1.0 Terms of References
As the newly appointed Head of Research for Ryanair, I will review the current strategy for the company. Ryanair is a very low-cost Ireland airline and it is operating to 180 destinations within the European Union. The internal analysis of Ryanair, the firm is using the SWOT technique also highlighted various features of the airline company. The Ansoff and Porter 5 forces analysis highlights information such as Ryanair leading the approach in online booking and the need of union support at Ryanair creating further flexibility. (Witcher, 2010)
Ryanair was found on internet sources, authorised company website and in journal articles. The information related to Ryanair is accessible on electronic book, articles and blogs. Furthermore, newspaper and course books are also helpful in finding information related to this task. The lecture notes, writing material, presentation and discussion in class is very helpful in understanding and gathering the information.
Macro environment of a company, PESTLE Analysis, SWOT analysis will be discussed on this report
3.1 PESTLE and Competitive Analysis of Ryanair
- In 1978 the deregulation was helping the industry to grow, which was began in US from which the deregulation act was shifted the control over the air travel from political to market domain (Boesch, 2007).
- There was an agreement the open sky agreement which is form of a deregulation that be affected the Ryanair position in airline industry in future,
- Ryanair took the full advantage of new opportunities that was presented to them. That was about the new designation, routes and charges depending upon circumstances. (Elmers, 2011)
- The oil prices were an issue of all the airlines, but they have resolved their issue through hedging.
- As the increase of oil and fuel was actually giving benefit to Ryanair , actually by forcing the competitors at higher prices
- In social factor airline has an advantage by consumer needs in cheap prices, focusing on the previous luxury of flying, which was complementary, the biscuits and drinks were charged in the every aspect.
- Ryanair in 2009 began the overview and starts self-service passenger check in, as that was present already for customers who were travelling deprive of luggage, but now this service is for every traveller.(Hoffmann, 2015)
Ryanair’s two main low-cost competitors are EasyJet and Air Berlin.
- EasyJet Europe second largest passenger numbers air carrier, EasyJet strategy is similar to the Ryanair low cost with high margins, operates main primary airports, more business passengers.
- Air Berlin is the third low-cost air carrier in Europe, Air Berlin strategy is semi low-cost carrier operates traditional and low cost airline services with different types aircrafts for long haul and short haul destinations, Air Berlin offer more services at lower cost.
Consequently, EasyJet is the biggest threat to Ryanair; the reason is both airline carriers to employ similar business strategies to get more passengers, furthermore EasyJet more focusing the European market than Air Berlin.
3.2 Internal analysis of Ryanair:
- Ryanair is the leading airline in the Europe.
- The airline has rapidly increasing the its Boeing 737 aircrafts
- Ryanair adopt a low cost concepts, keeping low cost with irritate free
- Ryanair employs the cost leadership strategy
- Ryanair concentrates in lowering its costs by always findings ways to change their primary and secondary actions to reduce cost
- The company is follows a very deliberate strategy which is only configured with single class assigning no meals as it offers low fares
Company strategy: Ryanair’s organization society is about offering a low charge item which applies a draw on passage mindful clients and is on the premise of restricted outing favourable position the same number of their rivals do not employ this attitude.
Passenger Service: Ryanair’s airline company culture is about present low fare products which concern a pull on fare-aware customers and is on the beginning of one-way trip which has an advantage as many of their competitors. (Mayer, 2008)
3.3 Porter’s 5 Force Analysis, SWOT Analysis, Ansoff Product Matrix of Ryanair
Porter 5 forces
Bargaining power of suppliers
- The costs of supplier switching for Ryanair is enormously high
- Pilots have high bargaining power in the industry. (Mennen, 2010)
Bargaining Power of customers
- Ryanair valuable customers advantage from high bargaining power because switching to another airline is simple and not connected with extra expenses
- Increase level of price sensitivity
Threats of substitute product and services
- No alternatives for high-speed travelling, except perhaps high-speed trains
Threats of new entrants
- International and local airports may not be able to make extra slots in their platforms to provide new entrants into the market.
Ansoff Product Matrix
- Existing Market/Existing Products – Market Penetration: Scandinavia, Germany, Eastern Europe
- Existing Market/New Products – Product/Service development: ancillary service
- New Markets/Existing Products – Market Development: Eastern Europe extension, newroutes, newdestinations
- New Markets/New Products – Diversification: expand to new markets(Russia, Asia)
- Ryanair is the largest low-cost airline carrier in Europe and provides lots of benefits to the valuable customers over its competitors.
- Weakness of this airline is to set up the reputation in social media and among people.
- Ryanair made many opportunities to expand, when they were thriving at economic climate.
- Ryanair planned to expand beyond EU market to Asia, Russia, through which there could an increase of traffic of passenger.
- Dealing with Chinese Aircraft Manufacturer COMAC (theguardian.com)
- The airline has the biggest threat which is recovery of economic condition.
This airline was doing extremely well and announced that it is the Europe’s largest airline which is scheduled and earning with increasing rate of 17 percent half per year. Ryanair in 2009 began the overview and starts self-service passenger check in, as that was present already for customers who were travelling deprive of luggage, but now this service is for every traveller. Some of the issues are customers are not happy with the services and airline has to improve the quality in order to make improvements. (Mayer, 2008)
This airline has significant reputation in all over the Europe, in order to gain expansion the airline needs to improve the customer services and social media attraction. The valuable customers wants proper attention in product and services otherwise they will not spend a second to switch to another airline. The company has a significant name in the airline industry. In order to gain more market shares the company needs to make changes in services and give more attraction packages to customers will help them to grow rapidly and people will trust this airline in more frequent manner.
- Barry J. Witcher, V. S. C., 2010. Strategic Management: Principles and Practice. illustrated ed. s.l.:Cengage Learning EMEA.
- Boesch, F., 2007. The Ryan Air Model – Success and Impact on the European Aviation Market
- CAPA, (2013) “Ryanair SWOT analysis – Michael O’Leary’s maniacal focus on being the lowest cost producer” [Online] http://centreforaviation.com/analysis/ryanair-swot-analysis–michael-olearys-maniacal-focus-on-being-the-lowest-cost-producer-96465/ Accessed on 27/12/2015
- Creaton, S., 2007. Ryanair: The Full Story of the Controversial Low-cost Airline. revised ed. s.l.:Aurum.
- Elmers, S., 2011. Ryanair Voted Least Favorite Airline for Third Year Running
- Hoffmann, J., 2015. Ryan Air. Environmental Analysis, Core Competencies and Strategy Proposal.
- Hoffmann, S., 2007. The Low-Cost Airline Ryanair
- Kahawatte, U., 2010. Ryanair’s Strategy from a Perspective of Core Competencies.
- Ller, C. M., 2011. Ryanair case study and strategic analysis: An analysis on the competitiveness and low-cost strategy of Europe’s leading low-cost carrier.
- Mayer, S., 2008. Ryanair and Its Low Cost Flights in Europe
- Milmo, D. (2011) “Ryanair snubs Boeing by announcing jet design pact with China’s Comac” The Guardian [Online] http://www.guardian.co.uk/business/2011/jun/20/ryanair-designs-chinese-rival-boeing-737 Accessed on 27/12/2015
- Mennen, M., 2010. An Analysis of Ryanair’s Corporate Strategy.
- Ryanair (2015) Passenger Charter [Online] http://corporate.ryanair.com/about-us/passenger-charter/ Accessed on 27/12/2015
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