Strategic Analysis of Ryanair

Adesuyi , Ibukunoluwa(@00284075) Agbelusi, Oluwafisayo Tola(@00299101) Ibiloye, Omotoke Seyi(@00289980) Ogunbor, Ogunbor, Osarobo Naomi(@00291067) Orija, Oluwabusola(@00295120) Uchealor, Bill-Anthony(@00284390)

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Business environment of Ryanair  Pest Analysis Porter¶s five forces Strategic group analysis Value chain analysis Resource based view Leadership style style of Michael O'Leary Conclusion and recommendations

 Airline industry

PEST Budget airline industry

PORTER¶S FIVE FORCES Ryanair 

STRATEGIC GROUP

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Political

factors

Deregulation as the market increases in size, therefore economies of scale may arise. Expansion of EU `

Economic

factors

R ecession ecession

September 11 crisis `

Social factors Changing

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consumer demographics

Technological factors Fluctuating

consumer preferences increase in economies of scale in production due to expanding market size E-commerce method of selling tickets, therefore less infrastructure infrastructu re required, overhead savings

Threat of New E ntrants ntrants MEDIUM High capital investment Barriers of entry Threat of existing existi ng firms

Industry Competitors

Suppliers Bargaining Power MEDUIM Switching cost

Buyers Bargaining Power

Rivalry Among Existing Firms HIGH c ompetition petition High degree of com

Threat of Substitute Products MEDIUM Main: Land, rail and water Indirect: video conferencing

HIGH Low switching cost Price sensitivi sensitivity ty Low loyalty

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Strategic Group Map of  R yanair: yanair: Easyjet, Aer Lingus and an d yanair are in the same strategic group and so compete R yanair closely. The Critical Success Factors (CSFs) of R yanair yanair are as follows: The strategic focus of having the lowest prices. Being reliable in the industry for fo r punctuality. punctuality. Service and frequency. frequency.

Minimum Corporate HQ 

Infrastr. HRM

Low

Cost Training

Limited Crew

Management Control

Internet

Integrated

Information

Systems

Boeing Discount

Alliances

Outsourced

Quality Training

No Frills

Low Cost Suppliers

Low Cost*

Tech. ech . Dev D ev..

Internet

Proc.

Airport Agreements

Inbound Logistics

Operations

Quick Turnaround time

In-house Low Tech

Performance Contracts

Marketing

Internet Sales

Low Cost Low Cost Promotions

Limited Resources

Free Publicity Controversial

Reliable Service

Yield Management

Outbound

Marketing

Logistics

& Sales

Internet

Sales

Basic/Low Cost High Productivity

Service

THRESHOLD RESOURCES Website Operations Opera tions denom denominate inated d in Euro Offices, facilities, appropriate personnel, suppliers and customers

UNIQUE RESO UNIQUE RESOURC URCES ES Brand name(Ryanair) Management Managem ent team(Micheal team(Micheal O¶lea O¶leary) ry) Number one low budget airline Boeing airplanes

THRESHOLD COMPETENCES Outsourcing of major services Online booking Operation of on-time delivery Point to point routing

UNIQUE COMPETENCES No frills frills strat strategy egy Reduced turn-around time Low cost Route policy strategy

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 Autocratic style of leadership

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Determining strategic direction.

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Effectively managing the firm¶s resource portfolio.

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Exploiting and maintaining core competences.

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Developing human and social capital.

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Sustaining effective organisational culture.

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Improve

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Improve

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customers perception of  R yanair  yanair 

its oil hedging and currency trading practice. Expand into Eastern Europe and North Africa countries.

Succession planning. Continue its market penetration plans especially their strategic alliance with Aer Lingus. By applying the above recommendations, R yanair yanair will definitely maintain its leadership position in the budget budg et airline industry.

http://www.youtube.com/watch?v=g3so6AJe4UQ