Strategic Planning in Travel and Tourism: Ryanair Case Study Report

This report provides a comprehensive strategic analysis of Ryanair, a leading low-cost airline in Europe. It begins with an introduction to strategic management and its importance for business success, specifically within the context of the travel and tourism industry. The report employs various strategic management models, including STEEPLE analysis to examine the macro-environment, Porter's Five Forces to assess the micro-environment, and the McKinsey 7S framework to analyze Ryanair's internal environment. A SWOT analysis is also conducted to evaluate the airline's strengths, weaknesses, opportunities, and threats. The report then identifies and discusses the challenges facing Ryanair, such as seasonality of earnings and media criticism. Finally, the report proposes objectives for Ryanair and provides a conclusion summarizing the key findings and strategic implications. The analysis covers various aspects of Ryanair's operations, from its competitive advantages to its responses to external factors such as economic, technological, and political influences, and its approach to the airline industry. The report aims to provide a detailed overview of Ryanair's strategic planning process and its implications for its future success.

STRATEGIC PLANNING IN TRAVEL AND TOURISM
ID -
TRAVEL AND TOURISM
Tutor
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Table of Contents..............................................................................................................................2
1. Task one :Introduction...............................................................................................................3
2. STEEPLE..............................................................................................................................3.1
2. Porters Five Forces......................................................................................................................8
3. McKinsey 7s .................................................................................................................................9
4. SWOT analysis.......................................................................................................................10
5. Challenges...............................................................................................................................11
6. Task 2......................................................................................................................................12
7. Strategic planning for Ryanair....................................................................................................13
8. Conclusion..............................................................................................................................17
References.......................................................................................................................................18
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Travel and tourism
Introduction
For any business to achieve its goals, the management will have to come up with a
method in which will be a driving force in their firm to meet the intended objective. The report
will analyze using Ryanair airline. Ryanair is Europe’s favorite airline and has been in existence
since 1984 offering its customers with low cost fare. It is an Irish airline. The company aims at
boosting its sales and increase its competitive advantage. Strategic management is one of the
mechanism the management use to achieve its goal (Vellas, 2016, p. 10). The report aims the use
of the strategic management theories and models, to critically analyze at demonstrating the
strategic planning process of Ryanair firm regarding its Strategic situation.
Macro Environment Analysis of Ryanair using STEEPLE
Ryanair is one of the developing firm in the airline's industry in Europe, which offer
cheaper travel fare compared to other airline firms, is faced with economic, technological,
political and legal and environmental factor (Viswanathan et al. 2014, p. 20). These factors may
be of importance to the firm or a challenge to the firm. The factors determine the success of any
firm either directly or indirectly.
Social-cultural Factors
Every business strives to give the best product to their customers. The company with a better
reputation on the market can compete with its rivals as it has its loyal customers. To win the
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loyalty of customers in the airline industry, you have to guarantee the security of customers from
attack from disease and terror attacks. The other social factor is how the employee of the
companies in the airline industry treat their customers.
Ryanair airline employees treat its customers politely and are also a hospital. The act
encourages the customers to opt to travel using Ryanair as the employees are to cater for their
needs. Secondly, the Ryanair is one of the airlines that charges low fare compared to other
airlines. It has also enabled Ryanair to have a more significant number of customers thus
allowing it to grow in the past few Years.
Technological Factors
Due to changes in technology every day, the airline industry has drastically changed. As
a result of this, many business activities are carried out without having to travel. For example,
the use of video conferences has discouraged the traveling of business persons who could have
opted to move through air transport. Technological changes have also improved the airline
industry by helping the firm in the industry to serve their customers to the best. In the case of
Ryanair, it is possible to book for the flight, check the time of departure and price charged using
the mobile phone through the internet. The Ryanair uses modern technology whereby it offers
services such an entertainment during the flight such as audio song and music. The airline has
also included the advanced software and equipment in the planes to cater for the needs of the
customers.
