Senior Management Team Of Ryan Air Tourism Essay

A Jenoir direction adviser is supplying adviser service for strategic direction of the companies.

Senior direction squad of Ryan air inside informations on the contracts signed with Jenoir direction consulting company for acquire the confer withing service in strategic direction of the Ryan air ‘s hereafter. As a consequence of this we carried out a strategic analysis in footings of the environment, industry and besides sing the internal public presentation of Ryan air.The purpose of this study is to supply confer withing services to Ryan air for its strategic direction in the hereafter. This study will concentrate on:The strategic analysis of the Macro Environment taking into history the PESTEL factors which will pull out the chances and menaces,Industry analysis utilizing the Porters Five Forces Model and a Strategic Group Model andInternal analysis pulling out the resources and capablenesss and the VRIO utilizing the Value-Chain Model for Ryan air.Thereafter, recommendations will be given as to how Ryan air can better which will be continued in the 2nd portion of this study. Hence, this study will demo how Ryan air can execute better in the long tally by placing the cardinal strategic issues.

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Table of Contentss

EXECUTIVE SUMMARY 1Table of Contentss 11.

0 INTRODUCTION 32.0 CRITICAL ISSUES 42.1 Company Background 42.


1 PESTEL ANALSIS 53.1.2 Porter ‘s Diamond Model of Ryan air 63.2 INDUSTRY ANALYSIS 63.

2.1PORTER ‘S FIVE FORCES ANALYSIS OF RYAN AIR 63.2.2 Strategic Grouping 73.

3 INTERNAL ANALYSIS 83.3.1 VRIO/ VRINE of Ryan air 8Barney ‘s Model for Ryan Air 93.3.3 Ryan air Value Chain Analysis 94.

0 EXTERNAL ENVIROMENTAL ANALYSIS 105.0 INTERNAL ENVIORNMENTAL ANALYSIS 115.1 Resources and capablenesss 117.0 CONCLUSION 138.0 RECOMMEDATION 149.0 Mentions 1510.0 APPENDIX 1610.1 Appendix 1 1610.

2 Appendix 2 1710.3 Appendix 3 1810.4 Appendix 4 1910.

5 Appendix 5 2010.6 Appendix 6 2110.7 Appendix 7 2210.8 Appendix 8 22

1.0 Introduction

The present concern universe is extremely complex, competitory and fast changing. Ryan air started in twelvemonth 1985 with one 15 seated propjet plane from the South of E of Ireland to London Gatwick which carried 5000 riders on one path. Ryan air was the first budget air hose in Europe and besides more successful low cost air hose in Europe. Ryan air ‘s competitory advantage is its ability to turn and surpass others as it is Europe ‘s first low-fares, no-frills bearer and in malice of economic instability there has been a growing in net incomes.

( Ryan air 2006 )Harmonizing to Viljoen and Dann ( 2003 ) strategic direction is defined as “ the procedure of identifying, taking and implementing activities that will better the long tally public presentation of an administration by puting waies and by making on traveling compatibility.Presently in 2006 European air line industry confronting a background and the burgeoning budget sector. In order to analyze Ryan air ‘s strategic will be focus on External, Internal environment and Industry.External environment will be analyzing the factors in the macro environment which influence hereafter industry growing and development, factors impacting current and future profitableness, place of rivals and strategic groups within the industry, to derive the drive forces of the industry, kineticss and eventually to understand international fight.Further more this analysis focal point on how Ryan air wants to make value for clients, its client value and competitory advantage, its activity value concatenation, client value the value proposition and finding the concern theoretical account to present the value place, short term and long term focal point and sustainability and methodological analysis of analyzing concern scheme.In concluding this analysis will concentrate on Ryan air ‘s current strategic direction positions and how it can profit by utilizing strategic direction theories and the agencies by which the organizational efficiencies of Ryan air would be improved and urge to direction squad of Ryan air for bettering scheme execution.



