis of those resources
using VRIO framework for determination of organisation’s competitive advantage.
Ryanair is an Irish Ultra low cost carrier that was founded in 1985 and was one of the
leading low cost airline which is located in Europe and whose headquarter is in Ireland. Ryanair
fleet is increasing continuously and for this they have added Boeing 737 aircraft’s with new
routes, new base and new operations. Recently due to emerging new airlines that provide low
cost services to customers competition for them have increased drastically.
Recent, strategy of Ryanair is to focus upon adopting cost leadership strategy by
designating themselves as Europe’s favourite airline by adopting low cost or low fare model. But
recently they have focused upon bringing chances within their current recently due to increasing
competition with EasyJet (Melnik, Ermolaev and Kuzmin, 2019). This is because their customers
prefer easyJet as it is classy and cheap as compared to Ryanair because Ryanair is pain and
cheap. They have always focused upon adopting cost reduction strategy by reducing cost
associated with primary and secondary activities or operations. They do not offer any special
services to their customers like serving means or booking seats as they are low cost airlines. But
increasing tough competition with easyJet have made it important for Ryanair to focus upon
bringing chances within their current strategy. They have recently purchased fuel efficient
aircrafts in order to reduce fuel consumption.
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VIRO analysis of Ryanair
VIRO framework is a kind of tool or framework which is used by organizations for
assessing their internal environment for evaluating resources and capabilities of organization for
analyse their competitive potential. It can also be said that this framework directly helps in
analysing internal resources and capabilities of the company that can be used as a source of
gaining competitive advantage. As per this framework resources of an organization is rare and
valuable assets of an organization due to which it becomes important to focus upon evaluating
resources and capabilities of an organization for gaining competitive advantage (Gary, Amos and
Tehseen, 2018). Foru main questions that are asked while using this framework are: how
resources and capabilities are rare, can those resources or capabilities be imitated, are those
resources and capabilities organized, and are those resources and capabilities valuable or not.
This analysis can directly help in gaining and ensuring that organization has competitive
advantage. This VIRO framework can be used by organizations like Ryanair for analysing their
competitive advantages over their competitors.
Value: it is first and the foremost component of VIRO framework that helps in analysing value
that is offered by organization in terms of their products and services to their customers. One of
the most valuable capabilities of Ryanair is implementation of their low cost cornerstone. They
have further increased their overall value by combining with subsidiaries from government for
reducing overall chances of airport in order to maintain effectiveness of their low priced model.
This has further helped them in enhancing their overall customer base and provides lower cost
services to customers for attracting more number of customers (LEE, KIM and PARK, 2020).
Not only this, it has further helped them in enhancing their overall growth and increased their
overall customer database. Not only this, it has further helped them in neutralizing their
competition. Another valuable resource and capability of Ryanair is their low cost policy. After
launching new routes their main target had been to price their new routes to lowest as compared
to other lowest cost careers by providing satisfactory operating margins to the company.
Recently, Ryanair had purchased low fuel consumption aircrafts and sold their old high
maintenance aircrafts in order to reduce their overall operational cost. It has also helped in
reducing their fuel cost by more than 25 percent. This has not only helped them in increasing
their productivity but has also helped them in increasing overall quality of service provided by
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them to their customers by bringing improvement within their overall passenger service (Silin,
Dvoryadkina and Antipin, 2018).
Rarity: Ryanair is one of those organizations who is well known for providing their rare
valuable airline services to their customers to at extremely lower cost as compared to their
competitors. Ryanair uses only Boeing aircrafts because of which it becomes easier for them to
train their employees. They also focus upon training their employees about different kinds of
equipments and aircrafts used by them in order to main safety of their staff members and
customers. It is one of their rarest resource and capability that helps them in gaining competitive
advantage over their competitors. This has further helped them in bringing improvement within
their passenger services and attracts more number of customers (Indartono and Wibowo, 2017).
Imitability: low cost service is one of the main capability of Ryanair and its imitation chances is
extremely high but still it is extremely difficult for most of the organizations to imitate low cost
service and high maintenance of Ryanair simultaneously. In fact for new entrat in this industry it
is extremely difficult. But if Ryanair do not maintain overall quality of services provided to them
then imitating this capability by other organizations in this sector can become much easier. As a
result it becomes extremely important for Ryanair to maintain overall quality of their services in
order to maintain competitive advantage (Lacaze, 2020).
Organization: Ryanair has a well defined, well organized and well cultured organizational
structure. This helps them in maintaining training and development of their staff members,
maintain lower cost of services, maintain high quality of services provided by them.
Above VIRO framework has helped them in gaining competitive advantage over their
competitors such as lowest cost services, lower fuel cost, high quality aircrafts that require loet
maintenance.
