Strategic Management Report: Ryanair's Competitive Advantage

This report offers a comprehensive analysis of Ryanair's strategic management, detailing its mission, vision, and the strategic management process. It explores core competencies, Porter's Five Competitive Forces, and business ethics within the context of the airline industry. The report examines both the internal and external environments of Ryanair, including leadership, organizational structure, and external factors such as political, economic, social, technological, environmental, and legal considerations. It also delves into strategy formulation, implementation, and evaluation, incorporating a SWOT analysis to assess Ryanair's strengths, weaknesses, opportunities, and threats. This report provides a detailed overview of the company's strategic approach to achieving a competitive advantage in the aviation market, addressing challenges and opportunities related to technology and market expansion.

Strategic Management

Table of Contents
Executive summary......................................................................................................................................3
Introduction.................................................................................................................................................4
Core Competencies.........................................................................................................................12
Porter's Five Competitive Forces.....................................................................................................12
Business Ethics ................................................................................................................................14
Competitive analyses.......................................................................................................................15
Conclusion.................................................................................................................................................16
References.................................................................................................................................................17

Executive summary
The present report is related with the strategic management which is essential for every
types of organization. It can be profit making business or nonprofit making. The report is
explained about the process of strategic management of the company in order to attain
competitive advantage of the company. There are various stages involves in this process which
can help to attain organizational success. The report also discussed about the various business
tactics which can be used by them such as BCG matrix. The competitive analyses are having
essential for the company in order to evaluate their position in the market. The report also
includes the SWOT analyses of the Ryanair ltd so that they can determine its market
opportunities in an effective manner.

Introduction
Strategic management is all about the identification and description of the business
strategies which can help to achieve better performance and competitive advantage over other in
the market. It can help to increase profitability of the company which is a core objective for each
and every business unit. There are various decisions which make by the higher authorities of the
business organization in order to provide long term growth to their business. It is a process of
scanning the internal and external environment of the business, design strategies and formulate
those in an effective manner (Ambrosini,and Bowman,2009). The present report is based on
Ryan Air ltd which is an airline company and operate their business in the across the world. They
provide a low fair product of its customers and provide a high quality services to its them.
Aviation market is to competitive and complex because the business environment of such
business is uncertain. For this the cited business is required to use various strategies in order to
attain their desired goals and objectives in an effective manner. The major challenges in aviation
is related to the technology. Therefore, every airline more focused on using new and innovative
technology in their operation to meet future challenges in an appropriate manner.
Strategic management Process
It is essential for a business organization is to determine new opportunities and use these in an
effective manner so that the business unit can attain their organizational goals and objectives.
The cited firm is required that to develop SMP for technology to meet its sustainable targets in
an effective manner. Ryanair ltd is required to make a process of strategic management as given
below:
Identify mission and vision: This is one of the first stage of strategic management process
where a company design their mission which provide future direction. In the context of Ryan
Air, there are following vision statement of the company:
“To provide lowest possible fare to its customers and provide them best services as compare to
other companies.”
In the context of technology, Ryan Air required that to use technology which helps to reduction
in operational cost and fair leads to increase sales and profitability. For example, they can sue

new identity management system with use of biometric technology. The main motive of such
approach is to digitalize customer identification which save time and money.
Determine organizational objectives: It is essential for a business organization is to analyses
and evaluate their capabilities and design its short and long term targets. There are given
objectives of Ryan Air:
 Provide best customer service to its loyal customers.
 To develop strategies for maintain operational cost lower.
 Use of innovative technology in order to meet future challenges.
 To follow international guidelines in order to meets its environmental targets.
 Expand its business in to other attractive market.
Environmental scanning: Business environment is too competitive and complex due to its
change over a period of time (Audebrand,2010). The business performance is depending on this
environment which required to scan this environment in an appropriate manner. there are two
factors having a large impact on the business operations these are internal and external:
Internal environment: This is one of the major elements which affects business internally such is
leadership, organizational structure, organizational culture, suppliers, customers, company
polices and employees. These factors can be controllable for the company and its future
performance.
 Leadership: This is one of the major factor which is related with the leadership. It having
a great significant on the business. this is the responsibilities of the leader is to make
strategic planning in an appropriate manner. they also motivate their staff so that they can
contribute in order to attain organizational goals and objectives. In the context of Ryanair
ltd, the higher authorities is required to design mission and vision of their business and
grap the market opportunities (Bottani,and Rizzi, 2006).