2.1 Company Background

Ryan air started in twelvemonth 1985 with merely 57 staff members and with one 15 seated propjet plane from the South of E of Ireland to London Gatwick which carried 5000 riders on one path. Ryan air was the first budget air hose in Europe and besides more successful low cost air hose in Europe. Ryan air ‘s competitory advantage is its ability to turn and surpass others as it is Europe ‘s first low-fares, no-frills bearer and in malice of economic instability there has been a growing in net incomes.In placing the current concern scheme we would be analyzing the vision, mission and aims of Ryan air. The mission of the Ryan air is to go Europe mostly paid low menu by turn overing out proven low cost no frills in all markets in which we operate to the benefits of riders, people and portion holders. ( Ryan air Report, 2007 ) Ryan air ‘s societal duty is supplying good service to the riders.The vision is “ to firmly set up itself as Europe ‘s cargo low menus scheduled rider air hose through continued betterment and expanded offerings of its low menu service ” ( Ryan air Report 2007 ) .

Ryan air ‘s aims are 40 per centum addition the market portion within the low menu air hose sector, in 2012 dual the one-year rider transit to eighty million and to quadruple Ryan air ‘s one-year net income up to 1,230 billion.

2.2 Core Problem

Ryan air being one of the taking budget air lines in Europe, which is presently confronting crisis.

Though they were executing good during the last few old ages, presently European air line industry confronting a background and the burgeoning budget sector. Therefore it is necessary for Ryan air to see the causes of the crisis and necessary action good on clip. Due to this ground Jenoir direction advisers will be analyzing the external, internal and industry, whether Ryan air could over come this barrier.




Pestle analysis is of import for identify Ryan air ‘s schemes through macro external factors.

These factors are in the air hose industry to understand Ryan air ‘s future external menaces and chances.

( Refer Appendix 1 )

Political and Legal

Security solution is the current move of authorities about air hose industry, which will increase the cost of service. Governments can take an action if there will be any difference in concern trades from Ryan air with Airport. The Ryan air must besides accommodate its schemes to accommodate the authorities statute laws and policies and must give more attending to the political of the state where they operate.

Ryanair have been involved in assorted legal differences with authoritiess both in Ireland and the EU sing their concern trades with airdromes and air hose regulation organic structures.

Economic Factors

Global Economic recession in 2001-2003 had adversely affected many states and in had prostration the fiscal schemes of the company. Due to the recession the income degree of the people has come down due to that most people are proroguing or call offing their air travel.

Socio cultural Factors

After the September 11th incident in USA air travel as become a high hazard in concern in air line industry. More security steps are taken and the riders are confronting troubles. This has become a immense menace to air line industry.Technological- Ryan air ‘s web site is the largest travel web site in Europe and this could assist them to increase e-commerce and advertisement gross. Their in flight cyberspace gaming, satellite telecasting and web-based check-in is an added advantage for Ryan air.

Environmental Factor: The impression that the universe is ‘becoming smaller ‘ and a move towards eco friendly environment by commanding noise degrees and green-house C emanations.


2 Porter ‘s Diamond Model of Ryan air

Porter ‘s diamond theoretical account for Ryan air is stated in appendix 2 severally.




Dickering Power of Supplier

Ryan air ‘s chief aircraft provider is Boeing and other one is Airbus. Switch overing cost will be high when change the aircraft. Fuel monetary values will impact Ryan air ‘s cost straight, so they are extremely dependent the fuel monetary values and besides it is really large menace of their strongest side. Generally regional airdromes have small bargaining power if they are to a great extent dependent on one air hose but twenty-four hours by twenty-four hours their bargaining power increasing because of the competition between low cost air hoses.

Besides of those regional airdromes, bigger airdromes have really immense bargaining power. ( Refer Appendix 3 )

Dickering Power of Customers

Ryan air is the low cost air hose for all Europe finishs and clients are particularly in recession times extremely monetary value medium. It is really easy to alter their air hose and it is In this client ‘s cognition about the cost of service is high and there is no client trueness for Ryan air. Even though there is no client trueness, dickering power of clients is low.

Ryan air is the cheapest air hose for all Europe finishs and clients are particularly in recession times extremely monetary value medium.

Menace of New Entrants

There are tonss of barriers to entry and it is really risk to be new in air hose industry. The capital that will put in this sector is really high. It is besides difficult to take a topographic point current competition and besides difficult to happen suited airdromes for the flights.

Menace of Substitutes

There is non any trade name trueness of clients and Ryan air preferred client relationship is non close relationship. If their clients find better manner to travel they will non experience any vacillation to take it. So the menace of direct and indirect replacements is really high and the most of import point is there are no shift costs for the clients.

