Strategic Management Analysis of Ryanair

This assignment provides a detailed analysis of the strategic management practices of Ryanair, including its use of PESTLE analysis, SWOT analysis, and Porter's Five Forces Model. It also discusses the company's implementation of cost-cutting strategies and innovative ideas to improve business quality and services. The document is suitable for students studying strategic management and business analysis.

Strategic Management

Table of Contents
INTRODUCTION...........................................................................................................................3
MAIN BODY...................................................................................................................................3
Ryanair- Background information...............................................................................................3
External Airline industry analysis by using strategic tools..........................................................4
Analyse the three major direct competitors to the Ryanair..........................................................5
Analyse the internal environment by using the relevant strategic tools.......................................6
Strategic directions evaluated the Ryanair's strategic choice and future strategic direction........7
Critically evaluation on the selected future strategy in Ryanair..................................................8
Justification of selected future strategy........................................................................................8
FUTURE RECOMMENDATION...................................................................................................9
CONCLUSION................................................................................................................................9
REFERENCES..............................................................................................................................10
Books and Journals.....................................................................................................................10

INTRODUCTION
Strategic management is basically a continuous process that can be used for the purpose
of planning, analysis and monitoring all the assessment which is required in organization to
achieve their goals and objectives. It is generally applicable for long term planning and provide
the direction the business to handle the task in proper manner. Ryanair is a type of low cost
airline which founded in 1984, headquartered in Ireland, with primary operational bases. Ryanair
was founded in 1895 by the Ryan family to give the proper scheduled for passenger services
between UK and Ireland. This report will discuss about Ryanair airline industry that can use
different type of business model to manage the operations and financial performance at the time
of recession. Furthermore, this document will discuss about the internal and external
environment factors.
MAIN BODY
Ryanair- Background information
Ryanair was founded in 1895 by the Ryan family to give the proper scheduled for
passenger services between UK and Ireland. On the other, as alternative to then state monopoly
airline. The Ryanair airline was provided the full services such as two classes of seating and
three leasing aircraft etc.
 The organization is consisted of repositioning Ryanair as a low cost fares. It is also
providing the service according to the choices of customers and also improved the travel
services by using digital concept.
 This organization has followed the specific strategy to adopt the digital platform for
improving the flying experience which allows for user to bring bags.
 Enhance the digital concept to launching a new idea, the simplest website and Ryanair
applications where consumer easily access the details. (Pels, Njegovan & Behrens, 2017).
Changing its previous policy of concentrating on cheaper secondary airports and also added to
the networks. In 2015, They offered various type of services relating 1,600 plus flights per day
from 190 airports across the Europe. In additional leased air craft to give the extra capacity in
summer seasons. In this way, it was increased the growth 11% from the 81 million passengers in
2014 to 2015. They also expected to be 105 million in 2016 and load factors increases from 83 %
to 89%. As per December 2015, Ryanair were shared the trading range in between €1-4.60 to
€15.08 with increase the profit rate. Afterwards, Ryanair began to pay the serious of special

dividends. It had engaged in the different share buyback and company had returned over the 2.9
billion to share holders over the eight years, In this way, it is subsequently increased the interest
rate to the 29.8 % at the total aggregate cost of 407.2 million.
External Airline industry analysis by using strategic tools
External analysis had been conducted by using PESTLE framework to determine the
environment conditions and situations of business. Pestle analysis is a Framework a which is
used to analyze or monitor the macro environmental factor that may have profound the impact on
Ryanair performance (Ansoff & et.al., 2019).
There are different external factors such as :
 Political Factor- There are the strict rules and regulation for the Ryanair airline industry.
It associated with the risks such as damaged and accident. There are specific factors
involves policy, foreign trade, labor law, trade restrictions and environmental law etc.
these are the major element that impact on the Ryanair airline.
 Economical Factor- this factor influence on the Ryanair airline and determinants of
certain economy performance and efficiency. The recent economic recession made the
market to see the lowest period. Ryanair were under the pressure to cope with increasing
the price of fuel. These are the different factors that impact on the Ryanair industry
which needs to maintain their business process because it directly affects the country.
 Social Factor- Ryanair always create social value in order to meet the changing demand
of customers, the organization is required to incorporate changes, Many Passengers are
preferred those airline which are providing the best quality of service at cheap price. In
this way. It impacts on the airline industry and decrease the number of traveling
passenger.
 Technological Factor- Technology is the advancement of modern facilities where
Ryanair has provided the online services so that customer easily booking. The company
also conducted the online campaign on the social media network for attracting more
peoples. The increased technology can make airline gain more profit in global
marketplace.
 Legal factor- This factor is holding the special importance for analyzing the external
environment of Ryanair airline. There are various type of rules and regulations which
necessary for airline to offer the safe travel along with the high quality of services.

