Strategic Management Report on Ryanair

This report critically analyzes Ryanair's sustainability strategy and competitive position in the UK aviation market. It discusses the impact of current changes on Ryanair's operations and evaluates the effectiveness of its low-cost business model. The report also highlights the importance of strategic management frameworks in assessing Ryanair's performance and future prospects.

STRATEGIC
MANAGEMENT

Table of Contents
INTRODUCTION...........................................................................................................................3
MAIN BODY...................................................................................................................................3
Ryanair's strategy.........................................................................................................................3
Key issues that could affect Ryanair's strategy............................................................................4
Current changes and Ryanair's step towards sustainability.........................................................4
Measuring strategy sustainability:...............................................................................................6
Ryanair's strategy towards sustainability:....................................................................................6
Analysis of competitive position:................................................................................................7
CONCLUSION................................................................................................................................9
REFERENCES................................................................................................................................1

INTRODUCTION
Sustainability is one of the major concern of today's economy. Sustainability is not only
concerned with the concept of environment but it also includes the concept of economic and
social sustainability. Thus, every company have to make strategies and adopt different
frameworks in order to ensure sustainability. This report will study about the concept of
sustainability and Ryanair's strategies towards maintaining sustainability. This project will also
highlight about various strategies and framework which are adopted by Ryanair towards
measuring its competitive position in market.
MAIN BODY
Sustainability:
It is one of the important term which focus on the concept of efficiently using the natural
resources in such a way that it will meet the current need of people along with keeping the
resources left for meeting the future need (Moore, 2017). Since, resources are scare so it is very
essential that it will be used effectively in order to prevent them for future generation.
Ryanair's strategy
Ryanair is one of the famous and cost effective airline of Europe. It offers its airline
services at a very nominal prices. It is one of the most using and people's wanted airline which
also provides connectivity at shorter distances also. It is not only famous among local passengers
but it is also equally famous among business class. This is because of its services in the form of
providing connectivity for short distances. Ryanair's main strategy is to ease the airline services
and providing cost effective services. It also works on the strategy of expanding its services in
the form of covering all the cities and countries across the globe.
It work on the strategy of making payment to its employees on the basis of number of
sales they will make. This will not only help the employees to raise their productivity and
earning but through this practice Ryanair also trying to acquire more and more customers
towards it. Ryanair mainly work on the policy of reducing its cost in order to raise the profits.
Digitalization or online services adopted by Ryanair is also one of the important cost saving
practice of it. This service have not only helps the passengers in terms of raising comforts but it
is also a major step of Ryanair towards sustainability.

Key issues that could affect Ryanair's strategy
Raising prices of fuel:
It is one of the important key issues that could affect its strategy. Since resources are
scare and due to less availability of resources and continuous fluctuation in the prices of fuel can
have a major impact over the strategy of Ryanair in terms of availing the airline services at low
cost (Brueckner and Abreu, 2017).
Difference in currency value:
Since, headquarter of Ryanair is in Ireland with a reporting currency of euro. Thus, it
become very difficult for Ryanair when it operates its function in more than one country. As the
main strategy of Ryanair is to raise its business operations into different countries. But due to
difference in the exchange value of currency it becomes a major issue for Ryanair to perform its
function in addition to buying the raw material at high prices due to difference in exchange
value.
Raising operating cost:
It is also considered as major issue for Ryanair because a high operating cost is directly
affecting its strategy in the form of availing services at low cost for customers. Since due to
changing environment and trends it becomes very essential for Ryanair to adopt and act as per
changes. For adopting such changes Ryanair is continuously taking initiatives in the form of
raising comfort, making availability of boing with better facilities, enhancing digitalizations and
many more. On the one hand it raises its services but at the same time it is also increasing its
operating cost which is directly affecting its strategies.
Meeting legal environment:
This is one of the major issue for Ryanair because since it serves its services in more than
countries thus it becomes very essential for Ryanair to act as per the legal environment of every
operating country (Mersch, 2018). As changes are continuously taking place in the legal
environment which create a major issue if it will not comply its operations accordingly.
Current changes and Ryanair's step towards sustainability
There are various changes taking place in the environment and business environment.
This changes are very essential to be study for running the operations of the business. These
changes can be understood as:

