Strategic Position and Strategic Choice Analysis of Ryanair Airline

This report provides a comprehensive strategic analysis of Ryanair, a major European airline. It begins with an executive summary and an overview of the European airline industry and Ryanair. The report delves into the application of strategic position and strategic choice tools, including PESTEL and VRIO analyses, to assess Ryanair's competitive environment and internal capabilities. A competitive forces analysis determines the attractiveness of the European airline industry and how Ryanair should manage the competitive forces it faces. The PESTEL analysis develops a scenario analysis targeted at the year 2030, identifying the greatest threats and opportunities. VRIO analysis evaluates Ryanair's resources and capabilities. The report concludes with recommendations for strategic choices Ryanair should adopt to improve profitability, based on the preceding strategic position analysis. The report utilizes the case study of Ryanair: the low fares airline – ‘always getting better’ and applies relevant theoretical concepts to the real-world business scenario.

Strategic Position and Strategic Choice of European Airline Ryanair
By (Name)
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City and State
Date
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Executive Summary
Ryanair airline plays one of the most fundamental roles within the European airline since
it has been focused towards obtaining a vast range of objectives in order to make sure that the
needs of various customers are met within a reasonable time frame. Moreover, is one of the first
and largest budget airlines within the boundaries of Europe and has been in a position of
enjoying both growth and success across various markets (O’Higgins, 2014). Interestingly, the
airline has been able to fully depend on a low cost business model that has made it much easier
for its management department to apply fewer efforts when it comes to attracting customers from
different regions. This report will therefore be able to put focus on the strategic position and
strategic choice that is associated with Ryanair airline. Furthermore, this topic will be very
essential in terms of coming up with a reasonable understanding regarding the strategic positions
that this airline has been able to attach itself to in order to offer high levels of competitive
advantages by making sure that appropriate are reliable services are adequately delivered to all
its targeted customers (Dizkirici, Topal and Yaghi, 2016). At the same time, it will also help to
develop a clear understanding regarding some of the major decisions that the airline has decided
to put into its consideration in relation to its strategic choice in order to scale up to greater
heights where it can continue to increase its performance efficiency across different market
platforms. On the other hand, one of the major aim that is attached to this report is to come up
with a competitive forces analysis in order to adequately determine the level of attractiveness
that is attached to the European airline industry together with how Ryanair should be in a
position of adequately managing a vast range of competitive forces that it is capable of
encountering. It is also determined to find out some of the reasons as to why and how the
organization has been able to reach its current level of performance.
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Table of Contents
Strategic Position and Strategic Choice of European Airline Ryanair............................................3
Executive Summary.....................................................................................................................3
Introduction......................................................................................................................................4
Overview of the European Airline Industry and Ryanair................................................................5
An explanation and relevance of strategic position and strategic choice tools...............................6
PESTEL Analysis............................................................................................................................7
VRIO Analysis.................................................................................................................................8
Conclusion.......................................................................................................................................9
Recommendations..........................................................................................................................10
References......................................................................................................................................11
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Strategic Position and Strategic Choice of European Airline Ryanair
Introduction
The decisions of a firm to put a lot of focus in terms of how it serves is potential
customers and even go as far as competing against its rivals in a reasonable manner is normally
referred to as strategic positioning (Lordan et al., 2016). Additionally, in order to come up with a
more reliable strategic position within an organization, an organization normally focuses on
combining its undertaking of the entire competitive environment which is known to constitute of
the organization’s resources and capabilities, its current industry situations together with a vast
range of facts that are related to the entire macro environment (O’Higgins, 2014). On the other
hand, when an organization is dealing with strategic positioning, there is always the need to put a
lot of focus on various aspects of generic competitive strategies that the organization has been
able to select in relation to its own capabilities and also in response to a vast range of positions
that have been staked out already most so by its rivals existing within the industry (Barrett,
2016). An organization is also able to get a perfect opportunity of determining the kind of
customers to be served together with the amount that they are willing to pay in relation to the
services that are offered to them (Dziedzic and Warnock-Smith, 2016). To some extent, a strategic
position is also likely to include various decisions regarding the kind of geographic markets to
explore in order to reach out of various customers (Lopes, Ferraz and Rodrigues, 2016).
