RYANAIR MANAGEMENT ANALYSIS

Ryanair Management Analysis

TABLE OF CONTENT

INTRODUCTION3

CURRENT BUSINESS ENVIRONMENT ANALYSIS4

Political4

Economic4

Social5

Technological5

Micro Environmental Analysis: Porters Five forces5

Substitute products6

Bargaining power of customers6

Bargaining power of suppliers7

Entrance barriers7

Industry Competitors7

Ryanair's Strategic capabilities8

Low fares9

Frequent Point-to-Point Flights on Short-Haul Routes10

Choice of routes10

Low Operating Costs10

Commitment to Safety & Quality Maintenance11

Ancillary Services11

Focused Criteria for Growth11

RYANAIR CURRENT STRATEGIES12

Ryanair's Low Cost Strategic Implementation12

Focus-differentiation strategy14

CHALLENGES FACED BY RYANAIR15

CONCLUSION18

REFERENCES20

APPENDIX22

Chart A: Ryanair SWOT Analysis22

Graph 1: Low cost market share 33% by 201024

Graph 2: Porters Five Forces25

Graph 3: Strategic groups map for Ryanair26

Ryanair Management Analysis

Introduction

Ryanair was founded in 1985 by Christy Ryan, Liam Lonergan owner of an Irish tour operator named Club Travel, and noted Irish businessman Tony Ryan, founder of Guinness Peat Aviation. Christy Ryan was from Waterford and it was his idea to start an air service between Waterford and London. To start with airline began with a 15 seat Embraer turboprop aircraft flying between Waterford and London Gatwick with the aim of breaking the duopoly on London-Ireland flights at that time held by British Airways and Aer Lingus. Ryanair has been characterized by rapid expansion, a result of the deregulation of the air industry in Europe in 1997. Over the years, it has evolved into one of the world's most profitable airlines, running at remarkable margins by passing its costs directly to its customers. Ryanair is the largest airline in Europe in terms of passenger numbers. Ryanair's profit could be halved due to ever risen fuel cost and a weaker UK pound. The quarter of 2007 net profit dropped with as much as 27%. Applying the Southwest business model it is well know for being a “no frills airliner” generating sound financial figures. The business model is mainly focused on the price sensitivity of customers. PRC being in general an “affluent” country can be appalled and attracted by this. Being able to shell out much money but not getting the due end result could spell disaster for Ryanair (Sorokin, 1982, pp 83-190).

Current Business Environment Analysis

Macro Environmental Analysis: PEST Analysis

Political

Political and legal factors encompass actions by local and national administration and political parties, and by international bodies such as the European Commission, the UN and the World Trade Organisation(Goldschmidt, 1990, pp 34-18).

Economic

Consumer spending power is a major factor in the prosperity of any industry. In most developed and a number of developing countries, personal disposable income has been steadily increasing for the past three decades.

Social

Consumer tastes ultimately determine where demand is directed. Sometimes these tastes are manifested in what consumers themselves actually buy. In other cases they are expressed through voting, lobbying and other political processes, which influence the decisions of politicians and civil servants.

Technological

Many major transformations in the ways firms compete can be traced to technological change. Sometimes these changes span the boundaries of many industries and trigger changes in society itself.

Micro Environmental Analysis: Porters Five forces

The Porter Five Forces analysis on Ryanair offers a good explanation for the profitability of low cost airline industry, and the firms within it, also it enables us to evaluate Ryanair competitive ...