Case Study: Internal analysis of Ryanair

Ryanair was established in the year 1985 by the RYAN family and has grown from a small airline flying a short hop from Waterford to London, into one of the Europe’s largest carriers. The company expanded and within 4 years it had 350 employees, 14 aircraft, and carried 600,000 passengers a year. It is currently serving to 26 European Countries with 148 destinations. It operates on 794 different routes daily serving by more than 1050 flights in a day. It has totally 169 aircrafts running for different routes with 5986number of employees working in it However, Ryanair’s costs rose drastically and it recorded losses of £20 Million sover four years despite its growth. Although consumers were continuing to fly Ryanair

As can be understood from the analysis given below, if British Airways can cut it’s staffing by 25%* and increase it’s utilization to 90% from 60%, it shall be able to reduce the prices significantly to I£104, still I£6 more than Ryanair. As British Airways is a renowned market leader, people would be inclined to travel by British Airways by paying the I£6 extra than by a relatively unknown carrier Ryanair. Also, such a reduction in tariff on all of BA’s routes might not be necessary. It can very well position separate flights/routes for this rate so as to offset any reduction in utilization through profits in other routes.

A unique cost cutting policy would be the main core competence of Ryanair. It refuses to provide any meal vouchers or hotel accommodation for flights which are delayed or cancelled for reasons beyong Ryanair’s control in order to reduce the operating cost. (Ryanair, 2011) Meanwhile, Ryanair is using LFA business model to design the size of its

Michael O Leary uses a centralized management style in the company which is also used a functional structure. The organisation structure of Ryanair is tall. As illustrated in my diagram Michael O Leary is the CEO of Ryanair and he deals directly with the chief financial officer, head of marketing, head of customer service, head of pilots union and all the other departments displayed in the structure. A functional structure is a structure that groups people in different departments or functions because they all share common skills or they can make use of the same resources. The members of these teams working in these different departments become very skilled and become more specialized within each function. My reason for choosing functional structure for Ryanair is that there no real hierarchy in the organisation, this improves the channels of communication and ensure there is no confusion. Michael O Leary makes the decisions in the firm and uses a very hands on approach in the business by dealing with other managers in the business on a day to day basis. If any problems are ever encountered Michael O Leary would deal with the problems internally. Staff within the company are also matched with their expertise and assigned to a certain group such as marketing, finance etc. A functional structure helps organisations to group tasks into functions to increase their effectiveness in which the company will be allowed to reach their company goals such as providing customers with cheap flights with excellent customer service. As Ryanair grows in size there may well be more departments added to the structure as there will be more employees and more roles and responsibilities to be

The strategic plan of Ryanair has been to establish itself as Europe’s leading low-fares airline.” Ryanair aims to offer low fares that generate increased passenger traffic while maintaining a continuous focus on cost-containment and operating efficiencies.” (www.ryanair.com)

Generally speaking, the launch strategy of Ryanair was not the best one for that moment in time. They began operations between Dublin and London, in a very saturated market, which was already served by two competing and very experienced companies owned by the governments:

According to Slack et al. The corporate strategy or business strategy is the guide lines for the whole corporation’s businesses in relation to its markets, customers, and the competitors (2007). In the same context, the same authors discussed the link between the corporate strategy and

The purpose of my assignment has been done in terms of strategic analysis, its formulation and implementation of Ryanair organization. The assignment is developed by three parts which includes variety of questions in the each part.

Ryanair consists of a centralised functional organisational structure. Normally, employees positioned within a centralised functional

The airline industry has always been a fiercely competitive sector. Since the invention of low-cost carriers, also known as no-frills or

Prior to 1991, Ryanair had suffered from continuous losses from 1985 to 1989. The first reason that put it into this situation was that it tried to position itself as a low fare airline with the first rate services. It tried to keep low and unrestricted fare, while keep focusing on the best customer service and relationship. This mixed model was proven inefficiency. The low price could lure number of

The aim of this report is to carry out a strategic analysis of Ryanair. This will involve investigating the organisation’s external environment, to identify opportunities and threats it might face, and its strategic capability, to isolate key strengths and any weaknesses that need dealing with. Finally, a SWOT analysis will be carried out to assess the extent to which Ryanair’s strategies are suitable to what is happening in its task environment.

1. In-depth environmental analysis of the European Airline industry and discuss the implications for the budget sector and especially for Ryanair. 2. An integrated understanding of the functioning of a company – its human and technical operations, leadership, customer relationships and financial structure. 3. Implications of the internal functioning to create viable strategic positioning and discuss any changes to Ryanair’s approach to ensure an improved sustainability 4. Evaluate the strategic leadership style of Michael O’Leary

Now I am going to discuss Ryan air’s (RA) current strategic position by analysing its macro (external)and micro (internal) environment.

We will see how Ryanair was successful as world’s one of the most favoured low-fare airline and how did it apply each of this mix by putting in the