Business Management and Strategic Analysis of Ryanair Airlines

This report provides a comprehensive analysis of Ryanair Airlines' business and strategic management. It begins with a VRIO analysis to assess the company's internal resources and capabilities, followed by a SWOT analysis to identify its strengths, weaknesses, opportunities, and threats. A TOWS analysis is then conducted to formulate strategic options based on the SWOT findings. The report also applies McKinsey's 7S framework to evaluate the alignment of key organizational elements within Ryanair. Strategic recommendations are presented, derived from the VRIO, SWOT, and TOWS analyses, and these recommendations are further evaluated for suitability, feasibility, and acceptability. The report concludes by addressing Ryanair's key challenges, such as currency fluctuations, rising oil prices, regulatory changes, customer service issues, and human resources management, emphasizing the need for the airline to leverage its resources and capabilities while aligning its mission, vision, and objectives.

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Executive Summary
The aim of this report is the analysis and management of business strategy of the Ryanair
Airlines. It is one the largest low cost Irish airline in Ireland which was founded in the year
1984. Under this report discussion will be based on VRIO, SWOT and TOWS analysis. In
addition, Mc Kinsey’s 7S framework analysis will be done. Moreover, the strategic
recommendations based on the analysis of VRIO, SWOT and TOWS will be presented in the
report. Lastly, analysis of the overall suitability, feasibility and acceptability through
evaluation of the recommendations will be presented in the report. Hence, it is concluded that
Ryanair airlines is facing some key issues such as fluctuations in the currency, increase in the
oil price, changes in the government regulations, poor customer services, poor human
resources management. Therefore, the airline needs to identify, analyze and implement the
strategies through utilizing their resources and capabilities with aligning the mission, vision
and objectives of the organization.

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Table of Contents
Introduction................................................................................................................................3
Section 1- VRIO Analysis..........................................................................................................3
Section 2.....................................................................................................................................6
SWOT Analysis.....................................................................................................................6
TOWS Analysis.....................................................................................................................8
Section 3- Mc Kinsey 7S Framework of Ryanair Models.......................................................10
Section 4...................................................................................................................................12
(a) Recommendations.....................................................................................................12
(b) Evaluation of SFA on Recommendations.................................................................13
Conclusion................................................................................................................................14
References................................................................................................................................15

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Introduction
The aim of this report is the business management and the strategic management of
the Ryanair Airlines. There are so many low cost airlines which operates in Europe.
However, the most popular airline is Ryanair Airlines. It commenced its operations on 8th
July 1985 and is considered as one of the oldest and largest budgeted European airline
headquartered in Ireland. The operations of Ryanair include 400 aircraft of Boeing 737-800
and one charter aircraft of 737-700. The success and rapid expansion of this airline is resulted
from its low cost model of the business and due to the deregulation of the European
aviation’s industry (Ryanair.com 2019). The discussion of this report will include VRIO
Analysis which includes internal strategic capabilities as well as any limitations in terms of
strategic capabilities. In addition, SWOT and TOWS Analysis will be presented in the report.
SWOT Analysis will include strength, weakness, opportunities and threat of the company
whereas TOWS Analysis will include identification of the options of SO, ST, WO and WT
for the company. Moreover, the models of change management will be discussed. Lastly,
strategic recommendations based on the analysis of VRIO, SWOT and TOWS will be done
and based on the recommendations overall evaluation of the suitability, feasibility and
acceptability will be done. It will followed by summary of the findings and conclusions based
on the strategic recommendations.
Section 1- VRIO Analysis
The resources of the organization include physical, organization, reputation,
intellectual, financial and technological. On the basis of these resources, the core
competencies can be developed by Ryanair. Hence, VRIO analysis is performed for finding
out whether the internal resources helps in competitive advantage or not (Slavik and Bednár
2014).

