Ryanair External Env. Analysis

Competitive rivalry exists between companies with the same or similar products/services and similar markets. Factors to be considered include:

Existing Competitors. Rivalry among competitors within an industry use price discounting, new products, marketing, and other techniques to be competitive. Profitability of an industry suffers from high rivalry. The intensity with which companies compete and the basis on which they compete determine to which degree rivalry brings down an industry’s profitability (Porter, 2008). Pure competition is considered by economists as a competition with a high

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

Knowing who your competitors are, and what they are offering, can help you to make your products, services and marketing stand out. It will enable you to set your prices competitively and help you to respond to rival marketing campaigns with your own initiatives. You can use this knowledge to create marketing strategies that take advantage of your competitors ' weaknesses, and improve your own business performance. You can also assess any threats posed by both new entrants to your market and current competitors. This knowledge will help you to be realistic about how successful you can be.

1. Ryanair’s domain in relation to the external environment and sectors of concern for the company

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.

In spite of the cost deduction planning, Ryanair also has designed other plans to maximize its profit and expand the market share of the company. On 1st February 2003, Ryanair announced that it was acquiring Buzz, the loss making budget subsidiary of KLM, based at Stansted. Ryanair purchased the loss making company Buzz, as it was a golden opportunity to pick up a ready- made bundle of take -off and landing slots at Stansted Airport, where there is intensifying competition for space. This would not only increase Ryanair‟s share of slots in Stansted from 33 to 49.5 per cent but also produce profit by the fiscal year end of March 2004. Ryanair also aimed to increase its sales through ancillary services in conjunction with its core airline

To understand how a firm competes with different firms, one must have a sound idea of what resource similarity and market commonality are. The way a company can compete with other markets through the intangible and tangible factors can be broken down into four quadrants as a source of identifying the factors amongst the rivals. Market commonality is basically the amalgamation of different markets that a firm and its rivals are somehow linked to. The degree of similarity of their interaction in the markets then gives the idea of how fierce the competition really is. (Hitt et al., 2013 p 138) Resource similarity is stated as how much similarity there is between the firm's and its rival's resource in relation to how much of the resource is available and the time of resource there is present. (Hitt et al., 2013 p 138) It is also noted that the business who have same resources and abilities also go on to have similar strongpoints and weak points.

This article is focusing on the Ryanair case study in addition to understand the main model and values in the strategic management field. In addition, Ryanair is founded in 1985 and it’s an Irish low cost airline which has become Europe most popular aviation providers (Eleanor, 2016).

Economic segment that the economy affects all industries from suppliers of raw materials to manufacturers of finished goods and services as well as all organizations in the service, wholesale, retail, government and non-profit sectors. Key economic factors indicators include interest rates, unemployment rates, the Consumer Price Index, the gross domestic product and net disposable income any others.

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

According to the Profit & Loss accounts of Ryanair, the operating revenues are splitted into two categories: the scheduled revenues and the ancillary revenues. The scheduled revenues are generated through direct sales of flight tickets while the ancillary revenues1 are generated from other non-ticket sales. Figure 1 depicted the growth of the scheduled and the ancillary revenues from 2004 to 2011. While the scheduled revenues increases from € 924,5 mio to € 2.827,9 mio with an increasing return factor equals to 206%, the ancillary revenues increases from € 149,6 mio to € 801,6 mio with an increasing return factor equals to 436% during the period 2004 to 2011.

The purpose of this report is to comment at the first part how Ryanair achieve its competitive advantage through the RBV analysis (Barney,1991), the second part will assess its approach to the diversification through the Ansoff matrix , the third part will discuss the company’s organisational culture using the cultural web modeland last part its internationalization strategy.

After evaluating the analysis, it can be concluded that there are several central problems that exists within the strategy of Ryanair, which are poor customer and media relations, poor employee relations and the rising of fuel prices.

An analysis of the external environment includes the factors in a business’s external environment about a business's industry, competition, and political and social environments, and affects the firm’s strategy (Aaker, 2001).