Strategic Position and Strategic Choices of Ryanair Case Study

This case study analyzes Ryanair, a major European low-cost airline, examining its strategic position and strategic choices within the competitive aviation industry. The report includes a competitive forces analysis to assess industry attractiveness and how Ryanair should manage these forces. A PESTLE analysis is conducted to develop a scenario analysis for 2030, identifying key threats and opportunities. Furthermore, a VRIO analysis evaluates Ryanair's resources and capabilities. Based on these analyses, the report recommends strategic choices to improve Ryanair's long-term profitability, focusing on adapting to changing market conditions, managing competitive pressures, and enhancing customer service. The analysis considers both internal strengths and external environmental factors to provide a comprehensive strategic overview.

Industry Analysis
Case Study of Ryanair
Student Details
1-1-2020

INDUSTRY ANALYSIS
i
Executive Summary
The report effectively analyses the European Aviation Industry and identify the challenges
within the industry. The industry is highly competitive and the customers are mostly focused
on the quality of the services that are being provided to the customers. Ryanair is among the
organisations that are competing within the industry. Therefore, in order to retain its customer
base within the industry, the organisation has established with a low-cost strategy focused on
providing the customers with airline services at low cost within the industry. The strategy has
resulted in providing a competitive position to the organisation within the industry. Apart
from the internal strengths and strategies, it is required that the organisation focus on its
external environment and the threat that is required to be deal with.
As the changing technological requirements and the economic condition of the nation are
required to be focused upon so that the management can effectively adapt the changes
required within the industry and can develop strategies through which the organisation’s
strategic as well as the competitive position can be retained within the industry. The
management effectively focuses on utilising internet services and develops strategies through
which the needs and requirements of the industry, as well as stakeholders, can be achieved.
Ryanair is required to focus on its internal strengths and the managerial capabilities so that
the future development of the organisation can be ensured.

INDUSTRY ANALYSIS
ii
Table of Contents
Introduction................................................................................................................................1
Overview of the industry and the organisation..........................................................................1
Strategic Position and Strategic Choice.....................................................................................2
Industry Analysis.......................................................................................................................3
Competitive-Forces................................................................................................................3
PESTLE Analysis...................................................................................................................4
Scenario Analysis...................................................................................................................5
VRIO Analysis.......................................................................................................................6
Discussion and Recommendation..............................................................................................7
Conclusion..................................................................................................................................8
References................................................................................................................................10

