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THE STRATEGIC MANAGEMENT OF RYANAIR CASE:ContentsINTRODUCTION1STRATEGIC ANALYSIS1Environment analysis1EXTERNAL ANALYSIS2Pest analysis2Political factors:2Economical factors:2Social factors:2Technological factors:3Oppurtunity:3Theart:3INTERNAL ANALYSIS3Strenght:3Weakness4VALUE CHAIN ANALYSIS4Primary activities:4Supportive activites:4Core competences:5Strategic group analysis5Porter five forces5Barriers to entrants5Bargain power of suppliers5Bargain power of customers5The threat of substitute product6Rivarly among competitors6Generic strategies6Focus6Cost leadership6Differentiations6No frill strategy6Ansoff growth matrix7Market penetration7Market development7Product development7Diversifications7Implications on the certain issues7Strategic capabilities7Price based strategy.8Lock in customer8Conclusion8REFERENCE:8

INTRODUCTIONThe first ever budget air line tag had been introduce by the name of ryanair. The ryanair had been considering the principle of low fares from its consumers and quality services in that cost. The ryanair has been holding the cost leadership quality in its business strategies, through this strategies ryanair is widely known as masters in air dealing. As with high competition in tours and travel business the ryanair had created a legendary for its business. The strategies potentail of ryanair would help and make one of successive companies in next 5 years, as it is largest airlines and with lowest fares carriers in the Europe.It had almost 35 millions passengers across 24 countries with 346 low fare routes at current holding. The ryanair company had created the hoslistic implementations of the cost oreinted business approach as well as efficient operations. The ryanair considered as Europe and world largest airlines in terms of national passenger and international passenger both. The ryanair is second sucessful model after first US carriers (south west air lines) as ryanair tried to copy this successful model in the airlines or aviations industry. At present ryanair are having 737-800 flights or air craft which is moving around 1000 air routes over the 40 bases.STRATEGIC ANALYSISThe strategic analysis means analysing the situations in very depth concern and taking a most suitable decision on this situation. As in case of ryanair the CEO, of ryanair micheal Olerry had brought the drastic change in this functioning due to this conventional ideas and innovative steps the co has to bear no marketing cost as well as ryanair has wider its horizons of functioning and comeup with one of the best international company. The standard and quality leadership of ryanair had excellent appproaches towards its new model like low fares every time and every new discount and schemes to customer with full of homely environment.Environment analysisDue to highly competition ryanair and many other airlines has to face lot of hurdles, and adversities, but the sustaiinbality strategies of ryanair had put the company of the peak level over 21st century, internal enviornment of ryanair is quiet simple and strong in terms of resources, planning, process etc. but the external enviornment of ryaniar is not as much as easy moving, the company is facing lot of problems and lack through a proper co-ordinations in this particular environment.EXTERNAL ANALYSISThe external analysis of ryanair would include the Pest analysis, threats of the company and oppurtunity of the company as well.Pest analysisIn pest analysis mostly there are four factors like political, economical, and social and technology factors etc. which are involve in this.Political factors:The political factors inside the europe was stable on certain concern but the factors where not stable outside europe, like the political force named OPEC had put lot of restrictions and controverses for the company, as well as UK minister of climate change, Ian person comments on ryaniar by saying that the irresponsible