What is more important is that an organization’s strategic position should try as much as
possible to be unique in a vast range of ways to an extent that different competitors will not find
it easy to imitate what has already been implemented by the organization (Morrell, 2016). High
level of competitive advantage is always attained when a given firm is capable of attracting more
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customers and even going as far as making more profits compared to various rivals available in
the market platforms (Alderighi, Nicolini and Piga, 2016). Strategic choice on the other hand, is
always the ability to come up with a vast range of decisions that are likely to determine the future
strategy of any given firm. As a result, it provides an organization with an opportunity of being
able to determine an appropriate direction that it should follow towards implementing all the
intended goals and objectives (Koopmans and Lieshout, 2016). This topic is therefore essential
since it considers the strengths together with weaknesses of the airline and also goes an extra
mile to determine the needs of customers together with various markets and how different
competitors are positioned in across different markets. This report will therefore conduct a
PESTEL analysis of the European airline in order to come up with a scenario analysis that targets
the 2030. On the other hand, the report will also conduct a VRIO analysis which will help in the
determination of various resources and capabilities that are fully attached to Ryanair airline.
Finally, it will also be able to capture an advanced analysis of the airlines strategic position and
even go as far as informing a vast range of options that should be adequately adopted in order to
scale up its chances of making much profit across different customer segments.
Overview of the European Airline Industry and Ryanair
The European Airline industry consists of a lot of competitions where almost every
Airline is working hard to meet the expectations of different customers. As a result, they have
been able to come up with various favorable services that have extended to capture the attention
of various customers across different regions. Ryanair was majorly founded several years back in
1985 by the Ryan family. Moreover, it was mainly created with an intention of providing
scheduled passenger services that were to take place between Ireland and the United Kingdom
(Mason, Morrison, and Stockman, 2016). On the other hand, it was to emerge as an alternative to
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then airline monopoly which went by the name Aer Lingus. At its initial stages, Ryanair acted as
a full service carrier that was attached to two different seating classes. This made it to lease three
different types of aircraft. Irrespective of the growth that was being encountered in terms of
passenger volume, way back in 1990, the entire organization decided to dispose a five chief
executives. This was a dangerous decision that led towards the emergence of serious losses
within the company (O'Connell and Williams, 2016). Later on, its struggles to overcome various
challenges enabled the airline to be totally transformed where it emerged as Europe’s first low
fares that were basically build on a special airline from the Southwest. Moreover, this was when
the organization decided to incorporate a new team that was led by Michael Leary. In 1997,
Ryanair was able to float on the Dublin stock exchange where it is currently being quoted as the
Dublin together with London stock exchanges. Right after its makeover into the budget airline,
the entire organization never looked back thus this provided it with an opportunity of adding a
vast range of new bases, routes together with aircraft which were all geared towards making it to
achieve future goals and objectives within an appropriate time limit (Rosenberg Hansen and
Ferlie, 2016).
An explanation and relevance of various tools
Strategic position tools are normally a combination of various tools that are normally
implemented with an intention of identifying or evaluating a relevant set of data that is always
required to formulate a particular strategy (De La Fuente et al., 2016). As a result, these tools are
always relevant when it comes to the determination of strengths and weaknesses that are attached
to a given organization and also the needs of various customers, markets together with the
specific locations where the competitors are likely to exist (Fichert and Klophaus, 2016). Strategic
choice tools on the other hand, are also attached to a wide variety of positive outcomes. Firstly,
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they have the capability of increasing awareness regarding a specific targeted business
environment, strategic issues and also make an extra mile to cover various opportunities and
threats which further helps to scale down various risks that are normally involved when making
certain decisions. To some extent, they normally develop the capability of coming up with
various priorities most so in large and complex organizations by providing a reliable framework
that can be relied upon when it comes to dealing with various evaluation processes.
PESTEL Analysis
Political Analysis- If the passengers’ tax decides to skyrocket from the currently existing lower
rates, this will negatively impact the sales of ticket that is associated with the company (Zuidberg
and de Wit, 2016). Moreover, the UK government has been able to increase the tax several times
on both the long and short distance journeys that are made by the planes. This is a situation that
is likely to discourage various passengers most so the tourists. At the same time, the taxes
imposed on the short journeys can make people to prefer the use of other modes of transport like
the road transport (Albalate and Fageda, 2016).