INDUSTRY ANALYSIS
Introduction
The organisations should focus on the industry issues and challenges so that the management
can develop goals and strategies to achieve the strategic goals and objectives. The analysis
can be done by effectively utilising the tools and techniques to identify the competitive
advantage and the challenges within the external environment so that the strategic position of
the organisation within the industry can be identified and accordingly the strategic choice can
be made. The analysis is focused on analysing the environment of the European Aviation
industry and the issues faced by the organisation within the industry.
The report is focused on Ryanair that is among the leading players within the industry and the
strategies established by the management has resulted in achieving the position within the
industry. The analysis effectively focuses on the analysis of the strategic decisions that are
required to be taken by the organisation so that the organisation’s overall effectiveness can be
achieved. The result also effectively focuses on analysing the decisions taken by the
organisation and the future recommendation that the organisation can implement to retain its
position.
Overview of the industry and the organisation
The European Airlines industry is highly competitive, the European airline sector has
effectively contributed towards the employment and a share in the GDP in the European
countries. The industry is expected to grow with an increase in the air passenger, with the
increase in demand for the new aircraft. The development or the expansion of the industry is
the result of the increasing demand for private aircraft and charter services. The industry is
dominated by the top airlines including the Ryanair and the major airlines are expected to rise
to 2.0% by 2024 (IATA, 2018).
Ryanair is among the major player within the Europe Airline Industry. The organisation
focuses on providing low-cost airline services and established it as a major competitive factor
within the industry. The company was established in 1985 and was the first airline within the
industry to offer airline services at such a low cost on the European routes. The organisation
due to its low-cost business model was able to ensure a remarkable success even in the
recession period. In order to provide its customers with effective services within the industry,
the organisation effectively focused on introducing measures and adopting strategies to boost
the revenue and achieve the customer satisfaction level within the industry (Ryanair, 2020).
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The organisation is effectively focused on sustainable development within the industry.
Ryanair mission within the industry is to serve the customers effectively and to provide them
with low fares so that the passenger traffic can be generated and the organisational
performance can be improved. The key areas on which Ryanair focuses include growth in
target markets, providing best and low-cost services, commitment towards the passenger’s
safety and the quality of the service. As in order to retain the position within the aviation
industry, Ryanair focuses on such areas, along with a focus on the competitor’s practices
within the industry (Ryanair, 2020).
Strategic Position and Strategic Choice
The position of the organisation within the industry reflects the performance of the
organisation, as the strategic position of the organisation within the industry defines the
strategic choices that the management is required to make to ensure that it creates value as
defined for the stakeholders and to develop a brand image that is different from its
competitors within the industry. The strategic position is influenced by the internal and
external factors and the capabilities of the organisation; therefore, it is required that the
organisation focus on such factors and ensure that the changes are being adopted within the
organisation as per the requirements (Rothaermel, 2016).
Ryanair has effectively achieved its position as a low-cost service provider within the
industry, and with the changes in the leadership and managerial position at the organisation, it
has effectively ensured that the strategies and policies developed at the organisation are as per
the industry requirements and the competitor's strategies. Ryanair often got criticised due to
its ignoring attitude towards the customer's problem within the industry, therefore the
organisation focused on changing its decision-making process and introduced a three years
plan named as Always Getting Better, to identify the issues and to take decisions accordingly
(Ryanair, 2020).
Strategic Choice, on the other hand, is based on the position of the organisation and
according to the issues faced within the industry. The organisation is required to focus on the
risk and challenges that are being faced and as per the analysis, choices are being made so
that the strategic goals and objectives can be achieved. The analysis helps in identifying the
requirements and the trends and the current position within the industry and accordingly
management focuses on introducing changes within the organisation so that the overall effect
can be ensured (Malik, 2018).
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INDUSTRY ANALYSIS
Ryanair is required to focus on its key competitive factor that is the low-cost airline services
to the customers, and along with the service, it is required that the organisation focus on the
expansion within the industry and to focus on the service quality and the customer
satisfaction as compared to its competitors within the industry. The program introduced by
Ryanair for the development of the organisation is an effective choice towards maintaining
and retaining the position (O’Higgins, 2017). As the organisation operates in a highly
competitive industry, therefore, focusing on the strategic choice and the position is an
important factor to ensure the success of the organisation. The decision on the strategic
position and the choice to be made is based on certain market analysis such as analysing the
competitive factors, environment analysis and the scenario analysis so that an effective
decision can be developed and the success can be ensured (Kraaijenbrink, 2019).
Industry Analysis
Competitive-Forces
The competitive factor within the industry can be effectively analysed through the industry
factors in terms of the new entrants, power of the existing players and the customer's position
within the industry. The competitive model defined by Porter effectively focuses on
identifying the competitive factors within the industry. Ryanair operates in a highly
competitive industry as due to the presence of the major players within the industry it is
required that the organisation focus on innovation and change within the organisation. The
threat for the entry of new players in the aviation industry is expensive hence limited,
however, Ryanair is required to deal with the emerging international market and the
international airlines (mgodek, 2015).
The European Aviation industry is dominated by the two major suppliers Boeing and the
Airbus; therefore, they have a high bargaining power within the industry. The bargaining
power of the customers is high within the industry, but Ryanair being the airlines providing
low-cost services faces limited risk from the customers bargaining power. The competitive
factor within the industry results in the increased options for the customers within the
industry, therefore, resulting in a high threat of substitute within the industry. The
competitive factor analysis of the Ryanair results that the industry has certain factors that can
influence the strategic position of the organisation if effective decisions are not taken and
implemented (Shelmon, 2019)
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Figure 1 Competitive Analysis of Industry (Ryanair)
PESTLE Analysis
The pestle analysis of the industry helps in identifying the external environment in which the
organisation is operating and accordingly developing strategies so that any issues can be
eliminated. The political factor within the European industry is required to be analysed, as,
after the Brexit, the political uncertainties have been increased and the organisation may face
heavy tax burdens or loss of the market shares. The economic condition of the nation
influences the performance of the organisations operating within the nation's boundaries,
therefore, the declining in the foreign exchange rate has created a barrier in the expansion of
the business operations and has also limited the disposable income of the customers within
the industry (Steele, 2018).
The social and the cultural factors are dependent on the trends and practices within the
society, as the people within the nation prefer to travel by the airlines and like to spend on the
leisure activities, therefore increase in such spending has a positive impact over the
organisational development within the industry. Apart from the social and economic aspects,
the organisation is also required to focus on the technological aspect and the changing
industry requirements in terms of technology and innovation (Rosen, 2017). As the internet
has brought an effective change and the organisations are effectively utilising the internet as a
source to promote their brand and to attract the customers (Segre, 2015).
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Competition
Within
industry
(High)
Suppliers
Power
(Moderate)
Threat of
Sunstitute
(High)
Buyers
Power
(Limited)
Threat of
new
Entrants
(Low)