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Value analysis is done to ensure that whether the company is able to deploy the
resources in such a way that it meets the expectations and needs of the customers. Ryanair
airline is able to achieve the distinct value in the minds of the customers through reducing
airport charges, model of their low price structure, subsidies of the government. It becomes
one of the low fare airlines by combining these aspects.
Rareness analysis of Ryanair helps in identifying the resources and capabilities it is
having as compared to other airlines. Resources, such as reduction in the airport charges and
subsidies of the government makes the company valuable and rare as compare to other direct
competitors such as EasyJet which do not have this resources. The company has gained in
terms of these resources due to its ability for attracting customers and access to secondary
routes. Therefore, the government helps in developing secondary airports which increases
tourism and consumption for the local government.
Limitability analysis of Ryanair helps in finding out the limitless of the company in its
resource. The resources such as reduction of the airport charges and subsidies of the
government is hardly imitated and transferred. Hence, it is the biggest advantage for the
company in comparison of the other airlines.
Organization analysis of the Ryanair helps in finding out the fact that it provides
lowest cost and price by utilizing effectively all the internal resources and capabilities. The
effective strategy of the organization and the strong team of management help in making
good strategy of operations and strategies of marketing for the best possible use of the
resources and capabilities which leads to competitive advantage for the company.
Financial analysis of the company helps in identifying that the company is
continuously growing in terms of excess in the earning by 20%. The operating revenue of the
company from year 2010-2011 has grown to 21% and from 2011- 2012 has grown to 20%

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which is a good sign. The Net Profit margin of the company is calculated which measures the
amount of the profit the company achieves after the total sales. It is calculated by net profit
divided by total sales. The net profit margin was 10.22% in the year 2010 which rises to
10.32% in the year 2011 to it again rises to 12.76% in the year 2012.
Net Profit Margin 2010 2011 2012
Net Profit 305.3 374.6 560.4
Sales 2988.1 3629.5 4390.2
Result 10.22 10.32 12.76
The Gearing ratio is calculated to know the financial leverage that shows the extent to
which the operations of the company is funded by the shareholders fund in comparison with
creditor’s fund. The gearing ratio of Ryanair airlines from the year 2010 to 2012 shows that,
the firm has highly levered that means it uses debt for paying its continuous business
operations.
Gearing 2010 2011 2012
Total Debt 4714.8 5642.1 5694.3
Sharesholders Funds 2848.6 2953.9 3306.7
Result 62.34 65.64 63.26
The Liquidity ratio is calculated to recognise the capacity of the company in meeting
their short term liabilities. Credit rating and credibility of the company is influenced by the
liquidity ratio. Current ratio is calculated through dividing current assets by current liabilities
that give the idea to the firm that to what extent they should maximize their current assets for
meeting the debt which is due for the payment within one year. The trend from 2010 to 2012
shows that the liquidity position of the company is growing every year and it has sufficient
current assets for covering their short-term liabilities.
Current Ratio 2010 2011 2012
Current Assets 3063.4 3477.6 3876
Current Liabilities 1815 1837.2 1549.6
Result 1.69 1.89 2.50

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Hence, the financial position of Ryanair airlines shows that the firm has grown in
respect of financial resources and it is the greatest competitive advantage for the company in
terms of profitability, liquidity and solvency position.
VRIO Framework of Ryanair
Strategic
Capability
Value Rarity Inimitability Organization Competitive
Implications
Physical Yes No Yes Yes Sustainable
Competitive
Advantage
Reputational No Yes Yes No Competitive Parity
Organizational Yes Yes Yes Yes Sustainable
Competitive
Advantage
Financial Yes No Yes No Competitive Parity
Intellectual Yes Yes Yes Yes Sustainable
Competitive
Advantage
Technological No No No Yes Competitive Parity
Section 2
SWOT Analysis
The analysis of the SWOT Analysis forms the important aspects of the strategic
planning process which helps in scanning the internal and external environment. Strength and
Weakness forms the factors which are internal environmental factors and Opportunities and
threat are the factors which are external to the business environment. This analysis helps the

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company for e formulating and selecting the strategy through matching the company’s
resources and capabilities to its operating competitive environment (Gürel and Tat 2017).
SWOT Analysis
Strength
 Ryanair airlines strong brand
positioning has helped the
company to get the title of low
airfare airlines.
 The revenue of the company is
boosted by its integrated strategy
in the business operations which
leads to low cost operations and
subsequently it drives revenue by
offering the customer low fare.
 Ryanair is considered as one of the
Europe’s largest low fare airline. It
is because of its size, it has got the
benefit of leverage for negotiating
with the suppliers in the
agreement. The company has also
got reduction in the airport charges
and government subsidies which is
an added advantage.
 Introduction of the new technology
flights helped the company in
Weakness
 Ryanair pay less attention in the
services to the customers. Hence
less customer loyalty.
 This company has the major
obsession for reducing the cost and
for that it has the attitude to cut the
cost at any cost.
 The company has the poor policy
of the Human Resource
management.
 The company dependence on the
third party providers of service.
 The employee relationship of the
company is weak.

