Ryanair Strategic Management Report

This report analyzes Ryanair's strategic management, examining its background, external industry analysis, competitor analysis, internal capabilities, strategic directions, and recommendations. It utilizes PESTLE and SWOT frameworks to assess the company's environment and identify key strengths, weaknesses, opportunities, and threats. The report also explores Ryanair's strategic options and justifies its chosen strategy, highlighting its success as a low-cost airline in Europe.

Strategic
Management
INTRODUCTION...........................................................................................................................1

Ryanair- Background Information:........................................................................................1
External: Airline Industry Analysis:.......................................................................................1
Brief Competitor Analysis:.....................................................................................................3
Internal Strategic Capabilities:...............................................................................................3
Strategic Directions Options:.................................................................................................4
Strategy Selection and Justification........................................................................................5
Recommendations:.................................................................................................................5
CONCLUSION................................................................................................................................6
Books and Journals.................................................................................................................7

INTRODUCTION
Strategic Management is a round-the-clock process which includes various set of
activities like, analysis, planning monitoring and classification of all other necessary
requirements of company (Bettis and Mitchell, 2014). All these functions are done with a motive to
achieve organisational goals in best effective way. Strategic management process benefits
company to adopt fast-paced emerging technology. With the help of formative strategic
management company leaders and managers can effectively able to assess company conditions
and chalk out new and innovative strategies. In simple terms strategic management is a planning
for predictable and unfeasible occurrence. Present case study has been conducted on, Ryanair
which is a European low cost airline industry. In this report, discussions has been made on,
competitor analysis, airline industry analysis along with strategy selection and justification of
company.
Ryanair- Background Information:
Ryanair was established in the year 1985 and launched 15 flights in a day in between
turbine support and London Gatwick Airport Waterford. Company is one of the largest low fare
airline in Europe. It is a public listed company and was established by Tony Ryan, Christopher
Ryan and Liam Lonergan with a purpose of establishing company as an low-fares scheduled
passenger airline service industry with a core motive to offer low services to customers. By the
year 1990 Ryanair had 350 employees with operating 4 different types of 14 aircraft and was
carrying estimated number of 600,000 passengers. Till the year 1995 on the 10th anniversary
Ryanair become largest low rate airline in Dublin-London routes. Even after attaining this
success company committed towards providing low fares servicing to their customers.
External: Airline Industry Analysis:
PESTLE
Political:
In this factor of PESTLE of ryanair, internal and external political stability conditions of
Europe and other countries like Middle East is included. In this regarding, company is effectively
following Newly framed EU rules in which basic factors like, duty free sale of product and
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expansion of duty in included. Along with this government helped company to operate their
operations in international market along with providing them full security system.
Economical:
In economical analysis of ryanair, it can be evaluated that market of Europe is far
different in internal and in external market. It can be said that inside market economy is stable as
compared to external which is non stable (Sammut and Galea, 2015). Prices of fuel are mounting
continuously. For this, ryanair is taking advantage of regional subsidies and also developed a
linkage in between new highly speed airport and trains.
Social:
In the social factor, there is a maximisation in lifestyle of travelling and rise in grey
marketing which is varying day-by-day. There is a slight change in customer’s demographics and
demand and preferences of customers are also changed along with fluctuations in passage of
time.
Technological:
Ryanair is taking effective use of technology and purchased advanced aircrafts and new
fleets in order to effectively satisfying customers. Along with this, company is also introduced
new software programme which helps them to improve their functioning of supply chain system.
In addition to this, Ryanair by utilizing technology in best effective manner is using satellite
television and focusing more to reduce fuel consumption.
Environmental:
Ryanair is taking advantage of new and innovative technological system which helps
them to reduce noise pollution. Along with this that system also aid company to save
environment from hazardous forms of gases such as greenhouse CO2.
Legal:
Rynanair is abiding all legal law and regulations. Company removed all type of illegal
subsides from those entire airport in through which they deal. They also assert illegal form of
publicity on the airport.
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Brief Competitor Analysis:
Easy Jet:
This Company is one of the peak competitors of Ryanair. Easy Jet was established in the
year 1995 and having their headquarters located in Bedfordshire, England. Similar to ryanair
former company is also engaging in the operation if airline field. This airline industry is having
583 less employees as compare to ryanair.
Monarch Air Group:
Monarch Air Group is ryanair one the leading competitor and was established in the year
2006. Company operates their business in travel agency filed and generates less revenue as
compare to ryanair.
Jet 2:
This Company is 3 rival competitor of ryanair while having its headquarters in Leeds,
England. Jet 2 was recognized in the year 2003 and engages in the travel agency industry.
Company generates estimated ratio of 0.81% of ryanair revenue.
Internal Strategic Capabilities:
SWOT Analysis of Ryanair:
Strengths:
Ryanair has strength that its brand image in their market and perception of their
consumers towards them that helps in reduction of their barrier to enter into new market with
new products and services. It has low fair rates in comparison to other airline industries in
Europe market and able to maintain image in market place. It has London Stansted is one of
busiest traffic zone that operation's by that company. It is one of innovative and maintains better
quality of their marketing tools and techniques. It adopts various safety and fuel efficiencies and