INDUSTRY ANALYSIS
Ryanair has effectively adapted the internet to promote and attract the customers, also the
internet has resulted in providing with an effective and cost-saving option within the process
of customer acquisition and providing satisfactory services. The organisation is required to
focus on the legal rules and regulations developed by the government so that the
organisation’s effectiveness towards the society and the stakeholders can be ensured along
with ensuring the development of the organisation. The last element within the analysis is the
environmental factors, as the organisation is required to focus on climate change and the
impact over the environment and society. The increasing level of pollution, carbon emissions
and the changing climate are the areas of concern for the transportation industry. Ryanair is
focusing on fuel consumption and the level of the carbon emitted by the aircraft during
operations so that it can contribute towards mitigating the impact of climate change
(Oroschakoff, 2019).
Factors Impact
Political  Political uncertainties have been increased.
 Heavy tax burdens or loss of the market shares.
Economical  Decline in the foreign exchange rate.
 Limited the disposable income of the customers.
Social  People prefer to spend on leisure activities and
travel through airlines.
Technological  The emergence of the Internet.
 Promotion and customer attraction through internet
sources.
Legal  Legal rules and regulations developed by the
government
Environmental  The increasing level of pollution.
 Carbon emissions and the changing climate are the
areas of concern for the transportation industry.
Scenario Analysis
Through conducting PESTLE analysis, it can be found that the political and the economical
factors are the major factors influencing the industry.
Scenario 1:
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INDUSTRY ANALYSIS
Ryanair has the maximum threat in the case in which the nations within the EU separates and
trade relations among the nations abolish, as such situation will result in limiting the market
for the organisation and will also result in increasing the tax burden and the market
uncertainty within the industry.
Scenario 2:
The situation in which the nations agree on maintaining effective trade relations will result in
boosting the nations trade and economic stability and will contribute towards increased
disposable income for the citizens hence will prove more profitable for the organisation.
Scenario 3:
The organisation can focus upon charging comparative fares within the industry so that it can
spend towards the environmental changes and contribute towards maintaining the climate
change.
Scenario 4:
The decline in the foreign exchange rate will result in the increasing competition among the
international and domestic players hence resulting in low profit margin, therefore it will be
required by Ryanair to focus on developing customer service quality to protect customer
base.
Therefore, from the scenario, Ryanair can focus upon the Scenario 2, as through political and
economic stability the organisation will be able to focus on its profitability and social
responsibility which will contribute towards the organisational development in industry.
Scenario 1 will possess major threat for the organisation within the industry.
VRIO Analysis
VRIO analysis of an organisation helps in identifying the competitive position of the
organisation within the industry and the factors that contribute towards the improved
efficiency of the organisation within the industry. The analysis is focused on identifying the
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Scenario 1
Political Uncertainity
Economic Unstability
Scenario 2
Political Stability
Economic Development
Scenario 3
Profitability Improvement
Fulfiling Social Responsibility
Scenario 4
Increasing Competition
Improved Customer Service

