Ryanair Strategic Management Report

This report analyzes Ryanair's strategic management, covering its background, external industry environment, competitor analysis, internal capabilities, strategic direction options, and future recommendations. It utilizes frameworks like PESTLE and SWOT analysis to assess the airline's current position and potential for growth.

Strategic Management

Table of Contents
INTRODUCTION...........................................................................................................................1
Ryanair Background Information ...................................................................................................1
External Airline Industry Analysis .................................................................................................1
Brief Competitors analysis...............................................................................................................3
Internal Strategic Capabilities .........................................................................................................4
Strategic Direction Options .............................................................................................................5
Strategic selection and Justification.................................................................................................5
Conclusion and Future Recommendation .......................................................................................6
REFERENCES................................................................................................................................7

INTRODUCTION
Strategic management plan is the action plan that company built for a specific purpose or
goals for a particular purpose or goal. In other words, Strategic management is a scientific
formulation or implementation process that enable the organization goals and objectives. Present
case study based on Ryanair which is the first largest budget airline in Europe it has enjoyed
remarkable growth and success in the market. Further, in this report will be covering the
company background of Ryanair and also explaining the internal or external environment of the
airline industry. However, the study also describing the company competitor analysis in other
words it helps to adjust the things and making the work more effective and thoughtful.
Ryanair Background Information
Ryanair is the most famous airline company which is mostly famous for remarkable
growth and success based on rigorously applied low cost business model with robust operating
and financial performance even during the financial recession (Aalto (2016). In other words, this
airline company known for its low cost prices headquarter in Swords, Dublin, Ireland with its
Primary operational bases at Dublin and London Stansted airports. In other words, it helps to
keep the task more popular and effective in other class level.
In 2015 December Ryanair shares were trading in the €1-4.60 to €15.08 with P/E ratio of
13.5. The share price had risen steadily after plummeting to low of €1.97 in October 2008 at the
time when the global equity market is slip. As per the scheduled passengers flown, Ryanair is the
biggest European budget airline which carried more international passengers than any other
airline.
External Airline Industry Analysis
PESTLE Analysis
Aviation industry is known for its luxury services and opulence as well as comfort and
convenience. On the same side, airline industry also facing high operating cost, lower profits and
decreasing margins because of the various factors discussed in this article (Ansoff & et.al.,
(2019). Airline industry would have been affected by several factors such as Political, social,
legal, technological etc. here, it has been described below how the external factors affect industry
in positive as well as negative manner.
Political : Aviation industry is highly regulated by the government policies and laws due
to the safety of passengers over the airlines. It will cover the new long lasting and new
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development areas which need to be covered in the best approachable manner. Aviation industry
get influenced by the changes of government policies such air traffic, regulatory systems etc. for
example: Brexit has given the huge impact on not just Ryanair but all other low cost airlines
which operates in the UK (Bryce, 2017).
Economical: Economical factor is the another factor which generated equal impact on
the company development growth. Economical condition is highly affected the airline cost due
to direct manner. As per the global level, aviation industry always falling revenues as air travel
has decreased. Further, travellers are making bookings at the last minute and ticket prices have
fallen. Due to recession or inflation, customer reducing their purchasing power due to high prices
of fair which directly affect the profitability of the company. This economic conditions affect the
Ryanair's profits.
Social: In modern time, customer is very well aware from the services which gets the
better development growth and results in order to evaluate the new growth of the market
opportunity. Social factors are highly affected the overall airline industry in several manners. In
order to secure passengers safety, Aviation industry adopts proper maintenance of its
equipment’s and a board level safety in order to reduce the happening while travelling (Frynas
and Mellahi, (2015). This safety issues have been given challenging impact to the aviation
companies and on their profitability ratio.
Ryanair provides the direct services or booking for their customers. This will also help
company to eliminate the travel agent cost in order to increases the service initiatives for their
clients. This activity influenced social factors and bring good image of the company in the
market. On the other hand, bad social image can hurt company values and profitability as well.
Technological: Technological factor has been given many good services or profit to the
aviation industry. By the help of digital platform, online services companies can easily flow the
services or communicate the messages to customers (Ginter, Duncan & Swayne, (2018). In
terms of customers, they getting many benefits by the companies in order to book the flight
tickets on instant basis. Technology plays a most crucial role in terms of customer service that
creates opportunity for the company to maintained their customer satisfaction.
