Strategic Management of Ryanair Assignment

Strategic
Management

Table of Contents
INTRODUCTION...........................................................................................................................1
1. Ryanair Background and information .....................................................................................1
2. Strategic tool to analyse the external environment .................................................................2
3. Analysis of major director competitor and strategic group .................................................6
4. Strategic tools to analysis internal environment......................................................................7
5. Strategic direction options: .....................................................................................................9
6. Strategic selection and justification.......................................................................................10
7. Influencing the organisation by providing information ........................................................10
CONCLUSION..............................................................................................................................11
REFERENCE.................................................................................................................................12
....................................................................................................................................13

INTRODUCTION
Strategic management is a continuous process of management that involves planning,
formulation and implementation of objectives which is decided by the organisation. Moreover ,
it is a solid planning of an enterprise that helps to meet business objectives after accomplishing
organisation's goals (Audretsch, 2015). The main purpose of this report is to research the
importance of strategic management that helps to meet with company's objectives and
increase profit margin. For research Ryanair has been taken. It provides airline services to
customer at low cost. In this report various topics will be discussed such as Ryanair background,
strategic tools to analyse the external and internal environment, value of resources and group
market segmentation. This report will also helps to understand the PESTLE analysis, SWOT and
porter's model that will help to comparison with other industry (Baumgartner and Rauter,
2017).
1. Ryanair Background and information
Ryanair is a airline service provider company that provides schedule passenger services
between Ireland and United kingdom. This is a largest company that was established in 1985 by
Rayan family. In starting, it provided full services carrier, with two classes of seats, leasing three
different types of aircraft. It was growing rapidly and increasing number of passenger, by the
end of 1990, Ryanair had appointed of five executives and had bear accumulated losses of
IR£20 million. It fight to survive, this company become Europe's first low fare and no frills
service provider company, built on the model of South west Airlines, the successful US
operator. A new management team was appointed by Michael O' Leary who is the CEO of
organisation. In 1997, it was listed on Dublin stock exchange and quoted on Dublin and London
stock exchange and on the NASDAQ-100.
2. Strategic tool to analyse the external environment
Strategic tools are the techniques that helps to set vision, mission, objectives and tactics
in order to achieve targets and goals of an enterprise. European airlines industry involves
PESTLE analysis and porter's five forces model that is discussed as below-

Political: Political factor includes some key drivers for change that impact on business
organisation such as new technology, global issues, market and demographic changes. For
instance, Global instability raised due to threat of supply and distribution of with ten producing
regions like as middle east, Russia and in other major oil consuming region such as south china
sea. If oil prices will increase it will affect Ryanair business because it has to spend more money
on oiling and petroleum. Hence, company has to face low profit margin situation(Chen, Delmas
and Lieberman, 2015).
Economical: This includes key drivers for changes such as population and unban/ rural
dynamics, economic growth, prosperity, trade development , inflation, currency strength,
interest rate, balance of trade etc. that can affect any organisation. Key drivers helps to
increase the business growth after making some changes and improve productivity.
Social: In key drivers it involves ageing, inflation, demographic and changes in fashion of
people that affect Ryanair 's business for instance younger age of people may be ready to pay
high prices for travelling but old age of people will not be ready to pay high economical prices.
Instead of this they will prefer other airlines, for solving such issue Ryanair can make budget
and planning to increase in number of services by providing class travelling at low cost.
Technological: This key factor also can affect Ryanair's business by providing online
services such as passenger can book ticketing and check in services through hand hold devices.
As a result client will prefer this online services rather than booking manually. But some times it
may be barrier poor network connection and high prices that affect any organisation's business.
Legal: This includes key factor such as workmen compensation act, pollution, minimum
wages, commercial and employment that can affect Ryanair's company because of pollution
liabilities and decarbonisation. For instance, there are many rules and regulation that require
Ryanair to offer less pollution or decarbonisation that helps to save environment as well as
provide safety travel.
Environmental: It involve key factors for change like temperature, precipitation, land
cover, per capita water demand and climate change that can affect Ryanair business because of
changing in environment. It may be positive or negative which is depend on climate (Cook,

