Ryanair: STEEP, Porter's Five Forces, SWOT Analysis Report

This report provides a comprehensive analysis of Ryanair, Europe's largest low-fare airline, within the context of tourism and hospitality management. The study examines both the macro and micro environmental factors influencing Ryanair's operations, including socio-demographic, technological, economic, environmental, and political influences. The report employs STEEP analysis, Porter's Five Forces model, and a SWOT analysis to evaluate Ryanair's strengths, weaknesses, opportunities, and threats. It explores the airline's business strategies, customer service, competitive landscape, and financial performance, offering insights into its market position and future prospects within the industry. The report also highlights key challenges, such as fuel cost fluctuations, and suggests strategies for maintaining a strong market presence. This report is an excellent resource for students studying tourism and hospitality management, providing a detailed overview of Ryanair's business model and its place in the airline industry.

Tourism and Hospitality Management
Name of the Student:
Name of the University:
Author Note:

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Executive Summary
The purpose of the report is to enumerate Tourism and hospitality management scenario of
Ryanair airlines. Special emphasis will also be given on the macro and micro environmental
factors to study the overall management of the industry. The study will include a comprehensive
STEEP analysis, Portar five forces model and SWOT analysis to offer a lucid understanding of
the various aspects of the tourism and hospitalitysector including its shortcomings and strengths.

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Table of Contents
Introduction......................................................................................................................................4
Macro Environment Analysis of Ryanair........................................................................................4
Socio Demographic Factors:........................................................................................................4
Technological Influences:............................................................................................................5
Economic Influences:..................................................................................................................5
Environmental Influences:...........................................................................................................5
Political, Governmental, Legal and Regulatory Influences:........................................................6
Micro Environment Analysis of Ryanair.....................................................................................7
SWOT Analysis of Ryanair.............................................................................................................9
STRENGTHS..............................................................................................................................9
WEAKNESSES...........................................................................................................................9
OPPORTUNITIES....................................................................................................................10
THREATS.................................................................................................................................10
Conclusion.....................................................................................................................................10

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Introduction
Listed as Europe’s largest low fare airline, Ryanair has established itself in the market
especially because of the customers’ preference on availing low cost services from their airlines.
Ryanair has been innovative and has earned huge profits by catering to the section of customers-
the retired people, students and immigrants (Bridoux and Stoelhorst 2014). Here is a complete
analysis of Ryanair’s services.
Macro Environment Analysis of Ryanair
STEEP ANALYSIS
Socio Demographic Factors:
 The organizational strategy was aimed to reduce the excess expenses required for the
operation of Ryanair. The HRM of Ryanair focuses on achieving the competitive
advantage that would help the airline to sustain in the long run.
 Michael O’Leary has introduced an authoritative style of leadership in the organizational
culture which maintains a strict discipline amongst the staff members. The employees are
trained in a manner so that their attitudes are attuned to provide the finest customer care
service. Ryanair focuses on the elimination of frequent trade unions due to which they
have faced a lot of conflicting situations from staff members.
 With the introduction of low fare in Ryanair, there has been a significant growth of
passengers accounting to more than 4.4 millions in 2002. The management is in control
of decision making process, work activities and task specialization.

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Technological Influences:
 Since Ryanair is a budget airline, it operates on low cost fuel utilizing jets. They have
implemented advanced technological features in their aircraft like LCD screen which
keeps the passengers glued and prefer them (Caputo and Borbely2016).
 They have also upgraded their other technological aspects like maintaining the webpage
in place of hiring workers, so that the customers can see the availability of seats, book
tickets virtually and avail information about the different services of Ryanair.
 Ryanair has revolutionized the technological sector by selecting Vodafone to deploy the
95pc of telecoms with 3G and 4G speed operating across the 189 locations in Europe and
North Africa. This has created a secured connection with the credit card companies.
Economic Influences:
 The fall of ticket prices and lesser number of people travelling by air has affected the
business. Fall in customer income, increased marketing costs and inflation had also its
impacts on Ryanair.
 Ryanair has to evaluate the plan of economic class and develop a flexible marketing
strategy in order to incur profits.The low fuel fare can also lead to greater price
competition by new companies (Creaton 2014).
Environmental Influences:
 Ryanair has tried to implement noise reduction methods in order to avoid penalties that
are being imposed for degrading environment.

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 Ryanair should now take steps to lessen the carbon emission that is leading to global
warming.
Political, Governmental, Legal and Regulatory Influences:
 Ryanair has a significant portion of its operation in UK and the fluctuations in UK
economy can affect Ryanair.
 The Brexit Refurendum can also affect Ryanair due to restrictions on freedom of
movement between UK and EU (Kaufman 2015). Around 28% of revenue in fiscal 2016
came from UK.
 Any phrase of recession in UK due to Brexit can also affect the smooth operation of
Ryanair. Irish tax increase and several other tax assessment and audits can risk Ryanair.
 In 2005 according to the rule, the passengers whose flights got cancelled / delayed for
reasons like strikes, weather conditions and will be given accommodation and food apart
from lodging. This was a blow to Ryanair’s business profits (Jacob and Jakesova 2003).