Environmental Factor- Fuel is a major important and expenditure of Ryanair airline
which are required invest in the environmental friendly or fuel efficient craft. Climate
change also impact on Ryanair so that it is required to practices the green flying for
protecting the environment conditions.
Analyse the three major direct competitors to the Ryanair
Ryanair is a leading airline industry to establish their business operations and functions in
proper manner. There are three major competitors and alternative of Ryanair such as Easy Jet,
Virgin and British Airways etc (Aithal, 2017). These are the important competitors in
marketplace which provide best quality of services to their consumers. Porter's five forces is the
important tool that help to analyze the other competitors which enter in the global market.
 Competitive Rivalry – There are various types of low cost airline operating on the routes
similar to Ryanair. It includes wizz air, Easy jet and so on. It covers the competition level
where maximum number of routes at least the cost intense. There are so much tough
competition in global market to maintain their position and brand image. There are
various type of small enterprise establish their business and try to enter in marketplace.
 Threat of New Entrants – The Ryanair airline is expensive to enter for new entrants and
their barrier entry is also high. In fact, purchasing and leasing jet is also expensive. . It is
necessary to generate awareness and online marketing. Staff members of airline needs to
develop the low cost operational services such as Ryanair. This airline wants more
experiences and maintain the economies scale.
 Bargaining power of supplier- There are two main important manufacture of airplanes
such as Airbus or Boeing. Ryanair has purchased its planes form the Boeing. They have
led to their manufactures charging with high prices. This airline is the highest purchasing
the consumer of Boeing. They cannot attempt to bargain the cost of jet fuel from the
suppliers.
 Bargaining Power of Buyers- Sometimes, it has created lack of trust and loyalty where
consumer are not loyal to the low prices. In this way, other competitors are offering the
lowest fares to increase the popularity in marketplace. The switching cost of buyer is zero
so that other competitors attempt to increase the fares. In this way, buyer will shift to
other airlines due to business loss. It makes to increase the bargaining power of
consumers in marketplace.

 Threat of Substitutes- In UK, there are various option to chose by consumer such as
cars, buses etc. they can travel from one place to another. As compared to flight, they
have the lowest fares (Minutes, Feys & Probert, 2015). Ryanair tackle this situation by
providing the appropriate comparison between the rates of trains and other routes, They
also encourage people to use different services on the basis of their requirement. It
directly reflects a weak threat of substitution for Ryanair airline.
Analyse the internal environment by using the relevant strategic tools
For the internal environmental analysis, company can use SWOT analysis as a strategic
tools. SWOT stands for Strengths, Weaknesses, Opportunities and Threats. Strengths and
Weaknesses are from company's internal environment and Opportunities and Threats are from
company's external environment. SWOT Analysis of Ryanair airline are as follows -
STRENGTHS WEAKNESSES
LOW COST
MANAGEMENT TEAM
BRAND VALUE
EMPLOYEE RELATIONS
OPPORTUNITIES THREATS
EXPANSION
EASY ACCESSIBILITY TO CUSTOMERS
COMPETITORS
FLUCTUATIONS IN FUEL PRICES
STRENGTHS OF RYANAIR AIRLINE -
Company's strengths are as follows -
LOW COST – Ryanair Airlines is the lowest of any airline in whole world. Its cost in terms of
per passenger or per seat or traffic is low as compared to its competitors.
MANAGEMENT TEAM – Company's management team always focus on innovative ideas and
finding new ways to keep customers happy and satisfy (Jenkins & Williamson, 2015).
WEAKNESSES OF RYANAIR AIRLINE -
Company's weaknesses are as follows -

BRAND VALUE – Due to low fare and low cost, Customers think that low price means low
quality of service. This perception is the biggest weakness for the company to not create a good
brand value.
EMPLOYEE RELATIONS – Company's management team's relations with employees, pilots
and cabin crews are not good due to low pay and high work load.
OPPORTUNITIES OF RYANAIR AIRLINE -
Company's opportunities are as follows -
EXPANSION – Company has a strong brand image in some countries such as Germany, Italy
and Spain etc. Thus, company should expand its business in these countries.
EASY ACCESSIBILITY TO CUSTOMERS – Company can enter into Internet business in
order to fast and easy accessibility to its customers.
THREATS OF RYANAIR AIRLINE -
Company's threats are as follows -
COMPETITORS – Company has to face high competition with EasyJet, Norwegian, Eurowings,
Jet2.com and Vueling Airlines.
FLUCTUATIONS IN FUEL PRICES – Due to increasing prices of fuel, company can have to
increase its costs and fare which is the biggest threat face by company.
Strategic directions evaluated the Ryanair's strategic choice and future strategic direction.
VRIO stands for Value, Rarity, Imitability and organization are the framework which
help to provide the strategic direction of Ryanair airline. For Future development, this is the right
choice in terms of strategic directions that Ryanair move towards their mission and vision to
manage the business task in proper manner. It is continuously performed the different operations
by using the internal and external analysis. (Gürel and Tat, 2017).
Ryanair is mainly used as a strategy that help to identify the resources, capabilities and its
competitive potential. A great way to determine the possibly valuable capabilities which is
looking into the Ryanair value chain, this airline company has to maintain their services by using
an appropriate resource which allows for operating in effectively in certain ways. There are
different ways to divide in different manner.
 Value – In Ryanair airline, It helps to provide the values of resources and capabilities
which takes more advantages in the business process. Many other competitors are trying

