Ryanair’s Strategic Position and Choices | Report

RYNAIR’S STRATEGIC POSITION AND CHOICE
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Ryanair’s Strategic Position and Choices
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RYNAIR’S STRATEGIC POSITION AND CHOICE
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Contents
1.0 Introduction.......................................................................................................... 3
2.0 Overview of the European airline industry and Ryanair.......................................3
3.0 Theory.................................................................................................................. 3
4.0 Analysis................................................................................................................ 4
4.1 PESTEL analysis................................................................................................. 4
4.2 Porter's five forces............................................................................................ 4
4.3 Ansoff matrix..................................................................................................... 5
4.4 Porter’s generic strategies................................................................................ 6
4.5 VRIO analysis.................................................................................................... 6
4.6 Scenario analysis............................................................................................... 6
5.0 Discussion............................................................................................................ 8
6.0 Conclusion............................................................................................................ 9
7.0 Recommendations................................................................................................ 9
References............................................................................................................... 11

RYNAIR’S STRATEGIC POSITION AND CHOICE
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Executive summary
Ryanair is one of the largest airlines by the customer base in Europe. The
adoption of a low-cost strategy has led to the company attracting a large pool of
customers who are price-conscious. The report seeks to demonstrate the
application of strategic position and choice using Ryanair’s case study. The use of
strategic analysis tools such as PESTEL analysis, competitive forces, Ansoff matrix,
and VRIO analysis disclose the strengths and weaknesses of Ryanair. Thus, they
provide insight into recommendations that Ryanair can adopt to increase its
profitability. The report also reveal that Ryanair has to avoid legal tussles that it
faces in relation to labor relations. Ryanair also needs to invest heftily in its
customer service if it is to attract more customers.

RYNAIR’S STRATEGIC POSITION AND CHOICE
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1.0 Introduction
Ryanair as of 2013 after three decades became ranked as the largest airline
by passengers in Europe. Ryanair outperformed low-cost competitors on almost all
operational frameworks. Ryanair ended up becoming unambiguously positioned as
one of the airlines offering low-cost fares. However, Ryanair’s success was not
without sacrifices as it was nothing close to being loved. It is through Ryanair’s
operational framework that translated to low-cost flying which led to adverse effects
with regards to services as they were reported to be below the industry standards.
As of 2013, O’Leary who is the CEO received criticism for his macho image and was
urged to improve the company’s service levels. To achieve this O’Leary had to
incorporate a successful operation framework to his company. It is through such a
business model that led to the launch of Always Getting Better program aimed at
transforming Ryanair as the European's Amazon of travel. Thus, the report will seek
to demonstrate the application of strategic position and choice with regards to
Ryanair’s case study.
2.0 Overview of the European airline industry and Ryanair
The European airline industry is marked by several challenges facing the
airlines on various aspects such as declining operating margins, aspects of
privatization and consolidation. Such issues establish a platform for uncertainty in
the future for such airlines both privatized and those that are state-owned (Ahmed,
2014). This has led to the exploration of new markets to facilitate survival. Airlines
have been reported to be the least profitable link in the supply chain with regards to
air transport. Presently, the situation is dire due to rising costs linked to fuel and
also due to taxes, airport and fleet charges and general inflation (Diaconu, 2012). This
squeezes the slim operation margins of the airlines tighter than before.
Ryanair was established in 1985 by Tony Ryan. Originally, he aimed at
providing an alternative to the state-owned Are Lingus which had become a
monopoly operating between the UK and Ireland. Founded on the cost leadership
strategy, Ryanair became the first airline offering the budget airline framework in
Europe. Following huge debt challenges where Ryanair overcame, the company
transformed to offering low fares in Europe in the 90s. Ryanair managed as of 2009
to be the budget airline that sustains its competitive edge in Europe.
3.0 Theory
The tools used in analyzing strategic choice and position are crucial to
facilitate consistency and ensuring that the required level of rigor gets applied to
the analysis. To analyze Ryanair’s strategic choice and position various tools such
as PESTEL analysis, Porter’s five forces, Ansoff matrix, and VRIO analysis have been
an employer in this report.
Ansoff matrix is employed by the business to assess the opportunities and
risks associated with growth. The Ansoff matrix entails four strategies that can be
utilized by businesses to grow and assess risks that are related. However, before
applying these tools, companies must put into consideration various factors that