MNG93210: Ryanair Strategic Position and Choice Analysis Report

This report provides a comprehensive strategic analysis of Ryanair, a major European airline. It begins with an executive summary and table of contents, followed by an introduction outlining the importance of strategic positioning and choice for competitive advantage. The report then analyzes Ryanair using Porter's five forces to assess the competitive landscape, identifying high bargaining power of suppliers and customers, low threat of substitutes and new entrants, and high competitive rivalry. A PESTLE analysis examines political, economic, social, technological, environmental, and legal factors, including the impact of Brexit and the COVID-19 pandemic. A VRIO analysis evaluates Ryanair's resources, identifying key strengths. The discussion section recommends strategic choices for Ryanair to enhance profitability, with a focus on customer service improvements. The report concludes with a summary of findings and a list of references.

RUNNING HEAD: STRATEGIC POSITION AND STRATEGIC CHOICE
STRATEGIC POSITION AND STRATEGIC CHOICE
Name of the Student:
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Author’s Note:

1STRATEGIC POSITION AND STRATEGIC CHOICE
Executive summary
To compete in an intensely competitive business environment, a business organisation can utilise
the strategic position and strategic choice. Through a strategic position, a business organisation
differentiate its business operation with its competitors. To determine the future strategy for the
company, the authority of a company can use strategic choice. In the European Region, Ryanair
Airline does its low-cost airline business. Competitive forces analysis has identified that the
competitive rivalry, the bargaining power of customers and suppliers for this company are high.
The threat of new products and new entrants for this company is low. A PESTLE analysis has
identified that the business of this company may face disruption due to the COVID-19 pandemic
and the BREXIT. A VRIO analysis has identified that leadership, subsidies from the
government, low airport fare, the new fleets are the key resources of this company. In the end, it
is recommended that this company needs to improve its customer service to retain happy
customers.

2STRATEGIC POSITION AND STRATEGIC CHOICE
Table of Contents
Introduction:....................................................................................................................................3
Analysis:..........................................................................................................................................3
Context:........................................................................................................................................3
Theory:.........................................................................................................................................4
Strategic position:....................................................................................................................4
Strategic choice:.......................................................................................................................4
Competitive forces analysis:........................................................................................................4
Bargaining power of suppliers:................................................................................................4
Bargaining power of customers:..............................................................................................5
The threat of substitute products and services:........................................................................5
The threat of new entrants:......................................................................................................5
Competitive rivalry:.................................................................................................................5
PESTLE analysis:........................................................................................................................6
VRIO analysis:.............................................................................................................................8
Value:.......................................................................................................................................8
Rareness:..................................................................................................................................8
Imitability:...............................................................................................................................9
Organisation:............................................................................................................................9
Discussion:.................................................................................................................................10
Conclusion:....................................................................................................................................10
References:....................................................................................................................................11

3STRATEGIC POSITION AND STRATEGIC CHOICE
Introduction:
Strategic positioning and strategic choice are important for a business organisation to
achieve competitive advantage. Strategic positioning is the choice of a business organisation to
create value which will differentiate the company from its competitors. The strategic choice
indicates the decision, taken by the authority to determine its future strategy. This report aims to
analyse the European airline Ryanair by using competitive force analysis, PESTLE analysis and
VRIO analysis. By using the outcome of these analyses the authority of this company will fix its
strategic positioning and strategic choice.
Analysis:
Context:
The European Airline industry was badly affected by the 2008 economic crisis. This
industry is successful to maintain sustainable growth since 2014. The number of the traditional
scheduled flight and low-cost flights has enlarged since 2015. In 2017, the total number of low-
cost flights in this region was 3.03 million (Easa.europa.eu. 2018). The number of traditional
scheduled flight in 2017 was 4.87 million (Easa.europa.eu 2018). In comparison with 2005, it
can be said that in 2017 the number of passengers has increased by fifty per cent (Easa.europa.eu
2018). In 2017, among the share of total flights in the Airline category, the share of the low-cost
airline was 31.7 per cent (Easa.europa.eu 2018). According to the European Union Aviation
Safety Agency, the number of flights will be increased by 42 per cent between 2017 and 2040
(Easa.europa.eu 2018). Low-cost airlines connect more city in comparison with traditional
scheduled airlines. So it can be said that in future the demand for the low-cost airline will
increase. However, the airline of this industry has to follow environment-related rules and
regulation to do its business in the EU.
In 1984, Ryanair Airline was established. Headquarter of this business organisation is
located in Dublin, Ireland. Ryanair Dac, Buzz, Lauda and Malta are the parent company of
Ryanair Airline. More than 200 of destinations in 40 countries are connected by the Ryanair
Airline (Ryanair.com 2020). Michael O’Leary is the present CEO of this company (Ryanair.com
2020). The number of permanent employees of this organisation in 2019 was 18640 (Mazareanu
2020). The mission statement of a Ryanair Airline is “to offer low prices which can produce