face of capitalism in uk, but not only this the ryanair has to face lot of EU commission rules and regulations, so this conflicting political environment make ryaniar to over veiw its strategy once again.Economical factors:This factors hadsome good side effects on ryanair, as due to inflations period company move in peak level amd peeak profits, the ryanair is having powerful strategy towards cost cutting and acheiveing cost leadership thus the prices of fuel rise which could not have affect the model of rynair that is low fares every time for customer. Social factors:As day by day the customer prefrences and consumer needs or desire change so this negative prefrences had becoming companys head ache, the social factor engine had been running because of its strong and healthy industrial relations. The ryanair had always done same cultural and social benefits to its customer as it had brought new approach of ultra furgal, through which the ryanair had come up with customization, not only this there are also lot if facilities as entertainment, reducing fatigue etc. which ryanair plan for the customer to feel free, the ryanair had also jion some societies and club from brand improving this club and societies are manchester united, liverpool foot club etc.Technological factors:One of the most essentail need in this competitive era is of technology advancement. The ryanair most competitive advantages is technology advance, a power technical support had provide an excellent yeild management system developed. Through the supply chain software and technified aircraft the work of ryanair smoothen, as well as functioning is maintained properly. As O,higgins (2004) conveys that ryanair has 737 boeing currently as this considered as best for communical used in aircraft thus, the company is able to obtain spares and maintainance services on favourable terms thanks to economies of scale limit cost of staff training and after flexibility in scheduling aircraft crew assignments.Oppurtunity:There are lot of doors open for ryanair if the bid would be successful with aer lingus, through this there are lot of chances for forwarding itself it new, planes new capacity, new links and widen their capacity not only this but the cost reductions had been possible through the CEO Olerry is doing the publicity as well. The ryanair had hold the market mostly through internet banking as from sources the fact is that ryanair is holding the largest travel web sites in all over Europe and it had been covert its web traffic into the advertising revenues and ecommerce. The ryanair is recognised as most faviourite brand in google with 5th position. (S. furlong, 2006)Theart:As due to high inflations the opeartive cost is going high, mostly the fuel prices had put company into the theart. The rynair is face the forth coming rules and regulations problem with EU commission even some threat like environment effects had also put into the dangerous zone to company.INTERNAL ANALYSISThe internal analysis mostly included or integrated through strenghts and weakness as well as competitive strategy and value chain analysis.Strenght: The ryanair is considered as one of the most competitve fare airlines it has been holding no. of passenger in 2007 as ryaniar is holding a monopoly at dubline and as well as stanted airport. It is considered as lowest fair airlines in Europe through (IATA) international Air transport authprity in March, 2007) ryanair is considered largest international airlines. As every timw growth revenue of ryanair went high and high, during the fiscal year 2007 it had raise by 32.2% over pervious year 2006[footnoteRef:2]. The strong brand name attracts lot of customer through. The strategy of ryanair sounds interseting through this the quality of punctual, objective focus, better perfromance, maximize utilizations etc. had made the ryanair as successful and leading airlines in aviation industry. [2: Annual report of ryaniar 2007]

