Ryanair: Analysis of Airline Industry Contribution and Growth

This report provides a comprehensive analysis of Ryanair's impact on the UK airline industry. It begins with an introduction outlining the study's focus on Ryanair's contribution and growth within the competitive market. The report then delves into Ryanair's competitive advantages, including its brand values, supply chain management, and marketing strategies. The report also analyzes Ryanair's HR policies and employs Porter's five forces model and SWOT analysis to assess its position in the market. Further, the report examines the company's contribution to the growing airline industry, supported by PESTLE analysis to consider the political, economic, social, technological, legal, and environmental factors affecting Ryanair. The report concludes by summarizing key findings and providing a reference list.

CONTRIBUTION OF RYANAIR TO THE GROWING AIRLINE INDUSTRY
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Table of contents
Introduction.................................................................................................................................................3
Competitive advantage of Ryanair over their competitors..........................................................................3
Brand values of Ryanair...............................................................................................................................3
Supply chain of Ryanair...............................................................................................................................4
Marketing concepts used by Ryanair...........................................................................................................5
HR policies of Ryanair..................................................................................................................................5
Porter’s five forces model...........................................................................................................................5
SWOT analysis of Ryanair............................................................................................................................7
Contribution of Ryanair to the growing airline industry..............................................................................9
PESTLE analysis of Ryanair...........................................................................................................................9
Conclusion.................................................................................................................................................11
Reference list and bibliography.................................................................................................................12
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Introduction
The entire study mainly deals with the various aspects of the growing airlines industry in
the United Kingdom. It mainly measures the opportunity for the airlines industry and
based on that assessment this study provides a competitive advantage regarding the
fact that how the airlines companies can grow in the market. The main aim of the
particular study is to critically evaluate the different aspects regarding the fact that how
the organization can easily grow up in the competitive market. The organizations need
to take certain things into their account which may help them to sustain in the market. In
this study, Ryanair has been chosen and the competitive analysis of them is performed.
Along with that, the study also provides the fact that how the company contributes to the
growing airline industry in the United Kingdom.
Figure 1: Logo of Ryanair
(Source: Ryanair.com. 2017)
Competitive advantage of Ryanair over their competitors
Brand values of Ryanair
Making discussion on the brand value of Ryanair is to be made by considering the
market capitalization of the company as the airline industry in the UK is judged by taking
the parameter of the brand value. In this regard, the researcher is required to mention
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that the market capitalization in the UK is required to be made by considering the share
price in the stock market (Dinic and Dinic, 2017). In this context, it is to state that the
market share of the company in terms of the share price has increased in last decade.
Therefore, it can be said that the brand value of the company has also increased in last
decade. In this contrary, Belobaba et al., (2015: 89) opposed with the claim that the
brand value of the airline industry players could be judged by talking the parameter of
share prices of the company as this factor could easily be analyzed by considering the
enhancement in the number of passengers. In this regard, it is to mention that the airline
company has seen an enhancement of 13% passengers in last five years (). For
achieving the high customer strengths, the company has developed the perception of
low cost and high customer satisfaction (Ryanair.com. 2017). In this context, the
researcher is to mention that the brand value of the company has been built up on the
factor of serving the customers with low costs as compared with the industry
competitors.
Supply chain of Ryanair
Supply chain of Ryanair is required to be analyzed by considering the operation
management techniques within the organization. As stated by Belobaba et al., (2015:
89), use of sophisticated tools for developing supply chain management is essential for
the airline industry players as loopholes in the supply chain management in this industry
could results in financial losses of the customers. In this context, the researcher is to
mention that the inbound logistic of the company depends on the quality training to the
new joinees along with the existing employees. Moreover, the agreement process with
the suppliers of aviation tools and fuels could also be considered as an important part of
the inbound logistic process of the company. On the other hand, the quick turnaround
process has enhanced the managerial efficiency and integrated system development
process of the company and therefore, this outbound logistic system is required to be
considered as an important part of the supply chain of the company. Marketing and
sales process and the related service standard of the company are based on the high
productivity. Therefore, the researcher could mention that the profitability of the
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company depends on the inbound and outbound process of the company followed by
the sales and service activity.
Marketing concepts used by Ryanair
In the organizational process of the Ryanair, management sets a roadmap in the initial
level of the marketing strategy. After setting the goal and the marketing aims, the
framework of the marketing strategy is developed by the marketing managers. For
serving quality services to the passengers, the marketing managers consider
advertisement and promotional strategy through online. Social networking sites are also
used by the marketing managers in order to the enhance the market in the country.
HR policies of Ryanair
Recruitment process in Ryanair is to be considered as the initial HR activity of the
company. In this process, the company considers on campus recruitment policy as this
policy ensures the human resource managers in selecting highly efficient technical
staffs. On the other hand, the HR management of the company considers the
employees as the partners of the organization and therefore, all the recommendations
and the suggestions made by the employees are taken as important for the
management process. The skill development process is also considered as a regular
activity of the HR team of Ryanair to maintain the existing quality service to the
customers of the company.
Porter’s five forces model
It is a kind of framework that mainly helps to analyse the competition level within a
certain industry. According to Baum (2015: 205) the five forces include three horizontal
competitions and two vertical competitions. The forces from horizontal competition are
the threats from the substitute products or from the services, the new entries to the
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market along with the threat of the rival organizations. On the other hand, the vertical
competition includes the bargaining power of both the buyers and the suppliers.