4STRATEGIC POSITION AND STRATEGIC CHOICE
improved passenger traffic while maintaining a constant focus on cost containment and
efficiency operation”. “Making a world where passengers can fly for free” is the vision of this
company. According to the CEO of this organisation, this low-cost airline is the largest and
greenest airline in the EU. By following continuous upgrading and low fare service, this
company is interested to become the foremost scheduled passenger airline of Europe. The annual
revenue of Ryanair Airline in 2019 was approximately 7.7 billion euros (Statista 2020). In
comparison with 2013, the annual revenue of this organisation has increased by 37% (Statista
2020).
Theory:
Strategic position:
The influence of strategy on the internal resources, external business environment and
competences are analysed by strategic position (Guo, Wang and Wei 2018). Whether the
organisation can fulfil the interest of the stakeholder or not can be analysed through strategic
position. Strategic positioning can help a company to identify its strengths and weaknesses. It
allows the organisation to highlight certain areas which need modification to muscle out its
competitors (Lundgren-Henriksson 2017).
Strategic choice:
Strategic choice allows a company to identify its future strategies (Suh and Lee 2018). By
following this method, the authority of a firm can emphasise on alternative strategy, evaluates
the alternative factors, consider the selection factors and make the appropriate future strategy for
the firm, which will be beneficial the firm to gain competitive advantage (Yoo and Reed 2015).
Competitive forces analysis:
Competitive forces analysis will be useful to identify the attractiveness of the European
airline industry. It will help the authority of Ryanair to manage the competitive forces. By using
Porter’s five forces model, the competitive force analysis will be done. Porter’s five forces
analysis is used to understand the forces, which play is an effective role for competition in the
industry.

5STRATEGIC POSITION AND STRATEGIC CHOICE
Bargaining power of suppliers:
The suppliers of this organisation are Boeing, Airbus, and fuel supplier. The bargaining
power of Boeing and Airbus is high. As these two are main suppliers so it can be said that these
two suppliers are hard to replace (Caputo, Borbély and Dabic 2019). The bargaining power of
fuel suppliers is also high. Fuel is not only the largest operational cost for Ryanair but also the
primary raw material, without it, this organisation cannot operate. The bargaining power of
suppliers for Ryanair airline is high.
Bargaining power of customers:
The bargaining power of customer for Ryanair Airline is high. It can be said that the
level of customer loyalty or brand loyalty is not adequate for the low fare airline industry.
Customers of this industry prefer low fares. Any other business organisation, who can offer the
lowest fares, can attract the maximum number of customers. The switching cost for the
customers of this industry is almost zero. Competitors of the Ryanair Airline are interested to
curtail their operating costs and propose the lowest tariff to its customer.
The threat of substitute products and services:
The treat of substitutes for this organisation is low. There are several other substitutes
like train and buses in the European land. The fares for the train are not cheap. Besides that, it
takes several times to reach the destination. On the other hand, this organisation offers the lowest
fare and help the passenger to reach the destination at a minimum time. For this reason, the threat
of substitutes for Ryanair Airline is low.
The threat of new entrants:
The threat of new entrants for this organisation is low. The aviation industry one of the
most expensive industry to enter the new business organisation. Due to high entry barriers, it is
difficult for the new entrants to enter this industry and compete with this organisation (Caputo,
Borbély and Dabic 2019). The new entrants have to manage several areas such as economies of
scale, access to the distribution channel and the constant flow of capital. Ryanair is successful to
reduce its operational costs and propose the lowest tariff for its customer. It will be difficult for a
new business organisation to reduce the operation cost and offer the lowest tariff for the
customer of Europe.

