Case Study Report: Strategic Analysis of Ryanair's Business

This case study report provides a comprehensive strategic analysis of Ryanair, examining its external environment and industry dynamics. The report begins with an introduction and an overview of Ryanair's history, highlighting its growth from a small airline to a major player in the European market. The core of the analysis involves the application of various theoretical models, including PESTEL, SWOT, and Porter's Five Forces, to assess the political, economic, social, technological, legal, and environmental factors influencing Ryanair's operations. The SWOT analysis identifies Ryanair's strengths, weaknesses, opportunities, and threats, while Porter's Five Forces model evaluates the competitive intensity within the airline industry. The report also discusses critical issues such as cost management, customer service, and human resource strategies, offering recommendations for improvement and concluding with a summary of key findings and management implications. The analysis emphasizes the importance of adapting to external factors, maintaining a low-cost strategy, and leveraging technological advancements to sustain competitive advantage.

Case Study Report: Ryanair1
CASE STUDY REPORT: RYANAIR
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Case Study Report: Ryanair2
CASE STUDY REPORT: RYANAIR
Introduction
Business entities are influenced by various factors, both internal and external factors.
With regards to this, multiple theories and hypotheses have been developed to help explain these
effects. The content of this paper is, therefore, a case study strategic analysis and evaluation of
the external environment of Ryanair as well as the general industry.
To begin with, I have conducted a critical external analysis of the company to figure out
various factors that are critical to the organization. To follow, I have done external
environmental scanning of the organization to identify how multiple factors influence business
operations. However, to successfully identify the influence of these factors, various theoretical
and company analysis models have been used, such as SWOT analysis tool, PESTEL tool
analysis and PORTERS five forces model for Ryanair analysis.
Overview of the company
The company in question Ryanair, was first established in the year 1985 and had 57
employees working to support a 15 seated turboprop plane. The plane moved from south-east
Ireland to London. The company also had a Gatwick plane which carried 5000 passengers on the
same route (Caputo and Borbely 2016). The company expanded over the years ending up
beating theor British airline. As a result of the expansion, the organization was able to expand its
workers from 57 to 130 employees in 1989. Further, the company acquired a larger plane with a
capacity of 83,000 passengers; thus, in the year 1990 had a maximum number of 350 employees
and 700,000 passengers (Barrett 2016).

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In as much as Ryanair kept expanding, it experienced financial losses due to poor cost
management. However, a new management team was brought in to take over the running of the
company leading to the organization purchasing their first Boeing 737 aircraft. The plane had a
more substantial capacity and carried over 1.5million passengers becoming the biggest carrier
aircraft in Dublin- London route as well as the most significant Irish plane on almost every route
(Shaw et al. 2019.). Ryanair was given authority by EU to operate in Europe, thus achieving
3million passengers annually operating on 18routes within continental Europe. The company
has expanded in Europe and according to the current data, the company has 1500 employees,
operates on 60 routes and have over 10million passengers annually (Gummesson 2017). The
company has also acquired Boeing 150, Boeing737-800 series aircraft currently the company has
web accounts for passengers booking.
Application of Theories, Models and Analysis of Ryanair
PESTLES Analysis
A PESTLES analysis is one of the most appropriate tools used to assess the influence of
various environmental issues affecting the organization (Young and Ghoshal 2016). The tool
summaries various factors that affect and also create opportunities or may even be a threat to
Ryanair’s business operation.

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Political
To begin with, the operation of the company is profoundly affected by the political
institution. For instance, EU laws and regulations which stipulate various restriction in the airline
industry has multiple effects on the operations strategies of the organization (Fleisher and
Bensoussan 2015). The following are some of the political and legal factors that influence
Ryanair operation:
 The objection of noise and runways building by local councils
 Various countries of their services supporting their flagship carriers
 Government concerns towards increasing tourism positively affect Ryanair
operation
 Changing government policies regarding airline regulation dealing with regarding
airports

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Economic
With regards to economic factors, the organization focuses on operating cost
minimization through secondary airports use and deals. The firm, therefore, has been able over
the past to minimize extra costs charged when operating in primary airports. Thus over the past
few years, Ryanair has been regarded as an economic downturn company and one that can offer
services to their clients at lower prices compared to other airline companies (Majid and Firdaus
2017). However, the change in fuel prices also affects the company's operations. The following
are economic forces influencing the company’s operations.
 Fuel and energy price fluctuations
 Economic instability and changes in various countries that the company planes fly
over may lead to the opening of new routes for example war in Iraq means the
costly opening of new routes
Social
Another factor within the external environment that influences Ryanair's operations is the
social aspect. Notably, most of the social customers have a perception that the company offer
poor services due to lack of refunds for cancelled flights. Another factor that the organization
should consider is the working condition and adverts, which may have a negative perception
among the customers (Litavniece and Znotiņa 2015). Some of the identified social factors that
the company should not ignore due to their potential impact on consumers include:
 Controversial adverts and lack of refunds for the cancelled flights
 Customers’ perception with regards to working condition within the organization

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Technology
The company is technologically wise and has demonstrated that technology is the key to
success. The company has, therefore, come up with online web booking, onboard Wi-Fi as well
as TV connection and computers for VIP. These can increase the number of customers as well
as more revenue moreover the company also has online check-in and self-service checkouts.
 Video conferencing threat
 Utilization of modern innovations such as Self-service online check-in and
checkouts
Legal
Ryanair over the past has been having various legal issues with the Dublin and Stansted
airport legal requirements. Other factors that have been challenging the company operations
include labour laws, poor working penalties as well as a misleading advertisement which have
attracted series penalties, thus affecting company operation.
 Labour laws and regulation
 Advertisement laws
 And compensation issues
External
Eternally the pilot union over the past have contested poor working conditions within the
company, thus affecting operations. The firms also experience stiff competition from airline

