Strategic Management of Ryanair: Assignment

Strategic
Management

Table of Contents
INTRODUCTION...........................................................................................................................1
MAIN BODY...................................................................................................................................1
1)Background information of Ryanair.............................................................................................1
2)external airline industry analysis..................................................................................................1
3)Brief of the competitor analysis....................................................................................................3
4)internal strategic capabilities .......................................................................................................3
5)strategic direct operations.............................................................................................................4
6) strategic selection and justification..............................................................................................5
7)Conclusion and future recommendation.......................................................................................6
REFERENCES ...............................................................................................................................7

INTRODUCTION
Strategic management is defined as the process of planing, analysing and monitoring
from all the activities which is necessary for the company for accomplishing the goals and
objectives. It also includes the strategic planning which can define the ability of the company for
setting both the long term and short term goals. It determines the actions and decisions which
require to achieving the goals. Ryanair is one of the first Europe airline industry which
established in 1985 and it is one of the lowest fare price cost of airline. This report will study the
external and internal analysis of the organisation and also it shows the brief competitor's analysis
of the airline industry. It also defines the SWOT analysis. It also highlighted the strategic
direction tools which evaluate the strategic choice and future strategic directions(Grant, 2016).
MAIN BODY
1)Background information of Ryanair
Ryanair is one of the first largest budget airline in Europe, it has remarkable success and
growth in the market. It provided scheduled service between UK and Ireland. It a low cost airline
which was founded in 28 November 1984, headquarter was in Dublin, swords and Ireland and
also with the primary operational bases. The despite growth in the volumes of passengers and its
fight for surviving in early 1990's and saw the transformed of the airline for becoming the first
Europe's low fares. After the makeover with new budget of airlines, it never looks back, as it
added in the bases, aircraft and routes. From the up down cycles of the airline industry over the
decades, it also continued the upward trajectory, among the worlds most profitable airlines which
leaving almost behind for all others. There are 13,000 employees working with Ryanair, the
financial data can be viewed in the relations of investor. It proposed to the charter business in
the unit of Ryanair Pic and headquarters at Warsaw. There are more than 2000 daily flights and
86 bases which connecting to 222 destinations in more than 37 countries on fleet of 430 Boeing
and further it will enable to lower fairs and also grows the customers to 200 million.
2)external airline industry analysis
Political factor :- the political environment of the Europe is stable from that it constant
with their fair budget model and all the routes are point to point only. It has designed as low fair
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prices and launching new routes. It only concerns to support the local government for their own
carriers for the nationals.
Economic factor:- For Ryanair which has been cautions for the outlooks in 2007. There
are few things which create issues for the company in the economic of the Europe for the
downturn such as when the increasing the price of fuel, products, raw materials and the last in
the terrorist attack which directly affect the company in negative manner. Continues Low cost
strategy of the Ryanair help to develop and growth of the economic environment(Zahari &
Romli, (2018)).
Social factor:- its important and necessary for understanding the values and preferences
of the customers which runs the Ryanair with a flow and even it provides the poor customers for
their service which form the cheap and low fair prices for attracting the customers and it easily
retains the customers of the Ryanair.
Technological factor:- its necessary to use the new technologies of the internet which
easily provide so many facilities to both the company and customers for checking and making
the websites, online booking, finding the details for their preferred flights and also the websites
which is most helpful and useful for both. Technological factor of Ryanair is a leverage for the
traffic of the website to sale and promote the products ancillary. It provides the ancillary
services, food, merchandise, include beverage in flight and entertainment and it also distributes
the car park services, airport transfers, accommodations through their websites. From delivering
this type of services it increases the sales while reducing the unit costs.
Environmental factor:- From producing and manufacturing the less emission products
which do not harm the climate and environment because from the eco friendly emission and
especially focus on the legacy of the carriers gives growth in the market. It manufactures the
products which is better and healthier for the environment and pollution free.
Legal factor:- Ryanair currently involve the legal battles with the field of case and
against the case and cases filled by it. It all depend upon the decision and legal laws of the
government which regardless the case for wining it or lose it. There are so many problems faces
by the Ryanair due to the expenses of the legal structures and also get the attention from the
management which could be different for running smoothly.
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3)Brief of the competitor analysis
The main three competitors of the Ryanair is British airways, Easy jet and Austrian
airlines. The emergence for entering into new airline industry heavily increase the competition in
the industry. Airlines compete the primarily in respect to the level of the fare, dependability of
services, frequency and convenience of other passenger services. Day by day increasing the level
of competition in Europe that is top five airline industry which combined the market share by
31%. According to the recent research airline has both the financial and competitive competence
in Europe such as Ryanair(Jin, Ji & Gu, (2016)). Even no airline has no effective share at
industry at large numbers. It also setup the new routes for discouraging the new competitors.
There are number of routes which operating the airline industry which are similar to the routes of
the Ryanair which also includes the Easy jet and Whiz-air and so on. In the industry each of the
competitor in the industry for following the process in the terms of minimizing the cost by
reducing on the board passengers facilities and airport outlay the cost. It has been able to drive
the competition in the market from its experience and large size of fleets to so many routes
which result help in reducing the competition of same routes in market.
Ryanair effectively compete with other competition in the market because the level of the
unit cost is unlikely matched by the competitors in Europe and so many airlines which are
unlikely able to compare with its pricing strategy in the market. It also moves for increasing the
