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Business environment of Ryanair Pest Analysis Porters five forces Strategic group analysis Value chain analysis Resource based view Leadership style of Michael O'Leary Conclusion and recommendations
Airline industry
PEST
Budget airline industry
STRATEGIC GROUP
Political factors Deregulation as the market increases in size, therefore economies of scale may arise. Expansion of EU Economic factors Recession September 11 crisis Social factors Changing consumer demographics Technological factors Fluctuating consumer preferences increase in economies of scale in production due to expanding market size E-commerce method of selling tickets, therefore less infrastructure required, overhead savings
Threat of New Entrants MEDIUM High capital investment Barriers of entry Threat of existing firms
Industry Competitors Suppliers Bargaining Power MEDUIM Switching cost Rivalry Among Existing Firms HIGH High degree of competition Buyers Bargaining Power HIGH Low switching cost Price sensitivity Low loyalty
Threat of Substitute Products MEDIUM Main: Land, rail and water Indirect: video conferencing
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Strategic Group Map of Ryanair: Easyjet, Aer Lingus and Ryanair are in the same strategic group and so compete closely. The Critical Success Factors (CSFs) of Ryanair are as follows: The strategic focus of having the lowest prices. Being reliable in the industry for punctuality. Service and frequency.
Minimum Corporate HQ
Limited Crew Management Control Integrated Systems
In-house
Low Tech Marketing Internet Sales
Performance Contracts
Internet Information
Alliances
No Frills Low Cost*
Outsourced
Low Cost
Low Cost Promotions Free Publicity Controversial Internet Sales Yield Management
Inbound Logistics
Operations
Outbound Logistics
Service
THRESHOLD RESOURCES Website Operations denominated in Euro Offices, facilities, appropriate personnel, suppliers and customers
UNIQUE RESOURCES Brand name(Ryanair) Management team(Micheal Oleary) Number one low budget airline Boeing airplanes
THRESHOLD COMPETENCES Outsourcing of major services Online booking Operation of on-time delivery Point to point routing
UNIQUE COMPETENCES No frills strategy Reduced turn-around time Low cost Route policy strategy
Autocratic style of leadership Determining strategic direction. Effectively managing the firms resource portfolio. Exploiting and maintaining core competences. Developing human and social capital. Sustaining effective organisational culture.
Improve customers perception of Ryanair ` Improve its oil hedging and currency trading practice. ` Expand into Eastern Europe and North Africa countries. ` Succession planning. ` Continue its market penetration plans especially their strategic alliance with Aer Lingus. By applying the above recommendations, Ryanair will definitely maintain its leadership position in the budget airline industry. http://www.youtube.com/watch?v=g3so6AJe4UQ
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