Strategic Analysis of Ryanair: Approaches, Leadership, SWOT, and Porter's Five Forces

This report provides a strategic analysis of Ryanair, including its approaches, leadership, SWOT analysis, and Porter's five forces model. It evaluates the effectiveness of Ryanair's operational activities and growth rates, critically assesses the strengths and attractiveness of the airline sector Ryanair is currently operating in, and analyzes its competitive strategies and the sustainability of AGB plan over time.

QUESTION ANSWER

Table of Contents
INTRODUCTION ..........................................................................................................................3
MAIN BODY...................................................................................................................................3
Analysing strategic development approaches adopted by Ryanair:............................................3
Evaluating the strategic leadership of Ryanair's CEO:................................................................5
With the help of SWOT Analysis, evaluating the effectiveness of Ryanair's operational
activities and growth rates:..........................................................................................................5
Critically assessing the strengths and attractiveness of the airline sector Ryanair is currently
operating in:.................................................................................................................................7
Critically analysing Ryanair's competitive strategies and the sustainability of AGB plan over
the time:.......................................................................................................................................9
b. Using Ansoff Matrix for assessing the growth strategies by Ryanair:..................................11
CONCLUSION..............................................................................................................................13
REFERENCES..............................................................................................................................14

INTRODUCTION
Strategic management is ongoing planning, monitoring and analysis of the requirements
so that attaining the objective of proper working criteria can become possible. In current era,
having strategic management is important as it helps in gaining the competitive performance by
developing reliable course of action which can uplift its overall performance. The current study
is based on Ryanair airline which is one of the successful company operating in the aviation
sector by offering the lower prices services to its client. Recent report will pay attention on
approaches adopted and strategic leadership of Ryanair’s CEO. This will give emphasis on
having the effective insights about the company's performance by using SWOT and response to
major changes in macro environment. Current report will concentrate on using Porter's five
forces model so that competitive environment faced by it can be analysed. Recent report will
give focus on analysing its competitive strategies which is helpful for the company to get
significant information in turn accomplishing the depth insights can become possible. Ansoff
matrix will be applied in current report so that reliable growth strategies adopted by the
company can be analysed for gaining the deeper information about the highlighted subjected
matter.
MAIN BODY
Analysing strategic development approaches adopted by Ryanair:
Ryanair is said to be the first and largest European airlines to experience an impressive
amount of growth rate due to its strategy of low cost and better financial performance which
made them confident about their “Always Getting better” plan and encouraged them to adopt
various strategies and their aspects to achieve success (Rotondo. Corsi. and Giovanelli. 2019).
The perspective of Ryanair about their customers was wrong which led them to change their
way of providing services which marked the rise of “Always Getting Better” in order to rise
above its competitors and to attain higher customer retention rates. Thus, the company
incorporated various kind of strategies such as prescriptive and emergent to recognize the need
of setting required objectives. Eventually, the company was proved out to be unsuitable to either
of the strategies or to the functions because of its these strategies are mainly suitable for those
organizations whose operational activities are carried out as a whole and have common
objectives. For Ryanair to adopt such strategies is not favourable as the company is divided into
different parts in accordance to its size and each part has different goals and objectives to
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achieve. As already stated above, the company does not follow any of the strategies mentioned,
and possess their own area of strategic development that is suitable to their area of operations
and about which they think is the unique option for the achievement of the needs and objectives.
However, if evaluated, their way of forming the strategies and the development of strategic
decisions is not unique as it does not match with the common aim of customers but only focuses
on their individual needs and demands. For the prescriptive approach, that is the opposite of
emergent approach, states that there should be proper establishment of strengths and
opportunities for the firm to identify the challenges that will be help them to survive in the long
run.
As it is described that Ryanair provides the largest international air carrier, it adopts the
strategy of low cost and low fare model to attract more number of passengers and potential
audiences to increase the rate of its success. To simply put, Ryanair's business model and
strategic development process was inspired by the US based airline Southwest that claims to be
a straightforward model that targets customers who have more than one option for mode of
travelling for their convenience. Though the company has a low perspective about its customers,
it still manages to form effective and parallel strategies to increase its brand image in the
industry. Over the past few decades, Ryanair made an effective use of the straightforward
strategies that did not have much attention to its customers satisfaction rates. The CEO of the
company clearly mentioned that the company only focuses on the profitability rates and their
position in the industry (Abdul-Kadir. Sadat. and Sadick. 2020). This resulted in turning a blind
eye towards the customers who are the main source of its income led to the initiation of a three-
year plan called “Always Getting Better” to reform the company's strategic development as the
company faced huge challenges in the form of customer relations which in return affected their
equity and brand image in the industry. To resolve the issue evolving against them, the company
proposed another plan known as AGB plan that focused more on the customer needs and
satisfaction. It included on providing customers with the improved travel and digital experiences
that also focused more on the convenience of the passengers during and after their journey. This
balance between the prescriptive and emergent approaches could have been adopted by the
company initially, to attain maximum satisfaction from customers to gain competitive advantage
and success rates.