Economic Factors
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The economic state of any given country has an impact on the performance of the airline
industry. It is because when the economy of a given country is doing good, it means that the
business activities are performing better and the lifestyles of the citizens improve meaning they
will able to use air transport as their mode of transportation. Ryanair airport is suited in Europe
where the economic state of countries is better compared to other countries in developing
countries. It enables the Ryanair airline to have ready customers that will allow the airline to
lower its transportation free across Europe. In the case of an economic crisis, small firms such as
Ryanair are less affected by the crisis compared to a large firm in the industry.
Environmental Factors
There has been increased awareness about the need for conserving our environment
mostly in the transport sector. Several bodies have been brought up to help in preserving the
environment. Eu emission trading schemes help in protecting the environment from the emission
of carbon (IV) oxide. The firm involved in emitting the gas in the air has to support the
government in reducing the gas in the atmosphere. As a result, the Ryanair has to reduce the
amount of gas its planes emit to conserve the environment.
Political factors.
These are factors that the firms have no control over them. The firm has to work per these
factors and strive to meet its objective. The political system of a given country determines its
relationship with other nation in the world. The airline industry is affected by the political
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relationship between its government and other nations (Pereira and Caetano 2015, p. 75). For
example, if the government in which the airline comes from has a good relationship with other
countries, it will be simpler to trade in this nation. Ryanair firm operates in Europe where many
countries are in good terms with each other; this has enabled the Ryanair to grow and become the
first airline in Europe to have transported one billion passengers in Europe.
Most airlines tend to be the flagship and are abide by the political policies of their
countries where the government oversees the activities of the firm. But this is not the case in
Europe the government in this countries do not monopolize the airline industry (Phillips and
Moutinho 2014, p. 97). The operation enables small firms such as Ryanair to grow in the
industry and become one of the cheapest airlines to board in Europe.
Legal Factors
There has been an introduction of IATA which is the international air traffic agency
which set rules and regulations to be followed to control flights across the world. The IATA
control the issues of airport ownership which every airline has to follow.
Ethical factors
These are factors such as morality, behavior, duties integrity and what favors the
company. Ethical factors which affect Ryanair insider trading, discrimination of workers, and
executive pay. There are different ethical issues that can determine the progress of the company
such as sustainability, working conditions, regulatory compliance and many more.
Analysis of the micro environment in Ryanair airline using Porters Five Forces
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The Bargaining Power of suppliers
Ryanair airline has been buying its aircraft and equipment from Boeing, but recently the
firm has opted to buy from Comac which is a rival firm of Boeing. It is a result of better aircraft
from Comac compared to Boeing as the Comac a Chinese jet manufacturer aircraft has many
numbers of seats in the planes, with increased efficiency as a result of energy consumption. It
shows how the Ryanair airline has more significant bargaining power compared to its main
supplier, Boeing.
Bargaining power of customers
Ryanair customer’s experiences better bargaining power as swapping to another airline is simple
without no added expenses.
Threat of substitute products.
Substitute services and products are a significant threat to any firm. Air transport has little risk
regarding a substitute (Nasehi, Allahyari, and Zebardast 2017, p. 5). The only substitute threat
that air transport have is high-speed trains which are not entirely developed in most of the
regions.
Ryanair experiences the threat of substitute from sea transport, railway network, car rental firms,
and coach transport. But Ryanair can compete with them as it charges little compared to other
means of transportation.
Threat of new entrants.
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This treat relates to the ease of entering into the industry and being able to compete effectively
with the existing firm (Poister 2010, p. 102). The threat of new entrants is minimal for Ryanair
due to the significant barrier associated with entry into the airline sector which includes capital
requirements, economies of scale and many others. The level of competition makes it difficult
for a new firm to join the airline sector.
Industry rivalry
Ryanair has a more significant advantage over its rival airlines due to its low-fare policy
across Europe and a good number of loyal customers across Europe (Porter 1979, p. 103). It is a
result of good reputation and customers in Europe as their employee are polite and more than
willing to help their customers (Tran et al. 2015, p. 3). It has also expanded short-haul flight
destination across Europe to cater the needs of every customer.
