Ryanair Strategic Analysis And Recommendations For The Future

Ryanair strategical Analysis And Recommendations For The FutureRyanair is the first base figure airline business in Europe. Based on the case study of Ryanair by Eleanor OHiggins, a role of a addressment consultant is assumed to shell expose a strategic depth psychology on the friendship. The report consists of the initial environs Analysis conducted on Ryanair prior to the detailed strategic depth psychology that forget be conducted in the proximo in order to offer up the attach to with strategic recommendations for the future.The Environmental Analysis conducted consists of both an extensive epitome on the immaterial surround and the inborn environment.The external environment abbreviation is conducted in order to position the nature of the environment Ryanair officiates in and its have-to doe with on the strategic circumstance of the company. Through PESTEL, External instrument and Industry abridgment conducted, rejection of Aerlingus offer and rules and reg ulations imposed by governments etc. are cleard as the critical external environmental factor demanding Ryanairs strategy.An analysis of the internal environment through time value Chain model and SWOT analysis reveals the let on issues hindering the strategic success of the firm poor guest value and human vision problems.While this initial environmental analysis is used to assist the strategic analysis that is to be conducted on Ryanair, the greatness of taking necessary actions regarding the critical issues is highschoollighted,CONTENTEXECUTIVE SUMMARY 1CONTENT 21INTRODUCTION 32 OVERVIEW OF RYANAIR 43 faultfinding ISSUES 54 international environs analytic thinking 64.1 big ENVIRONMENT summary (Appendix 1) 64.2 INDUSTRY ANALYSIS (Appendix 2) 84.3 EXTERNAL agent ANALYSIS (Appendix 3) 85 INTERNAL ENVIRONMENT ANALYSIS 95.1 VALUE drawstring ANALYSIS 95.2 SWOT ANALYSIS 11Strengths 12Weaknesses 12Opportunities 12Threats 136 coda 147 RECOMENDATIONS 158 REFRENCE 15INTROD UCTIONRyanair is the first work out Airline in Europe inspired by the U.S figure Airline, Southwest Airlines. The report is based on the case study by Eleanor OHiggins, University College Dublin, and Republic of Ireland in 2007.The case by Eleanor OHiggins is based on the dodging of Ryanair against the backdrop of the European airline industry and the burgeoning budget sector. The case discusses the opportunities and challenges introduce up by the industry and the firm. Leadership of Ryanairs CEO, Michael OLeary is highlighted.I volition be assuming the role of management consultant identifying strategic management issues of the company. According to the shorten between my consultancy firm and Ryanair my role is to conduct a strategic analysis of the environment, the industry, company in order to recommend refreshing strategic initiatives and areas of advance for the senior management team of Ryanair. whence an environmental analysis consisting of a macro environment anal ysis, industry analysis and internal analysis is carried out initially, in order to conduct detailed strategic analysis and provide recommendations in the future.2 OVERVIEW OF RYANAIRRyanair was founded in 1985 by the Ryan family to provide scheduled rider airline attends between Ireland and the UK, as an choice to the then deposit monopoly carrier, Aer Lingus. Initially, Ryanair was a full-service conventional airline, with two classes of seating, leasing three different types of aircraft.Ryanairs objective was to fend for its position as Europes leading low-fares airline, operating frequent point-to-point flights on short-haul flights, chiefly out of regional and secondary airports. The heart of its strategy was based on providing a no-frills service with low fares designed to stimulate demand, specially from budget-conscious leisure and business travelers, who might otherwise have used alternative forms of transportation, or who might not have travelled at all.troupe Vision- To firmly establish itself as Europes low fare, schedule passenger airline through continued cleansements and expanded offerings of its low fare service.(Ryanair, n.d)Company Mission- To shape Europes most profitable low cost airline by rolling-out proven low fare, no-frills service in all markets in which we operate to the benefit of passengers, people and stake-holders. (Ryanair, n.d)3 CRITICAL ISSUESThe critical strategic issues approach by Ryanair idler be set as follows based on analysisPoor Customer Service where the guests are unsatisfied and face episodes of dissatisfactions due to the poor services provided by the un congenial staff of Ryanair has been identified as the critical issue that dismiss be identified by reading the case. The high insurance charges and the need of services regarding safety terms, lack of comfortable seating and other facilities has lead to this negative word of talk spreading with regard to guest dissatisfaction which is clearly identif ied.The other main issues that dejection be recognized can be unwillingness and failure to recognize unions where Ryanair is also