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Evaluating the strategic leadership of Ryanair's CEO:
Ryanair's CEO, Michael O'Leary is often accused of making headlines across the
continent of Europe with his fiery reputation and ignorant customer satisfaction strategies. He is
often indulged in making controversial statements about the surroundings and its elements that
do not allow him to carry out his task based leadership style, that is concerned with getting job
done of increasing the profitability rates (Chmielewska-Muciek. Jakubczak. and Marzec-Braun.
2021). He emphasizes more on grabbing those opportunities that have more advantage and
maximum returns, without focusing on the main element of achieving success, i.e. the customers
and their needs and demands.
He does not deserve to be CEO of the company because of the strategic implementation
often led the company into bad brand reputation and increased losses in the course of action. His
main attention was to provide the board members and stakeholders with maximum profits,
without caring about the external sources and other internal sources that can prove out to be a
great source of success. The leadership style followed by the CEO is highly concentrated over
the financial matters and how to attain more financial growth. This strategy has its drawbacks in
terms of loyalty and retaining talents, failing to which can result in avoiding of different cultural
sentiments and not delivering efficient results.
With the help of SWOT Analysis, evaluating the effectiveness of Ryanair's operational activities
and growth rates:
1. Strengths:
 Ryanair is the largest low cost Airline in Europe that helps the firm to expand its
operational activities across the globe.
 It has attracted many passenger network and has initiated a large amount of tourist
connection to build smooth relations.
 The firm is an influential constituent of the modern era with high contribution in
innovational activities indicating the renovation of its own business model.
2. Weaknesses:
 Ryanair has unknowingly secured itself a bad reputation regarding the travellers and
customers by dissatisfying them.
 Due to this, the customers have turned out to be disloyal and are enraged with the
customer centric view of the firm which is negative.
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 The profit making strategy is seasonal because of lack of proper evaluation of customer
and their regions in they reside.
3. Opportunities:
 Ryanair enjoys the biggest advantage of the political interference in relation to their
financial stability rates and is used to receive high returns.
 Improved customer service is the opportunity for the firm to enhance its success rates.
With this the technological advances and creative approaches to retain the customers are
evaluated.
 With the resources available, the firm is entitled to hire and retain worthy talents in their
areas of operational activities to mark the initiation of its competitive advantage.
4. Threats:
 Being the largest aircraft of Europe, it is understood that the firm is entitled to high
competition rates and its competitive advantage may also get hindered due to exceptional
abilities in the aviation sector.
 Uncertainties of the world can also hit the overall business performance of the firm,
thereby decreasing the success rates.
 Political and Economical instability might prove out to be a negative factors as these
impose great risk on the survival of the firm.
It is determined that the firm enjoys the advantages of being innovational and low cost operator
which makes it a favourable option, but it also faces major challenges that could impose
challenges and threats on them such as high competition and customer retention rates (SWOT
ANALYSIS. 2022). For this, they need a very strong strategic implementation to analyse and
evaluate the area of success as well as lacking areas to achieve success.
The reason behind the firm's success:
With the long journey of customer retention rates, Ryanair has finally managed to ensure
success with the help of providing what its customers need and demand. The firm started to
analyse its area of growth and what all measures could be taken to improve the customer value
proposition with the view of operating in a low cost model only (Harvey, G. and Turnbull, P.,
2020). In addition to its single aircraft fleet, the firm has now moved to more than one aircraft
that has assisted them in enjoying high rate of returns along with the measures of better customer
experiences. This was made possible with the help of applying the cost leadership strategy that
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helped the firm in targeting the price sensitive customers and by providing the with reasonable
pricing policies, Ryanair made most money out of it.