WeaknessThere is a huge conflict going on in the coompany between top excceutive and pilots etc, as well as there are huge no. of labor distputes faced by ryaniar as ryanair faced strike was potential actions strike called wallon governement employed security staffat burrel, charlleroi in dec, 2006. The ryaniar most lacks in economies of scale as due to small in size as compareted to competitors Air France, luftansa, British airways.VALUE CHAIN ANALYSISIn this mostly the primary and support activites of the company is analyse on the basis of the value.Primary activities: The inbound logistics and outbound logistic are in favour of ryaniar, as ryaniar was benefited from low cost suppliers and some air port agreements in favour ryanair. The staff of ryanair was highly trained and efficient so funcitoning wasz running smooth. The ryanair had paid all levy and tax towards the polluting enviornment, and due to high technology the less% of pollutions was done by aircrafts of ryanair[footnoteRef:3]. The marketing sales and services always put the company on high time as through this customer based mantra was set up by the ryaniar that is every time low fares which had brought huge customer intreset with limited resources and implicating a low cost strategy too. [3: Annual report of ryaniar 2006]

Supportive activites:The ryanair had built the excellent infrastructure with the superb plant layout through this the corporate cost of company reduces highly. There is a lot sales company through internet, as internet marketing is one of strong support of ryaniar. The systems of ryanair are integrated highly and so through it the technological benefits had carried out over the plant of ryanair. The out sourcing and logistics of ryanair is better as it had now put the tag of low services cost.Core competences:The company was holding huge advantages of tis core competences as the in house marketing and free publicity put the ryanair as more media oeriented. The dealing with bid and holding collebrations with other airlines would made ryaniar as massive carriers in aviations indurty. The low cost strategie and high quality services are alos crab the new customer with inspirational ways no frills, no delays and bording of tickests done on web so this all small things encourage the customer to come forward, there some favourable policys towards customers and ryanair had develop its industrial relations very much healthy as this makes the airports international much familiar with ryaniar. The sharp strategy through which the bargaining power customers as well as suppliers is low.Strategic group analysisThe ryanair was most feasible company as from the group of other airlines company. As by one research he conveys that europe market as healthy, with huge potential and only increamental growth this is by Davy in relations to ryaniar poin of view. There are lot of corrupt the no. is bit high it is 50 companies approximately due to large no. entrants, they fail to survive in market so ryanair models strategy work for its sustainability in long time.Porter five forcesThere are lots of strategies but the most efficient strategy is competitve strategy by Micheal E. porter.Barriers to entrantsAs the market is very much saturated but especially the EU commission had removed certain barriers fro the airlines company so, the entry of new and different company was easy so this becomes a threat for ryanair as it has to face lot of competitions in future.Bargain power of suppliersThe bargain power of suppliers is low because the company is highly technological advances and it delas with it suppilers in bulk as due to strong and huge brand name the suppliers want their business running, so the power of ryanair is on its suppliers.Bargain power of customersThe ryanair keeps customers on highest position, ryanair had highest position ryanair had utilize the models which is more suitable to its customer more worthy towards the organisation. So the low fare is the strategy and nont the customer force, so put the company into certain threats like reducing prices etc.The threat of substitute productThe ryaniar has to face lot of threats now a days because there are too many airlines, as they are also considering the same facilities as by one conflicts in iindustry between easy jet and ryanair was that ryaniar had low fares but the levy on insurances charge by the company through its customer is 10% which is very much higher so threat of substitution product is high for ryaniar.Rivarly among competitorsThe ryaniar plans to decrease the rivarly because of doing mergers and acquistions with other airlines like aer lingus and so many more the ryaniar try to counter increase rivarly by frooming distinguihing schedules and planning out new strategic alliances. (www.ryaniar.com)Generic strategiesThis strategies concept was also give by Micheal E porter where the ryanair veiw on the basis of its importance to customers.Focus The airlines does not havve any special group to focus it morely concenttrate on whole populations the process and plans had been design and develop strategical veiw this idea only.Cost leadershipRyaniar is considered as leadership in manging low cost it had superb cost management as ryaniar always plan to minnimise it cost as in one of the important statement given by micheal Olerry in public place was is to simply contionous to be the largest cost leader in the europe airlines industry. .(www.ryaniar.com)DifferentiationsThe ryaniar has considered itself as more different from other airline companies; it is noise, full of entertainment[footnoteRef:4]. It had had develop the approach of ultra furgal which put the customer more closely towards the enviornments etc. [4: Milmo ibid]

