Strategic Management TABLE OF CONTENTS INTRODUCTION 1 MAIN BODY 1 1. RYANAIR: background information

CONCLUSION AND FUTURE RECOMMENDATIONS 7 REFERENCES 8 INTRODUCTION Strategic management is considered to be as a part of management activity in an organisation which is mainly concerned with establishment of strategic vision, development as well as implementation of strategies in order to drive firm towards success. CONCLUSION AND FUTURE RECOMMENDATIONS 7 REFERENCES 8 INTRODUCTION Strategic management is considered to be as a part of management activity in an organisation which is mainly concerned with establishment of strategic vision, development as well as implementation of strategies

Strategic Management

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................1
MAIN BODY...................................................................................................................................1
1. RYANAIR: background information-....................................................................................1
2.External: Airline Industry Analysis:........................................................................................2
3. Brief competitor Analysis......................................................................................................3
4. Internal strategic capabilities ..................................................................................................4
5. Strategic directions options ...................................................................................................5
6. Strategy selection and Justification ........................................................................................6
7. CONCLUSION AND FUTURE RECOMMENDATIONS........................................................7
REFERENCES................................................................................................................................8

INTRODUCTION
Strategic management is considered to be as a part of management activity in an
organisation which is mainly concerned with establishment of strategic vision, development as
well as implementation of strategies in order to drive firm towards success. It is basically a
procedure which includes different activities continuous planning, monitoring, analysis and
assessment of all those procedures which are very much essential for accomplishing the desired
business objectives.
The present study have focus on reviewing the strategies adopted by RYANAIR. It is
basically a first and largest budget Airline in Europe. Report will emphasize on analysing the
internal and external environment of organisation. In addition to this, strategic choices made by
the company for dealing with business issues will be highlight in the report.
MAIN BODY
1. RYANAIR: background information-
Ryanair: the low fare airlines- 'always getting better'? Is the cheapest airlines in the
context of fare price among the airlines in Europe. As the airlines uses low cost model and there
are more operating cost and the financial cost. The airlines was facing problems regarding the
policies of the airlines. In the year 2014 they introduced a new plan named 'always getting
better'.The plan emphasis on the customer satisfaction and the aiming at the redress-al of the
complaints by the passengers. Along with the customer satisfaction Ryanair continues to focus
on the low price airlines among its competitors (Chernev,2018). There are many strategies
formed in order to solve the problem faced by Ryanair which are as follows-
 Fare and route management- With low fare and route management Ryanair aims at
covering more areas at low price for passengers. The airlines sets its new route policy in
such a way that it is low cost to the passengers as the earlier flights. The airlines thus
forms the route point to point and short travelling duration so that there is reduced cost of
in flight food delivery and movies.
 Growth and development- Though the airlines is achieving the growth and development
by keeping the flight prices low among there competitors also the airlines is planning to
cover more new routes and achieve a larger customer base.
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 Ancillary revenues- Ryanair focused on the ancillary revenues like in-flight beverages
and meals and check-in luggage charges. It also delivers car park services,
accommodation, travel insurance and many other services.
 Safety and maintenance- Ryanair also imposes its resources in the maintenance of its
planes and giving proper training to the staff in regards any accident which may occur
during the travel.
2.External: Airline Industry Analysis:
The external environment of the Ryanair includes the social, economic, political and
environmental conditions in which the airlines are working. The analysis of external factors
includes PESTLE analysis and its components which are as follows-
Political factor- As Ryanair have its headquarters in Ireland its currency is euro which is a major
concern in dealing with the extensive route system by the airlines. Also there is problem
regarding purchase of the input in other currency which becomes costly in the another currency.
Changes in political conditions affect overall working of industry to great extent. Before entering
into new market it is essential for business to make sure its political situations so that firm can
sustain in market for longer duration.
Economic factor- The fuel is the primary input for the airlines. As there is a problem of
fluctuating fuel cost and sudden increase and decrease of the fuel price results in high operating
cost for Ryanair. Furthermore, changes in value of currency, inflation, deflation kinds of
situation create issue for the firm in sustaining in the market for longer duration and generating
reasonable profit. If exchange rates get changed then it may influence mind of travellers in such
condition Ryanair will not be able to generate such profit as expected by the firm (Chernev,
2018).
