LSBM103: Business Environment Analysis of Ryanair's Value Chain

This report provides a detailed analysis of Ryanair's business environment, focusing on the application of the value chain model to understand its internal factors and strategic positioning. The report begins with an introduction to the business environment and an overview of Ryanair, highlighting its key operational aspects and market presence. The core of the report involves an in-depth examination of the value chain model, breaking down both primary and support activities within Ryanair. It explores how the airline leverages these activities to create value, achieve cost advantages, and differentiate itself in the competitive airline industry. The analysis includes a discussion of the benefits and drawbacks of using the value chain model, followed by a company overview detailing Ryanair's operations, fleet, and market strategies. The report then applies the value chain model to analyze Ryanair's internal environment, examining activities such as services, marketing, human resource management, and technological development. The reflection section discusses the model's strategic implications, helping Ryanair identify valuable activities, improve brand reputation, and respond to market changes. The report concludes by emphasizing the importance of understanding the business environment and utilizing tools like the value chain analysis for formulating effective strategies and achieving competitive advantages. The references section lists the sources used for the report.

Business Environment

Table of Contents
INTRODUCTION...........................................................................................................................1
Analysis of Value Chain Model..................................................................................................1
Company overview.....................................................................................................................1
Internal environment analysis with Value chain model .............................................................1
Reflection on Value Chain model ..............................................................................................1
CONCLUSION................................................................................................................................1
REFERENCES................................................................................................................................1

INTRODUCTION
Business environment is regarded as the internal as well as external factors which
influence a firm's operating situation. This involves aspects like suppliers, owners, competitors,
government activities and many more. As per the scenario, the undertaken organisation for this
report is Ryanair which is an European leading airline company having headquarters is in
London, UK. This report covers the description about the value chain model, companies
overview and application of value chain model for examining internal environment. Apart from
this, reflection upon value chain model is also discussed in this report.
Analysis of Value Chain Model
Value chain is regarded as the procedures that is utilised for representing the insider
practices which are performed through an organisation for transforming inputs into outputs. On
another side analysis of value chain is define as method where an entities find its fundamental
and support practices that aids them to add ons the value to its goods or services. It also perform
examination of that costs for reducing them and maximise differentiation. In addition to it, this
will also assists entities to examine so much valuable resources an practices that assists them to
obtain competitive edge in market area.
Within value chain model, practices are categorised in 2 that are primary as well as
support activities. Moreover, these practices are also sub categorised in various parts such as
primary, this involves logistic, sales, outbounds, operations and many others. On another hand,
support activities is sub section such as HR, administration, technology and others. These
practices includes many drivers of cost like learning, linkage, vertical integration degree,
geographic location, economic scale and many more. In addition to this, in context of Ryanair
there are many advantages that are acquire through undertaken organisation like drives towards
profitability enhancement, create coordination between staff members, facilitates higher returns
upon investment, increase competition into market are, assists in providing services at
international level and various another benefits.
There are also more benefits as well as drawbacks that are faced through Ryanair at the
time they used value chain analysis in its work areas among them few majors are described
underneath:
Benefits:
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 By this Ryanair may examine and create competitive advanatge associated to factors such
as differentiation as well as cost.
 As the value chain model is flexible in nature that facilitates support to the management
of undertaken entities for adapting this in any circumstances in order to create efficacious
decisions.
 By this organisation may also become competent to get knowledge and examine its
problems in context of creating service or products as per the demands as well as
requirements of clients in efficacious way.
Drawbacks:
 In about all persons get knowledge regarding analysis of value chain but there are so
much less or limited expertise of this particular analysis.
 This will not aids in forming the information of the enterprises in efficacious organized
manner that develops problems while obtaining information associated with any topics
that is needed through the management of entities.