Evaluating the effectiveness of Ryanair's responses in relation to its macro environment:
In evaluating success, Ryanair was fast enough to make changes in its business strategy
to improve its macro environment's growth and creating an impressive competitive advantage in
the aviation sector globally. This enabled them to create and provide impactful value for their
customers with the view of providing them with activities and services that could help them in
raising the standard of living. They also have an advanced way to utilize the available resources
in order to enhance the corporative strategies for its different parts which have external sources
as well. To improvise the macro environment and its constituents, it was essential for the firm to
meet the expectations of major stakeholders and various other aspects of external environment
along with the satisfaction of the customers. By fulfilling all these requirements, Ryanair has
become an emerging and effective firm in the aviation sector with all the needed equipment to
add value to their activities, whether internal or external. The firm is now qualified to face any
kind of challenges because it has the ability to cope up with the environment and to make
necessary amendments that will prove out to be a source of profit.
Critically assessing the strengths and attractiveness of the airline sector Ryanair is currently
operating in:
Porter's five forces model analysis of Ryanair:
1. Competition in the industry:
 The firm faces a high competition in the industry because there are many low cost
airlines operating and have majorly have the same routes.
 The focus of all the airlines is on the short-haul flight routes that are able to drive less
competition due to its experience and size.
2. Threat of new entrants:
 There is not much threat of new entrants to enter the industry as there is high competition
and also the entry barriers are high.
 The new entrants face the difficulty at the time of landing because most of the gates are
taken and there is a limited number of cells to enter the industry.
3. Bargaining power of suppliers:
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 The suppliers have a major role in bargaining as there are not many airlines to provide
low cost services, hence, their number is also not high.
 The manufacturers charge high prices from the management department as there are not
many purchasers and the market rates are also lower than the standard rates.
4. Bargaining power of buyers:
 As the matter of making choices while deciding, the buyers have high negotiating power
as there are not many purchasers of the manufactured items.
 There is a threat of shifting to the other airline manufacturers as the increased prices will
result in more choices offered to the buyers.
5. Threat to substitutes:
 The threat to substitutes is on a low basis for the aviation sector because of the necessity
created by the travel routes that no other means of transport can enter the aviation sector.
 As compared to the other means, time consumption in the aviation sector of Ryanair will
be lowered, encouraging people to engage more with the firm.
Ryanair Holdings Plc operates in the provision of low fairs airline related services that
includes scheduled services , data services, and other services that could benefit the firm in
attaining competitive advantage in the aviation sector (PORTER'S FIVE FORCES MODEL.
2022). It is a leading budget airline that offers competitive prices and related services to the
customers that can be worthy of the pricing policy. The firm continues to enjoy the competitive
advantage strategy and the cost leadership strategy to expand their operational activities in all
over the European continent and its major countries. Keeping in mind the threats of its
substitutes and other elements, the operational activities might be of a risk to them as these can
force them to amend their powerful growth strategies into less powerful ones (Strom. 2019).
Although the effective strategies of the firm forces every other operating airline to devise their
own unique strategies, it can further focus on how to improvise the competitive strategies in
order to ensure growth rates and customer satisfaction. With the utilization of the technological
advances and innovational activities, the firm managed to optimize their business online by
providing the customers with amenities of saving time and money right from their doorsteps.
From the above analysis of Porter's five forces model, it was even determined that
Ryanair operates in an airline that has maximum chances of profitability and bargaining power
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to build the brand name and position in the aviation sector is important and possess high chances
of successful low cost production along with low threat of substitutes. As there are many low
cost airlines operating in the industry, the competition levels faced by the company are the most
influential activities that have a great impact on the strengths and attractiveness of the company.
In order to retain more resources and sources to evaluate the success points, it is essential for the
firm to carefully manage the inputs as these are the factors that decide the bargaining power of
both the external and the internal sources to positively affect the formulation of strategic
planning. Also, the firm faced bad reputation which resulted in the low and least brand
reputation, but the improvements made by the firm in relation to its customers and their needs
and demands really assisted the firm in increasing their brand image globally, thus affecting
their bargaining power and competitive advantage passing all the external threats and
challenges.
Critically analysing Ryanair's competitive strategies and the sustainability of AGB plan over the
time:
The competitive strategy adopted by Ryanair is the cost leadership and the direct sales
strategy that helps in maintaining low costs and focuses more on how to increase the customer
retention and traffic rates. The firm wants to establish a low fared airlines that will provide all
the amenities and improvised services to the passengers during their journey with the airlines to
focus their strategic planning towards customer centric view that will help the firm in
maintaining cost containment and operating efficiencies(Efthymiou, M., and et.al.,, 2021).