6STRATEGIC POSITION AND STRATEGIC CHOICE
Competitive rivalry:
Competitive rivalry for this organisation is high. There are several low-cost airlines such
as Easy Jet, JetBlue, Virgin and several others who are operating in the same route, which is used
by Ryanair. Competitors of this organisation are interested to decrease the operation cost and
offer the lowest fare to its customers. To attract potential customers, competitors of this
organisation has started offering additional benefits.
High Moderate Low
Bargaining power of
suppliers
Bargaining power of
customers
The threat of
substitute products
and services
The threat of new
entrants
Competitive rivalry
PESTLE analysis:
Political factors  Political stability is necessary for this low-cost airline. Due
to the Brexit, the political stability of the EU is not in good
condition.
 Frequent terrorist attacks in Europe can be a problem for this
organisation.
 Because of the Brexit, the business environment of this
company will be changed. The market share will be reduced.
Economic factors  The price of fuel is very much fluctuating. It creates an
impact on the operation cost of Ryanair Airline.
 Post-Brexit the uncertainty in the European Union is
creating an adverse impact on the business of this company.

7STRATEGIC POSITION AND STRATEGIC CHOICE
 Due to COVID-19 pandemic, the aviation industry is facing
huge problems (Sweney 2020).
 Post-Brexit, taxation can affect the business of this low-cost
airline.
 To achieve a competitive advantage, the authority of
Ryanair Airline has invested in short-haul capacity, which
creates an adverse impact on the capacity growth of this
company.
Social factors  Though consumer prefers low fare yet they are interested to
get comfortable travel experience. As Ryanair is a low-cost
Airline, this company has to prioritise customer comfort
issues (Caputo, Borbély and Dabic 2019).
 Customer service plays a significant role to produce a
devoted consumer base by delivering the exclusive customer
experience. Ryanair Airline has been marked as the poorest
airline regarding customer satisfaction for the sixth
successive year (Topham 2019).
Technical factors  By implementing innovative technology, this company can
reduce the operation cost.
 To boost customer engagement, the marketing team of this
company can utilise social media platforms (Caputo,
Borbély and Dabic 2019).
 This organisation can utilise technology to provide customer
satisfaction.
 The online payment system can be introduced by this
company by using advanced technology. It can help this
company to enhance customer satisfaction (BBC News
2019).
Environmental factors  EU is very much concern about the environment-related
issue. That is the reason, the carbon footprint can create an
adverse impact on the business of this company (Caputo,

8STRATEGIC POSITION AND STRATEGIC CHOICE
Borbély and Dabic 2019).
 To follow the carbon emission regulation set by the EU, this
company has to invest a huge amount of money for technical
advancement.
 This organisation has to follow environment-related rules
and regulations. It will help this company to generate a
positive brand image in the market. To avoid any kind of
disruption from the government can be managed by this
initiative.
Legal factors  Post-Brexit, this company has to obey the rules and
guideline of the EU and the UK.
 Due to its bad customer service, this company has to face
legal problems.
 This company has received state aid at specific airports of
EU. For this, Ryanair has to face a lawsuit by the European
Commission (Caputo, Borbély and Dabic 2019).
VRIO analysis:
VRIO analysis, a strategic management tool, used by the management team of a business
organisation for strategic planning. It can help a business organisation to make effective business
decisions. This analysis is useful to identify resources and evaluate the significance of the
resources (Knott 2015). It will help a business organisation to utilise its resources appropriately
to gain competitive advantages. In this part, VRIO analysis will be done to identify the resources
of Ryanair Airline. It will help the senior executive of this company to utilise the resources
appropriately to gain a competitive advantage in an intensely competitive market.
Value:
This factor analyses the value of the resources. Whether the resources are valuable
enough to fulfil the interest of the customer, which is an important stakeholder of a business
organisation, or not is analysed through this factor. This organisation is successful to manage its
business operation and fulfil the interest of the customers. By providing the lowest fare this

