Ryanair Strategic Management Report

This report analyzes Ryanair's strategic management, examining both internal and external factors influencing its success. It delves into PESTEL and Porter's Five Forces analyses, competitor analysis, SWOT analysis, and strategic direction options. The report concludes with recommendations for Ryanair to enhance its competitive advantage and customer satisfaction. Desklib provides past papers and solved assignments for students.

STRATEGIC
MANAGEMENT

Table of Contents
INTRODUCTION...........................................................................................................................1
MAIN BODY...................................................................................................................................1
Ryanair – Background Information .......................................................................................1
External : Airline Industry Analysis ......................................................................................1
Brief Competitor Analyses ....................................................................................................3
Internal : strategic Capabilities ..............................................................................................4
Strategic Directions Options .................................................................................................5
Strategy Selection and Justification ......................................................................................6
Conclusion and Recommendations..................................................................................................7
REFERENCES ...............................................................................................................................8

INTRODUCTION
Strategic management refers to the process which help the company for analysing,
monitoring and continuous planning and also helps to achieve the goals and objective of the
company. Ryanair is the Irish low cost airline that was founded in 1984. In the present report it
covers the background of the company and also cover the internal and external analyses which
are help to identify the various factor which effect the business. Strategic direction tools are used
to evaluate the Ryanair's strategic choice and future direction. Further it covers justification
recommendation of the strategic direction.
MAIN BODY
Ryanair – Background Information
Ryanair is Europe 's largest airline, founded in 1984. Ryanair has grown from a small
airline, flying the short journey from Waterford to London Gatwick, into Europe 's largest
carrier. Headquarter of Ryanair is situated in Swords, Dublin, Ireland. Ryanair now has over
13,000 people working for the company. The strategy of the company focus on low cost and no
frills airline. The company has approx 1000 route network that serves around 37 countries such
as in Morocco, Israel, Jordan, Europe, North America and many more. In 1997 the company
went public because of its rapid growth, the money raised used to expand the airline into a pan-
European carrier (Moutinho and Vargas-Sanchez eds., 2018).
External : Airline Industry Analysis
PESTEL analyses is the tool which helps to identify the element which are present in
macro – environment and also influence on the way Ryanair makes its decision. This include –
political, economic social, technological, environment and legal factor which are discussed
below-
Political Factor
Political factor are the factor which affect the decision making process. The airline is
affected by the decisions posed by the other political organisation like the OPEC, in this the
organisation unite the oil producing countries and then decide the oil costs. This influence
Ryanair as high cost affected it to large extent. There are many political factors which affect the

Ryanair are various trade and tariff regulation, different rules and regulation and industrial safety
framework (Mkude and Wimmer, 2015).
Economic factors
This is the most important aspect which need to be taken care as it affect the profit
generation of Ryanair. There are many factors which affect the Ryanair are inflation rate ,
income level, employment rate, economic cycle, interest rate and many others. If the GDP of the
country is decreases then it will affect the behaviour of the customers as airline sector will
experience falling revenue as air travel has decreased.
Social Factor
Social factor include the attitudes changing according to the preferences of the customers,
education level, leisure interest. As customers has wide variety of choices between the airlines,
road transport and even rail transport. Low end customers tend to always look for lowest cost .
This will influence Ryanair to the large extent.
Technological Factors
Technological factor plays a great role in Ryanair 's success and likely to be important
also in the future. Ryanair is using aircraft new generation engines which help with cost
reduction strategy. The rise in online ticketing, internet sales and online check in has increses
efficiency and effectiveness of the air line industry.
Environment Factor
Environment factor can impact the air line industry to the large extent. As there is rise
concerns about environment as there is demand made of airlines to lower their carbon emissions.
And also climate and weather changes affected the airline industry and their network routes.
Legal Factor
There are legal factors which influence the Ryanair as there are many rules and regulation
which affect the airline industry. As it include customers protection act, health and safety act,
employment act, intellectual property act and discrimination act.
Porter's five forces analysis :
It is the model which used to analyse the external factor which affect the Ryanair. In
which it includes five factors which affect the working of the industry are -
Bargaining power of customers -