Analysis of the internal environment of Ryanair using the McKinsey 7S Framework
The 7-s models are evident in Ryanair where they have been put in practice to enable the
firm to achieve its intended goal. It has allowed Ryanair to accomplish its goal of being the
cheapest airline in Europe this is evident in the following scenarios.
Strategy - The Ryan air core objective was to be one of the cheapest air hosen in Europe.
The firm worked genuinely toward their goal, and eventually, they did achieve their goal by
becoming a low budget air hose which gave them a modest advantage over their rivals.
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Structure- Every sector in the Ryanair organization reports to the CEO who is Michael
O’Leary. It helps in ensuring that there is a small management construction that enables
transparency. The management in this form guarantees enhanced performance in the firm, and
any query can reach to the top management as first-hand information.
Systems and shared values- Having experienced and better employees in frontline will
maximize the carrying out firm activities. The CEO of Ryanair acts as the role model in the
company thus encouraging workers to work better thus raising the revenue of the business.
Staff and skill- Any firm strives to hire the right employee who will attempt to achieve
the business goal (Evans, Stonehouse and Campbell 2012, p. 4). The CEO of Ryanair is one of
the staff who works to his best to encourage workers, and he hires the right kind of employee
with competency. The skill of the employee is important for the success of any business. The
Ryanair ensures that their employees are per the expectation of the customers (Dobbs 2014, p.
33). The employees undergo training to acquire the necessary
A SWOT analysis of Ryanair
Ryanair’s Strength
Low fare
Leading 32 Years safety records.
Ryanair Weakness
Seasonality of earning.
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Ryanair’s earning is seasonal with its best month where it makes a massive profit during the
summer, and great loses during the winter. It hinders the growth of the company as some of the
benefits earned in summer are used to compensate for the loss during the winter seasons.
Ryanair Airline Opportunities
Increased customer services
Ryanair improved its website by re-designing its website by making it better and attractive. The
company also introduced its new mobile application that enable its customers to access the firm
services using their mobile phones.
Introduction of New planes
The Ryanair ordered 100 Boeing and the firm has a plan of buying another 100 Boeing 737
MAX200 aircraft which are to be delivered by year 2019 which has more seats compare by the
current 77-800 fleet which has 189 seats compared to Boeing 737 MAX200 aircraft which has
197 seats. This will enable the firm meet its goal of lowering its price in the next ten years.
Ryanair threat
Accident
The company has kept a better record as none of its plane has been involved in a serious
accident. But there has been criticism from the media that the company only concentrate in the
lowering its fare than concentrating in improving its security in reducing the chances of accident
occurring.
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Brexit
Ryanair could be grounded to and fro Europe if should be hard Brexit
Challenges facing Ryanair
The Seasonality of earning is a significant weakness or challenge facing the Ryanair Company
(Shepherd and Günter 2010, p. 120).
Criticism from the media.
Employees frequent strikes
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TASK TWO
Q1. Proposed objectives for Ryanair Airline Company.
Weaknesses or challenges hinder companies from performing well and making an improvement
on these weaknesses means that the performance of companies will become better (Karadakis,
Kaplanidou, and Karlis 2010, p. 170). Like any other company, Ryanair Company faces different
challenges which need to be addressed by the management.
1. To extend the business to west Africa where winter impact is minimal by the end of
2019.
2. By the end of 2019 Ryanair should buy new 100 Boeing 737 max200 aircraft which has
more seat in order to help work towards its objective of leading in low-cost fare.
3. The company plans to enact its operating outcomes by use of ancillary services and also
focus on development.
Recommended strategic option for Ryanair
For any business to be successful in its operations, it has to come with a strategic choice or
procedure that will enable it to carry its business in a different approach to allow it to maximize
profit mostly when the business current strategic option is not working per the expectation of its
management (Belton 2017, p. 10).
Q2. The recommended strategic option for Ryanair is to extend business to Africa where
there is no winter. Airlines to Africa where the impact of winter is minimal and will enable the
company to reduce its losses during winter. Extending to African countries means that the
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