Ryanair Strategic Management Analysis

The report discusses the current situation of Ryanair, focusing on its low-cost strategy, political, economic, social, and technological factors that affect the organization's business. It also analyzes the company's strengths, weaknesses, opportunities, and threats using SWOT analysis, and identifies its strategic resources and capabilities using VRIO analysis. The report concludes with recommendations for Ryanair to improve its market reputation and increase profitability by adopting EU regulations on carbon emissions trading and providing equal wages and fair opportunities for workers.

STRATEGIC
MANAGEMENT

Table of Contents
INTRODUCTION...........................................................................................................................3
TASK ..............................................................................................................................................3
Background information of Ryanair............................................................................................3
External environment analyse......................................................................................................4
Three major competitors of Ryanair............................................................................................6
Analysis Internal environment.....................................................................................................7
Strategic direction tools...............................................................................................................7
Future strategy for company........................................................................................................8
Recommendation ........................................................................................................................9
CONCLUSION ...............................................................................................................................9
REFERENCES..............................................................................................................................10

INTRODUCTION
Strategic management is constant monitoring, planning, assessment and analysis of all
that is essential for any company to meet their objectives and goals. It is one of the most
important activity of business which helps to sustain in marketplace for long term period
(Kleymann & Seristö, 2017). Centering on consumer satisfaction, analyzing market data,
beating competitors is the role of strategic management that assure long term profitability and
success. Strategic management provide non financial benefit to business as it helps to become
organized and disciplined. The present case study is based on Ryanair business management
strategies. It explains organization background and also justify PESTEL analysis as strategic tools
to analyze external environment. This report clarifies three competitors of Ryanair and strategic
tool to identify internal business environment. Furthermore, this study explain strategic
direction tools and evaluate one future strategy for company and then justify recommendation
as improvements.
TASK
Background information of Ryanair
Ryanair is an Irish low cost airline which operated much than 400 Boeing, 737 to 800
aircraft, with individual 737- 700 they used primarily as charter aircraft, but also as for pilot
training and backup. The company was founded by Ryan family in 1985 to offers regular
passenger services between UK and Ireland. Customers like to travel in Ryanair airlines because
they are using low cost strategy which is very beneficial for their business growth and success
rather than the other airlines. They enjoyed remarkable success and development in
marketplace based on strictly applied low cost business strategy. Organization is the biggest
European budget airway by regular passengers flow, they carried mostly international
passengers within it more than any other airlines. Firm designates themselves as Europe's
popular airline as the world's biggest international carried by travelers. Thus, before their
transition moment, organization had stuck nearly to low fares and low cost. It is different from
their application of Southwest Airlines business concept and that of their main European
business rival, Easy jet. Firms build their headquartered in Dublin, Ireland, Swords with its main
operational bases at London stansted and Dublin airports.

Across North Africa and Europe they also operated from 54 bases copulative 35
countries. Company prefers to fly to secondary or smaller airports basically outside main cities
to support firm benefits from low landing fee and fast turn around time to cut down costs. In
2015 annual report, they indicated different key facet of their strategy (Dziedzic & Warnock-
Smith, 2016). Ryanair always provide better services to their customers within it low cost
business strategy that helps to retain customer with them for longer term and increase their
profitability more and more.
External environment analyse
PESTLE analysis is one of the best strategic tool that helps to analyze external
environment and their impact upon any business such as Ryanair airline. It also helps to
determine how political, social, economical, technology, legal, environmental factors will
influence activities and performance of organization in long term.
 Political factor- Europe Union is wholly stable political region which considered as the
advantage for them. EU desegregation permit carrier to expand their routes and
activities. Airlines affected by decisions posed by another political companies like OPEC,
it is inter government company of 14 nations. For example, Organization of petroleum
exporting countries is a team consisting of 14 of the world's main oil exporting nations.
They merge with oil producing countries and decide on oil coots, determining their
output quality and international supply chain. Sudden changes in organization decisions
get impact Ryanair as high cost of fuel. Change cost of fuel get directly impact Ryanair
business activities and revenues.
 Economic factor- Currency fluctuation is one of the Economic factors that affect
business the most. It particularly refers to fuel hedging actions put in place by Ryanair,
will affect their carrier strategy and carry business in risk. For example, Organization
mostly operate their functions in UK and fly within euro zone countries. Firm and their
values of euro denominated assets will impact by break down of euro. Operating
business in non euro countries will become more costly which affect their profitability.