Political changes:
It refers to the changes regarding rules and policies of the country. This changes covers
all those changes which are taken by government of the country and have significant impact over
the business (Shtal, 2018). Meeting all those changes by Ryanair will lead to its social
sustainability in the form of raising its image among other competitor.
Economic changes:
This includes all those changes in the form of interest rate, economic conditions, tax rate,
employment rate and various other. Due to current changes in economic factors in the form of
raising unemployment due to Covid situation, Ryanair's strategy towards providing its services at
low cost would be considered as a step towards sustainability.
Social changes:
It refers to all those changes which are concerned with customers. This basically includes
changes in trends, taste and preferences and many more. Ryanair's step towards providing
comfortable services with low emission of carbon dioxide is will not only helps it in raising
economic sustainability but it also enhances environmental sustainability.
Changing technology:
These include technological changes in the form of change in technology or up-gradation
of technology. Using of the latest technology low emission of harmful gases is considered as an
important step of Ryanair towards sustainability.
Legal changes:
Since the rules and regulations of every country is very different. Thus, this factor
includes all those rules and regulations which are required to be followed by every company for
running their business. Working within the legal framework will raises social sustainability of
Ryanair.
Environmental changes:
Changes in environment in the form of climate, weather, ecology and various others are
included in this factor. Since Ryanair adopts all those practices by which it will continue its
services without harming the environment is taken as a step of Ryanair towards environmental
sustainability (Yusop, 2018).

Measuring strategy sustainability:
To measure sustainability of Ryanair's strategy KPI (Key Performance Indicators) is
considered as one of the important tool. KPI refers to a set of elements which is used to measure
the performance of companies. This performance can be considered as a base for measuring the
efforts of companies in terms of sustainability. This tool in addition to measuring sustainability,
it will also suggest any improvement methods that Ryanair can adopt for further development of
sustainability. This tool also help the companies to compare their performance with other
companies working in the same sector.
Ryanair's strategy towards sustainability:
Ryanair always works on the principle of fulfilling the elements of KPI to ensure
sustainability. Since, KPI consist of various elements, out of them some are:
Carbon footprint:
It refers to the amount of harmful gases or greenhouse gases that could be generated by
business operations of the company. It is one of the best indicator for measuring sustainability
because this element has direct impact over the environment or the natural environment. Since,
Ryanair always take steps to reduce the emission of carbon dioxide emission while carrying out
its operations (Zheng and Suh, 2019). And as a result of those efforts Ryanair is counted as one
of the most efficient airlines in terms of sustainability because of very low or just half emission
of carbon dioxide in comparison of other airlines.
Waste recycling rate:
It is a indicator that rate which shows the company capacity in term so recycling the
waste or using those products that can be recycled and will not harm the environment. As
Ryanair's main aim is to reduce the use of plastic in its airlines and thereby considered as a major
step towards sustainability (Beydoun and Klankermayer, 2020). Ryanair's steps towards saving
environment shows its efficiency towards high sustainability.
Energy consumption:
Since, Ryanair works on the policy of becoming plastic free with the aim of becoming
world's greenest airlines. It operates its business from point-to-point path which helps it in

reducing the consumption of energy along with reducing the emission of carbon dioxide in the
environment.
Thus, fulfilling almost all the elements of KPI it would be right to said that the Ryanair is
not only meeting its strategies of providing low cost flights but also paying a major contribution
towards sustainability.
Analysis of competitive position:
It is a way by which companies can identify the potential competitors which could affect
their business. Analysing the competitive position is very essential for companies. Analysing of
competition helps the companies to know the strengths and weakness of other competitors
companies. This will ultimately help the companies in formulate their own plans and strategies.
Ryanair by adopting various frameworks can analyse the competitive position:
Porter's five force model:
This model helps the Ryanair to analyse the competition in the market. By analysing the
competition Ryanair can frame its strategies accordingly that it can easily meet the competition
in addition of knowing the intensity of competition.
Supplier's power:
It refers to the power of suppliers in terms of affecting the business of companies due to
raising the prices of raw material. This power is also depends upon the number of suppliers
(Helmold, 2019). In case of Ryanair supplier's power is of high intensity. This is because a small
shift of Ryanair towards suppliers may involves a huge amount of cost which could affect its
business severely.
Bargaining power of customers:
Since every customer wants to avail best services but at lowest possible price. Thus, the
intensity of this force is also high in case of Ryanair because a small variation in price may shift
its entire customer share to some other competitor. As Ryanair is one of the company who
provides its services at low cost but if any company will start providing services with a slight
variation or with slightly low cost then this will causes a serious impact over Ryanair in terms of
loosing its customers.
Threat of substitutes:

A substitute is that product which also offers the same values as that of original product.
In case of Ryanair this force has low intensity. This is because of the existence of various means
of transportation including trains, buses, personal vehicles. Since the prices of Ryanair is
competitively low in comparison of the prices of trains thus it has very less intensity that
substitutes can affect its business.
Threat of new entrants:
The industry in which Ryanair deals is one of the expensive industry. Thus, it becomes
very difficult for other companies to enter into this trade and raises the competition for Ryanair.
Thus, the intensity of this force for Ryanair is low which could not affect its business.
Competitive rivalry:
This refers to the level of existing competition in the market which is brought up by well-
known companies (Goyal, 2020). In case of Ryanair this force has very high intensity. This is
because there are many well-known airline companies which are offering low cost services to the
customers. Since every company wants to raise its sale by meeting more and more customers.
Thus, providing the services at low cost is one of the common policy adopted by many
companies. Hence, this force has major impact over the Ryanair.
Porter's generic
This models help the company to follow competitive advantage in the market or industry
in which the company is operating. There are four steps involved in the porter's generic model,
which states that by using any one of them company can take the competitive edge and give
tough competition to others.
Cost leadership
Ryanair wants to become the cheapest-cost producer in the aviation industry. The cost
leadership strategy of this company is, they want to provide their services at lower cost because
they believe that by offering cheap prices they can capture the large part of the market. By
offering cheap fares Ryanair can attract more customers (Firoz and et.al, 2019). Cost leadership
is the biggest strength of Ryanair to pull down the sales and profit of its competitors. The
thought behind using cost leadership is that when the competitors try to cut the prices of Ryanair,
the company will give tough competition to them and try to match the prices set by its
competitors. The reason behind using this strategy is the company believes that by implementing
low fare they can rule the market and this is the basic principle of Ryanair to lead the market.

Differentiation
Differentiation strategy of Ryanair is that they give more focus on punctuality and
providing best services to the customer which makes the company different from its competitors.
Ryanair is providing various discount voucher on internet booking to the customers, apart from
this company try to remove middleman, agents, travel agent and operates so that customers don't
have to pay any kind of extra cost in the form of commission and fee to these agents. These are
the strategy which differentiate Ryanair from its competitors. In the economic crises and
turnover Ryanair don't take high prices from the customer even though it is operating in highly
competitive market. So these things make this company different from others.
Cost focus
Ryanair has become a lowest and cheapest cost airline of Europe and attracting many
customers in a day (Porter's Model of Generic Strategies for Competitive Advantage, 2020). To
reduce the cost company is not providing any paper ticket they provide e-mail or by message so
that company can save extra cost. Apart from this company is not providing meal to those
passengers who are taking the flight for short route so that company can earn profit and remain
competitive in the market. Due to focusing on cost, Ryanair can touch the next level of market
by beating the name and famed airline companies.
Differentiation focus
By implementing differentiation focus strategy, Ryanair wants to capture the entire
market of its home town. As the company has trust of people and knows that customer will not
get such cheaper prices on the booking of airline and these things differentiate Ryanair from
other airline companies. By following this strategy it is trying to beat the British airways. By
following differentiation strategy company is focusing to increase the number of flights for
different routes so that this company becomes the first choice of passengers specially in Europe.
CONCLUSION
From the above report it is concluded that it is very essential that the concept of sustainability
will be adopted by companies so that resources will never be over utilized. Using the resources
effectively will not only help the companies in meeting their objectives but it will also act as
contributing step towards meeting the future generation needs. It is also understood that it is very
essential, that companies should adopt the appropriate steps for fulfilling the concept of
sustainability. However contrary to this, analysing the competitive position by companies will

helps them in knowing their own position in the competitive market. Along with knowing their
own position, companies by adopting different frameworks can also analyse the other companies
policies towards sustainability and business operations.

REFERENCES
Books and journals
Beydoun, K. and Klankermayer, J., 2020. Efficient Plastic Waste Recycling to Value‐Added
Products by Integrated Biomass Processing. ChemSusChem.13(3). pp.488-492.
Brueckner, J.K. and Abreu, C., 2017. Airline fuel usage and carbon emissions: Determining
factors. Journal of Air Transport Management, 62, pp.10-17.
Firoz and et.al, 2019. The applicability of Porter's generic strategies in pure online firms: A
case study approach. Strategic Change.28(3). pp.167-176.
Goyal, A., 2020. A Critical Analysis of Porter’s 5 Forces Model of Competitive Advantage.
Helmold, M., 2019. Tools in PM. In Progress in Performance Management (pp. 111-122).
Springer, Cham.
Mersch, Y., 2018. Legal analysis in a changing environment. Chapter II—Legal developments in
the ESCB central banking functions 109, p.110.
Moore, and et.al., 2017. Developing a comprehensive definition of
sustainability. Implementation Science.12(1). pp.1-8.
Shtal, and et.al., 2018. Methods of analysis of the external environment of business activities.
Yusop, Z.B.M., 2018. PESTEL analysis. COMRAP 2018, p.34.
Zheng, J. and Suh, S., 2019. Strategies to reduce the global carbon footprint of plastics. Nature
Climate Change.9(5). pp.374-378.
Online
Porter's Model of Generic Strategies for Competitive Advantage., 2020 [online]. Available
through: <https://www.tutor2u.net/business/reference/porters-generic-strategies-for-
competitive-advantage>
1

2