Competitive Competition

The market is extremely competitory. Most of Ryan air ‘s cost advantages can be imitative instantly. In Europe it seems like there is an understanding between Ryan air and Easy jet about non to vie caput to caput.

However if any company does make up one’s mind to vie on the same footing as Ryan air it will be extremely critical for Ryan air.

3.2.2 Strategic Grouping

Strategic Grouping have been defined by Finlay ( 2000 ) as groups of concern that are likely to react likewise to environment alterations and be likewise advantaged or disadvantaged by such alterations. Porter ( cited in John et al, 1997 ) , suggests that an industry can hold merely one strategic group if all houses followed fundamentally the same scheme.

At the other utmost each house could be a different strategic group.Strategic Grouping Map analysis below of the European Airline industry will bespeak that Ryan air has to vie with Aer Lingus and EasyJet really closely while British Air passages and other national bearers are in the part. Other smaller budget air hoses based across Europe such as FlyBE, German Wings and Hapag Lloyd Express besides pose competition in paths which they normally compete ( Small Masters, n.d. ) .This diagram besides shows how the Mega bearers compete within their strategic groups as opposed to the Mid-Sized bearers.PrivateMega Carriers:American AirlinesBritish Air passagesMid-Sized Carriers:FlyBEGerman WingssAer LingusEasyJetGovernment-Owned Carriers:British Air passagesBulgaria AirGovernmentNo: of FinishsHighLowOwnership



3.1 VRIO/ VRINE of Ryan air


The top direction should be able to place the resources available in the administration soon in order to measure whether the resources available are sufficient plenty to implement the schemes. So the result of the Reconstruction depends on the resources available at that clip.

VRIO of Ryan air – Value, Rarity, Imitability, Organization

Ryan air values its high service public presentation. The air hose is known for its rigorous observation on promptness, high rate of flight completion, and low luggage loss. It purchased modernized fleet which leads to less expensive care with unvarying trade names used while high aircraft use strengthens its concern and fiscal sheet.

The rareness of Ryan air is based chiefly on its strategic placement and direction operations. Its execution on low menus service and high degree of client service bringing made Ryan air strong and competitory compared to other houses in the same field. Other houses in the same industry barely find their ways in copying the same operations and strategic planning. Ryan air produced effectual planning and direction operations in which it leads others to copy.

Not all of the touchable and intangible resources like package, fleet designs, substructure, organisational civilization, and knowledge direction can be imitated. Causal ambiguity, clip compaction diseconomies and way dependences are factors which affect the trouble of other houses to copy effectual programs of successful houses like Ryan air.

Barney ‘s Model for Ryan Air

The top direction should be able to place the resources available in the administration soon in order to measure whether the resources available are sufficient plenty to implement the schemes. So the result of the Reconstruction depends on the resources available at that clip.Harmonizing to the Barney ‘s theoretical account can analysis Easy Jet as Ryan air ‘s rival. Easy jet has adequate resort.

For an illustration they have big figure of air trade and their skytrax star rate degree is high, so easy jet is valuable. Easy jet is non rare because same scheme what easy jet presently utilizing is other rivals besides utilizing. Easy jet can easy to copy to another company because low menu and besides they have adequate replacements ( for an illustration Train, ship ) . Easy jet is competitory para. ( Refer Appendix 4 )

3.3.3 Ryan air Value Chain Analysis

Ryan air strongly manages and signifiers relationships with different providers for an illustration.

Boeing and nutrient, drinks etc, to do certain goods are received of demand criterions and on clip in order to add value through out its value concatenation. In order to add considerable value for its service by supplying low cost and straight proctors relationships with airdromes around Europe, so they provide subsidies to the airliner in order for them to give low cost and seen as adding grater value for clients.In order to cut down the cost and give low cost to clients Ryan air contracts staff for aircraft handling, fining and luggage handling to 3rd parties at competitory rates every bit good as engine fixs and heavy cares of its aircrafts. Therefore reduces direct contact to employee relationships and disagrees cut downing costs all through value concatenation.Close direction with aircraft crew ensures good labours turnover cut downing the menace of staff being absent for flights, hence seen as adding value for clients. In order to add better value for client, the aircraft staff ( pilot, cabin crews ) , they maintain close relationships, supplying the right preparation doing them to experience positive to reply on flight inquiries. The airliner has a committee placed for its aircraft crew linked with the gross revenues of responsibility paid goods.

