Strategic Management: A Case Study of Ryanair

This report is a case study on the strategic management of Ryanair, including approaches adopted, strategic leadership, SWOT analysis, and growth strategies. The report also examines the effectiveness of Ryanair's responses to major changes in the macro-environment and evaluates the strengths and attractiveness of the European budget airline sector.

Strategic Management

Table of Contents
INTRODUCTION ..........................................................................................................................4
MAIN BODY...................................................................................................................................4
TASK 1............................................................................................................................................4
A) Evaluate about approaches used by Ryanair and explain what you believe in the balance of
prescriptive and emergent strategy formulation processes.........................................................4
B) Evaluate about strategic leadership of Ryanair's CEO. Should he continue to serve as
CEO?...........................................................................................................................................6
TASK 2............................................................................................................................................7
A)Identify the issues faced by Ryanair and evaluate present situation with support of SWOT
analysis. Describe why Ryanair has been successful and also examine the effectiveness of
Ryanair's responses to major changes in the macro-environment..............................................7
B) Critically evaluate strengths and attractiveness of European budget airline sector that they
are currently operating in with support of Porter's five forces model. Explain about the most
important influences arising from competitive environment facing Ryanair...........................10
TASK 3..........................................................................................................................................12
A)Apply a framework on their own choice and critically evaluate Ryanair's competitive
strategies with support of results of environmental analysis in question two. Explain also
about extent to which Ryanair's new “Always getting better” strategy is sustainable over time
...................................................................................................................................................12
B) Evaluate the growth strategies which is adopted by Ryanair in Europe with support of
Ansoff Matrix. What changes has been recommended to Ryanair's approach in future..........13
CONCLUSION .............................................................................................................................14
REFERENCES..............................................................................................................................16

INTRODUCTION
Strategic management refers to the monitoring, continuous planning, assessment of all
necessities and analysis that an organisation requires to meet their objectives and goals. Business
environment changes will need organisations to consistently evaluate their strategies for
success(Ahmed and et. al., 2019).In the present report, a case study is taken into consideration
which is named as “Ryanair the low cost airlines-always getting better?” In this case study, it is
all about Ryanair has improved its customer services, expanded route map, website updation in
the recent years. They have finally listened after years of customers bad reviews and improved
their standard into the market. The present report will cover discussion about strategic
development approaches and approaches adopted at Ryanair and also about strategic leadership
of Ryanair's CEO. In addition to this, the report will cover analysis about SWOT analysis that
identifies the issues faced by Ryanair including the present situation as well and also about
strengths and attractiveness of European budget airline sector that Ryanair is operating in.
Moreover, the report will cover discussion about Ryanair's competitive strategies and also about
growth strategies adopted by Ryanair in Europe with support of Ansoff Matrix.
MAIN BODY
TASK 1
A) Evaluate about approaches used by Ryanair and explain what you believe in the balance of
prescriptive and emergent strategy formulation processes
Strategy development refers to the process of identifying and researching strategic
options, select the most promising and needs to decide how resources will be allocated across the
organisation for achieving objectives. Strategy development is important because it provides
guidance in problematic situations and also act as initial point of all goal-setting activities. It also
ensures that individual actions should be aligned in a well mannered way (Andersen, 2013). In
context to strategy development there are some approaches which are required to fulfil the
organisational objectives and goals. Strategic development approaches are necessary for the
growth of an organisation and it basically includes partnership and collaboration, technology,
policy development and change, systematic change, capacity building and integration as well.
Ryanair's Strategy