plans each and every activity to reach at desirable outcomes and goals. It operates in single
aircraft that reduce in requirement of training and maintaining high cost of operations.
Weaknesses:
Weaknesses include areas in which Ryanair requires improvement and cope up with
changes that require competing in competitive environment. It has adverse press report and low
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or poor consumer services that spoil its image in front of their consumer base. It has low trained
personnel that not able to give their best in organisational development and advancement. In case
new taxes and policies apply in business environment that it is not able to cope up with these
changes that affect them in negative way and reduce profitability ratio while deal in other nation.
New taxes and laws become major cause of misleading in work and environment with wrong
advertising with information on websites that misleading in nature that hinders faith of
employees to give their best in organisational development and advancement (Düsseldorf, 2016).
Mobile phones and devices are not permitted during journey in their flights that discourage their
consumers and increase rate of emission of co2 and fuel consumption power also adversely
impacts on their profitability ratio.
Opportunities:
In their major opportunities consist of the routes and ways in which they start their
operation with help of merger and acquisition. If it is able to complete requirements of EU
market then it can easily operates in low and moderate fair polices that helps in grow and enlarge
business opportunities. The OPEN SKY agreement enables in developing their business routes
and ways by consolidating less prices. Their market segment is middle class people that avail
their services. Ryanair can use fleet services on lease that are best opportunity before it.
Threats:
In their main threatens consist of they are large no. of competitors in their marketplace
that hinders their self interest while operating in multinational market. The another major threat
is that they consumer base is only people who belong from middle class, upper or high class
people not prefer their services so that it hinders in their profitability. While operate in different
nations it have to comply with many different rules and regulation in which their employees face
many difficulties to give their best in organisational development and they also have to give
training and development to gain large marketplace and enhance their operating cost in
competitive environment. War and disputes also work as big threat for that company that hinders
on their profitability ratio when tourist plans their tours.
Strategic Directions Options:
Ansoff Matrix
It is strategic planning tool that assist in providing framework to executives, managers
and marketers to formulate strategies for future growth. This model was developed by Russian
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American Igor Ansoff to portray corporate growth strategies. This matrix provides four growth
strategies which involves Market penetration, Product development, Market development and
Diversification. These growth strategies are defined below according to Ryanair airline industry.
Market penetration: In this the firm seeks to achieve growth with existing products in
existing market share. Ryanair increases its market share by keeping the fares low, acquisition
and increasing market share by collaborating with bing path.
Product development: In this growth strategy the firm uses this growth strategy by
targeting its existing products in new market segment as it wants to capture new markets (Hill and
Schilling, 2014). With reference to Ryanair to target new markets customers are given free flights,
can check the schedule with the help of online checking because of IT development and also
provides accessory merchandise.
Strategy Selection and Justification
Ryanair is one the top leading airline service industry which provides low cost services to
consumers and become largest airline company to carry large number of passengers in all over
Europe in 2009. Company have adopted “ no frills” strategy which justifies them as agency who
offers low fare prices. Along with this Ryanair has adopted strategy in which they generates 20
% of their revenue in the form of ancillary revenue, in this “buy on Board” strategy is adopted by
company which includes charging extra fees for luggage. As company is having flexible culture
and culture it benefits them to become number one low fare service provider in all over Europe.
Ryanair can expand their opportunities while offering their services in developing routes of
Central and Eastern Europe which will benefit them to capture more market share. Along with
this by adopting refund policy Ryanair generate more profitability.
Recommendations:
As ryanair is first low fare airline in Europe, it is recommended to ryanair to attend issues
related to poor consumer services and its internal human resource management problems. For
this company is required to effectively recognize their labour unions issues and develop their
strategies in a more people oriented way in order to improve its relationships with employees
(Trigeorgi and Reuer, 2017). In relation to proving effective consumer service company is
required to reduce their cost which can be efficiently accomplished by improving their quality of
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proving training to their frontline employees. This will aid them to build a successful workforce
and satisfy consumers at their best. In addition to this company is also required to analyse
environmental initials and conduct detailed strategic analyses on it as to perform their operations
while taking care of environment.
CONCLUSION
As per the above mentioned report, it has been concluded that Ryanair is one the top
leading and low fare airline in Europe which is engaging in proving cost travelling experience to
its customers. In order to provide their services is best effective way company by taking
advantage of strategic management tools can efficiently able to serve their customers. In this
report in order to conduct external analyses PESTLE analyses is taken as to identify nature of
environment in which company operates. While for internal SWOT is done as to reveal major
hindering issues of company. Along with this top most competitors and strategic analysis of
Ryanair is done as to offer best services to customers.
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REFERENCES
Books and Journals
Bettis, R., Gambardella, A., Helfat, C. and Mitchell, W., 2014. Quantitative empirical analysis in strategic
management. Strategic Management Journal, 35(7), pp.949-953.
Hill, C.W., Jones, G.R. and Schilling, M.A., 2014. Strategic management: theory: an integrated approach.
Cengage Learning.
Sammut‐Bonnici, T. and Galea, D., 2015. PEST analysis. Wiley Encyclopedia of management, pp.1-1.
Düsseldorf, I., 2016. Ryanair. SWOT Analysis of the Leading Low Fare Airline. GRIN Verlag.
Trigeorgis, L. and Reuer, J.J., 2017. Real options theory in strategic management. Strategic Management
Journal, 38(1), pp.42-63.
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