products' perception and helps the brand for attracting the passengers of the business which has
easily impacted on the market competitors. From the less pricing strategy it also extent the
dimensions of the competition. It plays an important role in market which involves the quality of
network of the airports and also the level of the satisfaction of the customers.
4)internal strategic capabilities
Internal environment analysis with the uses of strategic tools such as:-
SWOT analysis of Ryanair
Strength:- The main and most important strength of the company is it offers low cost
fare prices to the passengers. The charges of the Ryanair is very low as compare to other airline
industries from which it helps for build the brand image and also the negotiation with the
suppliers. This strategy makes huge customers base in the market. It also focuses on key success
for driving the major decision which including the choice of the networks of the airports. It also
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gives significant choices of airport networks to its customers. Further, the cost of the
maintenance is very low in the new air planes of the company.
Weakness:- the main weakness of the Ryanair is it offers lower frequencies for its routes
then its
Other competitors of the routes and another is the brand perception in customers mind is
negative which decrease the rate of customers. The perception of public is that it grab money and
not providing the pure facilities to its customers. The service of the company to its customers is
too much poor so that companies taking huge lose from their low profit margins and it directly
affects the customers.
Opportunities:- the major and foremost opportunities which has been taken by the
Ryanair is growth of market and share of market gains. Company also take benefits from its
websites, website of the Ryanair is very popular which can be used as the purpose of the
advertising which can easily help the company for make it popular. Its biggest opportunity for
Ryanair for offering better dealing to the customers. Company can increase the sale by
motivating the employees for performing better and Ryanair can also expand their operations by
selling the ancillary products in the market(Phadermrod, Crowder & Wills, (2019)).
Threats:- Its biggest threat for Ryanair for increasing the charges of the navigation and
air travel taxes. It is under high pressure because of cash flow which may easily prevent the
company from rapid expansions and also the high competition in the market can also bring so
many difficulties for surviving and growth of the business for long run.
5)strategic direct operations
The strategic choice of the Ryanair can be categorised into two parts such as:-
Corporate level:- At corporate level, the target of airlines with the transnational strategy which
is shifted from international strategy which is more in the demand as the need of the
globalisation.
Business level:- At the level of business, it adopted the cost of the leadership which offer the
service of air travel at lower cost of units. It is the best and foremost strategy in broader
perspective and competitive scope and it only focuses on the airlines and both the differentiation
and cost leadership in order for become integrated.
Ansoff matrix
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This model is essential for the marketing planning strategic and also for the future direction
strategic of Ryanair.
Existing New
Existing Market penetration and
consolidation
It can be one of the most
effectively strategic key
directions for Ryanair. It
should also focus on this
strategy:-
It increased the number of
offered routes
It has low fares.
It has frequent flights.
It also emerging with low cost
of airlines(Grant, (2016).).
Product development
under this it should develop
the existing products or service
by;
It offers free flights.
It developed the technology of
information to promote online
booking.
The expansion of industry into
their existing products is a
good strategic fit.
New Market development
The development of market is
possible with the of secondary
airport and also by the
connecting flights which
enhance the frequency of the
customers.
Diversification
it can be achieved by the long
haul flights of Ryanair.
6) strategic selection and justification
It based on micro and macro analysis which has been analysed the cost leadership which
is not appropriate for the long term strategy and company is enjoying the current situation as
level of the competition which will enter in the market for the specific situation of Ryanair and it
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can come in front of the company in the terms of the issue of Kim, Khan & Kim. As per this plan
it effectively markets their business in the mind of consumers as the lowest price of the airlines
which will separate their segment of market. The evaluation of the strategies are as follows:-
Suitability
Strategy of the Ryanair is quite sensitive for the political factors and environmental
because of the negative conditions which can easily affect the operations and profitability of the
company. The diversification of the new market help them for increasing the revenue. Building
the low cost strategy of leadership and decreasing the prices even when it will challenge the
competition and lifts the barriers which has new entrants in the market. From lowering the cost,
it is essential for Ryanair for bringing the innovations in their products and services which will
maintain the standard of the company in the market.
Acceptability
It is related to the expected performance of the strategy which can be examined in two
main factors; risk and return. Risk can be measured on the bases of leverage and liquidity of
Ryanair. The profitability of the company if decreasing the possibly due for the amount which is
invested in the new products and expansion of the plans. In return, the strategy is resulted in the
better way of profit which has been earned by the company in last few years.
7)Conclusion and future recommendation
From above study, it has been summarised to analyse the internal environment through
strategic tools. It used SWOT analysis and also analyses the strategic capabilities and
competitive advantages. Apart from all that company used PESTLE analyses and also the
strategic tools to analyse the external environment. Furthermore, company also carried out its
competitors analyses by taking the considerations with its major competitors.
It has been recommended in order to capture the larger market share and company should
focus on improving the customers service by giving proper training and motivation to its staff
member's. Furthermore, company should take advantages for its popular websites for the purpose
of advertising as it will help in increasing the sales and company should pay the emphasis for
increasing the profit margins so it raises form the bottom line.
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REFERENCES
Books and journal
Ansoff, H. I. and et.al., (2019). Implanting strategic management. Springer.
Dess, G. G. and et.al., (2019). Strategic Management: Creating Competitive Advantages.
McGraw-Hill Education.
Grant, R. M. (2016). Contemporary strategy analysis: Text and cases edition. John Wiley &
Sons.
Jin, J., Ji, P., & Gu, R. (2016). Identifying comparative customer requirements from product
online reviews for competitor analysis. Engineering Applications of Artificial
Intelligence. 49. 61-73.
Phadermrod, B., Crowder, R. M., & Wills, G. B. (2019). Importance-performance analysis based
SWOT analysis. International Journal of Information Management. 44. 194-203.
Zahari, A. R., & Romli, F. I. (2018). Analysis of suborbital flight operation using
PESTLE. Journal of Atmospheric and Solar-Terrestrial Physics.
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