Strategic Management Report: An Analysis of Ryanair's Strategy

This report provides a strategic analysis of Ryanair, a prominent low-cost airline. It begins with background information on Ryanair and then delves into an external analysis of the airline industry using the PESTLE framework, examining political, economic, social, technological, environmental, and legal factors. A brief competitor analysis identifies key rivals such as Jet2 and EasyJet. The report then assesses Ryanair's internal strategic capabilities through a SWOT analysis, highlighting strengths, weaknesses, opportunities, and threats. Strategic direction options are explored using the Ansoff Matrix, covering market penetration, market development, product development, and diversification strategies. The report concludes with strategy selection and justification, emphasizing Ryanair's low-cost model and ancillary revenue strategies, and offers recommendations to improve customer service, address human resource issues, and consider environmental initiatives. The report is a comprehensive overview of Ryanair's strategic position and potential areas for enhancement.

Strategic
Management

Table of Contents
INTRODUCTION...........................................................................................................................1
1.Ryanair- Background Information: .........................................................................................1
2.External: Airline Industry Analysis:........................................................................................1
3.Brief Competitor Analysis:......................................................................................................3
4.Internal Strategic Capabilities:.................................................................................................3
5.Strategic Directions Options....................................................................................................4
6.Strategy Selection and Justification.........................................................................................5
7. Recommendations:..................................................................................................................5
CONCLUSION................................................................................................................................6
REFERENCES................................................................................................................................6

INTRODUCTION
Strategic Management refers to a continuous process which includes planning, analysing,
monitoring and evaluating all the required or necessary activity in order to achieve organisational
goals and objectives (Bryce, 2017) . With the help of this process, leaders and mangers analyse
current situation of the company, make strategies according to the need, implement them and
evaluate the outcome of implemented strategies. In other words, it is the management of an
organisation's resources in order to achieve its goals and objectives . Present report is based on
case study of Ryanair. It is a low cost airline company founded in the year 1984. Its
headquartered is situated in Swords, Dublin (Ireland). In this report, analysis of competitor,
airline industry analysis has been conducted along with selection of strategy and justification of
company has also been discussed.
1.Ryanair- Background Information:
Ryanair is an Irish airline company, well known in Europe for its low cost services. It
was established in 1985 by Liam Lonergan, Christy Ryan and Tony Ryan. In Europe it is one of
the biggest company, which provide low cost services to its customers. By the end of year 1990
airline company Ryanair had about 350 employees which operates in 14 aircraft and carrying
approximately 600,000 passengers on a regular basis. Company was running in loss, and was
reconstructed by Michael O'Leary in 1991, which provides low cost airline services and make
profit for the company. On the 10th anniversary of company in the year 1995, it become one of
the biggest low rate airline industry, in Dublin-London routes. Company is still providing low
price services to its customers after attain huge success at the competitive marketplace .
2.External: Airline Industry Analysis:
PESTLE is using as Macro environmental scanning tool. In this process political, social,
environmental conditions has been analysed which affects the overall working culture or
environment of the company (Frynas, and Mellahi, 2015). POLITICAL: In the political factor of PESTLE of Ryanair, government of Europe made
some restrictions and laws to avoid terrorism attacks on airports. Along with this,
company is following current framed EU rules and laws. In these rules, various factors
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are included such as duty free sale of products and services and so on. It can be seen as a
benefit for the company as government help in expanding its business operation at
international leve . ECONOMICAL: While analysing economical factor of Ryanair, it has been analysed
that market of Europe is quite different from internally as well as externally. As a result,
it has been analysed that internal market is stable as compared to external market (Hill,
2017). This is the reason behind price rising of fuel. This is the reason Ryanair is taking
advantage of regional subsidies. SOCIAL: In reference to Ryanair, it is analysed that there is improvement in lifestyle of
individuals in case of travelling, which as a result affect the business of the company.
