Case Study: Internal analysis of Ryanair

Decent Essays
Case Study in: Johnson, G. et al., 2005. Exploring Corporate Strategy. 7th ed. Essex: Pearson Education Ltd.

1. Internal audit of tangible, financial and intangible resources

Tangible Resources

1. Human Resources

* Ryanair currently employs 2000 people (2003) from 25 nations.

* The pay is performance related and among the highest in the airline industry (Annual Report 2004, p. 5). Travel concessions and participation in the share option program is granted to all employees. In 2003 over 30% (639 in total) of employees took part in the stock option program - the average pay per employee was about 53.000 (Annual Report 2004, p. 21).

* CEO Michael O'Leary has significantly shaped Ryanair.

2. Physical resources

* Ryanair operates 72
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5), keeping people who already know the company which in turn reduces costs (introduction...) and enhances motivation. Employees have also the interest to bring the company forward because over 30% already are shareholders.

Sustainable competitive advantage according to Lynch (2003) of Ryanair is: the low cost basis (key success factor), offering of the cheapest ticket prices (in order to target price sensitive customers) and the abilities of the management and the CEO (leadership) of Ryanair. In addition to that first mover experience (experience from competing against BA and Aer Lingus at the beginning) may also have benefited the company.

3 Ryanair's dynamic capabilities

Dynamic capabilities provide a constant flow of opportunities (Lynch, 2003), from which Ryanair could take advantage in order to sustain the competitive advantage:

* Ryanair immediately responds to opportunities and threats in order to cut costs and sustain the low cost basis (e.g. abandonment of ice cubes...) or to increase profits (e.g. ancillary services...)

* Constantly shaping the internet as the main communication device to its customer (marketing and sales, booking...).

* Ryanair wants to provide the lowest fares. Therefore the company must be very flexible and always at least react (or
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