9STRATEGIC POSITION AND STRATEGIC CHOICE
company attract a huge number of customers (Ahmed et al. 2019). So it can be said that this
company is successful to meet the expectations and needs of its most important stakeholder,
which is the customer.
Rareness:
Ryanair is successful to receive government subsidies and reduction of airport duties.
Competitors of this company are unable to receive these benefits. Easy Jet, which is the top
competitor of Ryanair do not have these resources. (Ahmed et al. 2019). So it can be said that by
utilising the government subsidies, and the reduction of airport fees, this company is gaining
competitive advantages. To receive these benefits, this company uses secondary routes. By
offering the lowest fare this company is successful to attract the customer. For its role to improve
the secondary airport, this company gets government subsidies. By bring maximum customers,
passengers and tourist, the Ryanair is helping the secondary airports to grow.
Imitability:
This company is successful to utilise its strengths to gain competitive advantages. To
muscle out its competitors, this company utilises its strengths and resources. By supporting the
secondary airport to grow, this company is getting the benefit of government subsidies. As this
company uses secondary airports. It can be said that this company has to pay low airport fees. It
helps the Ryanair Airline to decrease the cost of operation. To offer the lowest fare, this
company has to reduce its operation cost (Ahmed et al. 2019). With appropriate strategic
planning, this company is successful.
Organisation:
To attract potential customer by offering the lowest fare, this company uses its effective
operation strategy. An appropriate leadership helps this company to gain competitive advantages
in an intensely competitive market. Low-cost culture of this company is beneficial for the
management (Ahmed et al. 2019). For the new fleet, this organisation has financed a huge
amount of money. It will help this company to prove comfortable travel experience to its
customer. So it can be said that the organisation is itself a strength for Ryanair Airline. By
utilising these strengths, this company beat its competitors and enhance its market share.
Value Rarity Inimitability Organisation
Leadership Yes Yes Yes Yes

10STRATEGIC POSITION AND STRATEGIC CHOICE
Low-cost
culture
Yes No Yes Yes
New fleet Yes No No Yes
Government
subsidies
Yes Yes No Yes
Low-airport
fees
Yes Yes Yes Yes
Discussion:
In this part, the recommended strategic choice for Ryanair will be provided. It can be said
that the low-cost airline is successful to attract the customer by offering low fare. There are
certain recommendations which can be useful for Ryanair Airline to uphold its strategic position
in the European market.
 However, to attract maximum customer this organisation has to ensure customer
satisfaction. This organisation has to provide the best customer experience to create a
loyal customer base. That is the reason this company has to improve its customer service.
 To reduce the adverse impact of its business operation on the environment this company
has to implement technological improvement.
 The authority of this company should offer training and development programs for the
employees. It will help this company to maximise the efficiency of the human resource of
Ryanair Airline.
Conclusion:
Thus, this report concludes that Ryanair is successful to maintain its low-cost airline
business. However, due to Brexit and COVID-19 pandemic, the business of this organisation is
affected. This company can manage these disruptions by using an appropriate strategy. This
company has to improve its customer service to provide the best customer experience. It will
help this company to retain happy customers. So it can be said that by maintaining constant
development, appropriate leadership this company can muscle out its competitors.

11STRATEGIC POSITION AND STRATEGIC CHOICE