No frill strategyAs this strategies is very much favours and helpful for the to minimise it cost, ryanair was the frist company to introduce this strategy in 1999 as by (haberberg and reiple, 2001) it had made an attitude like no frills airlines its customer. (www.ryaniar.com)Ansoff growth matrixThe Ansoff Growth matrix is a device that helps businesses decides their product and market growth strategy. Ansoffs product/market growth matrix suggests that a business attempts to rise depend on whether it markets new or existing products in new or existing markets. (http://tutor2u.net/business/strategy/ansoff_matrix.htm)Market penetrationThe market peneration teerminology refres to the product of the company which is existing is been distribute in the existing market as in case of ryanair the existing services run successful in the existing markets as it has adopted low fare strategy. (www.ryaniar.com)Market developmentThe market development terminology refres to the product of the company which is existing product and lauch in the newly market as in case of ryaniar there are lot services coming up in the market newly like new distinations new plans with new routes large capapcity, advances bording on airport etc.Product development The product development terminology refres to the product of the company which is newly develop and launch in the existing market, as in of case ryaniar, as strategical ryaniar introduce short- hauls flights its customer as ot satisfy them, more and due to techniques put some changes in plant layout of air craft like the sits have been more comfortable and easy moving and going aircraft. (www.ryaniar.com)DiversificationsThe diversifications terminology is refres to launching the different new services in the new market as in case of ryaniar, its vision is very much higher and new plans are develop according so yet ryaniar is mental prepered for this stage but operations at present and not working.Implications on the certain issuesStrategic capabilitiesMostly the strategic capabilities in respect to investor perpective and customer perpective both are strong. The investors earn a lot in the financial year 2006 and 2007 as thrrough some sources finaincial facts that ryaniar had stock over by 12% rise (annual report, 2007) further the share of ryaniar went high as customer perpective was most concerning as new approach had attract millions of customer towards ryaniar and lot of customer become fans of ryaniar (K. done, 2006)Price based strategy.The ryaniar was the second successful model after the US carriers as the powerful buisness model was much concerned on the price based. The every time low cost and low fares for customer make ryaniar more popular in the marketing functions thehighly technified structure helps to reduces its cost through each and every functions. So the price based strategy make the company more sustainable in market for long term.Lock in customerThe customer was more consious through this airlines because of tis every time somethings different for its customer as the ryaniar had work to wins the hearts the services had no complains as in magazines the customer are more satisfied with the airlines, and its new model based working.ConclusionThe success of ryaniar is the hard work of its leaders behind it a excellent astaffing fuunctioning brought all this possible despite of no. Ofcontroversus and adverties coming in the way ryanair stand on its taargeet every time low cost, it had find and created lot of innvotive plan for lower its cost and managing the things under that, as all through this long process and time phase ryaniar passed on the with flying colours.REFERENCE: Bowley, Graham, How low can you go? Financial Times Magazine, no. 9, 21 June2003 Cavendish, Camilla, A policy that pretends we can all fly on the cheap is a policythat wont fly, The Times, 5 January 2006 Creaton, Siobhan, Turbulent times for Ryanairs high-flier, Irish Times, 31 January2004 Davey, Jenny, Ryanair has earned its wings investors should set autopilot, TheTimes, 6 January 2006 Finlay, Paul (2000), Strategic Management. An Introduction to Business andCorporate Strateg Pearson Education ISBN 0 201 39827 3 Haberberg, Adrian & Rieple, Alison (2001), The Strategic Management ofOrganisations, Pearson Education Ltd, ISBN 0 130 21971 1 Lynch, Richard (2000), Corporate Strategy 2nd Ed. Pearson Education Ltd, ISBN 0-273-64303-7 McManus, John, Maybe its time for Ryanair to jettison OLeary, Irish Times, 11August 2003 OHiggins, Eleanor, (2004), Ryanairwww.ryanair.comhttp://web.tic.ac.uk/staff/fosterdWheelen, Thomas L & Hinger, David, J (1993), Cases in Strategic Management 4Th Ed.Addison-Wesley Publishing Company Inc. ISBN 0-201-568659

Appendix: 1 generic strategiesSr.no.particularsActions

1Differentiation1). Approach of Ultra frugal 2). Frills policy is Not their 3). Value ethics services in Low cost.

1Focus 1). Aggregate population is trageted.2). Proper group is Not here3). General services is Render by the company

3Cost leadership1). Strategy of Low cost2). Cost management is superb3). Reduce operating profits with Corporate merger

Appendix: 2 value chain analysisBy (James 1995) the value chain analysis is the strategic technique and tools which helps to analyse the company working on the basis of activites carried out. It invovles the flowing functions: such as primary activities and supportive activites.Primary activities: Inbound logistics Outbound logistic Marketing and salesSupportive activites: Procurement Infrastructure Operations

Appendix: 3 SWOT analyses,Strenght 1).leading low cost airlines 2). Strong revenue growth 3). Business strategy

Weakness 1). Economies of scales2). weaking employee relationship 3). Different rules for different countries

Oppurtunity 1). Launch new routes2). Fleet expanision3). Global air line market

threats1). Dening bording compensation from EU commission2). Security threat3). Rise in fuel prices

Appendix: 4 balance sheet of the year 2006 and 2007 (in respect to assests and liability)Sr.no.Particulars March 2006March 2005

1Non current assets 25805922164732

2Current assets 20536271653421

3Total assets 46342193818153

4Non current liability 17693621434348

5Current liabilty 854872649302

6Capital 46342193818153

(Ryanair annual report of 2005 and 2006)

Appendix: 5 no frills to customer.All %Experianced no frills travel%Intended no frill travels%

No bothered about the lack of in flight catering345566

Would not fly long haul on a no frills carriers293740

Good travel no that agent is required 193546

No ticket to worry about162229

If a no frills airlines flew to any dsetinaiton, I would considered it first

21

34

49

Appendix: 6 proter five forcesParticulars High/low

Bargaining power of customermedium

Bargaining power of supplierslow

Threat of new entryhigh

Threat of substitute producthigh

Competive rivarlymedium

April 14, 2010