Case Study- “Ryanair: the Low Fares Airline- Future Destinations?”

Topics: Low-cost carrier, Airline, Strategic management Pages: 7 (2283 words) Published: August 21, 2013
Strategy and Leadership

The following assignment is based on the Case Study below
“Ryanair: the low fares airline- future destinations?”
By Elanor O’Higgins
Questions to be discussed:
I. Critically Review the leadership style of Michael O’Leary. II. Review the concept of value chains and core competences and explain how knowledge of these concepts might assist Ryanair in its strategic development. III. Consider using suitable models the competitive position of Ryanair.

[Note: The questions above are discussed in a flowing matter of the subject and not necessary answers them separately. They are all interrelated and go back and forth, mainly question no two and three.]

Introduction:
Since its inception in 1985, the Irish based airline (Ryanair website) Ryanair, is currently Europe’s leading budget carrier has experienced a rapid growth of the airline as a result of providing low cost, no frills service and designed low fare flights to stimulate demand whose idea originated by Michael O’Leary who was appointed CEO in 1994. It originally provided scheduled airline services between Ireland and the UK, with its biggest operational base at London Stansted Airport, UK. Following Michael O’Leary’s intervention, thanks to his determination, the company has now grown massively into one of the Europe’s first and largest low fares, no-frills carrier. Furthermore, it delivered 12% increase in profit despite a 74% increase in fuel cost, ancillary revenue grew by 36% later turning the airline to the most profitable airline in the world, on the basis of operating, and net profit margins. This steady growth has carefully guided by the genius yet controversial methods that have been used while competing with their main industry rivalries at the time- Easyjet, BA and KLM.

Leadership style of Michael O’Leary:
The two main leadership styles involved are transformational and transactional leadership. By definition, transactional leadership focuses on the role of supervision, organization and group performances, whereas, the transformational leadership style conveys on a clear vision, leads more to a positive change in those who follow and not only are these types of leaders passionate, energetic and enthusiastic, they go above and beyond each member of the group to succeed. Both types are gravely needed in guiding organizations to success.

Management styles range from a laisser faire approach to a more rigid autocratic or micromanaging styles, however it is up to the type of manager one chooses to portray and apart from their goals, how do they coma about in achieving them through the treatment of their employees. In addition to this, different techniques are employed to boost employee performance or accomplish internal change. Whatever one chooses to adapt, it is crucial to the long term success of the company.

In the case of Michael O’Leary in the Ryanair case study, his leadership style shifted from the transactional to the transformational leadership and in contrast to operating a full service conventional airline at first, it later strived to become Europe’s first low fares, no frills carrier. An article posted in 2012, by Mark Pegg, director at Ashridge Business School, comments with observation to Mr. O’Leary’s leadership style quotes: “By any measure, he has succeeded and delivered wealth to his shareholders beyond their wildest dreams.” Tuttle (2012) suggests that O’Leary’s leadership style has generated many controversial arguments within the business environment and has been described as aggressive, provocative, arrogant and irritatin g. More who agree, emerge from posted online comments (Anderson, 2012), which are, moreover, supported by some of the most well known and important personalities in the business world, such as EU Commissioner Phillipe Busquin.

One may ask whether Michael O’Leary is an asset or a liability to Ryanair in the case study, however it suggests that it might actually be...

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