Strategy Management: Ryanair's Cost Leadership Strategy Analysis

This homework assignment analyzes Ryanair's strategic management, particularly its adoption of a cost leadership strategy in the 1980s. The analysis identifies the strategic issue of bad reputation due to poor customer service and working conditions. Ryanair chose a cost leadership strategy to offer low fares and gain a strong market position, copying Southwest Airlines. The company implemented initiatives in operations, technology (self-service), and customer service to support its strategy. The assignment argues that the strategy was successful, leading to financial outcomes and high market share in Europe, and details how Ryanair continues to use the strategy through rapid turnaround, aircraft, use of secondary airports, point-to-point routing, the company’s services, fuel, and overheads and staff to provide best quality, customer service, technology enhancement, human behaviour, and low prices and safety. The assignment is based on the "Flying High at Ryanair" case study. The assignment covers the airline's generic business strategy, reasons for choosing the strategy, initiatives for implementation, the appropriateness of the initiatives, and the success of the strategy.

Running Head: STRATEGY MANAGEMENT
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Strategy Management
Student Details:

STRATEGY MANAGEMENT 1
Case Study: Flying High at Ryanair
1. Strategic issue
In terms of the Ryanair’s development in and outside the company, the strategic issue
faced by an organisation was its bad reputation due to working conditions and poor customer
service. It is essential to solve this issue for the development of the company in future by
improving its image while making new changes for attracting more customers based on their
poor reviews.
2. Generic business strategy
In 1980s, Ryanair adopted “overall cost leadership” generic business strategy were
this low-price strategy is a backbone of the company as per its tight cost control while
focusing on lowest costs in countries such as Europe which is lower than its one of the closest
competitors.
3. Reason of choosing this strategy
Ryanair chosen this overall cost leadership strategy for lowering fares and generating
a strong leadership by copying the Southwest Airlines this is why the company is known as
the low cost budget airline. The company chosen this strategy for its profit margins
maximisation with increasing sales volume when compared with competitors based on prices
and its cost difference.
4. Initiatives for implementing this strategy
Ryanair took initiatives of optimising or improving its internal processes for offering
better value to its customers along with eliminating or minimising waste while implementing
cost leadership strategy. Also, the company aimed at utilising its resources and human power
at its best effectively and efficiently for increasing customer based with offering numerous
routes to travel. Lastly, Ryanair took an initiative of providing technological advancements
by establishing ‘self-service’ based on web for customers where they can directly check-in,
ticketing and use it for boarding purposes for managing printing costs and eliminating prior
need where clients face staff. Thus, three initiatives include Operations, Technology, and
Service.

STRATEGY MANAGEMENT 2
5. Reasons of initiatives appropriateness
Ryanair’s CEO Michael O’Leary was too positive towards its company which make it
lead to success in such a short-period across the globe with large customer-based after taking
these initiatives while implementing cost leadership strategy. The company took these
initiatives correctly while being the low-cost fare industry with the presence of high
competition based on price-cuts, emerging discount, and lobbying to governments.
6. Strategy is working successful or not
Yes, this adoption of overall cost leadership strategy reach out to be successful for
Ryanair while offering lowest fares as possible to its passengers along with benefiting
through deregulation of “open skies” emergence across the region. The company attained
technology impact and sustainability along with maintaining its services, workforce and
security for large customer base. Ryanair achieved success through its financial outcomes and
highest market-share in Europe as well along with reputation enhancement based on the
company’s best fares.
7. Successful continuation of this strategy
In this challenging environment, Ryanair continued by using this strategy throughout
becoming a leader in airline industry across the globe which contains summarising its major
components such as rapid turnaround, aircraft, secondary airports use, point-to-point routing,
the company’s services, fuel, and overheads and staff for valuing its customers through best
quality, customer service, technology enhancement, human behaviour, and low prices and
safety.