Figure 1Strategic Management process
 Organizational structure:
This is another internal factors which is related with the firm’s structure and system. This is
related with the chain of command and other aspects. There are three types of organizational
structure are used by the business unit. These are functional structure, divisional structure and
matrix structure. In the context of Ryanair ltd, the firm can use divisional structure in order to
manage their operations in various countries. For this they can divide their market in to small
segment and appoint a divisional manager for the effective command and control. They also
provide the various resources and authority so that they can perform freely in order to attain
organizational goals and objectives.
 Employees: Human resource are the valuable asset for each and every business unit,
because they can help to attain firm’s target. Therefore, it is responsibilities of the
company that to provide all facilities for their jobs. Apart from that they also required that
to provide training to them on the regular basis so that they can improve their
performance and productivity. It can lead to increase customer satisfaction level which is
too significant to them (Cheng,and Grimm,2006).
External environment: This is another significant factors which influenced the business at the
large scale. This is essential for a company that they have to analyses and evaluate these factors

in an effective manner so that they can attain their long term targets. In the case of Ryanair ltd
they required to determine these factors which are given below:
 Political factor: This is one of the major factor which is related with the political stability
and the trade barriers of the country. This is important for a sound business environment
is that government are stable which can provide consistency in the business policies. UK
is having political stability which can help to the Ryanair ltd to operate their business in
an effective manner. Apart from that, they government also decide various polices such
as overseas trade policy, tax regulation, labor rate policy, etc. These factors can be
positive or negative on the business for Ryan Air and its future performance.
 Economical factor: This is another most significant factors which can help to provide the
more opportunities for the business entities (Furrer, Thomas, and Goussevskaia, 2008). It
can involve GDP rate, interest rate, inflation rate and employment condition of the
country. Ireland is the part of UK which is economically sound. It is one of the leading
economy power in the European countries. Apart from that, the other factors like growth
rate is 2.5 percent is quite goods as compare to other countries. It can help to provide
long term growth and market for the cited business organization. On the other hand, after
Brexit, it having negative impact on Ryan air which restrict them to freely operate their
business in to various European market without any barriers. Therefore, higher
authorities of Ryan Air required that to identify new market for their long term growth.
 Social factor: It includes various elements such as population size, cultural aspects,
education level, purchasing power and standard of living. This is having a great
significant in the market and future business performance. For example, the per capita
income of the UK is $42000 which is quite impressive as compare to other countries. It
can help to increase the market share and revenue for the Ryanair ltd. Apart from
education also one of the major factor which increase aviation market. Because people
wants to save time in their transportation which helps to increase frequency in flights and
increase future performance.
 Technological factor: Innovation and technology played a prominent role in the success
of the business. today, each and every business unit is to use such technology in an
effective manner. for example, the cited business unit can use social media tools such as
Facebook, You Tube, Instagram etc. in order to promote their products in the market

(Grunig, 2006). On the other hand, they also required to use innovative technology in
their operation which helps to reduce operation cost. There is various technological issue
which facing by the company. The key problem is cost of fuel in the old generation
aircraft. The firm need to induct new generation aircrafts specially for the long generation
which increase fuel efficiency and save money. Further, they also need to use technology
in their distribution system. For example, they can use online web portal for selling
products and service in an effective manner.
 Environmental factor: Today, the customer is more aware towards the environmental and
climate issues. Therefore, it is the responsibilities of the company is to promote their CSR
program which can help to protect environment in an effective manner. Ryan Air
required that to use such fuel which minimize the impact of carbon in climate and create
an ideal image in the market.
 Legal factor: There are various laws and legislation which can impact the business
activities of the company. These laws are make for the protection of the right of
employees and customers. therefore, it is responsibilities of the company that they should
follows these rules which can create an ideal image of the company.
Strategy formulation: This is the next stage where the higher authorities of the company can
formulate appropriate strategy. It is one of the complex task which required the careful analyses
of the business environment and other aspects. In the context for given case study, aviation
market is too competitive in the UK. It can be reducing market share and profitability of the
company. For this they make suitable market plan which can help to maintain their market share.
for this there are various strategy which can be used by the company like market development,
product development etc. (Hill, Jones,and Schilling,2014). At this stage they required that to
identify various strategies which can be used in the near future. For example, Ryan Air can
increase its destination in different continent such as Asia, Africa, America and Australia which
helps to increase their market share. apart from that the marketing manager of cited firm also
need to increase spending on promotional aspects in order to promote its product and services at
global level.
Strategy implementation: Once selection of the business strategy the top management of the
company is required to implement their selected tactic and support them through using its all
organizational resources effectively. At this stage, Ryan Air needs to select an appropriate

