Case Study: Internal analysis of Ryanair
Case Study in: Johnson, G. et al., 2005. Exploring Corporate Strategy. 7th ed. Essex: Pearson Education Ltd.
1. Internal audit of tangible, financial and intangible resources
Tangible Resources
1. Human Resources
* Ryanair currently employs 2000 people (2003) from 25 nations.
* The pay is performance related and among the highest in the airline industry (Annual Report 2004, p. 5). Travel concessions and participation in the share option program is granted to all employees. In 2003 over 30% (639 in total) of employees took part in the stock option program - the average pay per employee was about 53.000 (Annual Report 2004, p. 21).
* CEO Michael O'Leary has significantly shaped Ryanair.
2. Physical resources
* Ryanair operates 72 aircrafts (Annual Report 2004, p. 3). All aircrafts are of a single type. Ryanair has ordered 225 brand new Boeing 737-800 aircrafts. The average aircraft age was about 10 years vs. easy Jet's was 5.1 years (2003). However with the deliver of the new aircrafts, Ryanair's figure will enhance. The average age of the fleet is important, as maintenance costs depends on this.
* Facilities: Dublin Airport facilities, but no major other ones.
Financial Resources
* Ryanair will stay mostly unhedged in 2005 (Annual Report 2004, p. 12).
* With a quick ratio of 2.7 Ryanair has enough cash even if all liabilities have to be paid at once (Brealey et al., 2001). Ryanair has also shown good profitability.
* Ryanair is listed on a stock exchange, obtaining capital in form of equity capital. In total, Ryanair has 1.5 billion in shareholder funds (Annual Report 2004, p. 12). The stock was very attractive to investors, outperforming its benchmark index.
Intangible Resources
* Ryanair has access to medium sized airports which provide cheap slot licences. The average airport charge applied to Ryanair was less than 7 .
* Ryanair has an option to get 200 additional brand new Boeing 737-800 from Boeing.
* Internet as major distribution platform
1. Internal audit of tangible, financial and intangible resources
Tangible Resources
1. Human Resources
* Ryanair currently employs 2000 people (2003) from 25 nations.
* The pay is performance related and among the highest in the airline industry (Annual Report 2004, p. 5). Travel concessions and participation in the share option program is granted to all employees. In 2003 over 30% (639 in total) of employees took part in the stock option program - the average pay per employee was about 53.000 (Annual Report 2004, p. 21).
* CEO Michael O'Leary has significantly shaped Ryanair.
2. Physical resources
* Ryanair operates 72 aircrafts (Annual Report 2004, p. 3). All aircrafts are of a single type. Ryanair has ordered 225 brand new Boeing 737-800 aircrafts. The average aircraft age was about 10 years vs. easy Jet's was 5.1 years (2003). However with the deliver of the new aircrafts, Ryanair's figure will enhance. The average age of the fleet is important, as maintenance costs depends on this.
* Facilities: Dublin Airport facilities, but no major other ones.
Financial Resources
* Ryanair will stay mostly unhedged in 2005 (Annual Report 2004, p. 12).
* With a quick ratio of 2.7 Ryanair has enough cash even if all liabilities have to be paid at once (Brealey et al., 2001). Ryanair has also shown good profitability.
* Ryanair is listed on a stock exchange, obtaining capital in form of equity capital. In total, Ryanair has 1.5 billion in shareholder funds (Annual Report 2004, p. 12). The stock was very attractive to investors, outperforming its benchmark index.
Intangible Resources
* Ryanair has access to medium sized airports which provide cheap slot licences. The average airport charge applied to Ryanair was less than 7 .
* Ryanair has an option to get 200 additional brand new Boeing 737-800 from Boeing.
* Internet as major distribution platform