Figure 2: Porter’s five forces model
(Source: Darabi et al., 2014: 38)
Threat of new entries in the market is a fact that needs to take into consideration by
Ryanair in order to have competitive advantage in the airlines industry (Belobaba et al.,
2015: 89). They needs to make their services to such extend that the customers only
get attracted towards their service. The new entries such as the BMI regional flights,
Loganair flights are making their ways faster in the airlines industry. Therefore, Ryanair
needs to be very careful in terms of providing a good quality of service to their
customers. The threat of the substitute organizations is the other fact that also needs to
be taken into account. There are large numbers of airlines companies in the United
Kingdom and Ryanair is one of them. Dai et al. (2014: 165) said that therefore they
need to keep one thing in mind that the customers can easily switch to other companies
if they get a better treatment over there. The strength of the buyers and the suppliers is
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the other part that Ryanair needs to measure in order to sustain in the competitive
market. They needs to do a proper customer value analysis in order to measure the
strength of the buyers. In addition to that, they can also force down the service prices of
their airlines company. Moreover, Ryanair also needs to keep a track of the total
amount trading. When it comes to calculate the strength of the suppliers, the first thing
that Ryanair needs to take a look is the helping nature of the crew members. The
behaviour of the employees with the customers is considered to be vital parameter for
the Ryanair as well as with other airlines companies. Darabi et al. (2014: 48) stated that
the industry rivalry is another fact that measures the competitive advantage of a
particular organisation. The organisations like British Airways, Thomas Cook, easyjet,
Etihad airways are some of the rival organisations of Ryanair and these organizations
are very much settled in their respective positions. Therefore, Ryanair needs to make
their level of service up to the mark that they can compete with their rivals.
SWOT analysis of Ryanair
Strengths
 Largest airline in the Europe
 Airport charges are low
 Record of first class safety
Weakness
 Limited suppliers
 Reputation is not good
 Threats from the respective industry
Opportunities
 Expansion in Asia and in Russia
 Expansion of the services in the
new European Union countries
Threats
 Threat of the new entrants
 Recovery form the economy
Table 1: SWOT analysis of Ryanair
(Source: Created by self)
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Figure 3: SWOT analysis
(Source: Dobbs, 2014: 47)
As Ryanair is the biggest airlines company in the UK, therefore they mainly benefits
from their rival organisations. Along with that Dobbs (2014: 43) stated that, they use
modern Boeing flights which cuts the maintenance cost down. In addition to that, the
organisation is very much flexible due to their non union work force. This can be noticed
whenever there are sudden innovations and changes take place in the working
environment. Moreover, they have a good turnaround strategy compared to their rival
organisations. This makes them able to use their assets in order to make their
organisation more profitable. However, there are some loopholes in their organisations.
The passengers are very much price sensitive (Foster and Ren, 2015: 1570). Ryanair is
not able to provide a low flight cost to their passengers that are the issue with their
organisation. Therefore, their rivals take this thing as an opportunity for themselves and
work according to that. Along with that, the regional airports of Ryan air tend to be very
far from the city. This is considered to be another issue regarding the Ryanair. On the
other hand, there are some opportunities for the Ryanair. According to Hollensen (2015:
66) as they are expanding to Asia and Russia, therefore they have the opportunity to
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have a large number of customers. In contrast to that, one of the biggest threats of
Ryanair is that the recoveries form the economy. If the economic situation in Europe
settled down properly, then it can be suitable for the organisation. These are the certain
things that the organisation needs to take a look properly in order to sustain in the
competitive market and to grow their business in the respective industry.
Contribution of Ryanair to the growing airline industry
In the UK, airlines industry employs around 961000 jobs, which is 3.3% of the total jobs
in the country. In this context, the researcher is required to mention that the company
employs 0.1% of the total jobs in the UK. In this context, the researcher is to mention
that the company has 21% of the total market share of the airline industry of the UK
(Dinic and Dinic, 2017). In this context, the researcher is to state that the company has
a growth higher than the industry growth.
Figure 4: Comparative graph showing performance of Ryanair and the sector
(Source: Dinic and Dinic, 2017)
PESTLE analysis of Ryanair
Political factors  Restrictions over the aviation
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industry
 Brexit
 Lack in subsidy in the aviation
sector
Economic factors  Low growth in GDP
 Unemployment
 Stability in interest rate
Social factors  Use of flights in regular purpose.
Technical factors  Improved technology in aviation
sector
 Improvement in aviation
sciences.
Legal factors  Change in legal structures due to
Brexit.
 Excessive legal compliances
Environmental factors  Noise pollution control.
In the PESTLE analysis, the researcher has seen that the UK government controls the
restriction over the aviation industry in terms of fuel purchasing and the travelling
distance. This kind of restriction could affect the service of the company as the
operation standard of the organization could be affected. Brexit is to be considered as
another issue that could affect the macro environment of Ryanair. The employees of the
company belonging from countries apart from the UK could be removed from the
organizational process of the company. In this context, the researcher could mention
that the stable interest rate could facilitate the management to get loan from the banks.
As the UK is considered as an improved country in terms of technical advancement, the
researcher could state that the company shall be facilitated by such advancement in the
aviation technology. Moreover, the present restriction over the legal compliances could
also be faced by the company. In this context, the researcher is required to mention that
the noise pollution is a crucial issue in the aviation industry and therefore, the company
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is to consider the issue of minimizing the air pollution to avoid the government’s action
against the company.
Conclusion
The entire study mainly discloses the different factors that are taken into consideration
by Ryanair airlines in order to sustain in the competitive market. The brand value along
with the supply chain policies and the HR policies of the organisation are critically
evaluated in order to understand the fact that how the organisation is sustaining in the
market. Along with that, the variables of Porter’s five forces model also disclose the fact
that there are some opportunities and threats for the organisation. In addition to that, the
study also provides a brief description about the fact that how Ryanair contributes to the
airlines industry of the UK. Therefore, it can be concluded that if the organisation
maintains these critical aspects properly, then it would be helpful for them to have a top
spot in the market.
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Reference list and bibliography
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