Ryanair customers enjoy the bargaining power as it is very easy for the customers to
switch to other airlines. Bargaining power of the customers is relatively high . As there are many
competitors of Ryanair and customers has many options if the price of the tickets go out of their
pocket.
Bargaining power of supplier
The supplier switching costs for Ryanair is extremely high as there are limited number of
supplier in the industry. So it is very important for Ryanair to maintain a strong relationship with
the suppliers. As there are only two producers for production of planes so these companies will
charge very high price for planes to all airlines' company.
Threat of substitution
As there are much other transportation such as railways, roadways etc. but Ryanair
provide relatively lower price for the ticket and also offer high quality services to the customers .
So threat of substitution is relatively low.
Threat of new entrant
As entry in the airline industry is not so easy task. As it require a lot of investment . It is
considered as one of the expensive industry and thus have lot of entry barrier. So threat of new
entrants is very low for Ryanair.
Threat of competition
This factor affect Ryanair to the large extent. As there are many competitors which are
providing airline tickets in relatively low price and also providing high quality services which
gives very tough competition to Ryanair. Due to the intense competition between different
airlines it affects the profit of the industry. So threat of competition is extremely high for
Ryanair.
Brief Competitor Analyses
The major competitor of Ryanair are Easy Jet, Whiz Air and blue Air. As there are many
new entering of new airlines in the Europe which has lead to increase the competition level in the
industry. As about Easy Jet its operating income is £592 million and net income is £358 million
and employees are 12280. And Whiz Air revenue is £1946 million and operating income £291.8
million and net income is £275.1 million. And on the other hand Blue Air revenue is £415

million, operating income £32.4 million and employees are 1250. Ryanair and Easy jet provide
low cost services and they dominate the market share. Ryanair aims to capture market share and
also provide many services to its customers. In 2016, Ryanair carried 34% more passengers than
easy jet. Also, Ryanair has developed many new routes as compare to Blue Air. And Ryanair can
effectively compete with other by its effective cost effective services (Rothaermel , 2015).
Internal : strategic Capabilities
SWOT analyses helps Ryanair to do internal analysis in order to find out the strategic
capabilities of the company.
Strengths :
The first strength of Ryanair is that it is the largest airline in Europe and also have more
presence in most European market and also give tough competition to its customers. The second
strength Ryanair offer low price as it is lowest of any airline in the world. Also, the airline
maintains an extensive online tickets reservation system through which customers could manage
their itineraries without relaying on a travel agent that translate into further cost saving. And it
also has done many innovation changes which become the key of success (Hill, 2017).
Weakness :
The first and foremost weakness is it has poor customers service, tricky service
agreement to increase ancillary revenue and also the unfair pricing practices that mislead the
customers. Also, seasonal fluctuation can also affect Ryanair as low cost airlines are primarily
chosen by leisure travellers, any sudden change in demand could influence the airline industry
(Schuetz and Schrefl, 2017).
Opportunities :
The first and foremost advantage of Ryanair is that it can improve its customers services
which include re-designed websites with more attractive look and feel and with fewer clicks to
made a booking. Ryanair has recently launched its business traveller products. This may lead a
great advantage and benefits for Ryanair. Also, the customer care services can also improve by
Always Getting Better program.
Threat :

