Operations management



Ryanair's Operations Strategy

What is Operations Strategy

Term 'operations strategy' in some ways sounds contradictory in terms and word operations and strategy may appear to be oxymoron. After all, operations are related to day to day creating and delivering of services and products. So how operations can be strategic? The main issue here is to distinguish between the two words which are somewhat similar bet have different meanings. Those two terms are operations and operational. The term 'operations' refers to the aspects of the business that are concerned with the production of goods and services. Term 'operational' is actually the opposite of the term 'strategic' as it's not only limited in its influence, but also implies short term, day to day activities and work processes. Some functions of the business such as finance or marketing have both operational and strategic activities. For instance, marketing strategy refers to the long-term approach that is concerned with the overall intention of an organization to position its products and services in their relative markets and how organization will go about it.

The operational facets of marketing function are concerned with day-to-day tactics related to managing things like pricing, advertising, and so on. Same goes for the operations. Operations strategy refers to the long-term issues that organization faces that are concerned with managing the resources effectively and efficiently to produce products and services. Organizations that are making and delivering products (for profit as well as not-for-profit) relies on handful of processes to effectively and efficiently get their products produced properly according to the specs of customer and delivered on time. Each of the process that organization employs to get the job done is an operation. All the operations, from designing to manufacturing are driving forces towards organization's success, therefore are essential to produce the right product on right time at right cost with optimum utilization of organizational resources with minimum or no wastage in terms of material, time and the human resource organization holds (skills and experience of employees). All the work processes collectively contributes in the achievement of organizational goals, considerations and purpose of an organization. Therefore, the more effective and efficient these operations, the more profitable and productive organization would be (Bennet et al., 1998, Pp.25).

Ryanair's operations strategy

Ryanair is the leading European low-cost carrier in Europe. Ryanair employs an operation strategy which allows the airline to offer its customers air travel at lowest possible cost and maximization of its operating margins. To achieve these two objectives, management of Ryanair pursues numerous strategic decisions such as cutting back on services, overheads and operations, and implementation of a lean structure. These include:

Streamlining the operations such as maintaining common aircraft fleet which resuls in utmost efficiency in maintenance and operation.

Increasing the seat capacity of each and every aircraft.

Pursuing the “seat only” policy which means charging for all the additional services like priority boarding, online check-in, luggage etc.

Offering supplementary services to the customers such as online gaming, hotel bookings and car rentals.

Using secondary ...