( Refer Appendix 5 )


The external organisational environment includes all elements bing outside the boundary of the organisation that have the possible to impact the organisation ( Daft, 1995 ) . The environment includes rivals, resources, engineering and economic conditions that influence the organisation. The external environment can be farther conceptualized as holding two beds by and large and task environments.The general environment is the outer bed that is widely dispersed and affects organisation indirectly. It includes societal, demographic and economic factors that influence Ryan air.

The most of import portion refering in the undertaking environment which is closer to the organisations ; it is includes the sectors that perform twenty-four hours to twenty-four hours dealing with the organisation and straight act upon their basic operations and public presentation: – providers, competition, clients and the labour market.

( Refer Appendix 3, 6 )


All organisations have strength and failing in its countries of concern. No organisation is every bit strong or weak in all countries ( David, 2005 ) . The procedure of internal environment analogues that of the external analysis. Resources come in many signifiers form common factor inputs to extremely differentiated resources that are developed over a adult male old ages and are really hard to retroflex ( Collins and Montgomery 1998 ) . Internal environment analysis involves a survey of civilization, construction and resources including engineering adapted by the inception.


1 Resources and capablenesss

Ryan air ‘s chief touchable resource is air trade. Their intangible resource includes things such as company ‘s repute ( first budget air hose and low menu air hose ) , trade name name ( Ryan air ) , proficient cognition ( 100 per centum online ticket engagement ) , patent and hallmark. A competitory advantage is the set of factors and capablenesss that allow houses to systematically surpass their challengers.

( Refer Appendix 7 )

Tangible Resources

Air trade

Technical Promotion



Monetary value, Quality service, ReliabilityCompetitive advantage of Ryan air


Low cost, High net income

Intangible Resources

Ryan air ‘s ReputeBrand nameLow menuTechnical cognitionFigure 1: Resources based position if competitory advantage of Ryan air6.0 SWOT ANALYSISThis analysis is an effectual manner of placing internal strengths and failings of Ryan air and of fact-finding chances and menaces of the external environment.

( Refer Appendix 8 )


Ryan air is the largest and most successful of Europe ‘s low cost air hose. This fact is strongest merchandising point for Ryan air. Consequence of this low cost scheme, which increases clients and air hose, is spread outing quickly. Ryan air ‘s web site was the largest travel web site in Europe. And the fifth most recognized trade name on Google.

Harmonizing to the Ryan air one-year study 2006, Ryan air ‘s accessory grosss ( include not flight agenda services ) had climbed by 36 per centum.


Ryan air is the least favourite air hose in the universe. Passengers who travel in Ryan air lose their baggages really frequently. Ryan air staffs are considered to be really unfriendly and there is common issue that the procedure ever delays. Ryan air was merely mid scope or below norm in its P/E multiple relation to equals like easy jet, whose portions had risen by 46 % during the twelvemonth. Ryan air has been criticized for many facets of its client service.


They have possible market portion.

Because low cost air hose market portion non reached the peak degree. Ryan air has better chances to rule and catch up with the competition in the European air hose industry in footings of supplying more choice service. The uninterrupted enterprises of the company in variegation of its gross resources besides open new chances to do the concern become stronger to outgrow all its rival companies.


Ryan air faced assorted challenges as it entered the 2nd half of financial 2007. The air hose itself predicted that its excess capacity edifice would make uncertainness about the success of new paths, locations and other troubles. These were excess selling and discounted menu costs incurred in establishing new paths, every bit good as overcapacity taking to monetary value film editing by challengers.

7.0 Decision

By taking into consideration the above analysis, Jenoir direction adviser believe Ryan air has gained competitory advantage since there is a greater chance and strengths sing to the air line industry. Based on the External, Internal and Industry analysis, there are some major issues which were identified by Jenoir direction Consultant analysis squad in relation to Ryan air have failings and menaces. There are many countries which Ryan air should workout.Systematic, healthy and an organic organisation contribute much to the success of Ryan air.