Company overview
Ryanair is known as the one the leading European airline which carry above 130m
clients per annum upon over 2000 regular flights from the bases of 85. moreover, it is connected
approx 216 destination across countries upon a fleet of 430 Boeing 737 aircraft. In addition to
this, 240 Boeing on order that will allows them to reduce the fares as well as develop traffics to
200m clients per annum through the financial year of 2024. also, they have a team of above 13,
000 which are very much proficient aviation professional that delivers Europe number 1 on time
performance as well as an sectors growing 33 year record of safety (Ryanair, 2019).
Moreover, in year 2018, Ryanair took 75% stake into Austrian airline Laundamotion that
is initiated its basses into Germany as well as Austria who are flying Airbus aircraft. It continues
to leads with 5 aircraft that operates charter flights from Poland to Mediterranean. They also
announces new bases into London Southend, Marseillie as well as Bordeaux as well as started
new flights to various new nation involving Jordan, Turkey and others. In addition to this, in year
2017, the respective organisation become the first airline into Europe who has carried above 1
billion consumers. Also, the rolled out 4 year for its “ always getting better” programme that
involves connecting flights via Romje, Milan & Porto which reduces the fee of check in bags,
exclusive partnership with the Student network of Erasmus as well as new rooms, application as
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well as websites of Ryanair. Moreover, it develop above 30m members as well as the websites
Ryanair.com has become the world's most airline visited sites. It developed to 87 bases as they
opened Burgas, Poznan and others as well as also Rimmi, Varna and so on to its ever exploring
airport list. In addition to this, within year 2016, they performed improvement into its
application, developed Flexi plus as well as Leisure plus products, rate my flight, school travels
and many others. Also, they announced the Rynair Sun as well as ten new bases were introduced
at primary airport into Bucharest, Hamburg, Sofia and others. So, that year net profit was of
£1.316 billion and which is more than 6% in comparison to last year.
Internal environment analysis with Value chain model
Value chain model is also regarded as the Porter' value chain analysis that is formed
through Michael Porter into 1985 year. This is the management practice of enterprises that are
performed through firm for creating a value in order to obtain competitive edge. Ryanair utilise
this particular model to concentrate on practices and method with audiences. This is categorised
in two which are described underneath:
Value chain activities:
It is regarded as the fundamental practices that has an immediate affects on production,
sales, maintenances as well as support of products or services. It involves few elements which
are mentioned below: Services: This is regarded as a vital primary practices that maintains value of goods or
services to clients as quickly as relationship is developed based upon good so r services
procurements. Within Ryanair, these practices are conducted so that it many become
competent to maintain products or services value fro developing the relationship among
customers in efficacious way. Through this undertaken organisation may perform several
another functions such as staff training, supply of goods or services as per the needs of
clients and others.
 Marketing as well as sales: It is regarded as the overall methods that is associated with
putting products or goods into market area which involves maintaining as well as
developing relation among customer. It is the practices which are conducted into Ryanair
so that it may able to create awareness related to its services within market area by
rendering effective quality service as well as managing relationship among clients in
efficacious manner.
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Support activities:
This is regarded as the practices which assist primary practices and it is formed on the
basis of organisation. Therefore, few supporting practise of Ryanair are described underneath: Human resource management: It is regarded as the support practices in which the
development of the workforce within organisation is consider as key components. These
practices are conducted within Ryanair so that it may able to assists the primary practices
through recruiting proficient staff members, facilitating training and others. Technological development: It is regarded as the support practices that is associated
with formation of goods and services in internal as well as external manner. With the
assistance of this practices respective organisation may able to formed new type of
services based upon new technologies, it developed value utilising creation as well as
optimisation.
 Infrastructure of organisation: This is regarded as the support practices within
organisation that allows them to maintain its regular operations. Few of its example are
managing administration, line management and so on that creates value for entities.
Therefore, within Ryanair, it is considered as the supporting practices as this aids its
fundamental activities for maintaining day to day operation is efficacious manner
(Porter’s Value Chain Analysis, 2019.).
