MNG93002: Strategic Position Analysis of Ryanair Airline

This report provides a comprehensive strategic position analysis of Ryanair, a major European low-cost airline. It utilizes various strategic tools, including PESTEL, Porter's Five Forces, and VRIO frameworks, to evaluate the external environment, competitive forces, and internal capabilities of the airline. The analysis includes a scenario analysis for the year 2030, identifying potential threats and opportunities. Furthermore, the report examines the bargaining power of buyers and suppliers, the threat of substitutes, competitive rivalry, and the threat of new entrants within the airline industry. The VRIO analysis assesses Ryanair's resources and capabilities. Based on the strategic position analysis, the report offers strategic choices and recommendations for Ryanair to improve its chances of sustained profitability and success in the competitive aviation market. The report highlights the importance of adapting to changing economic, political, social, technological, environmental, and legal factors. The report also addresses the impact of Brexit and other external factors on Ryanair's operations and future prospects.

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Strategic Position
Name of the Student
Name of the University
Author Note

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Executive summary
This paper aims at the strategic position analysis of the Ryanair that is one of the largest low cost
airlines of Europe. The paper further puts light on the strategic choice of the airline company
having used the tools such as PESTEL, PORTER’ and VRIO. These tools help in elaborating on
the external and the competitive factors along with the capability of the company in standing still
against the potential rivals. The report also presents few recommendations so that the company
can be equally successful in the coming days too.

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Introduction
The strategic position deals with the impact of external environment, the expectations and
the stakeholder influences the internal resources on the competencies on the strategy of an
organization. In short, it is a consideration of the environment, the expectations, the strategic
capability within the cultural and political framework. This provides the foundation for
understanding the organization’ strategic position. It is quite significant to take into account it
about the future and then assess whether the recent strategy is that much suitable for the
organizations’ strategic position or not. When it is not, the organization should determine what
the changes that are required for making are and whether it is that much capable of affecting the
changes. As a summary, the strategic position then forms such an integral part of the whole
process of strategic management that it further informs the strategic selections which need to be
made and then implemented subsequently.
There are many tools through which the strategic position of an organization can be
known such as PESTEL analysis the Portal analysis, the VRIO framework and many others. The
resulting information should be used by an organization effectively and it should be debated,
discussed and then showed that the implication is understood properly (Roelens, Steenacker and
Poels 2019). The organization is further required to develop their own techniques for
understanding the position. The understanding of the external environment consists of two
influences such as a macro influence and the micro influence. In the Macro influence, their
economic, political, social, technological factors and in the micro influencers there are factors
which are particular to the industry such as competition, suppliers, customers, barriers of entry.

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In this report the strategic position of European airline named as Ryanair will be demonstrated
consisting of competitive force analysis, the PESTEL analysis the VRIO analysis and conclude
with effective recommendations.
Discussion
About the airline
The Ryanair is considered to be the first and the largest airline in Europe based on
budget and it has enjoyed considerable growth founded on the low cost business model having
huge financial performance even during the period of financial recession (Barrett 2016). The
previous Indifference of Ryanair towards the complaints regarding low-quality of the customer
service was reversed in the year 2014 when it introduced an ‘always getting better’ plan. It is an
Irish budget airline that was founded in the year 1984 and the headquarter of the airline is
situated in Dublin and London. It has formed the largest part of the Ryanair Holdings family of
the Airlines having Lauda, Ryanair UK are the sister airlines. This airline operates in more than
300 Boeing 737- 800 aircraft (Furse 2016). It is notable that the company has been criticized
several times for the situations and use of extra amount.
Theory
The strategic choice is the decision of selecting from the grand strategies that are
concerned, the strategy that will help in meeting the objectives of the enterprises in the best way.
This decision further involves few steps such as concentrating on few alternatives, the focus on
the selec6tion factors, the evaluation of the alternatives and making the real choice. There are
few factors that affect on the strategic choice such as the environmental constraints, the
management and the relationships of power, the impact of the past strategy, the competitive

