Ryanair: Strategic Analysis of a Low-Cost Airline Report

This report provides a detailed strategic analysis of Ryanair, a prominent low-cost airline. It begins with an introduction to strategic management and its importance in business growth. The main body of the report includes an external audit using Porter's Five Forces model to assess the competitive landscape, examining threats of new entry, bargaining power of suppliers and buyers, competitive rivalry, and the threat of substitutes. A PESTEL analysis is also included to evaluate the political, economic, social, technological, environmental, and legal factors affecting Ryanair. Furthermore, an internal strategic capability assessment is conducted using a SWOT analysis to identify the airline's strengths, weaknesses, opportunities, and threats. The report then discusses Ryanair's strategic choices, such as low-cost services, low operational costs, ancillary services, and safety measures. A critical evaluation of Ryanair's strategies, with a focus on human resource strategy, including its positive and negative impacts, is also included. The report concludes by summarizing the key findings and emphasizing the importance of strategic planning for long-term stability and growth. The report uses references to support the analysis and conclusions.

RayanAir:
the low fares airline

Table of Contents
Introduction.................................................................................................................................................3
MAIN BODY..............................................................................................................................................3
External audit of organization by using Porter’s five Force model..........................................................3
Internal strategic capability using SWOT model.....................................................................................5
Critical evaluation of Strategy.................................................................................................................6
CONCLUSION.......................................................................................................................................6
REFRENCES..............................................................................................................................................8

Introduction
Strategic management is concerned with constructing goals and objectives and implementing
them. Top management is involved in analyzing the resources along with evaluation the external and
internal business environment in which organization exists (Chiarini & Vagnoni, 2015). Its main purpose is
to increase the business growth by integrating the internal resources with the company’s goals. This also
helps managers in decision making for the purpose of improving the position of the business through the
adoption of effective strategies and providing competitive advantage in the market. The company which
has been selected in the following report is named Ryanair a well-known Europe airline. It is considered
as the largest airlines in Europe
This was founded in the year 1984 and its main headquarters is in Dublin airport, Ireland. Report
covers detailed description about the environmental audit of an organization, discussion on wide range of
strategic choices and last is potential strategies, their suitability, acceptability, feasibility with in the
organizational context. These are important to study in order to understand the impact of internal and
external factors on the business.
MAIN BODY
As a strategic manager it is essential to first analyze the external and internal factors affecting the
business of Ryanair before discussing about the strategic choices available to the organization (Zott &
Amit, 2013).
External audit of organization by using Porter’s five Force model
This framework is created by M. porter to analyze the attractiveness of industry based on five main forces
which explains the level of competition in the market and whether it will be profitable for the
organization or not. Wizzair, vueling and Pegasus airlines are the three main competitors of Ryanair an
analysis is made with the help of porter’s five force model.
Threat of new entry- This force explains that threat of new entry should be low as it is beneficial
for the organization to have low competitors in the market. There is various reason for this factor to
become high such as low capital requirement, existing business entities not being competitive enough or
low government interference etc. Ryanair industry has created high barriers due to its strong brand image
and expensiveness hence threat of new entry is not high in this scenario.
Bargaining power of suppliers- This determines the power held by the suppliers in the market,
if it is high then suppliers can charge high prices for the low quality raw materials. In case of Ryanair
since the prices of oil are ruled by the government institution therefore it leads to high bargaining power
of suppliers.
Competitive rivalry- It explains to what extent rivalry exist in the industry. There is an intense
competition for the Ryanair from various low cost airlines such as Wizzair, vueling, Pegasus but due its
vast size the company has managed to reduce the rivalry in the market.
Bargaining powers of buyers- This refers to power held by buyers based on their demand with
regards to the prices of goods and services. Bargaining power is higher in this industry as customers will
switch to other airlines in case the company increases the prices. Such industries are considered less
attractive where customers rule and changes can not be made in prices.
Threat of substitute- In an industry where customers have other options to switch to, reduces the
profitability of business. As Ryanair is providing much cheaper rates than other transport mediums like

trains helps the company to maintain its position hence this factor is weak here (Durand, Grant & Madsen,
2017)
PESTEL analysis
 Political- This factor is associated with the rules and regulation made by the political party which
is currently in power. Ryanair is impacted because of this factor as the company has to abide by
the EU guidelines like excise duties etc.
 Economical- Under this the organization gets affected due to the changing economy of the
country. Ryanair had large number of its passengers from UK but after BREXIT the company had
to take approval for continuing operations in the UK.
 Legal- The organization has to follow the laws made by the government, Ryanair avoids
indulging in illegal practices as it can badly affect the image of the company (Goldfarb & King,
2016)
 Social- Understanding the society dynamic is essential for the survival of business therefore
changing taste and preferences needed to be determined by the organization for example more
and more people wants to travel now at an affordable price, this has led to maximizing the sales
of Ryanair airlines.
 Technological- With ever changing technological advancements companies like Ryanair is
bringing new technology in aircrafts and also using satellite for the consumption of oil.
 Environmental- Over the past few years there is an increasing concern regarding environment and
companies like Ryanair are taking measures to reduce the green house impact (Walker, 2013).