fired for providing poor running(a) stipulations for its workforce. In July 2006 the Irish high court found out that Ryanair had bullied pilots and forced them to agree to a novel contract, pilots had to pay 15000 for retraining on a new aircraft if they left the airline. In 2006 pilots of Ryanair lodged a pay claim stating that there is significant difference in take home pay between Ryanair and Aer Lingus pilots it also claimed that training pilots were working for nothing.Understanding that employees and the customers are the factors that decide the success of the company Ryanair should solve these critical issues.4 EXTERNAL ENVIRONMENT ANALYSISExternal Environment analysis in conducted to analyze the nature of the environment the firm operates in. It identifies the forces in the environment affecting the firm and its degree of come to. It also i dentifies the opportunities, threats and challenges faced by the company.The external environment analysis for Ryanair consists of a macro-environment analysis, industry analysis and external factor analysis.The macro environment scans and indentifies the general environment factors that can have an impact on the scheme whereas the industry analysis focuses on the competitive situation of the company.4.1 MACRO ENVIRONMENT ANALYSIS (Appendix 1)The macro-environment is composed of major external and seditious factors that influence an organizations decision making, and affect its performance and strategies. These factors include the Political, Economical, Social, Technological, Environmental and lawful forces (PESTEL). These forces do not change frequently, but when it does, it has a major impact on the organization.The PESTEL analysis looks at the general environment in which the organization is operating in and alleviates to realize the risk associated with the market growth or decline. PESTEL is the abbreviated form of the following factors respectively Political factors that can be identified that will have a great impact on Ryanair are Aer Lingus rejection to amalgamate with Ryan Air, security measures and restrictions, stable political situation and the new EU regulation compensation law.Economical factors include the depreciation of US Dollar, availability of efficient substitute transport methods and also reduction in distribution costs from customers adapting to online check-ins where identified as the factors that has high influence regarding the sparing influence.Social factors are important to be identified as firms to be aware of these factors because they can directly affect the way the organizations manage the operations, more than than importantly human resources and marketing.Technological is also playing a brisk role as many new advances in technologies can affect the way businesses are carried on. Technological developments represent a real chance for the skillful people who can understand and apply them appropriately and the key factors identified that would have a high influence are environmental- friendly aircrafts and availability of online transactions.Environmental factors for Ryanair include noise level controls, global warming, gullible house gas effects and corporate social responsibility policies and environmental protection laws.4.2 INDUSTRY ANALYSIS (Appendix 2)The second stage of the external environmental analysis is to assess the industry environment and the aim of this analysis is to identify those factors that could contribute to or affect the industry profitability. To aid in the industry analysis, Porters Five Forces Model will be used.Porter developed a technique analyzing five forces that affect industry profitability known as Five Forces Model. These forces shape the industry and increase the intensity of competitiveness, and therefore, the profitability and attracter of the industry. Th is model helps to indentify the dynamic factors of the industry and the market to compete effectively.4.3 EXTERNAL FACTOR ANALYSIS (Appendix 3)The EFAS table is one way to organize the external factors into the mostly accepted categories of opportunities and threats as swell as to analyze how well a particular companys management responds to the specific factors in light of the perceived vastness of these factors to the company.The factors which were identified as important were put in to this table to see to it if they were opportunities or threats for Ryanair.According to EFAS, the key threat imposed on the company is the current political and legal factors and the increasing oil prices. The customer attitudes towards Ryanair is irresponsible and the friendly environment of aircrafts which are seen to be key opportunities that can help lessen the effects of threats faced by the organization.5 INTERNAL ENVIRONMENT ANALYSISThe internal analysis aids in discovering the strengths , resources, capabilities and activities that the organization possesses in order to perform better than their competitors and those that add measure to customers. To indentify the key strengths, weaknesses resources and capabilities of Ryanair, the Resource-Based check and the