Economic Analysis-Various economic issues like the increase in oil price normally impose a lot
of threats to the economy. A fall in oil price has the capability of adding marginal benefit to the
Ryanair. At the same time, the weakening of the pound was also able to lead towards the creation
of a strong barrier thus leading towards a negative impact.
Social Analysis- the British people have been able to show a lot of interests in terms of their
holiday travelling. This change in habit is likely to bring on board various influences that are
strongly based on both the long distance travelled. As a result, it is likely to contribute towards
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an increment in terms of the sales in a gradual manner since most of the lost cost flights appear
to b preferred by a huge number of United Kingdom passengers.
Technological Analysis- This modern generation is much interested in the use of internet most
so when it comes to matters pertaining social networking. The development of internet booking
facility for the airline has made it to become very competitive across different market platforms
thus going as far as eliminating travel passenger commissions.
Legal Analysis- As far as Brexit is concerned; Ryanair is likely to be expected to comply with a
vast range of regulations that are capable of being imposed by the UK government together with
the EU (Lopez-Valeiras, Gonzalez-Sanchez and Gomez-Conde, 2016). This will lead towards various
challenges being created for the airline company in terms of doing business with low cost
strategy
Environmental Analysis- Carbon footprint has emerged to be an alarming point of
concentration (Tobisová, 2017). As a result, this might lead towards various restrictions on various
aspects of carbon emissions from the EU thus leading towards the emergence of many problems
in terms of conducting various operations for the airline companies.
VRIO Analysis
Valuable- The resources that are provided by the airline are very valuable since they have the
capability of meeting the expectations of nearly every customer. The organization has been able
to outsource some of its resources most so the ones that are not able to bring any value to the
organization.
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Rare- What is more unique about Ryanair is that a vast range of its resources appear to be rare to
an extent that they can only be acquired by few companies. As a result, the management has also
been on the verge of posing a vast range of resources where most of them have always been
valuable and rare across different markets.
Imitable-A good percentage of the organization’s resources are very hard and costly to imitate
most so by the competitors who are capable of existing within the market platforms. This has
provided the airline with an opportunity of being competitive. They all tend to be having some
form of unique historical conditions that makes them very hard to imitate at any given point.
Organization wide supported- Without the company being organized, the resources will not
appear to be of any added value. It is known to be constituting of an organized organization that
aims towards attaining, using and monitoring a vast range of resources that are always involved
when dealing with various processes.
As far as the above information is concerned, the organization should be able to put itself in
a strategic position where it will be able to meet a vast range of objectives within the shortest
time possible. It needs to deal with quite a number of rare resources that cannot be easily
imitated by the competitors. Through this, it will be able to carry out all its operations in a unique
way thus making it to be easily distinguished from the other organizations. At the same time,
Ryanair also needs to put a lot of investment on technological advancements which will further
ease various operations by providing an opportunity of operating towards the direction of all the
intended goals.
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Conclusion
Aforementioned, one of the major aim that is attached to this report is to come up with a
competitive forces analysis in order to adequately determine the level of attractiveness that is
attached to the European airline industry together with how Ryanair should be in a position of
adequately managing a vast range of competitive forces that it is capable of encountering. It is
also determined to find out some of the reasons as to why and how the organization has been
able to reach its current level of performance. According to the findings, it is clear that Ryanair is
strategically positioned under various circumstances and due to this; it has been able to create
strong bonds with the customers by providing them with the right services that they need. One of
the major limitations that are associated with this report is inadequate time frame to carry out a
wide research regarding Ryanair airline.
Recommendations
 Overhead reduction
 Implementation of an increased conversion rate
 A review of the latest pricing structure
 Search for new customers in various market platforms
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References
Albalate, D. and Fageda, X., 2016. High speed rail and tourism: Empirical evidence from Spain.
Transportation Research Part A: Policy and Practice, 85, pp.174-185.
Alderighi, M., Nicolini, M. and Piga, C.A., 2016. Targeting leisure and business passengers with
unsegmented pricing. Tourism Management, 54, pp.502-512.
Barrett, S.D., 2016. Ryanair and the Low-cost Revolution. In Air Transport in the 21st
Century (pp. 163-178).