Critical evaluation of VRIO framework and discussion of which other model or framework could
be associated to VRIO to overcome its limitations
VRIO framework refers to value, rare, inimitable and organised. It is important to apply
this framework because it helps in identifying factors which can affect performance of RyanAir
company and determine ways by which competitive advantage can be gain. This framework has
some positive points such as, it encourages real understanding and better plans can be made for
future growth of company. Managers should identify market situation and according to that they
should make plans or strategies to gain competitive advantage and it helps in attracting people
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(Chatzoglou, Chatzoudes, Sarigiannidis and Theriou, 2018). VRIO framework enables managers
to understand things in better ways and necessary steps can be taken which is beneficial for
growth and development of company. When a firm enters into new market then it is essential to
conduct market survey so that better decisions can be taken.
RyanAir company is providing its product at low price to attract customers and to increase
sales. They are providing services to customers at less price as compare to their competitors and
good quality products & services are delivered to consumers. To attract customers, it is essential
to make plans or strategies so that goals can be achieved and it helps in gaining competitive
advantage. RyanAir is one of the well- known organisation which provides good quality products
to customers and find ways to attract people. VRIO analysis is an effective way to evaluate
internal factors which affect performance of firm. The company is delivering products at low
cost as compare to competitors. If company will increase prices of products than may be
customers shift to other organisations. People want good quality products at reasonable prices
and RyanAir is one of the well- known organisation which focuses on customer satisfaction and
they are generating profit (Ariyani and Daryanto, 2018).
For survival of company, it is important to make plans or strategies for growth of firm and
necessary steps should be taken by managers so that business can run smoothly. VRIO helps in
gaining competitive advantage and perform better than others. Another positive point of RyanAir
is company is making rules and regulations for safety of employees and provide them good
working environment. It may have negative impact on performance of employees because may
be workers are not working properly or not following rules. Managers should make policies and
procedures after analysing market situation so that there will be no problem. Safety of staff
member is important and it is the responsibility of managers to provide good environment to
employees. RyanAir is using tools and techniques for providing good products to customers and
it requires high maintenance cost. Managers should focus on issues which is faced by company
and try to find solutions so that goals and objectives can be accomplished (Buzatu and et.al.,
2019).
Maintenance cost should be reduced because there are other expenses which firm has to
bear. Managers are responsible for handling all issues and solve problems of employees.
RyanAir company is one of the best organisation which provides good quality products to
customers and increase revenue (Ariwibowo, Saputro and Haryanto, 2021). For accomplishing
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goals and objectives, it is important to make identify factors which affect performance of
company and creative solutions should be find. It is essential to provide safe and healthy working
environment to employees so that they can work efficiently. Managers are making plans for
managing day to day operations and they should reduce maintenance cost. When maintenance
cost is reduced then profit of company can be increased.
Organisation culture and structure should be good so that employees can work efficiently
and focus on accomplishing goals & objectives. Managers are responsible for providing good
working environment to employees and safe premises. It helps in boosting confidence and
morale of employees and they give their best for achieving targets. It is essential to make
organisational structure in which goals and objectives are clearly mentioned. It should also
include roles and responsibilities of every employee so that there will be no confusion and it
helps in completing work on time. Organisation culture is different; it depends upon size of
organisation. It is important to make proper structure so that work can be done in systematic way
and employees can work efficiently (Miethlich and Oldenburg, 2019). Company is earning profit
because people are attracted as goods and services are provided at low cost as compare to
competitors.
For success of an organisation it is essential to focus on satisfying needs of customers and
provide them good quality products. RyanAir company should not increase price of products
because it may have negative impact on overall performance of organisation. Managers should
identify positive and negative points of VRIO framework and then make plans to gain
competitive advantage in market and better opportunities can be received. It is the responsibility
of managers to make plans or strategies better than competitors and attract people.
CONCLUSION
From the above assignment it has been summarized that there are various kinds of resources
and capabilities that can help an organization like RyanAir to achieve competitive advantage but
for this, it is extremely important for them to evaluate and analyse whether their rare, organized,
valuable and cannot be imitated. This analysis can be done with the help of VIRO framework
that can further help an organization to identify ways in which limitations associated with their
resources and capabilities can be overcome and competitive advantage can be gained. It has also
been concluded that VIRO framework is an appropriate framework that can be used for
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evaluation of important resources and capabilities of an organization that can be used by them
for gaining competitive advantage.
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REFERENCES
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Framework: Development of Scale for Resource and Capabilities Organization (Case
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Chatzoglou, P., Chatzoudes, D., Sarigiannidis, L. and Theriou, G., 2018. The role of firm-
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Online
VIRO Framework. 2020. [Online]. Available through :<
https://strategicmanagementinsight.com/tools/vrio.html >
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