INDUSTRY ANALYSIS
resources that are valuable, rare, inimitable and organised within the industry, that contributes
towards being the strength of the organisation. Ryanair low-cost strategy within the industry
is valuable for the organisation, also it is well organised, and rare within the industry, as apart
from the Ryanair, no other competitor focuses on the providing services at such cost. The
leadership at the organisation is also a strength of the organisation which is rare but imitable
within the organisation and effectively adds value towards the effectiveness of the
organisation (Green, 2014).
The utilisation of the resources by the management and the implementation within the
organisation is an effective aspect for the organisation through which it is able to retain its
position and provide its customers with the effective services within the industry. The
resources retained by Ryanair are rare and not imitable within the industry, the cost
advantage to the organisation is an inimitable resource available with the organisation. The
customer base developed by the organisation from the year of the establishment to till now, is
a valuable resource for the organisation, as due to the presence of the customer base the
organisation has been able to establish its position as a leading airline operator within the
European Airline Industry.
Valuable Rarity Inimitable Organised
Low-cost strategy    
Leadership   × 
Resources    
Customer base  ×  
Figure 2 VRIO Analysis for Ryanair
Discussion and Recommendation
The industry analysis of the Ryanair helped in identifying several facts, that represents
that the industry is highly competitive, and requires that the organisations focus on
providing quality and satisfactory services. Ryanair has been among the leading players
within the industry, and to improve the customer satisfaction it has effectively introduced
policies and measures, such as the effective resolution of the customer claims, utilising
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INDUSTRY ANALYSIS
technological changes to attract and retain the customers. The AGB policy ‘Always
Getting Better’, has improved the organisation’s focus towards the customer needs and
requirements within the industry. Along with the competition and expanding industry, the
Europe Aviation industry also faces major threats due to political and economic issues
(O’Higgins, 2017). The analysis resulted in identifying that Ryanair has a major
competitive position within the industry due to its low-price strategy and such practice
has resulted in achieving a leading position within the industry.
 The Brexit has resulted in a negative impact on the nations economic status and may
result in influencing the way the organisations operate its business in the international
market. Therefore, it is required that strategies and policies are being developed
through which such issues can be avoided (CAPA, 2016).
 Ryanair is required to focus on implementing measures and strategies so that the
organisational goals and objectives can be achieved and the position within the
industry can be retained.
 The organisation is required to focus on customer satisfaction by ensuring the quality
of the service that is being provided.
 The success within the industry is based on customer satisfaction therefore it is
required to be ensured.
 Also, the organisation is required to focus on the timely analysis of its managerial
positions within the industry and identify any potential issues within the leadership so
that the decisions within the organisation and the strategy formed are as per the
strategic goals and objectives and the industry requirements so that the overall
achievement can be achieved (Lucy, 2018).
Conclusion
Ryanair is dealing within the competitive industry that requires that the customers are being
provided with the quality services and their satisfaction is ensured. Ryanair has effectively
established its position within the industry with its focus on providing the customers with
low-cost services. The low-cost model helped the organisation in achieving a competitive
position and establishing an effective customer base within the industry. The analysis has
resulted in identifying that the industry has high threats of availability of the substitute due to
the competition level within the industry. The political and economic issues of the nation are
required to be focused upon so that the overall effect can be ensured.
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INDUSTRY ANALYSIS
Ryanair is focused on implementing the strategies so that the organisation can focus upon the
issues within the industry, such as the implementation of the AGB strategy, and the
development of the plans and policies, also the management is focused on effectively
utilising the internet and the technology advancements so that the operational goals can be
promoted effectively and the customers can be provided with quality services. Ryanair is
required to focus on the managerial effectiveness of the organisation and the decisions made
by the managers and leaders so that the goals and objectives can be achieved. The report
limits on the internal strengths and the environmental analysis and has developed
recommendations based on such analysis and assumptions, therefore the result may differ
after implementing the strategies within the organisation.
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