 Social factor- Customer preferences changes according to the trends which is difficult to
foretell and it is very much connected to the prices of products or services. For example,
Travel industry affected by aging population factors, as Ryanair service will impact
because people like to purchase or buy cost effective things which is beneficial and
affordable for them. Changes in consumer preferences influence organization profit
margin and reputation.
 Technological factor- Current business environment required that airlines integrate
digital channels into their marketing strategies and distribution as if they need to survive
in airline industry. For example, integrate digital channels into system affected Ryanair
profit more and more rather than the others because organization is budget airlines
they will likely go for low cost strategies.
 Legal factor- In number of countries legal institutions and framework are not just
enough to safe intellectual property rights of company. For example, Employment law
is one of the legal factor which affect Ryanair airlines because Irish High Court ruled that
airlines had to provide workers equal pay and new contracts where they employees had
received all the right under employment law. Organization has been criticized for
denying union recognition and declared providing poor working conditions that impact
their reputation in marketplace. After Irish court order company try to maintained their
rights to treat crew members equally and pay right wages to them.
 Environmental factor- World's leaders concerns about establishing environmental
intended businesses globally. It is required that airlines need to lower their carbon
emission. Most of the airlines do not consider this concern and try to make their funds
look better in difficult economic times. Environment awareness goals include in the
contract which present the best opportunity to Ryanair, it they were like to adopt in
their business structure.
Three major competitors of Ryanair
Ryanair has many low cost competitors in marketplace who give tough competition to
their business and service. Aer Lingus is one of their competitors in Irish routes, that
organization is flag carrier airway of Ireland and consider as second biggest airlines in nation

after Ryanair because they moved to low costs strategy as like as Ryanair does. Aer Lingus
leading to more aggravated competition with Ryanair on same routes. Aer Lingus flights to over
120 destinations within Ireland, US and Europe as compare to others.
EasyJet airlines company is a British Low fares airlines and one of the Ryanair business
competitors. EasyJet provide all the facilities or services to customers just like as Ryanair, they
also follow the low cost strategy to grab the high position in marketplace better than another.
But still after competition Ryanair provide their better service and suggestion tools to
passengers.
Jet2.com is also a British lower cost airline that run chartered services and operates
scheduled. They are coming up with better flight times and cheaper costs which bring
difficulties for Ryanair business as competitors. Many people prefer Jet2 for traveling from one
of another country because they provide the comfortable setting standards.
Analysis Internal environment
SWOT analysis is one of the better strategic direction tools that helps to analyze internal
environment of business such as Ryanair.
 Strength- Ryanair has low unit costs of any other European airlines and one of lowest of
any another airline in world. Their manufacture of capacity and traffic cost is less than
any of its business competitors. Innovation is one of the biggest success key for Ryanair,
they do some innovation in their business for satisfy customers.
 Weakness- Ryanair cures to offer low frequencies on their Irish routes than its rivals and
often have departures flights at very inopportune times which decrease customers
interest and affect their profit margin. Organization earn profit highly seasonally and
rely on strong northern hemisphere summer, but in winters they do not generate much
profit as compare to summers.
 Opportunities- Ryanair provides different ancillary service to their customers, including
in flight beverage, food etc. and also include entertainment sales and internet affiliated
service and offers to customers within affordable price.