An organisation with clear aims and capable to pull everyone to work with these aims will take to its success. For air hoses, the hereafter will keep many challenges. Successful air hoses will be those that continue to try their costs and better their merchandises, thereby procuring a strong attending in the cardinal universe air line market.Therefore taking into consideration these damaging impacts to the entity Jenoir direction Consultant analysis squad formulated certain recommendations for Ryan air to execute the undertaking of a guideline in get the better ofing these failings and menaces, by consistently using these recommendations.

Ryan air will be able to change over its current failings into chances and strengths in the hereafter. However risk direction in the strategic direction must be given an of import consideration in strategic direction program execution procedure.


Based on External, Internal and Industry analysis, Jenoir direction advisers is recommended that Ryan air see the move their concern with low cost scheme in to international market, so Ryan air should has a elaborate program for this and be able to supply good client service to the clients like by holding discounted flights, publicity to maintain the competitory advantage at a stable manner within its rivals and besides will necessitate to concentrate more on the nucleus competition that will assist Ryan air to practically plan suited air hose operation within their market.There are some other recommendations for Ryan air,Ryan air, being the market leader in the budget air hose industry is executing really good as of now. But it does necessitate to take into history all the factors discussed supra. Ryan air besides has to do certain that even though Michael O’Leary ‘s tactics work today, they may backlash tomorrow.

Ryan air should decelerate down on the aggressiveness of its strategic planning and execution so that it can avoid acquiring into problem with the authoritiess and stop up paying 1000000s.In order to retain its employees, actuate them and besides another agency of cutting costs, Ryan air can follow a similar scheme that of Jet Star ‘s JEN ( Jet star Employee Network ) . This intranet package is both the edification and the functionality necessary to garner, portion and communicate cardinal corporate, HR and clip critical staffing information. Head of Corporate Relations, Simon West off says “ JEN delivers ongoing nest eggs of about $ 130,000 yearly ” ( Story, 2009, p.18 ) .

9.0 Mentions

Collins, D.J.

, Montgomery, C.A. ( 1998 ) , “ Competing on resources: scheme in the 1990s ” ( Volume 73 ) , Harvard Business ReviewDaft, Richard L. ( 1995 ) . Organizational Theory: Cases & A ; Applications. ( 4th edition. ) : West Printing CompanyDavid, R.

D. ( 2005 ) . Strategic direction: constructs and instances. ( tenth edition ) : Prentice Hall of IndiaFind Article ( 2005 ) . EasyJet to come in Irish Market for first clip.

Retrieved April 21, 2010, from hypertext transfer protocol: // ? tag=content ; col 1Find Article ( 2009 ) . Company Watch – Ryanair.

Retrieved April 22, 2010, from hypertext transfer protocol: // ? tag=rel.res1Hodgson, N. ( 2009, November 20 ) . Ryanair set to catch EasyJet in JLA ranks. Daily Post Liverpool. RetrievedApril 19, 2010, from hypertext transfer protocol: //, G.

Rice, J. & A ; Beamish, P. ( 2005 ) . Strategic direction believing analysis action.

( 3rd edition ) . Pearson instruction AustraliaLagadec, K. ( 2008 ) . Airbus and Boeing face a dark and painful hereafter. Post Carbon Institute. Retrieved April 20, 2010, fromhttp: //www. Airline Industry. ( n.d. ) . retrieved April 21, 2010, from hypertext transfer protocol: //

htmlViljoen, J. , & A ; Dann, S. ( 3rd Ed. ) .

( 2003 ) . Strategic Management: Planning and implementing successful corporate schemes. NSW, Australia: Pearson Education Australia.


10.1 Appendix 1


Political Environment

National air hoses supported by certain statesEurope brotherhood enlargement with new paths and new rivals.

New European Union regulations and ordinances.Due to the authorities stableness touristry will be addition, which is good for Ryan air.New different revenue enhancement policy for different states.