Along with this, people also focus on safety and health measures. So, it is the duty of
company to spend more on the security services to satisfy customers demands and
requirements. TECHNOLOGICAL: In reference with Ryanair, technological factor states that the
company is using latest and advanced technology. Which as a result attract more and
more customers and increase their overall profitability. In order to modify operating of
supply chain system, company develop a new software. As a result, with the help of this
technology, company can reduce their unnecessary expenses which will increase their
profit margin ratio . ENVIRONMENTAL: In context to Ryanair, with the help of new technology used by
company can reduce fuel consumption, by which there can be reduction in air pollution
(Hitt, Ireland and Hoskisson, 2016). As a result, company helps in reducing air pollution
from environment. With the help of latest technologies, company can save the
environmental factor from hazardous gases like CO2.
 LEGAL: To operate airlines industry across the world there is an organisation named
IATA. This is the organisation who manage and formulate all the rules and regulations
applied on a airline company. Airlines company like Ryanair is bide to follow these rules
and regulations which provide benefits to the passengers.
3.Brief Competitor Analysis:
In the airline industry there are many competitor which affects the profit market of the
company. Some of the competitor companies which affects operating activities are as follows:
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 Jet 2: It is the third biggest scheduled airline company in UK. Jet 2 is a British low cost
airline company, which has its headquarter in Leeds, Yorkshire. Company start operating
its business in the year 1983 under the name Channel Express. Easy Jet: Easy Jet Airline Company Limited popularly known as Easy Jet is a low cost
airline company. It is one of the extreme competitor of airline company Ryanair. In the
year 1995, Easy Jet was established. Its headquarters was situated in Bedfordshire,
England. As compare to Ryanair airline company, Easy Jet is having approximately 583
less employees (Hitt, and Duane Ireland, 2017).
 Monarch Air Group: Along with Easy Jet, Monarch Air Group is one of the leading
competitors of Ryanair airline industry. It is a British charter, which was founded in
1967. Headquarter of Monarch airline is situated in Luton, UK. Both the company is
operating in travel agency field but as compare to Ryanair, Monarch is generating less
revenue.
4.Internal Strategic Capabilities:
SWOT Analysis of Ryanair:
Strengths: Weaknesses:
 One of the biggest strength of the
Ryanair is they provide low fair
services as compare to other airline
industries.
 Company is generating revenue by
adopting “buy on board” strategy. In
this they charge extra fees for luggage
from their customers.
 Company is adopting innovative
strategies for attracting large number of
customers.
 Ryanair is having low trained staff
which is not able to provide better
quality of services to their customers.
 One of the major drawback or
weakness for the company is they do
not allow their passenger to use mobile
phone during journey.
 Company is having adverse press report
which negatively affects the brand
image of the company.
Opportunities: Threats:
 Their current market segment is middle
class people, by providing better
 One of the major threat for Ryanair is
only middle class or low class people
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quality services Ryanair can capture
more market share.
 By expanding its business operations at
Eastern Europe and other near by
countries company can increase their
market share and profitability.
 The focus should be on customer
satisfaction and experience can also be
the opportunity for Ryanair.
prefer their services. High class people
do not prefer it as they provide low
quality services to their customers.
 While operating in different countries,
employees of the company face many
problems as every country has their
own rules and regulations.
 Increase in Irish tax rates can also be a
threat for Ryanair. Also, new
competitors at marketplace can be a
competition for existing company.
5.Strategic Directions Options.
The strategic directions can be evaluated or analysed by using Ans-off Matrix, as this
model helps in designing new strategies for the overall development or growth of the company.
Ans-off Matrix of Ryanair – It is a strategic planning tool which aid the company by
providing structure to the managers, executives or marketers to develop new strategies. As a
result company can attain their goals and objectives in an effective manner. This model was
developed by Russian American Igor Ans-off, with the aim to represent firm growth strategies
(Jenkins, and Williamson, 2015) . It is the marketing strategy which includes various elements.
These elements or strategies are Market Development, Product Development, Market penetration
and Diversification. As per the Ryanair Airline point of view, these growth strategies are
discussed below.1. Market Penetration – under this strategy, company wants to achieve growth by
expanding its existing product in the existing market. In reference to Ryanair, by
providing low price services to its customers, company can increases their market share.2. Market Development – In this growth strategy, company seeks growth by promoting their
existing product in the new market. In context to Ryanair, company start promoting their
airlines flights at new airports. Along with this, company can go to other countries and
provide services to their new customers.