2015). if per capita water demand will increase then organisation has to face more spending
because of limited sources and more uses.
3. Analysis of major director competitor and strategic group
Strategic group can be measure two types that helps to identify company's performance
and comparisons with low performers. It involves strategic group in European airlines industory
such as full service carriers, low cost carriers that helps to increase in number of customer.
Full service carrier: It involves group of people who provides number of services to its
customer and give satisfaction in European airline industry. Moreover, it means it is a group
that focuses on full services provided by company as customer wants. In Ryanair manager
focuses on customer satisfaction by providing full services to its customer.
Low cost carrier: This involves services provided to customer at lower cost comparison
to other organisation in European airline industry . In additional, European airline industry
focuses on providing chain of services that helps to increase profit margin of airline industry.
4. Strategic tools to analysis internal environment
Ryanair is airline service provider company that focuses on increase in number of
customer (Ginter, Duncan and Swayne, 2018). SWOT analysis of Ryanair industry is mentioned
below-
Strength:
 Established in European market that
cover more than 200 destination.
 Solid balance sheet and consistent.
Weakness:
 Employee relations and changing staff.
 Competitive fleet expansion can be
overcapacity in future.
Opportunity:
 Ryanair has great scope to increase
supportive revenues.
 Helps to reduce charter flight segment.
Threats:
 Weak GBP due to post Brexit.
 Variation in fuel prices that may be
affect Ryanair business.

VRIO model is a business analysis structure that helps to define value of resources,
rarity, inhabitability and organisation support (Hitt, Duane Ireland, 2017). VRIO analysis of
Ryanair is discussed below-
Value: In Ryanair organisation human resources are valuable because it provide safety
journey to passenger that helps to increase number of passengers. Human resources plays an
important role in Ryanair's business such as pilot, passenger, manager, employees ect.
Rare: Rarity means which is not easily available. In Ryanair company human resources
are valuable as well as rare also because Ryanair has excellent and experienced human
resources that may not be available easily for other organisation in order to increase in number
of passenger by providing influencing services.
Imitable: In Ryanair company human resources are valuable and not imitable that can
not be available easily. But theses resources are imitable by competitors by providing excellent
training to its employees that can compete with Ryanair enterprise.
Organise: In Ryanair company managers are utilizing human resources properly that
helps to increase productivity by providing quality of services (Hladchenko, 2015).
5. Strategic direction options:
Strategic direction options helps to evaluate the current and future choices of any
organisation. In Ryanair it establish the structure for internal responsibilities that every
department and employees takes. Following strategic option are followed by Ryanair company
such as-
Finding new market: This means any organisation can adopt growth strategy in order to
increase profits. Manager of Ryanair company need to research more market place that helps
to increase number of passenger by providing airline services. It make future strategic direction
that helps to attract passenger to adopt new services at less prices (Karadag, 2015).
Service differentiation options: This means company can use this option to increase
productivity and profitability. In Ryanair manager innovate new product and services that helps
to attract passenger and provide different services from other enterprise (Wheelen and et.al.,
2017).

Low operating cost: It includes charging low prices for a product and services that
provide high range of services. In Ryanair managers make future strategy that focuses on
customer satisfaction rather than productivity. It provides travelling services at low cost to
operate airline services that influence the passenger.
Fare and route policy: This includes Ryanair should make pricing policy according to
distance that include reasonable fare and safety journey. It will helps to increase passenger
loyalty and increases continuously demand of airlines services.
Cost leadership theory helps to reduce the overall cost of organisation in order to
manage the profitability. In other words, it is used to manufacture at cheap cost or low price
and provide a provide a particular product or commodity. For managing cost Ryanair adopt
porter generic model that id discussed as below-
Cost leadership: Ryanair use this cost leadership theory that helps to maintain the cost
of organisation. Leader of this company check the cost and prepare budgets.
Differentiation: Ryanair use this strategy to provide different types of services that helps
to attract more passenger and increase competition.
Cost focus: Ryanair use this strategy to concentrate on particular market and
understand the different needs of passengers. After developing that kind of services it provides
at low cost.
Differentiation focus: Ryanair focuses on different types of services by adopting new
technology and innovate new services at less price that helps to attract customer by providing
new services.
Ansoff's matrix is the marketing plan model that helps a business to define business's
product and market growth strategy. It involves different corporate strategy that is given as
below-
Market penetration: This means a company should use market penetrate strategy while
entering in a new market. Its aim is to expand its existing business as well as market size. Such
as Ryanair can enter in Europe market by reducing its service's prices that will helps to attract
customer to obtain services from Ryanair. Hence, it can increase its airline business by reducing
prices.