Legal: Ryanair has been challenged with EU from few past years due to receipt of state
aid at some airports. Due to these issues Ryanair has facing issues due to some legal alligation.
In past years, Ryanair also facing issues in delays in paying airport charges, where they sued by
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the airport authorities. In terms of that, legal situation has occurred several challenges for the
company in their functioning level as well.
Environmental: In present scenario, customer is getting more awake about the carbon
footprints with the results that they are now environmentally conscious. It creates pressure on the
aviation industry to adopt the green flying and focused towards the making environment more
ozone-friendly (Hartman & Boscoianu, (2015).
Brief Competitors analysis
Competitor analysis is the tool or technique to identify the competitors' situation or
position in the current market. It helps to determine the strength and weaknesses of the related
firms. On the basis of competitor analysis company can easily build up market image and get the
good response from the company sites.
Basis Competitor 1 EasyJet Competitor Virgin Competitor 3 British
Airways.
Security Safety is the first
priority for the Easy
jet. They committed to
provide the safe
journey for its
customers and a safe
working environment
for its people and
suppliers.
Safety in Virgin
Airlines and it will
also provide the best
services. Virgin
Airline restricts the
liquids in hand
baggage. They also fix
the behavioural
detection to maximise
the security (Hill,
(2017).
British airways also
provide the high range
of security purposes
which aims is to
reduce the
uncertainties. This
been completing the
best
Services Easy jet has been
providing the best
services to their
stakeholders in order
to get their satisfaction
level.
Virgin group provides
airline services along
with travel and
tourism.
BA has providing the
luxurious services or
facilities to their client.
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Prices Easy jet is known for
its low cost pricing
strategies.
Virgin Airlines are
high end airline that
means its prices are
high.
The focus of BA that
all client are able to
afford the prices.
Internal Strategic Capabilities
SWOT analysis
Strength
Low Cost : It is the first and foremost strength of the Ryanair that they providing the
lowest unit Costs and one of the lowest of any airline in the world. Whether measured by costs
per available seat kilo meters, cost per seat, or cost per passenger.
Low Fares & Route Policy: Low cost helps company to avail the low prices on a
profitable basis. As per their competitors, this company has providing the lowest fair that attract
the customers (.Meyer, Neck & Meeks, (2017). On the other side, Ryanair having this key
approach to determine the new emerging trend and long lasting event to develop the new
customer service.
Network: With more than 1500 routes across 28 countries in Europe and North Africa
and 178 airports. Ryanair has the short haul network of any carrier in Europe. In other words, it
has almost large number of growth that helps to attract the number of client attraction level.
Weaknesses
Brand Perception: due to low cost carrier, Ryanair has facing the low cost issues in
many surveys and awards.
Seasonality of earnings: As for this industry in general, Ryanair earnings are highly
seasonal. In aviation industry their companies are highly depended upon the seasonal
opportunities. With its profit increasingly relying on the season like in summers between the
period of July to September and October to March (Moutinho & Vargas-Sanchez, eds., (2018).
Opportunities
Improved customer service: This is the opportunity for the company to look after the
services of customers such as re design the website with more attractive look and feel and with
quick results. This can help company to rebuilt the company opportunity and regain the market
positioning.
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Business Travellers : Company should invest on the customer service such as Ryanair
recently invest on the traveller products (Ryanair SWOT analysis. 2019). This is bundled
product offering a range of features for a single fee. Such as flexibility, fast lane security etc.
Threat
Accidents : Ryanair having the strong safety records in order to rebuilt the approaches
and growth. Accidents are uncertain they may have happened anytime such incidents are health
and safety incidents, climatic incidents, natural incidents, or financial incidents etc.
Loss of Focus : Company should need to invest on the management focus if they failed
to focus on their growth they failed to get the success (Noe & et.al., (2017).
Strategic Direction Options
Ansoff Matrix Model.
Market Penetration : Market penetration strategy can be adopted by the company which
is less risky and become growing market strategy for the Ryanair. This strategy will help Ryanair
to keep sustained the market opportunities and capabilities. Then after the saturation level,
company can get new market strategy to grow.