Ryanair's main target is to become Europe's largest scheduled passenger airline by using
improvement at low-fares and more offerings as well (Barrett, 2016). They basically target to
offer low-fares that would help in terms of increasing number of passengers. In this challenging
environment, they also concentrate on quality parameter and cost of operation as well. Sustained
strategy of Ryanair's include customer service and low fares which are the key main factors.
Their strategy is to provide best customer performance within Ryanair competitor group.
Statistics of Association of European Airlines and Ryanair's showed that they have succeeded in
terms of less flight cancellations, better on time punctuality and bags have lost in less terms as
compared to other airlines. For resolving the small issues they have organised conferences
through calls with staff at each of the Ryanair airport base. These issues can be loss of baggage
and flight delays and these needs to be resolved on faster basis. The staff members should be
ready to assist them so that these problems can be resolved on immediate basis.
Staff members of ground level are mainly responsible for delays and inspection of short
flights. Fulfilment of passenger expectation is possible through different types of surveys,
mystery passenger visit check and via online website. Ryanair has adopted low price strategy on
tickets so that they can attract large number of customers and also target those customers who
have low budget. They also aim for those customers as well who want to save money in an
accurate manner. They mainly sell their tickets to those passengers who are mainly focusing on
one way travel and does not want to buy ticket for returning back to their original destination.
Ryanair basically determines price on the basis of demand of certain flights and by day count left
till the departure day (Barrett, 2017). The prices of those tickets are higher when less days left till
the departure period of time. To earn profits on higher basis, Ryanair increases the price of fare
when demand of flight is high. For attracting people on large scale, they have introduced
promotional fare campaigns on time to time basis.

There are certain main competitors of Ryanair which includes Lufthansa, Alitalia, British
Airways, Easy jet and Air France. The fare competition amongst airlines has been observed
within price discounting, increased capacity, ticket sales promotions and price matching as well.
Airlines finances and operations have been majorly affected by smaller variations in passenger
flows and pricing as well (Becerra, 2009). Conclusively there was big competition between
airlines which can influence airline potential to expand route map, new bases opening and
support in terms of increasing passenger demand that could be unfavourable to airline market
share. So these are the strategies adopted by Ryanair in order to achieve a good performance in
terms of every aspect.
Prescriptive approach to strategic development is basically related to vision, mission and
core values which needs to be stated and objectives are also well defined before initial start of
strategic implementation. Whereas emergent strategy is that where managers make strategic and
operational decision on time to time basis that results into a certain pattern. For maintaining
balance in between prescriptive and emergent strategy they have to formulate strategy in advance
according to time and change requirement so that strategy can be implemented into realistic
manner. An organisation strategy is basically an outcome of features of both prescriptive and
emergent approaches. Both approaches are not mutually exclusive and they reinforce each other
in terms of developing an organisation's strategy. It is believed that emergent strategy
formulation and prescriptive strategy formulation can be maintained and implemented at
organisational level through proper planning because both have certain differences due to which
they have implemented through time taking process.
B) Evaluate about strategic leadership of Ryanair's CEO. Should he continue to serve as CEO?
Ryanair has introduced customer experience programme in the year of 2013 which is
named as “Always getting better” . In order to fix bad reputation of Ryanair's airline, they have
applied strategy on management team, on nine thousand five hundred staff members and on
entire Ryanair's board so that they can provide better flight experience and resolve customer
issues as well (Chaffee, 1984). This kind of strategy has been implemented for purpose of
delivering new online booking platform and also deliver new services which is best for Ryanair.

They have given major emphasis specially on improving customer reputation regarding
listening and answering to feedbacks that customers has given through “customer suggestions”
website. It can also be resolved through answer of chief executive Michael O 'Leary. Ryanair
policies also get changed which were exactly same for over twenty years. Customers desire that
they want assigned seats which is second carry on luggage and Ryanair has implemented on it.
They have also renewed certain services which are named as “Family extra” and “Business Plus”
services (Collis, 1992). They have also introduced their updated mobile apps which will provide
services according to customer preferences and they also access for those services on their own
convenience by booking on their own.
TASK 2
A)Identify the issues faced by Ryanair and evaluate present situation with support of SWOT
analysis. Describe why Ryanair has been successful and also examine the effectiveness of
Ryanair's responses to major changes in the macro-environment