Product development: It includes development of existing product and services that influence
the customers. Ryanair can use this strategy to bring new services such as Robotics services . By
bringing this services in airline passenger will attract to get instant response through robot who
will answer of customer query.
Market development: It includes how a business can enter in a new market and what need to
do for expanding a business in a new market. For instance, if Ryanair want to expand its
business in Europe it need to make solid strategy that helps to growth of business such as by
providing attractive services like discount in price and improve quality in existing services.
Market diversification: This involves how a business organisation can move in to new market
with new product ans services that helps to increase sale on the basis of customer. If Ryanair
use this strategy it need to bring new product and service to attract the existing customer.
6. Strategic selection and justification that defines suitability, acceptability and feasibility
It has been evaluated that Ryanair should adopt Market penetration strategy that is
suitable for Ryanair such as it will attract more customer by providing existing services at low
prices and discounted price. Hence, it will be an opportunity for Ryanair to expand its market
share and growth by providing attractive services to customer. This strategy also helps to meet
with stake holder's expectation such as customer wants economical and qualitative services
which is provided by Ryanair that will help to meet customer's needs and wants. Moreover, this
strategy will be feasible like if customer will obtain Ryanair's airlines services at different
market, its goodwill and market share will increase that will helps to increase finance as well as
profitability (Rosenberg Hansen, and Ferlie, 2016). Hence, this strategy will be suitable, feasible
and acceptable for Ryanair airlines industries.
7. Influencing the organisation by providing information
Ryanair provides airlines services at international level at reasonable prices that helps to
increase and attract chain of passenger. It influence the Airline industry by contribution. It also
helps in development and growth of Airline industry through contribution of some percentage
of profits.

CONCLUSION
From above mentioned report it has been recommended that strategic management is
the part of an organisation that helps to run a business effectively and makes future growth of
business. This report covered PESTLE and SWOT analysis that helps show internal and external
elements to run business. Moreover, various topics has been discussed such as VRIO model,
porter's five model, strategic option or strategy. VRIO model shows how human resources are
valuable, rare, imitable and can be organise in an organisation.

REFERENCE
Books and Journal
Audretsch, D. B. (2015). Everything in its place: Entrepreneurship and the strategic management
of cities, regions, and states. Oxford University Press.
Baumgartner, R. J., & Rauter, R. (2017). Strategic perspectives of corporate sustainability
management to develop a sustainable organization. Journal of Cleaner Production. 140.
81-92.
Chen, C. M., Delmas, M. A., & Lieberman, M. B. (2015). Production frontier methodologies and
efficiency as a performance measure in strategic management research. Strategic
Management Journal. 36(1). 19-36.
Cook, N. D. (2015). Crisis management strategy: Competition and change in modern enterprises.
Routledge.
Durand, R., Grant, R. M., & Madsen, T. L. (2017). The expanding domain of strategic
management research and the quest for integration. Strategic Management Journal.
38(1). 4-16.
Ginter, P. M., Duncan, W. J., & Swayne, L. E. (2018). The strategic management of health care
organizations. John Wiley & Sons.
Hitt, M., & Duane Ireland, R. (2017). The intersection of entrepreneurship and strategic
management research. The Blackwell handbook of entrepreneurship. 45-63.
Hladchenko, M. (2015). Balanced Scorecard–a strategic management system of the higher
education institution. International Journal of Educational Management. 29(2). 167-
176.
Karadag, H. (2015). Financial management challenges in small and medium-sized enterprises: A
strategic management approach. EMAJ: Emerging Markets Journal. 5(1). 26-40.
Rosenberg Hansen, J., & Ferlie, E. (2016). Applying strategic management theories in public
sector organizations: Developing a Typology. Public Management Review. 18(1). 1-19.
Slack, N., & Brandon-Jones, A. (2018). Operations and process management: principles and
practice for strategic impact. Pearson UK.
Wheelen, T. L., and et.al., (2017). Strategic management and business policy(p. 55). Boston:
pearson.

ASTERIX
1. Ryanair Background and information
After its reconstruction in to budget airline, Ryanair never looked back, even it growing
continuously as it added new bases, aircraft and routes. In july2015, it started more than 1600
flights per day from 72 bases and 190 airports across Europe. Its growing rapidly such as in 2014
passenger was 81.7 million to 90.6 million in 2015. In 2016 it crossed 105 million passenger by
providing airline services.
In December 2015, Ryanair shares and securities were trading in €1-4.60 to €15.08
range, with a price earning ratio of 13.5. The share price of of Ryanair had risen continuously
after plummeting to a low of €1.97 in October 2008, in global equity market tumbling situation.
Basically, it struggled more and become largest European budget airline by regular traveller
flown and carried more international client comparison to other airline.
2. Strategic tool to analyse the external environment
External environment includes Political, economical, technological, legal and
environmental factor that can affect Ryanair business. This analysis helps to find out the
problems while running a business. Moreover, PESTLE analysis is a strategic tool that help to
control and affect business outside the organisation.
Political: It involves tax rates, global instability, trade control, education law,
bureaucracy etc. that affect a European airline industry.
Economical: Economic growth of country can affect Ryanair's business such as slow
economic growth will reduce the profit because of lack of passenger.
Social: Ryanair create social values by providing airlines services to its customer at less
fare than other airlines industry.
3. Analysis of major director competitor and strategic group
This includes exploiters, explorers, outsources and emergent global. In Ryanair
managers measure the performance of employees give them ranking by using explorers and
outsources that helps to hire qualified employees. Market segmentation is an ongoing process
that helps to divide the work according to groups, based on characteristics and segments