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Micro Environment Analysis of Ryanair
Existing Competitive
Rivalry: (Low)
Threat of the Substitutes:
High
Figure: PORTER FIVE FORCES MODEL

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Bargaining power of suppliers: High as Ryanair invests huge on pilot training needs and
purchasing of planes from Boeing and Airbus.
Bargaining Power of Buyers: Bargaining power of buyers is high because of the customers face
little difficulty whilst switching from one budget airline to the together. Ryanair can lose
customer if a rival competitor decreases its fare. Ryanair has inadequate brand loyalty in this
respect.
Threat of Substitutes: Cost options like railway, video conferencing, car rental services and sea
transports. It is due to this reason that Ryanair constantly introduces lower prices comparing the
same with trains and services. Therefore, threat of substitutes is high for Ryanair (McCarthy
2015).
Threat of New Entrants: Low, mainly due to capital requirements and limited access to
distribution channel. Furthermore, the airline industry has significant number of entry barriers.
Existing Competitive Rivalry: Easyjeyt is one of Ryanair competitive budget airline. Ryanair
can expand the short-haul routes and work on the flight turnaround to hold a strong marketing
position.
Threat of New Entrants:
(Low)
Bargaining Power of
Buyers: (High)
this is because the
Bargaining Power of
Suppliers: (High)

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SWOT Analysis of Ryanair
STRENGTHS
 Brand Recognition: It currently holds the reputation of being Europe’s biggest and most
innovative budget airline brand
 Low Budget Fair: The low cost tickets enable Ryanair to build strong customer loyalty
base (Düsseldorf 2016).
 High Publicity: This is mainly because of their famous CEO Michael O’Leary.
 Easy Services: Ryanair offers customers easy ticket booking services over websites. The
same is also helpful to extract information about the airline company.
 Size: it has a large network, operating across 30 countries and 186 airports.
WEAKNESSES
 Customer dissatisfaction: mainly due to flight cancellation and schedule changes. Often
times, passengers also complain about the food quality and the lack of premium services
like British Airways.
 Seasonal Earnings: the earning reaches its peak during the summer in the northern
hemisphere and suffers blows during the offset winter season stretching from October to
March.

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OPPORTUNITIES
 Innovative and Improved Customer service: Ryanair has tried hard to enhance the
quality of services that they provide to the customers on board (Vasu, Stewart and Garson
2017). They have implemented a number of steps like a range of entertainment inside the
flight, relaxed baggage restrictions and many.
 Efficient Fuel Consumption: Ryanair has made use of judicious measures to reduce fuel
consumption as well as environmental damages.
THREATS
 Cheaper Alternative Transportations: For instance railways and skype can be threats for
Ryanair and make it lose customers.
 Fuel Cost Fluctuations: mainly due to inflation which increases both the fuel and
airplane process. Ryanair also incurred staff dissatisfaction during the recession and this
made Ryanair suffer more losses.
Conclusion
Ryanair airlines have struggled to pace up but however with the implementation of the above
strategies can surely maintain its position as one of the best budget airlines in Europe. Having
a fine balance in between the services and fare can help Ryanair dominate in the airlines
industry.

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Figure: Ryanair Growth Chart

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Reference List:
Bridoux, F. and Stoelhorst, J.W., 2014. Microfoundations for stakeholder theory: Managing
stakeholders with heterogeneous motives. Strategic Management Journal, 35(1), pp.107-125.
Caputo, A. and Borbely, A., 2016. The firm’s strategy and its negotiation capability: the Ryanair
case.
Creaton, S., 2014. Ryanair: How a small Irish airline conquered Europe. Aurum Press.
Düsseldorf, I., 2016. Ryanair. SWOT Analysis of the Leading Low Fare Airline.
Jacob, M. and Jakesova, Z., 2003. Emerging Tendencies in the European Airline Industry: an
investigation of SAS and Ryanair.
Kaufman, B.E., 2015. Market competition, HRM, and firm performance: The conventional
paradigm critiqued and reformulated. Human Resource Management Review, 25(1), pp.107-125.
McCarthy, C., 2015. Low Cost or Luxury–Can the low cost short haul airline model be
transferred to long haul operations with specific reference to the case of Ryanair? (Doctoral
dissertation, Dublin, National College of Ireland).
Vasu, M.L., Stewart, D.W. and Garson, G.D. eds., 2017. Organizational Behavior and
PublicManagement, Revised and Expanded.Routledge