PESTLE analysis of Ryanair
The PESTLE analysis is a strategic framework that allows an organisation to identify its
opportunities as well as threats in the market through effective evaluation of external
environmental factors. These factors are not in the control of the organisation and can have
negative impact on the overall operations of the business. In context to Ryanair, the analysis will
provide the organisation to understand its operation relative the the external environment and
evaluate the situation of the organisation. The PESTLE analysis consist factors of political,
economical, social, technological, legal and environmental. These factors are elaborated below in
context of Ryanair:
Political: This factor involves factors related to the influence as well as control of the
government over an organisation and involves elements such as tariffs, taxations and fiscal
policies. In context to Ryanair, the regulations based on national employment with Britain and
France along with taxation relative to EU's restrictions on staff welfare and emission cost have
negative impact on the organisations operations (Ahmed and et. al., 2019).
Economical: The factors in economic external environment have a direct impact on the overall
long-term plan of an organisation in the market. The economic environment can affect on how an
organisation prices its products and services or influence its supply and demand. In context to
Ryanair, the organisation focuses upon utilizing secondary airports to run its operation in order
to save extra cost and charges related to primary airport. Moreover, the changes in exchange rate
along with increase in fuel prices can elevate the cost of operation for the organisation.
Social: These factors involve aspects of demographics and culture that can impact the industry
environment of an organisation through influence peak buying period, purchasing habits of
customers along with their particular lifestyle. In context to Ryanair, the programme of “ always
getting better “ has enable the organisation to have good relations with its workforce as well as
customers. This is crucial as it is proven low social responsibility leads to decreased customers
satisfaction (Barrett, 2016).
Technological: These factors have both direct and indirect influence on an organisation as some
industries are highly depend on technology to operates where as, some organisation require little
to no technological assistance. In context to Ryanair, the utilization of online check-in enhance
customer experience of customers for the organisation. In addition to this introduction of
technologically advance aircraft allow the company to cut on emission and cost changes.

Legal: The legal factors can affect both the internal and external environment of the
organisation. The legal factors and regulations can affect the overall polices and procedures of an
industry due to aspects such as safety and regulation. In context to Ryanair, the organisation has
face several issues related to the acquisition of the organisation of Aer Lingus due to the
rejection form UKOFT and EC.
Environmental: These factors are related to the overall impact of the an industry operation on its
surroundings along with the obligation of an organisation to meet environmental protection
requirements. In context to Ryanair, the organisation encounter environmental issues due to
release of harsh CO2 management. Although the new aircraft have allowed the company to
lower its emission as well as noise pollution improving organisations operations.
SWOT analysis of Ryanair
SWOT analysis is a simple tool than enables an organisation to effectively analyse its
overall strength and opportunities along with the threats and weakness that can impact the
business operations. In context to Ryanair, the analysis can help the organisation to reveal the
areas where the business is lacking and the factors which can be exploited by the competitors if
not corrected on time. Given below is the SWOT analyse in context to Ryanair:
Strength: The organisation has a primary strength of its well established brand image relative to
being a low-fare airline. The network of the organisation is also broad in nature which provides
them competitive advantage in the market along with high operating margins and economic scale
. The organisation has the most effective low-cost strategy in the market which provides them
higher profitability (Barrett, 2017). In addition to this their aircraft model allow them to reduces
operating cost relative to fuel and maintenance along with training cost. Moreover, the primary
strength of the organisation is being a well established low-fare airline in Europe.
Weakness: The main weakness of the organisation is liked with their efforts to save operational
cost. The utilization of secondary airports is view by customers as too far from the main city.
This impacts the overall image of the business along with the reputation being damaged as a
result of news relative to bad service. In addition this significant profitability of the organisation
is based upon seasonality travel which leads to only certain opportunity for the organisation to
generate profitability (Direction, 2019). Furthermore, working conditions of their employees in
not optimal which reduces their loyalty towards the company.