These are considered as the essential implication of value chain model in context of
performing internal surroundings in efficacious way. By this Ryanair may able to formulate
efficacious plan of action and these factors also assist them to perform task in appropriate way
that drives to accomplishment of targeted objectives in successful manner.
Reflection of value chain
Value chain model was coined by Michael Porter. It effectively aid organisation to focus
towards specific activity with the help of which organisation can further able to create value and
competitive advantage. It has been identified by me that it is a strategic tool with the help of
which firm can effectively able to identify internal activities within entity. The main motive of
value chain analysis is to identify the activity that are most valuable to for organisation and
further evaluate which activities can be significantly improved by organisation with the help of
which company can able to get more competitive advantage. Further it has been evaluated by me
that with the help of value chain analysis Ryanair can able to identify the actives that turn out to
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be useful for them and along with the activities that waste their time. In addition to this company
can also able to effectively improve their brand reputation and further can respond towards
weakness, opportunities and threats in best effective and quick manner. As per according to me
this analysis model also aid organisation to make significant reduction in their overall cost and
further provide cost effective services to customers. This will not only help company to increase
profit reserve ratio but can also allows them to attract attention of customers towards cost-
effective services of company. This will further aid organisation to increase their competitive
image in Marketplace. Along with this I learn that value chain analysis have different type of
activities in their primary activities section that include inbound Logistic, operation, outbound,
marketing and sales, service while in support activities actions include procurement, human
resource management, technological development and infrastructure. From the above-mentioned
discussion it has been identified by me that value chain is a strategic management tool that
significantly benefit company to engage in physical changes and further effort towards creating
more valuable activities for company and customers. According to this model organisation can
gain long term advantage as this allows them to take advantage of flexible strategy and identify
about their business competitors and other respective places in industry value system. In addition
to this it has been identified by me that with the significant help of value chain organisation can
effectively able to create competitive advantage upon both differentiation and cost in best
effective manager. It not only help company to offer lower price products as per compared to
their competitors but also allow them to differentiate their business with their Rivals and further
ensure long term opportunities with high profitability.
CONCLUSION
As per the above report, it have been concluded that, there are several factors into
environment of business that is vital for organisation to assess which will help them to formulate
the efficacious strategies. Within whole factors of business environment, value chain analysis is
crucial as by this firm may assess its internal factors. By this, entities may also concentrate upon
its core competencies through maximising the supply chain procedures steps, drives towards
effectual utilisation of resources, ascertain appropriate period for performing assignment
appropriately as well as others. In addition to this, by efficacious execution of value chain model
entities can also become competent to obtain competitive edge at market areas.
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REFERENCES
Books and journal
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business. Review of World Economics, 151(1), pp.103-126.
Erasmus, B., Strydom, J.W. and Rudansky-Kloppers, S. eds., 2016. Introduction to business
management. Oxford University Press Southern Africa.
Kljucnikov, A., Belás, J., Kozubíková, L. and Paseková, P., 2016. The entreprenurial perception
of SME business environment quality in the Czech Republic. Journal of
Competitiveness, 8(1).
Kolk, A., 2016. The social responsibility of international business: From ethics and the
environment to CSR and sustainable development. Journal of World Business, 51(1),
pp.23-34.
Prajogo, D.I., 2016. The strategic fit between innovation strategies and business environment in
delivering business performance. International Journal of Production Economics, 171,
pp.241-249.
Saleem, S., 2015. BUSINESS ENVIRONMENT, 3/e. Pearson Education India.
Virglerová, Z., Dobeš, K. and Vojtovič, S., 2016. The perception of the state’s influence on its
business environment in the SMEs from Czech Republic. Administratie si Management
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Online
Ryanair. 2019. [Online]. Available through:<https://corporate.ryanair.com/about-us/history-of-
ryanair/>
Porter’s Value Chain Analysis. 2019. [Online]. Available
through:<https://www.toolshero.com/management/value-chain-analysis-porter/>.
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