Social factor- Company focuses on life style, income availability of passengers, it offers low
cost travelling experience to travellers that make the person loyal towards the brand. It has
adopted yield enhancing measures for luggage handling of passengers. The labour in the Ryanair
airlines are criticising the airlines for the union recognition and there by providing the poor work
conditions in the airlines.
Technological factor- the Airlines is major dependent on the internet in dealing and operating
day to day function of airlines. Thus disturbance in the internet disturbs the routine functions of
Ryanair.
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Legal factor- . Fare and route policies impact on business unit and industry both. Recently
government has made slight changes in its fiscal and fare policies that affect overall fare prices
of company. Thus, it influences mind of travellers and affect profitability of the firm to great
extent. Also there have been cases relating to the delays in the payment in the airport charges
alleged by the three airport authorities.
Ecological factor- the airlines focus on the increasing summer capacity and decreasing winter
capacity which prevents the amount of risk. This policy effects the airline in the variable cost but
the fixed cost remaining stable and causing the airlines an additional cost.
3. Brief competitor Analysis
There are basically 168 total number of carriers. In addition to this, low cost carriers
makes up total forty percent of total capacity share. Airline industry in Europe is very big and
there is intense level of competition between airline companies. Hight intense competition has
forced airline companies to develop as well as implement unique strategy. There is high level of
competition between Airline companies in context of name recognition, fares, dependability of
services, passenger amenities etc. In addition to this. An airline sector is highly suspect able to
discounting of prices which has direct as well as significant effect on the profitability of
RYANAIR. An organisation in order to deal with issues of price discounting has adopted the
strategy to maintain its focus on providing high value position to customers and to bring the
drastic improvement in customers services which has helped firm in gaining competitive
advantage.
The three major competitors of Ryanair airlines are Air Berlin, Monarch air, easy Jet etc.
Easy Jet is considered to be as biggest competitor of Ryanair airlines. It is a company which has
continued to take advantage of its network of primary airports and its lead over other
LCCs in terms of initiatives towards business travellers and customer service. In addition to this,
Wizz Air managed its unit cost down further while raising
its unit revenues. The implementation of new strategies has direct as well as significant effect on
the operations as well as performance of Ryanair Airlines (Ivory and Brooks, 2018). According
to the given case scenario, , there are few competitors of Ryanair airlines, those who have
launched other legal challenges against organisation. Ryanair Airlines has won as well as losses
some cases. Business entity in order to provide an appropriate response to such legal aid has
taken high initiative on alleged illegal aid to rivals. Firm has filed complain with Eu commission
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against the Air France-KLM for attempting to block competition. Ryanair airlines has also put
allegation that Marseille was acting illegally by offering discount airlines cut-price fees at its
second, no-frills
terminal. In simple words, Ryanair airlines has to face legal as well as ethical issues due to
competition which has adverse effect on the business performance of organisation (Santana,
Valle & Galan, 2018). It is because of intense competition, because of which firm is facing the
difficulty in concentrating on its core business functions. In addition to this, Ryanair airlines in
order to gain the competitive advantage has taken high initiative for bringing improvement in
business procedures so that excellent services could be delivered.
4. Internal strategic capabilities
VRIO analysis is considered to be as an effective strategic tool which can be utilised by
manager in Ryanair Airlines for identifying the internal strategic capabilities of firm. Operational
effectiveness is considered to be as important factor which has drive Ryanair Airlines towards
success.
VRIO frame work of Ryanair Airlines
Value rarity Immutability organisation Competitive
implications
No frill
strategy
yes No no yes It will; assist
an
organisation in
gaining the
temporary
advantage.
New fleet yes No No yes Temporary
competitive
advantage
Low cost
culture
yes No yes yes Competitive
advantage
Leadership yes yes yes yes It will support
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business entity
in sustaining
competitive
advantage.
War chest yes yes yes yes Sustaining
competitive
advantage.
Value : No frill strategy adopted by Ryanair Airlines is highly valuable, as it has assisted an
organisation in achieving success.
Rarity : Low costs culture is unique strategy which has assisted an organisation in making itself
different from other companies in an industry.
