Ryanair External Env. Analysis

Topics: Airline, Southwest Airlines, Low-cost carrier Pages: 48 (10036 words) Published: April 28, 2011

1.0 Introduction1

2.0 Critical Issues Analysis2

3.0 External Environment Analysis2

3.1 Analysing the Macro Environment2

3.1.1 PEST analysis2

3.2 Industry Analysis3

3.2.1 Five forces analysis3

3.2.2 Porters Diamond Model4

3.2.3 Strategic Group Analysis4

3.2.4 Industry Life Cycle Analysis5

3.2.5 Synthesis of External Factors (EFAS)5

4.0 Internal Analysis6

4.1 Value Chain Analysis6

4.2 Internal Factors Analysis Summary (IFAS)6

4.3 Ratio Analysis7

5.0 External Environmental Evaluation7

6.0 Internal Environmental Evaluation8

6.1 Resources9

6.2 Resources and Capabilities9

6.3 SWOT Analysis9

7.0 Conclusion10

8.0 References11

9.0 Appendix............................................................................................................................12

1.0 Introduction

Ryanair is a one of leading low fare airline with 41 bases and 1100 routes across 26 countries which connect 153 destinations. It has currently 7,000 staff and expected to provide service approximately 73 million in fiscal 2010/11. (“Ryanair (about us)”, n.d.)

Ryanair was established in 1985 in Ireland with only 51 staff and 15 seated Bandeirante aircraft. At that time Ryanair operated daily flight from Waterford in the southeast of Ireland to London Gatwick as an alternative to monopoly carrier Aer Lingus. Within very short time Ryanair got the permission to expand its service to Dublin-London route especially to challenge the British Airways and Aer Lingus high fare. (“Ryanair (about us)”, n.d.) At that time Ryanair was successfully able to slash their competitor’s high pricing strategy by attracting more passengers towards their low fare in its operations. Thereafter Rianair continuously was able to expand its operations in European airline industry.

As a result of rapid growth, high competition in aircraft, Ryanair accumulates £20m losses in year 1990. This badly course to Ryanair survival at that time and its invested additional money to restructure the company. It was successfully able to restyle Ryanair by imitating Southwest Airline model which was highly successful Texas based operator. (“Ryanair (about us)”, n.d.) Thereafter Ryanair became Europe’s first low fares and no frills carrier. This was the main strategic decision that the Ryanair took to face the backdrop of the European airlines.

After restructuring as a low fare career, Ryanair was able to expand its operation rapidly by overtake other main competitors like Aer Lingus and British Airways and became the largest passenger airline. In year 2006, the company records profits of £329m and with 42 million passengers. According to Air Transport World Magazine Ryanair was the world most profitable airline in terms of operating, net profit margins and per-airplane, per-passengers. In fact it was maintain upon no fuel surcharge. With this success Ryanair was bid for fellow carrier Aer Lingus.

2.0 Critical Issues Analysis

Ryanair’s main business strategy is low fare strategy and it’s continuously able to implement that strategy by getting maximum outcome. Even with these great business achievements, we can analysis the Ryanair business operations by highlighting several critical issues. These issues and organisational performances are can analysed under financial performances, customer performances and internal current performances as mentioned in Appendix 1.

3.0 External Environment Analysis

When considering about the external environment of the organisation, it is made up with main two sub environments including macro environment and task environment.(Appendix2) Before move into each type of environment it is important to understand the nature and the complexity of the given environment (Appendix – 3). When consider the external environment, it’s basically consists of uncontrollable external factors. As a business organisation Ryanair is...
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