Market development: In this strategy Ryanair can develop its market into the new
geographical regions. This strategy is helpful when brand is the core competency of the business.
This strategy involved high risk then penetration strategy.
Product Development: In this strategy company can upgrade their services in order to
build the strong market in the aviation industry (Popova, (2018). In this task it will help to
discover the new managing growth and market opportunities.
Diversification : This is the another strategy that Ryanair could adapt to enhance the
market share, this will help to continue the process building sources. Diversification is one of the
risky strategy adopted by the firms. However, diversification may be the reasonable choice if the
high risk is compensated by the chance of a high rate of return. This will return and emerging the
different opportunity and goals in order to build the long lasting results and goals.
Strategic selection and Justification
Justification
Strategic direction should always be taking for the development of the future goals for the
benefit of the company and employees. Ryanair should need to invest on the new products by
introducing new diverse services for the customers. This strategy can help company to make
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more profit and growth in the market. For example: Ryanair can enter into the joint venture or
acquires other companies that make more profit (Wheelen & et.al., (2017). This strategy also
helps to gain market share which is currently reduced. Overall, diversification strategy is the best
way for Ryanair to maintained the sustainability of the business into long term manner. This
approach can also help to mitigate the risk of customer switching, low market growth or lack of
opportunity growth. By acquiring the another company or through joint venture company can
easily increase the sales and revenue.
Conclusion and Future Recommendation
As per the given discussed report it has been analysed that strategic management handled
the company profits and also acquire the new strategies for the company growth and
developments. Present study discussed about the strategic directions and market capabilities of
the company so that they grow in the future manner. Present study based on the case study of
Ryanair which is the largest low fair aviation company.
Recommendation that should be adopted by the company
 Ryanair should be focus on the customer services.
 Ryanair should also need to abide all implemented legislation or legal implication posted
by the government (Zhu & Gong, (2016).
 Company also needs to invest on the employee training and development growth.
 Should need to take over the other brand to sustained their own stability growth for the
future.
 Ryanair also need to invest on the digital technologies in order to maintained the
customer service program.
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REFERENCES
Books & Journals
Aalto, M., (2016). Industry Analyses for a case company.
Ansoff, H. I. & et.al., (2019). Implanting strategic management. Springer.
Bryce, H. J., 2017. Financial and strategic management for nonprofit organizations. Walter de
Gruyter GmbH & Co KG.
Frynas, J. G. and Mellahi, K., (2015). Global strategic management. Oxford University Press,
USA.
Ginter, P. M., Duncan, W. J. & Swayne, L. E., (2018). The strategic management of health care
organizations. John Wiley & Sons.
Hartman, N. & Boscoianu, M., (2015). Single European Sky-the transformation of the aviation
industry based on the dynamic capabilities. INCAS Bulletin. 7(1). p.97.
Hill, T., (2017). Manufacturing strategy: the strategic management of the manufacturing
function. Macmillan International Higher Education.
Meyer, G. D., Neck, H. M. & Meeks, M. D., (2017). The entrepreneurship‐strategic
management interface. Strategic entrepreneurship: Creating a new mindset, pp.17-44.
Moutinho, L. & Vargas-Sanchez, A. eds., (2018). Strategic Management in Tourism, CABI
Tourism Texts. Cabi.
Noe, R. A. & et.al., (2017). Human resource management: Gaining a competitive advantage.
New York, NY: McGraw-Hill Education.
Popova, D. A. (2018). DEVELOPMENT OF AN ALGORITHM FOR MAKING
MANAGEMENT DECISIONS BASED ON SITUATIONAL ANALYSIS. Juvenis
scientia, (12), 20-22.
Wheelen, T. L. & et.al., (2017). Strategic management and business policy (p. 55). Boston:
pearson.
Zhu, S., & Gong, X. (2016, July). A SWOT Analysis of General Aviation Industry Development
in Shandong Province. In 2016 2nd International Conference on Social Science and
Higher Education. Atlantis Press.
Online
Ryanair SWOT analysis. 2019. [Online]. Available
through :<https://www.swotandpestle.com/ryanair/>.
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