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3. Product development – under this marketing strategy, in the existing market company
introduce or launch its new product. On the other hand with reference to Ryanair, in order
to launch new product or services in active market, company provide free flight services
to attract more and more customers (Meyer, Neck,and Meeks, 2017) . By using latest
technology, company provide facilities to their customers to check their ticket
information online.
4. Diversification - In this strategy, company wants to introduce new product at new market
place. In context to Ryanair airline industry, diversification is creating and developing
new services according to the requirements of the customers.
6.Strategy Selection and Justification
One of the top leading airline company which provides low cost services to its customers
is Ryanair. Also, it becomes the biggest airline industry in 2009 , by carrying largest number of
passengers in all over Europe. Company justify its low fare prices, by adopting “no frill” strategy
in their organisation. Along with this, company has adopted “buy on Board” strategy, in which
company charges extra amount for luggage. As a result, in the form of ancillary revenue,
company generates approximately 20% revenue . With the help of Ryanair flexible working
culture, it benefits the company to become number one low rate service provider (Morden,2016)
. In order to capture large market share, company can also provide there services in Eastern and
Central Europe. By adopting refund policy system company can increase there brand image and
goodwill at competitive marketplace which can increase their profitability.
7. Recommendations:
As per the above mention report, Ryanair is the first low fare airline company in Europe.
It has been recommended to the management team of the company to resolve issues related to
poor customer services. Also to look after and eliminate their human resource management
problems. In order to successfully achieve the following factors, managers or leaders of the
company is required to recognize issues related to their labour unions. In order to improve
relationship within employees, company need to develop effective strategies which will aid them
in achieving their goals effectively. Along with this, environmental initials should be analysed, in
order to perform their operating activities while taking care of environment.
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CONCLUSION
From the above mentioned report, it has been analysed that, Ryanair is the top leading
airline company which provides low fair services to its customers in Europe. It is a Irish airline
industry which is providing low cost travelling experience (Moutinho, and Vargas-Sanchez,
2018) . By applying strategic management tool, company can provide effective services to its
customers and retain them for a long period of time. In addition to this, in order to analyse the
external environment PESTLE analyses is taken as it can identify environmental nature in which
company operates its business activities. On the other hand while evaluating internal
environment SWOT analyses is done with the help of this analysis company can know their
hidden issues and also helps the company to know the weaknesses on which they has to work to
enhance the overall growth of their business organisation (Renz, 2016). At last, top most
competitors of company along with strategic analysis is done so as to company can provide best
services to its customers.
REFERENCES
Books and Journals
Bryce, H. J. (2017). Financial and strategic management for nonprofit organizations. Walter de
Gruyter GmbH & Co KG.
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Frynas, J. G., & Mellahi, K. (2015). Global strategic management. Oxford University Press,
USA.
Hill, T. (2017). Manufacturing strategy: the strategic management of the manufacturing function.
Macmillan International Higher Education.
Hitt, M. A., Ireland, R. D., & Hoskisson, R. E. (2016). Strategic management: Concepts and
cases: Competitiveness and globalization. Cengage Learning.
Hitt, M., & Duane Ireland, R. (2017). The intersection of entrepreneurship and strategic
management research. The Blackwell handbook of entrepreneurship, 45-63.
Jenkins, W., & Williamson, D. (2015). Strategic management and business analysis. Routledge.
Meyer, G. D., Neck, H. M., & Meeks, M. D. (2017). The entrepreneurship‐strategic management
interface. Strategic entrepreneurship: Creating a new mindset, 17-44.
Morden, T. (2016). Principles of strategic management. Routledge.
Moutinho, L., & Vargas-Sanchez, A. (Eds.). (2018). Strategic Management in Tourism, CABI
Tourism Texts. Cabi.
Renz, D. O. (2016). The Jossey-Bass handbook of nonprofit leadership and management. John
Wiley & Sons.
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