strategy which can be used by them in order tom meets its long term objectives. For example, if
the cited business firm is wants to expand their business and make their tactic accordingly.
Strategy Evaluation: This is the final stage of the strategic management process where the
higher authorities of the company can evaluate their overall strategic plan so that they can
improve in the near future and attain their desired goals and objectives.
SWOT analyses of Ryanair ltd
This is important for a company is that to identify their strength and weakness so that they can
set their mission and vison for the long run. There are various opportunities avail in the market
which need to be identify by the company. The SWOT analysis is very important for a company.
It tells everything about a company (Hitt, 2011). We can see that Ryanair is a very effective
airline which provides low cost fares to customers. It's SWOT analysis is as follows:
Strength Strong hub in UK which provide access in entire European countries
and other parts of the world.
They having more than 370 fleet of aircrafts in different sizes.
This company is operating in more than 30 countries 84 international
destinations.
There cost of flight is cheaper which provide competitive advantage
in the market.
Weakness Tough competition avail in the UK market which having adverse
impact on market share of Ryan Air.
Price war leads to increase competition having negative impact on
profitability of the company.
Limited global presence in Asia and American market.
Limited spending on marketing and promotional activities.
Opportunities There is various emerging market such as India and China provide
long term growth to the company.
Threats Increase fuel cost leads to increase operational cost.

Increase labor charges negative impact on Ryan air revenue and
profits.
STRENGTHS
 Cheaper costs – It has the lowest unit costs as compared to any European airline and is
the lowest as compared to any airline.
 Fares are also less – Cheaper costs enables less fares on a profitable basis. Due to its
lower fares large amount of profit is made.
 Innovative – No airline has changed the nature of short-haul flying than Ryanair. Direct
distribution, on-line check-in,hand luggage only travel are now all a part of the short-haul
flying in Europe.
 Size – It has the largest short-haul network of any carrier in Europe.
 Fleet – Having a single fleet will provide economies of scale and flexibility in terms of
aircraft deployment (Hitt,Ireland, and Hoskisson,2012).
 Focus on the management – Ryanair's management has done a great job by doing what
they are best at – keeping costs and fares low.
WEAKNESS
 Perception of the brand – Ryanair has given the results as per its brand value. It has given
a safe air travel at a lower fare at a high level of punctuality. But for many years it has
performed poorly in a range of awards and surveys.
 Earning seasonality – It's earnings are highly seasonal having a profits mainly in northern
hemisphere summer from July to September and having a loss in winter during October
to March.
OPPORTUNITIES
 Customer service improvement – It has improved the quality of its passenger’s
interactions with the airline. It includes various things like redesigned view of the website
having more attractive feel, new mobile app, relaxation of baggage restrictions.

 Business travelers – It has recently launched business traveler’s product. It has various
features like single fee, having booking flexibility, fast lane security, having reserved
seating facility in premium rows.
 It's new aircraft – Due to its new entry seating capacity has been increased. It has
successfully generated more revenues (Hodgkinson, and Healey, 2011).
THREATS
 Due to accident – Due to its low cost it cuts corners on safety. A major accident could be
harmful to its reputation.
 Focus is lost – If distraction of management attention happens from the core competency
of providing safe and punctual short-haul air travel at less costs can damage its track of
being the most consistent profitable airlines.
Response to competition – It has a unit cost that can't be matched by other competitors in
Europe. Due to perception of its product and brand they are able to attract more customers.
Business strategies: There are various strategies which can be used by the cited firm in order to
compete in the market. These are:
Porter Generic Strategies:
This is one of the most useful strategy for Ryan Air where they can implement it in a manner
which can provide competitive advantage in the market. there are three types of strategy out of
them one can be used by them. these are:
Cost leadership This is one of the most appropriate strategy for Ryan Air to offer its
services at affordable or discount rates. For this they need to
focused on operations and use different tools which can overcome
these cost. For example, in Festive season they can provide
exclusive discount to its customer which enhanced their sales and
profit.
Differentiation This is related create uniqueness in products which provide
competitive advantage. Ryan Air can provide customized services
and also provide additional benefits to its customers. for example,

they can offer tickets with hotel room bookings at discounted rate.
Focus Today, customer is a king of market which leads to increase the
focus of a business unit. Ryan Air needs to develop focus and tries
to understand the needs and wants of their customers which help to
meet its short and long term targets in an effective manner.
Ansoff matrix for Ryan Air
Market Penetration Maintaining market share by using aggressive promotional
campaign.
Increase current customer loyalty by providing lower rate air
tickets and best services.
Product development This is one of the best strategy where Ryan Air needs to
increase its products range. For example, they can offer four
category price economic class, business class, premium class
and customized services.
Market development Today, UK market is too competitive which having negative
impact on sales and market share of Ryan Air. Therefore, top
management needs to expands its business in to other growing
market such as Indonesia, Malaysia, India, China etc.
Diversification It is one of most appropriate strategy where Ryan Air expand
its business in to tourism in order tom maintain market share
and profits.
Marketing mix:
It is essential for cited firm is to design and develop appropriate marketing mix which gain
competitive advantage in the market over other. Ryan Air operates their business in to UK which
is too competitive market over other firms. These are:
Product Ryan Air provide excellent product to its customer which increase
their satisfaction level. they having different types of customer such as
economic, premium, and business class. For example, in the premium