Opportunity: The organisation has a major opportunity to enhance its business operation through
effective utilization of social media. The aspect of social media will allow the organisation to
further expand its brand image relative to customers. Moreover, the organisation can adopt new
and efficient technology in order to attain new aircraft models with low emission and cost of
operation. In addition to this the internet can provide the business the opportunity to attract
customers to their own website increasing their overall advertising promotion resulting in higher
levels of revenue.
Threats: The most crucial risk that the organisation encounters is the constant risk of security
relative to the act of terrorism. These acts of terrorism impact the organisation as they reduce the
overall reputation of the business and decreased the number of customer base. In addition to this
the organisation has a threat from the regulation from both local and EU government along with
legal issues with European Commission and Irish government (Kangisa and O'Reillyb, 2019).
Moreover, the organisation is at a constant risk relative to external environment changes such as
economic collapse and change in exchange rate. Furthermore, rise in fuel price would impact the
organisation in a negative manner as they would have to increase the cost of their operations
distributing their whole organisation fucntions.
B) Critically evaluate strengths and attractiveness of European budget airline sector that they are
currently operating in with support of Porter's five forces model. Explain about the most
important influences arising from competitive environment facing Ryanair
Porter's Five force analysis of Ryanair
The Porter's five force analysis allows an organisation to determine its competitive
position in the market. This analysis was developed in 1979 by Michael E Porter as a non-
complex framework for assessing and evaluation of competitive strength and position of an
organisation. The theory is based on the overall concept that there are five forces that impact an
organisation to determine its competitive advantage along with its intensity. The analysis also
allows the organisation to identify the attractiveness of the market. In context to Ryanair, the
organisation through this analysis will enable to determine if it is worthy to enter budget airline
market. Given below are forces of the analysis in context to Ryanair:
Threat of new entrance: It is very difficult for any new competition to enter the market of low
fair airline industry as Ryanair has strong cost leadership in the particular section. It will require
new entrants to cross entry barriers such as capital required, price and structure distribution

channels to establish high economic of scale in order to compete with the strong European
market (Kuljanin and Kalić, 2015).
Bargaining power of buyer: There is high treat to the organisation due to the power of buyers
being high as it is easy to switch to different airline as there is no extra cost. The competitors in
the market apply cost leadership strategy and gain a significant position in the market. In
addition to this, the rise in competition results in difficulty in proving cheap prices resulting in
higher power for the buyers.
Threat of substitution: The customers have various options to travel such as sea, railroad
networks, buses as well as rental cars. This increase the level of substitution for Ryanair. Europe
is known to have a well established and structured railroad system. Although the convince of
travel provide by air transport cannot be compared as it take less time to travel along with
offering of low fare reduces the overall risk of substitution for the organisation (Lawton, 2017).
Bargaining power of supplier: The organisation encounters high threat from its suppliers due to
lack of supplier in the market. The industry is captured by two major aircraft produces in Europe
which are Boeing and Airbus. The bargaining power is high in this force as the switching cost is
high which would result in high capital investment along with training pilots from the beginning.
The company has positive flow of cash which can assist them to switch suppliers if its is
required.
Existing rivals:
The threat of existing rivals is medium for the organisation as although the number of
competitors has increased in the market, Ryanair's cost leadership is structures and well
established in the budget airline industry which makes them the leader in the particular segment.
The strong cost leadership of the organisation provides it assistance in encountering its existing
rivals in the market (Pels, Njegovan and Behrens, 2017).

TASK 3
A)Apply a framework on their own choice and critically evaluate Ryanair's competitive
strategies with support of results of environmental analysis in question two. Explain also
about extent to which Ryanair's new “Always getting better” strategy is sustainable over
time
According to environmental analysis of Ryanair's competitive strategy is that they are
strong enough due to its brand image and positioning into the market. They have also
opportunity in terms of enhancing their business through support of social media platform and
they can also adopt new technologies as compared to other airlines so that they can create a
strong competitive edge into the market. They somewhere lack in terms of their long feedbacks
and some customers negative responses on social media platforms. Due to this reason, they can't
attract higher number of customers and lack in terms of generating higher revenue (Direction,
2019). Although they have improved their services but still they have to struggle in terms of
retaining customers for longer period of time. They also weak in terms of saving operational cost
and also they provide secondary airports services due to which it affects their brand image into
the market.
They have also implemented porter's generic strategies in order to improve their
performance in the eyes of their customers. Porter stated that competitive strategy is basically the
tool for allocating suitable competitive position in the industry. Through this companies can
upgrade themselves or destroyed subject to business alternative of the strategy. He has obtained a
proper model of three generic strategies which includes differentiation, focus and cost leadership
strategy. Michael Porter's main target is that in competitive strategy is to categorise and identify
successful and unsuccessful firms and place them either in condition of focus or cost leadership
and in differentiation. If company does not implement one of the strategy then they have to face
struggle in terms of operating it in appropriate manner (Jennings, 1996). If this condition will not
be improved then they will be categorised as “stuck in the middle”.