(Durand, Grant and Madsen, 2017). In Ryanair manager divide the work according to
employee's specialisation and experience that helps to increase passenger loyalty.
Market segmentation is a process or procedure to divining the market in possible
clients in various groups and segments that is depend on characteristic. Ryanair used market
segmentation to divide the customer on the basis of age group, lifestyle, usage, occupation,
place and income. It involves Demographic, geographic, psycho graphic and behavioural
segmentation. Ryanair use demographic segmentation to increase the number of passenger
because it focuses on demographic variables like gender, marital status, family size, income
level, nationality, and age. Manager of Ryanair provides airlines services according to
customer's income level and family size that helps to increase in number of customer.
4.Strategic tools to analysis internal environment
Internal environment means factors that affect business within organisation such as
employees, management, corporate culture and employee behaviour. To analysis the internal
environment SWOT is a strategic tool and technique that helps to control and show strength,
weakness, opportunity and threat of an enterprise.
Strength:
 Highly competitive because of low
cost.
 Run point to point flights in short
distance location.
Weakness:
 Higher dependency on online ticket
booking and check in services.
Opportunity:
 Increase in number of customer by
providing services at low cost.
 Increase passenger loyalty by fulfilling
their needs and wants.
 Focuses on passenger experience and
feedback by applying always getting
better programme.
Threats:
 Comparison from other low cost
service provider company.
 Lack of experienced employees.
 Increase in Irish tax rates and interest
rate.
 Strikes and low cost regional areas.

VRIO model is a question framework that asked regarding a resources or capability to
define competition from other organisation.
Value:It defines valuable resources such as human resources, finance, raw material etc.
Rare: This means if human resources are valuable then is it rare or not.
Imitable: This means resources can be copied or not by competitors.
Organise: This means if resources which are available in organisation are using properly
or not.
Ryanair has three major direct competitors who is also performing well and increasing
passenger loyalty and profitably. Such as Easy jet, Wizz Air , blue air that is providing airline
services. For comparison porter model has discussed as below-
Basis Ryanair Easy Jet Blue air Wizz Air
Threat of new
entrants
New product and
services.
Building
economies of
scale.
Building capacity
and spending
money on
research.
Pressure on blue
jet through low
prices.
More challenges
in airlines
industry.
Obstacle to
safeguard
services.
High prices on
services.
Expenses on
research and
services.
Build effective
barriers to
provide safety
competitive
border.
Put pressure on
Wizz Air by
adopting low
price strategy.
Reduce cost, and
provide new
value to its
customers.
Bargaining power
of buyers
More demands.
Large base of
customer.
Continuously
providing new
services.
Great base of
passenger.
Discount offering
on new product
and services.
Low base of
customer
because number
of passenger.
More powerful
base of passenger
who demand a a
lot.
Reducing cost
and discounted
prices.

Bargaining power
of suppliers
Cost-effective
supply chain.
New material
from various
suppliers.
Multiple
suppliers.
Build equal
demand and
supply.
Cost effective
supply chain.
New product and
services from
different
company.
Supplier in
dominant
position that can
decrease profits.
New innovation
that helps to
attract passenger.
Threat of
substitutes
Not meeting with
customer needs.
Services provided
by other
company at low
cost.
Perfect
competition.
Service oriented
instead of
product oriented.
Switching prices
for passengers.
Product oriented
instead of
services oriented.
Perfect
competition
situation.
Not switching
cost available.
Higher
dependency on
online services.
Switching cost for
customer.
Extent of rivalry Existing players in
an enterprise.
Lack of building
scales.
Lack of Building
sustainable
differentiation.
Existing players at
market place.
Lack of
economies scale.
Cooperate with
competitors to
increase the
market size
instead of
competing in
small market.
High economies
scale by providing
services at
multiple place.
6.Strategic selection and justification

It can also adopt cost leadership and differentiation focus leadership theory that will
helps to focus on passenger choices and new services which helps to attract more customer
than other airlines industry. Other airline industry focuses on increase on profits whereas
Ryanair focuses on customer satisfaction by adopting low cost strategy. By applying fare and
route policy it will be easy to find reasonable fare according to distance and route. This strategy
helps to increase passenger loyalty as well as number of customer It will also helps to define
the future demand and strategy in order to growing business.
7. Influencing the organisation by providing information
Ryanair company will be able to increase number of customer because it focuses on
passenger need and will provide services at lower cost as they wants. To follow this strategy
manager also need to get feedback and problems which passengers are facing (Slack and
Brandon-Jones, 2018). Above selected strategy will helps to solve passenger's problems by
providing quality of services.