Economic Environment

Menace of Ryan air is increasing fuel monetary value.Taxs and Interest ratesDecrease of US dollarsIncreasing concern category travelingThe menace of the replacementsRise of airdrome handling charges


Increasing Grey market, which is the trade of a trade good through distribution channels, which while legal, are unofficial, unauthorised, or unintended by the original maker.Populations growing – does an ageing population impact them i.

e. babe boomers, tonss of people in that life phase have more disposable income to passSafety solutionsTendency

Technological FACTORS

Internet gross revenues and Increased cyberspace competitionsHigh velocity trainsOnline cheque inLow fuel usage


Privatizing of air hose industryIllegal subsidies from airdromesCompetition Torahs in air power industryAllegations of false advertizementRules and ordinances about Carbon emanation degree

Environmental FACTORS

Noise degree controls,Global warming,2.6 % of Carbon emanation in the EU, so this gas will consequence Green house

10.2 Appendix 2

Porter ‘s Diamond Model of Ryan air



Demand Condition

Firm scheme construction and Rivalry

Related & A ; back uping Industries



Firm Strategy, Structure and Rivalry

Environmentally concerned.Entrants of other Low Cost Carriers

Factor conditions

Technological promotion.

Demand conditions

Demand is increasing for Low menus air travel.

Related and back uping industries

Car hire, Hotels, Travel insurance, Baggage tracing, Free metropolis ushers, Ticketing, Aircraft handling, Airport manager and other services

10.3 Appendix 3

Porter ‘s Five Forces theoretical account

Dickering power of Supplier

Dickering power of Buyers

Menace of New Entrants

Menace of Substitutes




4 Appendix 4

( Beginning: VRIO theoretical account / Barney ‘s theoretical account

hypertext transfer protocol: // )

Competitive Deductions from Recourses ( Easy jet as Ryan air ‘s rival )



Difficult to Imitate

Without replacements

Competitive Deduction





Competitive para

10.5 Appendix 5

Value Chain Analysis of Ryan Air

Firm Infrastructure

( Head Quarters )

Technology Development

( Internet, Integrate system, Low tech selling, Internet gross revenues )

Human Resource Management

( In house, Low cost preparation, Management control, Limited crew, public presentation contracts )


( Boeing price reduction, Alliances, Low cost, out beginnings & A ; private )

Inbound Logistic

( Quality preparation, Low cost provider, Airport understanding )


( No frill, low cost )

Outbound Logistic

( Reliable service, speedy turn around )

Selling and Gross saless

( Free promotion, Low cost, publicities, Internet gross revenues )


( High productiveness, Limited resourses )


6 Appendix 6

Location of the organisation general undertaking and internal environments



Undertaking EnvInternal EnvironmentSocio cultural






Legal/ PoliticalEconomicIt can be noted that SUPPLIERS forms an built-in portion of undertaking environment and the function of importance of providers of constituents.

10.7 Appendix 7


There are two sorts of resources, touchable and intangible which can farther be categorized into fiscal, human, physical and rational capital.

Physical Resources – which Ryan air possesses is 196 Boeing aircrafts. Huge sum of money was being spent for the aircraft care and they need to maintain the resources proper and running to do certain that these will non harm their low cost construction. They besides have the youngest fleet in the whole of Europe with a extremely fuel efficient capacity.Fiscal Resources – Ryan air is the highest net income devising low cost structured air hose. Harmonizing to O’Higgins ( 2007 ) , Ryan air ‘s net incomes have been increasing 8.5 % on norm per twelvemonth.

It besides goes onto say that in its Annual General Meeting in 2006 ; the air hose had delivered 12 % addition in net net incomes despite a 74 % addition in fuel cost.Human Resources – Initially Ryan air started with merely 25 employees and had 3500 people by the twelvemonth 2006 and all of them are entrenched with a cost film editing attack. Ryan air employees a really much dedicated as Ryan air pays its employees good. In its 2006 one-year study it claimed to hold the highest wage figures than any other major European air hose. Besides by orienting rolls, the bearer maximized productiveness and clip off for crew members. The biggest HR advantage Ryanair has is Michael O’Leary.

Intellectual Capital – The highest per centum of pie of ELFA is still being showed by Ryanair and because of its tremendous experience of its senior direction squad in the same industry. Michael O’Leary joined as a Director in 1988 and was appointed CEO in January 1994. Captain Ray Conway was appointed Chief Pilot in June 2002 holding joined Ryanair in 1987. He has worked in Irish Air Corps for 14 old ages taking attention of Training and Transport Squadron.