1. In-depth environmental analysis of the European Airline industry and discuss the implications for the budget sector and especially for Ryanair. 2. An integrated understanding of the functioning of a company – its human and technical operations, leadership, customer relationships and financial structure. 3. Implications of the internal functioning to create viable strategic positioning and discuss any changes to Ryanair’s approach to ensure an improved sustainability 4. Evaluate the strategic leadership style of Michael O’Leary
Chloe Butler BUT02048210 BSc Multimedia Technology
Business Development V Assignment 2 John Denholm
Table of Contents i. Title Page ii. Table of Contents I. Introduction II. Current strategic position II.1 II.2 II.3 III. Functioning III.1 III.2 III.3 III.4 III.5 III.6 SWOT Analysis Human and Technical Operations Customer Relationships Financial Structure Leadership Implications on strategic positioning Market Segmentation Prescriptive, Emergent or something unique Competitive Advantages
IV. Environmental analysis V. Recommendations V.1 VI. Conclusion VII. References VIII. Bibliography IX. Appendices IX.1 IX.2 Appendix A – PEST Analysis, Haberberg and Rieple (2001) Appendix B – Selected responses to survey on no-frills airlines – Changes to ensure sustainability
Haberberg and Rieple (2001)
Appendix C – Excerpt concerning Ryanair’s dispute with the EU
Commission IX.4 Appendix D – Financial Information
I. Introduction Ryanair is an Irish airline competing in the fairly recent development of the European budget airline industry. They are one of the key players within the market, and perhaps the most profitable. This report undertakes a detailed study of Ryanair. It looks at Ryanair’s current strategy and the management of that strategy. It identifies how the business’ operations and functions impacts on the carrier’s customer relations and leaderships with regard to their overall strategy. It also gives a brief evaluation of Ryanair’s financial structure as well as an environmental analysis of the European airline industry and how this affects Ryanair. The report is mainly a case study analysis based on Eleanor O’Higgins’ review of Ryanair conducted in 2004. However, other secondary research has been analysed and used to support the arguments put forward in this document.
II. Current strategic position To evaluate any organisations strategic position certain factors have to be assessed. These include those below and also the environmental analysis which follows later in the report.
II.1 Market Segmentation Ryanair lay claim to their market segment by stating they were ‘Europe’s first no frills airline’, www.ryanair.com. Ryanair have made strategic decisions based on increasing their competitive edge, the main one becoming involved in attracting customers at both ends of their routes. Haberberg and Rieple (2001), support this by showing that Ryanair’s key source of revenue from as far back as a decade ago has been in enticing passengers from France, Italy and Scandinavia. This has had the advantage of increasing their market share as well as the added bonus of creating a well recognised brand name across Europe.
II.2 Prescriptive, Emergent or something unique? ‘A prescriptive corporate strategy is one where the objective has been defined in advance and the main elements have been developed before the strategy commences….an emergent corporate strategy is one whose final objective is unclear and whose elements are developed during the course of its life, as the strategy proceeds’. Lynch (2000) As is shown above by Lynch (2000) the two recognised strategy models are extremely different, however these are the two dominant strategy approaches as stated by Dennis Foster in his lecture on Managing Strategic Change (2006).
It is safe to recognise...