Value Chain Analysis will be used.5.1 VALUE CHAIN ANALYSISThe vale chain is a set of activities that the organization undertakes or organizes to deliver the product to the customer. A value chain has two large-minded categories aboriginal activities and support activities. Primary activities represent the sequence of activities inbound logistics, operations, outward logistics, marketing/sales and service through which raw materials are born-again into benefits enjoyed by customers. Support activities are those tasks that contribute or assist the firms primary activities and include -procurement, technology development, human resource management and infrastructure.A value chain analysis performed for R yanair is shown in appendix 04. Each activity penalize is value-adding to the organization and its customers.5.2 SWOT ANALYSISStrengthsCompany reputation first cheapest budget airline in the European industryInnovative cost reductions wont of new environmental- friendly aircraftsSubstantial market growthLargest web rate in traveler industry 5thmost recognized brand.Labor force of divers(a) cultures to better serve customersNo fuel charges imposed on customersWork-life-balance do to prevent overflying for pilots and unnecessary accidents.Establishment of a safety committee.WeaknessesRefusal to recognize unions decreased customer satisfactionPoor customer services no devolve for cancellations, no accommodation provided for flight delays, etc.Over dependency on Michael OLearyOpportunitiesBy merging Ryanair with Aer Lingus it gives them better advantages such(prenominal)(prenominal) as being more efficiency in the industry, will be able pay to glower tax and operation cost as we ll as will be able fly to more destinations.By choosing Sub-Main airports to reduce Airport Charges Rather than choosing main air port and paying more gold to them.It facilitated the introduction of new consumer oriented innovative Service.ThreatsWhile new service was introduced it was rejected 72% by poll readers of the Financial Time.As well as passengers have resisted paying 8 to rent a games and entertainments console, in all likelihood because it was not worthwhile for short flights.Keeping the staff training and aircraft in a fleet commonality makes the Ryanair in a probable conditionDue to noisy environment customers will avoid choosing Ryanair mean prison term it would be only a second choice for them.Gurdidian Newspaper aver that insurance fee Ryanair charge from each passenger is very lots high. Such shocking news avoids customers to book their own ticket.6 endpointThe external environment analysis is conducted for Ryanair in order to assist the future strategic anal ysis assuming the role of a management consultant. some(prenominal) the external and the internal environments of the company is critically analyzed using tools such as PESTEL, Five forces model, Value Chain and SWOT analysis.The critical issues lining Ryanair can be identified as poor customer service and human resource management issues.With regard to Ryanairs external environment, the following forces can be identified as having a critical impact on the firm rejection of Aerlingus offer and rules and regulations imposed by governments etc.According to the Value Chain Analysis, Ryanairs core competency and critical success factor is identifies as its low cost. SWOT Analysis further confirms that and also points out the weaknesses such as poor customer service and inefficient human resource practices which may eventually prove to be costly for Ryanair and hinder the authorisation of its competitive advantage.7 RECOMENDATIONSThe environmental analysis is used as an initial analys is for the detailed strategic analysis which will provide recommendations to Ryanair. heretofore based on the environmental analysis some initial recommendations can be made.The critical issues facing Ryanair is identified as poor customer service and human resource management issues. It is important that Ryanair attends to these critical issues immediately. Therefore Ryanair couldRecognize labour unions be more people oriented to improve employee relationships and encourage career development in order to efficiently manage their Human Resource in the future and there by strain high employee commitment leading to a successful workforce.Improve the customer service they offer while minimizing cost. This could be achieved through improving the whole tone of training given to frontline employees and managing through a TQM (total quality management)8 REFRENCEBeamish, H. R. (2008). Strategic trouble. (3rd edition). New South Wales, Australia Pearson Education Australia.BusinessDictio nary.com (2009). Retrieved August 20, 2009 from http//www.businessdictionary.com/definition/macro-environment.htmlHill, C. (2007). Strategic forethought An integrated Approach, (2nd edition.). Australia John Willey Sons Australia, Ltd.Hubbard G. et al. (2008). Strategic Management. Pearson Education Australia.OHiggins, E. (2004). Ryanair Report.Wheelen T. L. Hunger J. D., (2000). Strategic Management and business policy. 7th edition.