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forces and some others (Tatoglu et al. 2019). There are few tools for making the appropriate
strategic choices such as the PESTEL, the PORTER’, the VRIO and some others.
Porter's five force analysis
It is actually a model for business analysis which helps in explaining the reason behind
different industries being able to sustain the different levels of profitability. The five force model
is further used for measuring the intensity of the competition, the profitability, the attractiveness
of an industry or a market. The porters five force analysis helps in analysing the competitive
force of a company. There are five parts of this framework such as the bargaining power of
buyers, the bargaining power of suppliers, the threat of substitutes, the competitive rivalry and
the threat of entry.
The bargaining power of buyers- It is found that the customers are highly essential in any
business and are one of the most important stakeholders of a company. They hold huge power
and can leave a company with low profits. The UK airline industry has customers who have
power in their hands because of the high competition in industry which has resulted in push in
the fares of the flights. The development of the low cost Carriers such as Easy Jet, Ryanair and
Norweigian have given the customers a range of choices with high bargaining power (Barrett
2016). The airways such as British Airways have started launching no-frills shares for reducing
leg room and compete.
The bargaining power of suppliers- As far as the suppliers are concerned, the Boeing has
traditionally been the primary supplier of Ryanair. There are reports about being interested in the
the planned c919 aircraft of comic that is developed to the Rival boeing 737 and the Airbus a320.
The Chinese Jet manufacturer named as comic is is recently attracting the interest of Ryanair
because of huge amounts of seeds in the plains along with developed level of proficiency in

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terms of energy consumption. This informs about the developing bargaining power of Ryanair
towards the primary supplier going. The switching cost of suppliers is high because of amounts
that are involved with the needs of pilot training (Roelens, Steenacker and Poels 2019). The
threat of substitute. The substitute is a service or a product of another Industry that develops and
equivalent value for the customer.
The threat of substitute- The substitutes of products or the services is important factor. In the
case of Ryanair it is found that the bus the train and the personal car are the substitutes of
Ryanair. In terms of short distance on the short time people usually prefer train services because
they tend to be faster and stress (Baxter 2019). The train services like Eurostar have
unpredictable expenses at particular days when late ticket is equal to the budget of Ryanair. Also,
the National Express, the Eurostar coaches, the Getlink are for the available options that are
cheaper and make the threat of substitute for the Ryanair maximum.
The threat of new entrants- In the aviation industry, it is an undoubtedly an expensive industry
for the new entrance. Ideas of entry and purchasing, releasing the Jets is quite expensive. Further
the achievement of loss at the desired airports is quite costly and tough specifically for the new
airlines because the Inventory of the squares is not that economic. For generating awareness, the
marketing expenses also need to be incurred. The staff required for an airline as the addresses
and the pilots who are not that cheap and it is not easy to find qualified staffs (Caputo, Borbély.
and Dabic 2019). The development of the lower operation cost which airlines like Ryanair have
developed takes up the economies of scale and experience. Therefore, the threat of new entrants
is not that high for the Ryanair airlines.
The competitive rivalry- There is also many low cost airlines that are operating in the similar
routes of Ryanair. These are the routes for the airlines the Easyjet, Go and other. Also, there is

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huge competition for covering maximum number of the routes with minimum costs. Each of the
players in the industry is highly striving for minimizing all the expenses through reducing the
passenger facilities and the airport expenses (Roelens, Steenacker and Poels 2019.). The aim is
on short hauling the roots of the flight and many such routes have become available in driving
out the competition because of the experience and the large fleet size. On some other routes, the
competition is still there because the deregulated airline industry has helped in the entry of other
airlines easier into the European region after developing competition for the local operators as
Ryanair. This reflects that there is high competitive rivalry for Ryanair (Borbély 2016),.
The PESTEL analysis
The PESTEL analysis stands for the political, social, economic, environmental,
technological and legal (Pisano 2017). This framework helps in conducting a situation analysis
of a company for identifying the changes in the entire macro-environment.
The political
As far as a political environment of Ryanair is concerned, it is found that the UK
government has charged highest taxes for the commercial airlines internationally on the
passengers who were flying from UK. This tax has tripled in the last 24 years and is highly
expected in going further which could scare away the passengers along with the trade partners
who are planning for visiting UK . Also this could affect the revenues of airlines such as Ryanair
having passengers on the short hauls. Also in June 2016, Britain has voted for the exit from you
that have resulted in the economic and political uncertainties (Hitt et al. 202).. The UK airlines
such as Ryanair that operate on the multiple routes could also lose its privilege which will limit
the expansion and the revenue generation too. Further, this could result in the loss of the
ownership and the market share for airlines such as Ryanair.