Ryanair has always tried to become the leading operator of the industry, before through the
means of only maximizing profits and now through satisfying the customers by utilizing its
effective cost and sales strategies. Taking advantage of recent trends and technologies, the firm
has been even committed towards the safety measures and quality maintenance of its customers
and target audiences to safeguard their interests and licensed properties. With this effective
means, Ryanair has not had any injury, loss of lives or any other uncertainties caused due to
their efficient dependence on the customer satisfaction and guarantee to safeguard the people
involved. The AGB plan of Ryanair was initiated with the view of improving its relation with
the customers and to enhance its sustainability and integration of connecting with them for
standardized and personalized services. Numerous initiatives were undertaken to convince and
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attract customers globally to establish a new and emerging brand image by effective strategy
formulation and implementation.
The marketing department claimed that the programme continues to be a strength of the
firm as it has pleased the customers in all the areas of internal and external sources to evaluate
customer retention and growth rates. Ryanair has also advanced its environmental activities
through this AGB plan that reduces the need of non recyclable resources which can harm the
nature and its constituents. All the biodegradable products are being used that can easily be
removed from the dumping process and hygiene can be maintained. The plan has also brought
about less time-consuming activities that might hinder the quality of the customer effectiveness
and has ensured about the flights to be punctual following all the rules and regulations of the
time being (Jimenez. and Suau-Sanchez. 2020). The financial issues arising also have one stop
solution for them with the help of their this plan that have assisted a lot of customers in the
pricing policy. The effective strategy of innovation and technological advances along with the
growth theories have sustained and integrated the operational activities of Ryanair with amazing
onboard experience and the best choice of routes and destinations. Now the targeted market even
gets attracted and the rates of customer retention get speed up because of all the facilities and
amenities provided by the company to their customers for positioning itself in a better
competitive condition that can help the firm in attaining high rates of success as they kept
focusing on achieving sustainability through maintained growth strategies and efficient
operational activities for the customers and other sources of income.
The Always Getting Better strategy of Ryanair enables the airlines to the cleanest and
greenest amongst all airlines of the Europe. The improvements with respect to the technology
that it uses and enhancements in its operations allows the airlines to aim at a reduction of 32
percent in its total carbon emissions (Barqueira, Quadros and Abrantes, 2022). The company
constantly make improvements in its technology to upgrade the existing aircraft into modern
aircraft making them more fuel efficient. The modern aircraft to the company uses less amount
of fuels and hence the carbon dioxide emission is limited. It established a research centre of its
own with the aim to realize new methods and approaches that are sustainable. The fuels that the
company uses are sustainable hence it can be said that this strategy of the company makes it
sustainable in its processes.
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b. Using Ansoff Matrix for assessing the growth strategies by Ryanair:
Ansoff Matrix also refer to as product or market expansion matrix is a framework in
management. It is used by teams to analyse the plan and for evaluation of incentives for growth.
The risk that is associated with the strategic decisions of the company for its growth can be
assessed with the help of such matrix. This is an intuitive and easy way by which management
teams can visualize the levers that will be pulled for growth perspectives of the company. The 2
by 2 grid represents the markets at its y axis and products at the x axis. There are two categories
to both of the elements namely, new and existing.
The first grid describes the growth strategy of the business who targets to expand in the
existing market with the existing product. this is known as market penetration. The next is
named as market development. In this strategy the company aims at growth of its business
through selling its existing products into the new markets (Clarissia, 2019). Profits are by
selling the same product but in new markets. When new product is developed by the company
and sold into the same market in which it sells its other existing products the strategy is given
the term as product development.
The last and the fourth grid of the matrix is the diversification. In this particular strategy
the company expands by introducing new product or service into the complete new market. The
level of risk is maximum in this as both the market and the product is new for the company so it
chances of not getting liked by the audience targeted and getting fail is highest. In market
penetration the market and the product are both known to the company and it also has its
expertise in it to the risk attached is minimal out of all the strategies.
Market development risk is moderate as the market is new but the business knows best
about its products or services that it introduces in such market. In product development the
relative risk is high as the company decides to experiment in the market in which it already
gained some level of goodwill and value for its brand. There is inbuilt responsibility over the
company to successfully carry and make an addition to that.
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The company Ryanair makes use of this matrix for the purpose of being a success in the
international market with its strategy. Market penetration is used by the company for increasing
its reach among the number of customers of the existing market. The company increases its
production capacities for enhancing its effectiveness and efficiency to serve the increased
customers (Kurniawan, Iswahyudin and Suciati, 2020). Also for this the company adopts
competitive pricing strategy to attract more and more customers. For market development the
company do effective research and development and expands regionally. It further aims at
creating awareness in the customers with advertisements and keep on educating them regarding
its new offers or services. Development of product by the company is made by making
modifications into its existing product to increase the levels of customer satisfaction. It also new
products for increasing customer reach. Strategic partnerships are practised by Ryanair to have
access to the new products and increasing quality of existing products. The company diversifies
into new businesses through mergers & acquisitions. The company practices both vertical and
horizontal diversification by launching new products in current line of products and also among
new lines.