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achieving efficiency in the fuel and
less maintenance cost
 Ryanair has sufficient amount of
the cash in their books which is the
added strength of the company as
compared to the creditors.
Opportunities
 Ryanair’s selling of the ancillary
products at the time of flying has
given the company the
opportunities of high margins. It
will be profitable for the company
if properly managed (McCarthy
2015).
 The website of the company has
got immense popular and hence
advertising through web media
will enhance the revenue for the
company.
 It also helps the company for
providing the complete packaging
of tour. Hence, customer will get
everything at one place.
Threat
 Burden on the cash flow by
expansion of the company and
stretching the management
capabilities (McCarthy 2015).
 Increase in the prices of fuel
 Arising of the new competitions in
the market.
 Fluctuations in the currency prices.
 Attacks from the terrorist are
increasing day by day that are
increasing the risk of the life of the
passengers and crew members.

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TOWS Analysis
TOWS Matrix is attained from the model of the SWOT Analysis. It helps in
developing the strategies using the analysis of the external internal business environment.
The organization by knowing their capabilities and expertise can improve their operations as
well as find ways to minimize the losses through threats of the company. After finding the
strength, weakness, opportunities and threat of the company, the Strength-Opportunities,
Weakness-Opportunities, Strength-Threats and Weakness-Threats are linked which helps in
generating strategic tactic (Davies, John and Thomas 2014).
TOWS Matrix
Strength Weakness
Opportunities  Ryanair programs such as
frequent flyer programs, credit
cards, advertising through
website has increased the
volume of customers and
possibility for additional
earnings of the company
(Ryanair.com 2019).
 With the help of leveraging the
immense customer base Ryanair
will increase and improve the
selling of their ancillary
products.
 With the help of motivation of
their employees and better
training programs, Ryanair can
improve their poor service to
the customers (Ryanair.com
2019).

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Threat  Ryanair airlines by using their
new fleet should depict the
image of being ‘green’. Hence,
whenever in the European Union
any strong rules regarding
emission have been passed, it
will help the organisation to lead
among other competitors.
 With the help of hedging the
prices of the oil, Ryanair can
better control the changes in
the prices of the oil.
 Currency fluctuations can also
be managed better with the
help of hedging. As industry of
oil deals in the Dollars.
Section 3- Mc Kinsey 7S Framework of Ryanair Models
Mc Kinsey 7S Framework is the management model which is developed in 1980 by
the two consultants of the business that is Tom Peters and Robert H. Waterman. This model
gives the insight that why it is not possible in isolation to change any particular aspect of the
company. It is one of the most popular methods used by the businesses these days. This
model is useful in improving the company’s performance, analyzing the effect of the changes
in future within the organization, lining up of the processes and department whenever any
merger or acquisition takes place and lastly it is also useful in order to make sure that there is
best possible implementation of the strategy (Ravanfar 2015).

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The study of Mc Kinsey 7S Model will help in improving the strategies and analyzing
how to overcome the current situation prevailing in Ryanair airlines. Hence, following are the
seven elements of the business of the airline which are aligned in such a way that it increases
the effectiveness of the organization (Kuhn 2017).
Strategy – Ryanair Airlines follow the business strategy of giving service differentiation
through becoming the low cost budget airlines. It is due to this strategy the company has
maintained the market leader in the industry as compared to other competitors (Dobruszkes,
Givoni and Vowles 2017).
Structure – Ryanair airlines is considered as one of the largest low cost airline in Europe.
The structure of the company is maintained in a way that all the sectors head directly report
to the CEO, Michael O’ Leary. Hence, it is the structure of the company short which helps in
maintaining transparency in the organization that eventually leads to efficiency in the task
(Nortilliand Wong 2014).
Systems-Apart from the system of the organization such as recruitment system, selection
system, appraisal of employees system, complaint handling system, quality control system