Strategic Analysis of Ryanair
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Adesuyi , Ibukunoluwa(@00284075)Agbelusi, Oluwafisayo
Tola(@00299101)Ibiloye, Omotoke Seyi(@00289980)
Ogunbor, Osarobo Naomi(@00291067)Orija, Oluwabusola(@00295120)
Uchealor, Bill-Anthony(@00284390)
Business environment of Ryanair Pest Analysis Porter’s five forces Strategic group analysis Value chain analysis Resource based view Leadership style of Michael O'Leary Conclusion and recommendations
PEST
PORTER’S FIVE FORCES
PORTER’S FIVE FORCES
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 EntrantsMEDIUM
•High capital investment•Barriers of entry
•Threat of existing firms
Threat of Substitute ProductsMEDIUM
•Main: Land, rail and water•Indirect: video conferencing
Buyers’ Bargaining PowerHIGH
•Low switching cost•Price sensitivity•Low loyalty
Suppliers’ Bargaining PowerMEDUIM
•Switching cost
Industry Competitors
Rivalry Among Existing FirmsHIGH
•High degree of competition
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.
Infrastr.HRMTech. Dev.Proc.
Margin
Mar
gin
Minimum Corporate HQ
Low Cost Training
Internet
Boeing Discount
Quality Training
Low Cost Suppliers
Airport Agreements
No Frills
Low Cost*
Quick Turnaround
time
Reliable Service
Low Cost Promotions
Free Publicity
Controversial
Internet Sales
Yield Management
Limited Resources
Basic/Low Cost
High Productivity
Inbound
Logistics
Operations Outbound
Logistics
Marketing
& Sales
Service
Limited Crew
Internet Information
Alliances
Management Control
Integrated Systems
Outsourced
In-houseLow Tech Marketing
Internet Sales
Performance Contracts
Low Cost
THRESHOLD RESOURCES•Website•Operations denominated in Euro•Offices, facilities, appropriate personnel, suppliers and customers
UNIQUE RESOURCES•Brand name(Ryanair)•Management team(Micheal O’leary)•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 firm’s 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