Ryanair basically belongs from cost leadership strategy and is a leader of low-cost fares
in the Europe. There are companies who uses cost leadership strategy for setting goals to become
low cost manufacturer in the industry. Within the industry, framework of the companies structure
is important because sources of cost advantage is different all the time. When companies sell
standardised product within wide range then low cost companies attempt to make full use of and
derive benefits from sources of cost advantages. Cost leadership strategy is set to be more
appropriate for big companies who have more strength and power over operating expense costs
and resources. With prices and performance and their leadership into the market then company
took over the control of more dominant players (Kangisa and O'Reillyb, 2019). Firms who are
cost leaders benefits from the rivals which have lower prices or at the same level because they
get extra profit for that and it also opens the way for barriers into the market.
Competition coming from differentiation strategy where cost leadership companies
cannot avoid competition because if the product which is to be sold is not suitable by
consumers, cost leadership firms sell products cutting them which however repeals for cost
advantage. The only way through which cost leadership functions is by letting one company
take over the industry by developing into cost leader according to Porter. The major challenge is
that if another company targets for cost leadership then rivalry between these two companies
gets very intense that the outcome of lucrativeness in the industry is catastrophic.
B) Evaluate the growth strategies which is adopted by Ryanair in Europe with support of Ansoff
Matrix. What changes has been recommended to Ryanair's approach in future
Ansoff Matrix is a tool used by firms to analyse and plan their strategies for growth. This
matrix shows about four strategies that can be used to help in terms of growth and also analyses
the risks associated with each strategy. Following are the main strategies that can be adopted by
an organisation for their further development and it has been defined into following manner:
 Market Penetration: This strategy is focused towards increasing sales of their existing
products within the existing market. With context to Ryanair, they can increase their
sales through improvement in their services and can offer attractive options due to which

customers are ready to pay that amount. The sales can be increased through promoting
their airline on online basis and can popularise themselves with supprt of certain kinds
of apps.
 Product development: Under this kind of strategy, they have introduced a new product
into the existing market which is slightly more riskier in terms of nature. With context to
Ryanair, if they have introduced a new facility for their customers then they have to plan
into most appropriate manner so that results can be achieved into positive manner. This
kind of introduction is basically difficult and challenging for the organisation because it
is considered under the risky factor.
 Market Development: Under this kind of strategy, the product and service is placed
totally into the new market. This can be possible through finding a new use of the
product or by adding new features and benefits into it (Kearns, 1994) . With context to
Ryanair, they have to analyse the market into appropriate manner so that they can
introduce the service in a comfortable manner and market also cooperate with this kind
of cooperation.
 Diversification: This is the most riskiest factor into the market because they have
introduced a new and unproven product into an entirely new market that cannot be fully
understand. With context to Ryanair,when they have introduced such kind of unproven
strategy then it requires lots of research and market study as well so that large number of
customers can be attracted towards it for this kind of service.
From future perspective, it has been recommended from above analysis of macro environment
and micro environment that they have to work on saving their operational cost. They have to
work on their promotional factor and procedure for it so that on the worldwide basis customers
can recognise about their name and brand as well. They have to work on introducing exceptional
services do that they can retain customers for longer period of time. It has also been
recommended that they have to always be attentive about market changes and customer choices
as well.
CONCLUSION
The above stated report concludes that strategic management plays a very important role
in terms of achieving organisational objectives and goals as well. It has been concluded from
case study that there are certain approaches related to strategic development so that these can be

implemented on the organisational level into the realistic ways. It has been determined that for
evaluating competitive advantage into the market it is required that to do macro and micro
environment analysis so that results can be achieved into positive framework. It has been
concluded that for determining growth strategies, ansoff matrix can implemented at
organisational level so that organisation can growth on faster pace manner. From future
perspective there are some recommendations which will be helpful for further growth and
development of an organisation. That's way strategic management is important at organisational
level.

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