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The economic environment
Because of Brexit, the pound has lost almost its value and has become weak
which is related with an economic uncertainty affecting negatively the UK airline industry. The
weak pound has further put a squeeze on the spending of the customers that has resulted into a
fall in the travel expenses that are for leisure.
Social environment
The low cost carrier as Easyjet and Ryanair have consistently benefited. In spite of the
development in the cost of living, the people of Britain still love to travel for holidays and opt for
the low cost flights. The ageing population of UK is further a threat to the airlines industry
because they are less likely to travel on the millennial generation.
The technological environment
Starting with the virtual reality to the biometrics, the world is changing with the internet
and the flight experience is also changing with it. There are some airlines that have adapted to
the skills of Alexa that are developed by the WBP allowing the customers in knowing which
movies will be shown on the flight with all the details regarding the rating and the travel advice.
The upgrade with the technology of biometric has helped in securing the payment authorization
on the word along with the other services such as the personalized programming catalogue. The
airlines such as Delta and Easyjet have embedded all of these services in the airlines (Baxter
2019).
The environmental factors
it is found that the world is growing towards a greener tomorrow and the government is
towards taking proper measures in controlling the greenhouse gases from the emission of carbon
that would lead to the human and the economic consequences. Ryanair is found to have networks

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in all of the European countries virtually. Hence, it is quite vulnerable to the EU environmental
regulation. The pressure on the EU laws for taxing the aviation fuel and the charges on the
environment pollution can have direct impact to Ryanair.
The legal environment factors
Regarding the legal environment it can be said that the European airline industry is going
through to the Brexit referendum added to the economic and political uncertainty of the UK. In
case of the difficult scenario after Brexit, the airlines having flights between the EU and UK
countries are likely to be subject to some restriction which could reduce the demand for the
airlines. The recent reports have depicted that all of the flights between the UK and the EU can
have the legal consequences on this specific matter.
The VRIO analysis
The VRIO Framework is one strategic analysis tool that is designed for helping the
companies uncover and then protect the resources along with the capital which provide them a
long-term competitive advantage (Hitt et al. 2020).. This framework must be put after the
development of a vision statement because the differentiation and the advantages that are
identified can help in determining how an organization should approach the marketplace and
inform the strategic decision which shapes the future of the company. The elements in the value
framework are such as valuable, rare, inimitable and organized. These components are
approached in the form of a decision tree. As far as the value is concerned, this is aimed at
whether the resources which are there can be deployed for meeting the requirements the
customer expectations. As combined with the subsidies of the government, the airport charge
along with the low price business model the European airline company Ryanair is quite able in
delivering the lowest price that attracts the millions of customers. Getting the nearest it can be

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said that Ryanair has the airport charge deduction and government subsidies which the biggest
competitors as Easyjet are not having. This helps Ryanair in being quite rare and valuable
because it has received secondary routes with the ability of attracting the customer support.
This further attracts more tourists under consumption for the local government.
Regarding its inimitability, it can be said that as compared with other airlines it’ resources have
caused many advantages. This is the resource which is hardly imitated or transferred to other
companies. About the organization, it can be said that it has made proper usage of the different
sources, capabilities for delivery in lowest cost travel. It has considered the customer first, has
the efficient management team along with the effectiveness so has everything with proper
operation strategy deploying all the resources in a successful way through which the computer
advantage is developed.
The recommendation
Firstly the customer perception of Ryanair should be improved. It is true that the key
edict of Ryan is that the customer with fly with this airline as long as it can provide the low price
travel. When it was the first mover this cost-cutting was a reasonable approach but with the
growth of competition the customer could easily switch to another carrier which might be a bit

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more expensive than Ryanair due to the fact that it has perceived weak customer service policies.
The marginal improvement of Ryanair can also help in lifting its image and standing still against
the potential competitors. It should focus on the marketing of the ancillary products. The
approach of Ryanair in terms of hard selling of the ancillary products in the time of flights
appears to have quite push back from the fliers who are frequent. This airlines is better off in
trying to sell the ancillary products at the time of flight. The airline should leverage its website
for selling products along with looking into the advertising revenue by the website. The credit
card of Ryanair can also be a good addition with the ancillary products.
Conclusion
On a concluding note it can be said that Ryanair is one of the most successful low cost
Airlines based on UK which has few factors both external and internal that have left impact on
the operations of the company. However, the success factors of Ryanair are quite clear as the
successful adaptation of the low cost model, the flying to the secondary citizen airports, the point
to point flights, single type aircraft, the cost culture and others. Then there was the first airline in
Europe to have introduced the low fares and it has made use of this strategy as an advantage
through negotiating with the secondary airports. However, it can be also said that the airlines has
developed the low cost culture and the entire organization has driven has been driven into this
philosophy. But the company needs to pay huge attention to the recommendation which are
highlighted through the strategic position analysis of airlines and the time has come when the
airline should modify the low cost at strategy to proceed successfully in future and compete with
the competitive rivals.

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