Ryanair has a strong safety record but also its low cost approach means that it concentrate
less on the safety. So it should focus on the safety measures of the customers so that it build
strong reputation. Also, there are several factors which affect the organisation which cannot be
control such as fuel prices, currency movements and events which affect the demand of air
tickets.
Strategic Directions Options
For generating the strategic directions for the Ryanair's internal environment TOWS
Matrix is used, which is explained below :
Strengths Weakness
Opportunities Ryanair airlines can take
effective advantage of its low
cost strategies in which it
offers low price with high
quality to increase the sales of
the company (Wheelen and
et.al, 2017).
Company can improves its
customer training services by
providing improve services
and also providing training
programs to its staff and also
to built strong relationship
with the customers.
Threats The Ryanair airlines can
effectively provides
competitive advantage by
charging low price (Percy,
2016).
Company can effectively react
to seasonal fluctuation and
offer customers high quality
services by low prices .
Strategic capability and competitive advantage :
For analysing its competitive advantage and strategic capability Ryanair can analyses the
various threshold resources such as its include financial resources, aircraft, staff, employees and
its other official equipments. By the help of websites or booking services, point to point routes
and its low cost operation Ryanair can analyse its threshold resources. Its effective management
team which provide great services to its customers and also it provides high quality of services
with low prices which give Ryanair a competitive advantage. This help to increase the sales of

the company. Also, it is a leading and oldest airlines make Ryanair different from other . And
also its loyal customers base help to give tough competition to other (Noe and et.al ., 2017).
Strategy Selection and Justification
Ryanair prefer using transnational strategy as compare to international strategy. Because
of it globalisation factor it is more in demand and use by all the companies. Also, on the business
level strategy Ryanair more prefer cost leadership strategy in which its focus on providing best
and excellent services and facilities at low price . This strategy will help the company in many
ways as most of the customers will get attracted towards it and also it will gain competitive
advantage.
Ansoff Matrix is used by Ryanair in order to strategic marketing planning which are
discussed below-
Existing New
Existing Market penetration and
consolidation strategy can be
use by the Ryanair as it focus
on the various factors as low
fares in which it provides low
prices second factor is frequent
flights and also it can merge
with other low cost airlines.
The company can also use
product development strategy
by offering many services such
as offer free flights , online
booking facilities which will
help customers to save their
time and also expanding
industry
New Ryanair can improve its
services and also it can
develop new routes and
destinations. And also by the
help of market develop
strategy it can help to develop
more customers.
By the help of diversification
strategy it can help to generate
more profit .

Cost leadership strategy will not bring benefit for long run. And according to the startegic
planning, Ryanair markets their airline business in the minds of customers as the low cost airlines
that lead to separate market segmentation (Ansoff and et.al, 2019).
Conclusion and Recommendations
For analysis the internal ans external SWOT and PESTEL analysis is used which help to
identify the factor which affect the business. TOWS matrix and strategic capability are also the
tools which help to identify the factors which affect the growth of the business and also influence
the efficiency of the business. Also in this report the business organisation also analysis the 3
major competitor of the company which can influence the running of the company.
It is recommended that the business need to focus on the quality of the services and also
improve its services in order to satisfy the customers. It will help to build the relationship with
the customers . It is recommended that the company must provided various training session and
also as to concentrate on the safety measures of the customers. This will lead to increase the
profit and sales of the company.

REFERENCES
Ansoff and et.al., 2019. Implanting strategic management. Springer.
Hill, T., 2017. Manufacturing strategy: the strategic management of the manufacturing function.
Macmillan International Higher Education.
Lasserre, P., 2017. Global strategic management. Macmillan International Higher Education.
Mkude, C. G. and Wimmer, M. A., 2015. Studying interdependencies of e-government
challenges in Tanzania along a PESTEL analysis.
Moutinho, L. and Vargas-Sanchez, A. eds., 2018. Strategic Management in Tourism, CABI
Tourism Texts. Cabi.
Noe, R. A and et.al ., 2017. Human resource management: Gaining a competitive advantage.
New York, NY: McGraw-Hill Education.
Percy, L., 2016. Strategic advertising management. Oxford University Press.
Rothaermel, F. T., 2015. Strategic management. McGraw-Hill Education.
Schuetz, C. G. and Schrefl, M., 2017, November. Towards formal strategy analysis with goal
models and semantic web technologies. In International Conference on Conceptual
Modeling (pp. 144-153). Springer, Cham.
Wheelen, T. L and et.al., 2017. Strategic management and business policy (p. 55). Boston:
pearson.