Internal strategic capability using SWOT model
SWOT analysis is a framework that helps in determining the strengths, weakness, threats and
opportunities of organization. This tool is used for the purpose of evaluating the position of business and
is vital for achieving long term stability in the market.
Strengths- This factor is associated with identifying those key areas which are the strengths of
the organization. Ryanair is known for its strong brand image in the market due to this new competitor are
not willing to enter in the industry. Another area where this organization excels at is its effective
innovative and marketing approach such as offering low flares also their safety measures for the
customers has helped building the positive image of the company.
Weakness- As per this determining those elements that are acting as roadblock in the growth of
company is very important. These are the areas where company lacks and is required to take appropriate
actions to overcome them. Ryanair image has been badly affected due to the incident of refusing a
passenger to change the flight even after knowing that it was for serious cause hence company suffers
from poor customer services.
Threats- These are the situation which can negatively impact the position of organization’s
business, such as changing taste and preferences of customers, government’s rules and regulations, etc.
Ryanair is facing threat from competitors like LLC and from those who wants high class services.
Opportunities- It is related to identifying those factors that can do wonders for the business,
attracting more and more customers through its low fare strategy provide opportunities like increased
employment that will contribute towards the country’s economic development (Hill, Jones & Schilling,
2014).
Strategic choices available to the company
Strategic choices are a procedure of choosing the most feasible alternative out of many which can
ensure long term stability of the organization. Ryanair uses different strategy for enhancing the growth
and profitability of business. Low cost services and safety of passengers are the two main capabilities of
Ryanair thus discussion has been on what are the strategies made by the company and how they have
impacted the growth of business.
Low flare policies- As vision of Ryanair is to keep offering low flare and attracting large number
of buyers. Fare and route policy is one such strategy where Ryanair charge lower prices for the new
routes this has helped in sustaining and increasing the customer base as they are attracted to the low
prices. By using this strategy organization is able to achieve strategic objectives.
Low operational cost- Ryanair is following its mission of gaining the attention of large customer
base by reducing the operating cost. The company has controlled cost associated with training,
maintenance and storage of large spare parts. Under AGB program it has further took actions to improve
the productivity of organization
Ancillary services- Under this approach the company included additional services such as food,
beverage, entertainment internet and medical services, as adopting these measures helps in increasing the
customer satisfaction. Revenues of the company has increased from the past couple of years due to this
(Osterwalder & Pigneur, 2012).
Safety and maintenance- Safety of customers has always been main priority of this company
special training was given to the employees under always getting better program. The image of this brand
completely relies on the opinions of the customers if they are satisfied with the security and quality

services provided by the airlines none can question the effectiveness of the company (Hitt, Ireland &
Hoskisson, 2012).
Critical evaluation of Strategy
Even though the company is consistently taking measures to improve the flying experience of
customers there are areas where company lacks. As per the functional strategy the organization has to put
focus on the different departmental units like HR, marketing, finance, IT etc. Human resource department
is the area where Ryanair is needed to focus as there were increasing issues between the management and
employees. The company was accused of not providing healthy working environment Effective HR
strategy will help in improving the productivity of the business therefore this approach should be selected
by the organization.
Positive impact of HR strategy:
 Using this strategy worker should be given relaxation in the working hours this will help in
increasing the efficiency of organization. When the company just focus producing large number
of goods and services instead of their quality this affects the productivity of business.
 Recognizing the efforts of workers helps in increasing their motivation, Ryanair should develop
attractive reward programs in order to increase the job satisfaction of employees. A highly
motivated workforce produces effective output.
 low turnovers are another positive impact of this strategy it ensures greater commitment from the
workers as they will feel that organization respects their work as result it increases their loyalty.
Negative impact of HR strategy
 This strategy can negatively impact the business in a way that workers can become lazy if they
are given extra free time by the organization and it will lead to reducing the efficiency of
organization
 Losses of the company can be increased due to the undue investment made on organizing the
events and activities for the entertainment of workers. Balance should be maintained by the
Ryanair with regards to the expenses made on the workers.
After analyzing this technique, it can be seen why the organization should go for this strategy as
Ryanair has faced backlash due to its poor relations with the workers. This situation has impacted the
image of brand and also company had to pay in millions in the court. Using HR strategy will help in
establishing strong bond between the workers and management and through the mouth publicity more and
more talented workforce can be attracted by the organization. Future uncertainties can be dealt if the
workforce is strong and competitive enough therefore this should by adopted by the Ryanair (Mišanková &
Kočišová, 2014).
CONCLUSION
From the above report it can be concluded that strategic involves planning, developing,
monitoring and regulating the objectives of the organization. Many organizations adopt this
practice for the purpose of long term stability. SWOT analysis explains the internal factors that
affect the position of business and through Porter’s five force model the competitive advantage
can be obtained in the market. It explains the five main forces such as bargaining power of buyer
and supplier, rivalry in the industry along with the threats of substitutes and new entrance. Further
strategic choices have been discussed, these are concerned to the identifying the potential
prospects and selecting the most appropriate alternative amongst them. Different business entities

adopt various strategies like pricing, functional, operating competitive etc. A Critical analysis on
HR strategy explains the impact that it poses on the business and why should the organization use
this to ensures further growth and development in the business.

REFRENCES
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