De La Fuente, S., Fernandez-Sanz, C., Vail, C., Agra, E.J., Holmstrom, K., Sun, J.,
Mishra, J., Williams, D., Finkel, T., Murphy, E. and Joseph, S.K., 2016. Strategic
positioning and biased activity of the mitochondrial calcium uniporter in cardiac muscle.
Journal of Biological Chemistry, 291(44), pp.23343-23362.
Dizkirici, A.S., Topal, B. and Yaghi, H., 2016. Analyzing The Relationship Between Profitability
and Traditional Ratios: Major Airline Companies Sample (Karlilik ve Geleneksel Oranlar
Arasindaki Iliskinin Incelenmesi: Büyük Havayolu Sirketleri Örnegi) 1. Journal of Accounting,
Finance and Auditing Studies, 2(2), p.96.
Dziedzic, M. and Warnock-Smith, D., 2016. The role of secondary airports for today's low-cost
carrier business models: The European case. Research in transportation business & management,
21, pp.19-32.
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Fichert, F. and Klophaus, R., 2016. Self-connecting, codesharing and hubbing among European
LCCs: From point-to-point to connections?. Research in transportation business & management,
21, pp.94-98.
Koopmans, C. and Lieshout, R., 2016. Airline cost changes: To what extent are they passed
through to the passenger?. Journal of Air Transport Management, 53, pp.1-11.
Lopes, I.T., Ferraz, D.P. and Rodrigues, A.M.G., 2016. The drivers of profitability in the top 30
major airlines worldwide. Measuring Business Excellence.
Lopez-Valeiras, E., Gonzalez-Sanchez, M.B. and Gomez-Conde, J., 2016. The effects of the
interactive use of management control systems on process and organizational innovation. Review
of Managerial Science, 10(3), pp.487-510.
Lordan, O., Sallan, J.M., Escorihuela, N. and Gonzalez-Prieto, D., 2016. Robustness of airline
route networks. Physica A: Statistical Mechanics and its Applications, 445, pp.18-26.
Mason, K., Morrison, W.G. and Stockman, I., 2016. Liberalization of air transport in Europe and
the evolution of ‘low-cost’airlines. Liberalization in Aviation: Competition, Cooperation and
Public Policy, 141.
Morrell, P., 2016. Airport competition and network access: A European perspective. In Airport
Competition (pp. 31-46).
O’Higgins, E. 2014. Ryanair: the low fares airline – ‘always getting better’? case study
O'Connell, J.F. and Williams, G., 2016. Ancillary revenues: The new trend in strategic airline
marketing. In Air Transport in the 21st Century (pp. 195-220).
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Rosenberg Hansen, J. and Ferlie, E., 2016. Applying strategic management theories in
public sector organizations: Developing a Typology. Public Management Review, 18(1),
pp.1-19.
Tobisová, A., Rozenberg, R., Vagner, J. and Jenčová, E., 2017, September. Social network
applicability in air transport. In Transport Means-Proceedings of the International Conference
(pp. 1040-1044)
Zuidberg, J. and de Wit, J., 2016. What makes the difference between a low-cost carrier airport
and a low-cost carrier base?. Research in transportation business & management, 21, pp.11-18.
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Appendix
Appendix 1: PESTEL Analysis diagram
As far as the above analysis is concerned, it provides a clears description of various macro forces
that are surrounding the entire organization. As a result, these forces are capable of determining the way
the organization is able to conduct its operations across various regions. In constitutes of both positive
and negative factors whose presence will affect the organization either in a positive or negative way.
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PESTEL ANALYSIS
ECONOMIC
Increase in oil price
POLITICAL
Increase in tax rate
LEGAL
Brexit Laws
ENVIRONMENTAL
Carbon footprints
TECHNOLOGICAL
Internet Booking
SOCIAL
Holiday travelling

Appendix 2: VRIO Analysis
Yes Yes Yes
No No No No
This technique is very brilliant when it comes to the evaluation of various resources that are fully attached
to the whole organization thereby making sure that it is capable of bringing some conditions of
competitive advantage within the organization’s environment. What is important about this mode of
analysis is that it has the potential of capturing the organization’s visions towards a given direction.
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Valuable Rare Imitable Organized
Competitive
disadvantage Competitive parity Competitive advantage
that is temporary
Competitive
advantage that is not
used