Recommendations
The main issues that the company faces are revolving around its inability in providing
good services to its customers and issues with its effective human resource management. It is
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suggested for the company to understand how crucial is it for the company to address these
issues in order to grow and expand the business (Schawel and Billing, 2018). It is recommended
for the company to recognize the labour unions. It is suggested to have an outlook that is more
people oriented so that it can enhance its relations with the employees. It is recommended that
the airlines encourage its employees in development of their careers. This will help in managing
its Human Resources for the better future. The company should train its front-line workers for
ensuring high quality services to its customers at low costs.
CONCLUSION
On the basis of the above report it can be concluded that strategic management refers to
the continual planning, monitoring & analysing of the needs that are necessary to make the
desired working standards in operations. The current business environment increases the
importance for companies all around the world to manage their activities and efforts strategically
to ensure their competitive edge among its competitors in the industry. The report study has been
based on Ryanair, a success in the airline industry that is known for its low prices offerings
among its consumers(East. and et.al., 2021). The report has described the strategy development
approaches used by the company. The strategic leadership of the CEO of the company has been
evaluated. Further the report has used SWOT analysis framework and identified the issues that
the company faces and evaluated the current situation. In this report Porter’s Five Forces Model
has been applied for critically assessing the strengths of the company. Lastly the competitive
strategies by the company have been analysed critically and Ansoff matrix is used for assessing
the growth strategies of Ryanair. Recommendations to the company has been included in the
report.
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REFERENCES
Books and Journals
Abdul-Kadir, A., Sadat, A. A. and Sadick, A. A., 2020. Global strategies of the airline industry:
a case study of Ryanair, Emirates, NetJets, and Thomas Cook. StudNet, 3(3), pp.204-217.
Barqueira, A., Quadros, R. and Abrantes, J., 2022. Airline booking applications: the case of
Ryanair, Easyjet and tap air Portugal. Aeron Aero Open Access J. 6(1). pp.7-15.
Chmielewska-Muciek, D., Jakubczak, J. and Marzec-Braun, P., 2021. Crisis Response Strategies
and Themes during the COVID-19 Pandemic in EU Aviation, Airlines' Executives
Communication with Shareholders: A Content Analysis. European Research
Studies, 24(4B), pp.276-299.
Clarissia, M. S., 2019. A study on Ansoff Matrix Technique: As a growth strategy and an
adaptive learning technique adopted in the leading brand of products. Journal of
Composition Theory. 12(9). pp.1494-1506.
East, R., and et.al., 2021. Consumer behaviour: Applications in marketing. Sage.
Efthymiou, M., and et.al.,, 2021. The factors influencing entry level airline pilot retention: An
empirical study of Ryanair. Journal of Air Transport Management, 91, p.101997.
Harvey, G. and Turnbull, P., 2020. Ricardo flies Ryanair: Strategic human resource management
and competitive advantage in a Single European Aviation Market. Human Resource
Management Journal, 30(4), pp.553-565.
Jimenez, E. and Suau-Sanchez, P., 2020. Reinterpreting the role of primary and secondary
airports in low-cost carrier expansion in Europe. Journal of transport geography, 88,
p.102847.
Kurniawan, D., Iswahyudin, M. D. and Suciati, T. R., 2020. SWOT Analysis and Ansoff Matrix
in Creative Food Industry Business Development: A Study on Creative Food Business
“Komala”. Open Access Indonesia Journal of Social Sciences. 3(2). pp.128-136.
Rotondo, F., Corsi, K. and Giovanelli, L., 2019. The social side of sustainable business models:
An explorative analysis of the low-cost airline industry. Journal of Cleaner
Production, 225, pp.806-819.
Schawel, C. and Billing, F., 2018. Ansoff-Matrix. In Top 100 Management Tools (pp. 31-33).
Springer Gabler, Wiesbaden.
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Strom, M., 2019. European Union Competition Law Developments in the Aviation Sector: July
to December 2018. Air and Space Law, 44(2).
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PORTER'S FIVE FORCES MODEL. 2022. [Online]. Available through:
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analysis-business-essay.php>
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