Ryanair Report

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27.5.2011
International Tourism Management/ Strategic Management | TSM3A| Case 2| RYANAIR|

Table of Content

Introduction3
Step 1: Identifying positioning questions3
1.1.Summary3
1.2.Main Problem and Questions4
1.3.Description of the strategic development5
Step 2: Gathering and Analyzing the Facts7
2.1. Analysis of Ryanair´s Environment7
2.1.1. PESTEL7
2.1.2. Five forces Analysis9
2.2. Analysis of Ryanair´s Strategic Capability12
2.2.1. Strategic capabilities and competitive advantage12
2.2.2. Cost efficiency14
2.2.3. Robustness15
2.3. Analysis of Ryanair´s Competitive Strategy and business model17
2.3.1. Competitive strategy17
2.4. Analysis of Ryanair´s stakeholder expectations and purposes21
2.4.1. Stakeholder analysis21
2.5. Business Economics Analysis24
2.6. SWOT26
Step 3: Alternative Courses of Action27
Step 4: Decision and Reasoning30
Step 5: Implementation32
Conclusion34
References34
Appendix36

Introduction
The ensuing report deals with a situation analysis of the low-cost carrier Ryanair. The strengths and weaknesses of this company are determined and different strategies developed in order to stay at the leading position of the European market. The first step consists of a summary of Ryanair in order to understand the characteristics of the company. The next step deals with the main problems and questions to identify the strategic position and strategic choices of the carrier. Consequently, a detailed analysis of Ryanair`s environment, strategic capability, competitive strategy and stakeholder expectation is conducted by means of strategic models from the book Exploring Corporate Strategy written by Johnson, Scholes and Whittington (2008). The SWOT and TOWS matrix help to summarize the findings and to suggest three options for Ryanair`s future in order to stay successful. Next, one strategy is explained in detail and implemented including an action plan. A short conclusion is given in the end summarizing the outcomes of the report. Step 1: Identifying positioning questions

In order to provide an overview of Ryanair`s business concept a summary is referring to he most important facts. Then, a description of the strategy development is given and the main problems and questions concerning Ryanair`s strategic position and choices are stated. 1.1. Summary

Ryanair was founded in 1985 by the Ryan family in respect to provide scheduled passenger services between Ireland and the UK. At first, the airline started with only three different types of aircraft, offering a full service with two diverse classes of seating. During the first two years Ryanair was a direct competitor to Aer Lingus. However, Ryanair had to struggle and made losses of IR£ 20m. In the early 90s, the owner of Ryanair made radical changes and used a new strategy in order to become Europe´s first low fares, no frills carrier. The new strategy was copied from a successful Texas based carrier, namely Southwest Airlines. A new management team was established with the new CEO Michael O´Leary, who subsequently became the airlines key figure. Ryanair started to offer the lowest fares in every market and changed to fly with only one single aircraft fleet type, the Boeing 737-800. The company grew step by step by opening new hubs in Europe. In 2003, Ryanair achieved to become the most profitable and the most highly valued airline in Europe ahead of Lufthansa and British Airways. In the same year Ryanair took over Buzz, the budget airline subsidiary of KLM which provided immediate access to new French regional airports (Eleanore R.E. O`Higgins, 2004). Ryanair provides no-frills service in order to offer low ticket prices for budget conscious travelers. Therefore, Ryanair focuses on a strict cost management and provides frequent point-to-point short-haul flights to mainly secondary airports. The Internet website is a crucial tool for the customers in order to...
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