to establish the business in global market. It also provides the value to the consumer
allows a Ryanair to make an acceptable return.
 Rarity – It has to rare resources and capabilities those possessed in uniquely manner by
the Ryanair. Ryanair airline may have supremely hired the talented staff members those
who are powerful to manage the operations and functions.
 Imitability – In Ryanair airline, Imitability resources and capabilities are those who find
the competitors find difficult or closely to imitate (Knott, 2015). It can build the
competitive advantages by using the unique resources. Ryanair airline mainly exploit the
opportunity and neutralize the external threats by using rare and other valuable resources.
The Ryanair airline can choose to ignore the profit gain by the competitive advantages or
continuously operates in their old days.
 Organization – It is last step for organizing the Ryanair airline in the best ways exploit
the resources. Ryanair can enjoy the period of sustained competitive advantages which
includes but not limited. The Ryanair airline has formal reporting structure and
management system to handle the business task in proper manner.
Critically evaluation on the selected future strategy in Ryanair.
As per Carraher. (2018) Cutting costs and investing the modern technology strategy
always support the Ryanair airline which perform complex task but the certainly requirement for
long term growth and development. On the other hand, Fuel costs where large number of
expenses of airlines that can hedged to the degree of petrol in global marketplace. In Ryanair
airline, the labour expenses are continuously increases and the cost of technology is not getting
cheaper. However, the investment of new technology can help to decrease the operational costs
and labor.
During the review of Ryanair airline performance that focuses on the cost control for
managing the business operations and functions. They are expected to saving the money and
greatest gain the efficiency.

Corporate strategy is the best part of Ryanair in terms of future growth and development
this company has selected a low cost strategy in term of using a premium pricing for their
consumer to enter the European market (Carraher, 2018). This strategy will help for
Ryanair for managing the business operations where they providing the services at low
cost.
Justification of selected future strategy
It has justified that business strategy in terms of innovation, facility services,
management and cost management etc. Ryanair airline has implemented the cost cutting strategy
and innovative idea strategy which help to provide the various services to their customer
regarding the lower fare and high quality of facilities. These are the important parameter that
help for organization to manage all the services in proper manner. Ryanair airline has
implemented the strategy for improving the business quality and services. It has used the
different analysis factors that help to identify the need and requirement of enterprise in proper
manner.
FUTURE RECOMMENDATION
It has recommended implementing to strategic management that help to improve the
quality of services and products in proper manner. It has provided the idea about the SAF criteria
and technique that help for evaluation of Ryanair airline. It has proposed the strategy to address
the key opportunities and threats. It has maintained the Acceptability where the strategy help to
meet the specific expectations of stakeholders. It has proposed the strategy to work in practices
that help for staff members which obtain the skills. For Future development, Ryanair has
required to implement the SAF criteria which identify the sustainability, Feasibility and
accessibility etc.
CONCLUSION
As per discussion, Strategic management is a type of continuous process that helpful in
the planning, analysis and monitoring all the assessment which is required in organization for
growth and development. It summarised that the Ryanair is a type of low cost airline which
provide the best quality of services to their passenger. As above discussion, It also discusses
about Ryanair airline industry that can use different type of business model to manage the
operations and financial performance at the time of recession. Furthermore, this document

discuss about the internal and external environment factors that impact on the business
operations and functions.

REFERENCES
Books and Journals
Feys, B. and Probert, C., 2015. PESTLE Analysis: Prepare the Best Strategies in Advance.
Primento Digital.
Aithal, P. S. (2017). Company Analysis–The Beginning Step for Scholarly Research.
Ansoff, H. I. & et. al., (2019). Implanting strategic management. Springer.
Carraher, S. M. (2018). An examination of an instrument to measure Porter’s Five Forces Model.
In International Journal of Arts & Sciences Conference at Harvard University.
Gürel, E. and Tat, M., 2017. SWOT ANALYSIS: A THEORETICAL REVIEW. Journal of
International Social Research. 10(51).
Jenkins, W., & Williamson, D. (2015). Strategic management and business analysis. Routledge.
Knott, P. J. (2015). Does VRIO help managers evaluate a firm’s resources?. Management
Decision. 53(8). 1806-1822.
Pels, E., Njegovan, N., & Behrens, C. (2017). Low-cost airlines and airport competition. In Low
Cost Carriers (pp. 125-136). Routledge.