Immutability: Low costs culture and leadership style is imitable.
Organisation : War chest has assisted Ryanair Airlines in maintaining its position in the market.
resources competences
Threshold capabilities  Aircraft
 Pilots as well as cabin
crew
 financial resources
 office equipments
 Online booking
 Point to point routing
 Low costs of
operations.
Capabilities for competitive
advantage
 Management team
 Effective leadership.
 Low fares
 Huge investment on
research and
development.
5. Strategic directions options
The strategic direction to Ryanair are
Ans off matrix .
Products
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Existing New
Markets Existing Market penetration
and consolidation
Product development
New Market
development
Diversification
Market penetration : this is the strategy which includes selling of existing products into
existing market. It is one of the key strategic direction to Ryanair airline. An organisation has
been provided with suggestion to consolidate the existing routes. In addition to this, it is required
by business entity to concentrates on increasing the market share of its existing routes.
Product development: It is the strategy which is mainly concerned with launching of new
products or services in existing market. Business entity can expand its business into ancillary
product line, as it is the strategy which will assist an organisation in increasing sales and
profitability (Li & McMillan, C., 2019).
Market development: It is the strategy which includes selling of existing products to new
customers in order to identify and build new customer base. An organisation can develop new
routes. As flying aircraft on new routes can be considered to be as one of the profitable strategy.
In context of Ryanair airline., expansion of business outside Europe might not be suitable
strategy for organisation.
Diversification : This is basically a strategy which is adopted by companies for entering into
new market. It is also the strategy which Ryanair airline should not adopt. As flying more than
point to point flights could be bad strategic choice and it can have adverse effect on overall
business performance of firm.
6. Strategy selection and Justification
As the main purpose of . Ryanair airline is to increase sales and revenue, Market
penetration strategy has been suggested to Ryanair airline. As it will assist an organisation in
fostering growth. Ryanair airline need to keep the fare low while entering into market, as this
tactic will help an enterprise in generation of demand for services. Market penetration strategy
will also assist Ryanair airline in increasing its market share. It will also support firm in
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increasing sales and profitability (Castiglioni, Gallego & Galán, 2018). The risk associated with
execution of market penetration strategy are unmet production costs, saturated market etc.
The another strategy which has been suggested to Ryanair airline is product development,
as this strategy will support an organisation in accomplishing desired business objectives. It will
also help an enterprise in increasing profitability (Dodgson,2018).. Before implementing the
product development, it is required by manager in Ryanair airline to consider the risk associated
with such strategy. The different type of risk associated with the product development strategy
includes risk of failing of product programs etc.
7. CONCLUSION AND FUTURE RECOMMENDATIONS
It has been concluded from the report that an effective strategic management is very
much important in order to drive business towards success. The fact which has been found is that
by developing an appropriate strategy, companies can easily accomplish its desired goals. It has
been concluded from the assignment that an organisation is performing well in the market but
there is more scope of improvement.
Manager or leaders in an enterprise is provided with suggestions to continuously review
the strategy mad make changes accordingly, as this strategy will assist them in providing an
appropriate response to changes in internal and external business environment.
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REFERENCES
Books and Journals
Dodgson, M., (2018). Technological collaboration in industry: strategy, policy and
internationalization in innovation. Routledge.
Li, X. and McMillan, C., (2019). Corporate strategy and the weather: Towards a corporate
sustainability platform. Management, 12, pp.2-1.
Implanting strategic management. Springer.
Chernev, A., (2018). Strategic marketing management. Cerebellum Press.
Dess, G.G., Eisner, A.B. & Lee, S.H., (2019). Strategic Management: Creating Competitive
Advantages. McGraw-Hill Education.
Ivory, S.B. & Brooks, S.B., (2018). Managing corporate sustainability with a paradoxical lens:
Lessons from strategic agility. Journal of business ethics, 148(2), pp.347-361.
Santana, M., Valle, R., & Galan, J. L. (2018). How National Institutions Limit Turnaround
Strategies and Human Resource Management: A Comparative Study in the Airline
Industry. European Management Review.
Castiglioni, M., Gallego, Á., & Galán, J. L. (2018). The virtualization of the airline industry: A
strategic process. Journal of Air Transport Management, 67, 134-145.
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