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companies and must concur with environmental requirements against emissions. Therefore the
following are major external factors affecting Ryanair's operations.
 EU pilot association demands
 Environmental regulation regarding emissions
 Labour unions demands
SWOT Analysis
SWOT analysis is another tool that can be used to assess the operation and factors that
influences operations. Through this, the tool summary of Ryanair's resource-based view is
presented (Litavniece And Znotiņa 2015). Therefore, Ryanair's strengths, weaknesses,
opportunities, as well as threats, are as below:
Strengths:
Following the company analysis, the fowling factors are the strength of the organization.
As a result of these factors, the company has been able to beat other firms up the ladder and
remaining competitive.
 The company has an effective marketing strategy based on well-established
brands and the aggressive price mechanism.
 The company also has over the past, established itself through reports and
magazines as the most efficient airline.
 Use of airport deals thus low cost and most significant budget Airline Company

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 Moreover, the company has also a more comprehensive reputation and publicity
as a result of the controversial issues created by O’Leary. The company has therefore used this
publicity to its advantage.
Weaknesses:
In as much as the company has stepped air transport ladder, various factors can be noted
to be its weaknesses. The fowling are some of the factors that can be classified as a weakness to
the firm.
 Notably, the company's success is built upon two significant pillars; the European
airline market that is low cost and O'Leary, who is the CEO.
 The company culture establishes a weak link and relation with the employees, and
this may affect its operations.
 The company's shock profit warnings utilized cash reserves, thereby weakening
the organization's fiscal structure.
Opportunities
The company has various opportunities whose exploitation can move the organization to
another step. These opportunities include:
 Development of planes with large capacities is an opportunity for the company.
 Developing technologies offer opportunities for website advertisements and easy
booking or access to Ryanair's services.
Threats:

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In as much as the organization has various opportunities to exploit, the organization is
faced with various threats as below.
 The company faces a threat of competition from various firms such as BMI Baby,
ThonsonFly and Easyjet.
 The company came up with a policy that could have led to monopolization in the
industry, and this is a threat as government regulation bares them from doing so.
 Another evident threat is the fluctuations in the prices of fuel.
Competitive Analysis of the Organization
Porter’s five forces analysis
The above models provide a theoretical framework for industrial attractiveness analysis
on a given industry, giving clarity to the competitive forces (Young and Ghoshal 2016).
Therefore I have utilized this framework to analyze whether the organization in question is
attractive.

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Entry threat
The threat to entry is low. The industry with low fares set by an organization such as
Ryanair makes it difficult for new firms to enter. As a result, any new firm entering the industry,
must have significant capital which may not be easy to acquire.
Substitute’s threats
The threat of substitutes is low. This is because the services of this manner can only be
offered by sea transport or car rental firms which are very expensive. However, electric trains
which are currently being established all across Europe seems to be a threat. Luckily, the electric
trains have not been established everywhere, and the remaining rail networks are very slow
(Gummesson 2017).
Customers’ bargaining power
The customers or buyers bargaining power is high. Ryanair has adopted the strategy of
cost leadership through airport deals, and thus, each customer is highly valued. However, all the
companies are currently utilizing the same approach by offering cheap prices meaning that
customers have high bargaining power.
Suppliers’ bargaining power
The suppliers bargaining power is high. There are only two aircraft suppliers in the
industry that is the Boeing and Airbus. The two companies compete for top changing techniques,
which means that the company must train its pilots at a higher cost too much the standards set by
aircraft manufactures.
Level of competition

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The degree of rivalry between Ryanair and other firms within the same industry is at a
middle level. This comes as a result of the evidence of future growth in the airline business and
on the fact that all its competitors are currently able to adopt cost leadership technique.
Critical Issues (key findings and management issues )
The company has faced problems associated with cost structures, which is a management
issue. Another critical issue is how to maintain the low-cost strategy which has placed the
company as the second best and first low-cost airline in the UK (Madhavaram, Hunt and Bicen
2017). Another is minimum standard services, and poor working condition, which comes as a
result of the firms focus on cost reduction and profitability. From the analysis the industry, it is
also evident that the management of the company has poor human resource strategies which they
should change as they have a culture of not taking care of their employees’ welfare.
Recommendation and Conclusion
Even though, the current strategy employed by the organization has proven to be
working, the organization faces various threats and issues as identified above. It is therefore
recommended for Ryanair to focus on cargo and time, which are their important tools for
competitors as they are likely to lose travellers in case these are changed. Another
recommendation is technological and advancement through research and innovations, which is
also a competitive tool for the coming future.

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References
Barrett, S.D. (2016). Ryanair and the Low-cost Revolution. In Air Transport in the 21st
Century (pp. 163-178). Routledge.
Caputo, A. and Borbely, A. (2016). The firm’s strategy and its negotiation capability: the
Ryanair case (pp. 16-18). Routledge.
Fleisher, C.S. and Bensoussan, B.E. (2015). Business and competitive analysis: effective
application of new and classic methods (pp. 50-85). FT Press.
Gummesson, E. (2017). Case theory in business and management: reinventing case study
research. (pp. 60-78) Sage.
Litavniece, L. And Znotiņa, D. (2015). External Business Environment Problems And
Opportunities In Rezekne City. Latgale national Economy research. Journal of Social Sciences.
Research papers, pp.107-119.
Madhavaram, S., Hunt, S.D. and Bicen, P. (2017, May). The FREE (Firm Resources and
External Environment) Framework as an Alternative to SWOT: An Abstract. In Academy of
Marketing Science Annual Conference (pp. 49-49). Springer, Cham.