 Threats- Aer Lingus, Jet2.com and EasyJet are the Ryanair competitors who offer their
best services to consumers and apply different business strategies to run their services
effectively, it one of the biggest threats for organization.
Strategic direction tools
VRIO is the strategic direction tools that helps to evaluate Ryanair strategic choices
which help to grow their business in the future. It is an analytical methods brilliant for
evaluation of firm assets and thus, competitive advantages.
Values: Ryanair offer their best resources that adds value for customers such as low cost
service and facilities, internet service, entertainment facility during travel period etc. They are
able to exploit opportunities and garb competitive advantage more than the other airlines.
Company provide all the facilities to their customers which make them happy and satisfy, it is
usually considered as valuable. By knowing their values which get from all resources now
company need to move towards making the right decisions. Ryanair also build good relationship
their customers and staff members which is one of their most valuable resources.
Rarity: It is difficult to chose one strategy among all of mention above, but it is valuable
when it does not exist within company. Low costs is one the best strategy which Ryanair hold
inside their business that is rare in field because no other airlines can do this. It helps to possess
organization over its competitors such as Jet2.com etc.
Imitability: Ryanair sees that Jet2 and Aer Lingus airlines company is having succeeds
with offering low costs to customers, so Ryanair will often rapidly work towards imitating their
lower cost strategy as more closely as possible in order to build high position in market as direct
competitors. They can build their image in market if they provide low costs services within good
quality, will make them able to raise higher profit margin more than its competitors.
Organization: The ending point of this list is question of company. In annual report it
has been declared that Ryanair intends to move growth and success path continually with the
way they expanded business in the past. They are deliberate to grow more and more in airlines
industry by providing low fares and schedule promotions, this will help to gain positive
outcomes and also provide competitive advantages. Ryanair talks with Portugal's TAP and

Norwegian Air shuttle to supply transfer connections on long haul flights which is very beneficial
for their business growth and success in marketplace.
Future strategy for company
Ryanair chose lower costs strategy as future development and growth that can build
positive image in market and attract customers more than the another (Fageda, Suau-
Sanchez & Mason, 2015). They are intended to grow business by offering low costs which
can be beneficial for them. Consumer like to travel within low cost airlines including having all
the services which they need to require. Organization offer clients their facilities as according to
their needs that can be useful for them. Jet2 airline also device to offer low cost to consumer,
but they cannot hold it for longer and face difficulties. Ryanair can garb the attention of clients
if they will be able to take this advantage or hold for longer term period. It can be beneficial for
their business and they can increase profit more through success of low costs strategy.
Recommendation
 Ryanair should adopt EU regulation of carbon emissions trading in context of
environmental safety that contribute for longer success.
 They do not to be depend on external service providers only, they must be relay on
internal service distributors as well.
 Ryanair should provide equal wages and give fare opportunities for workers in order to
improve market reputation and increase profitability rather than the others.
CONCLUSION
The present report discuss about strategic management which is important for
managing or organizing business effectively. It has been concluded that Ryanair are running
their business in many countries and focus on low cost strategy. This report discussed about
political, economic, social and other factors that affect organization business. The current
report discussed about the SWOT analyzes as Strategic tools that helps to analyze Ryanair
strengths, weaknesses, opportunities and threats. Aer Lingus, EastJet and Jet2.com are the
major competitors of company which give tough competition to firm. Furthermore, it has been

concluded VRIO as strategic direction tools and also discuss recommendation for Ryanair as
following EU regulation which is very beneficial for them.

REFERENCES
Book and Journals
Alderighi, M., Nicolini, M., & Piga, C. A. (2015). Combined effects of capacity and time
on fares: insights from the yield management of a low-cost airline. Review of
Economics and Statistics. 97(4). 900-915.
Cherkesova, E. Y., Breusova, E. A., Savchishkina, E. P., & Demidova, N. E. (2016).
Competitiveness of the human capital as strategic resource of innovational
economy functioning. Journal of Advanced Research in Law and
Economics. 7(7 (21)). 1662-1667.
Chiu, S. C., Liu, C. H., & Tu, J. H. (2016). The influence of tourists' expectations on
purchase intention: Linking marketing strategy for low-cost airlines. Journal of
Air Transport Management. 53. 226-234.
Dziedzic, M., & Warnock-Smith, D. (2016). The role of secondary airports for today's
low-cost carrier business models: The European case. Research in
transportation business & management. 21. 19-32.
Fageda, X., Suau-Sanchez, P., & Mason, K. J. (2015). The evolving low-cost business
model: Network implications of fare bundling and connecting flights in
Europe. Journal of Air Transport Management. 42. 289-296.
Kleymann, B., & Seristö, H. (2017). Managing strategic airline alliances. Routledge.
Spildo, K. and et.al., (2014). A strategy for low cost, effective surfactant
injection. Journal of Petroleum Science and Engineering. 117. 8-14.
Thomas, M. (2015). Ryanair: success before love. Strategic Direction, 31(8), 1-3.