Monday, August 19, 2019
Strategic Analysis of Ryanair Essay -- European Carriers Business Airl
1 INTRODUCTION The aim of this report is to carry out a strategic analysis of Ryanair. This will involve investigating the organisationââ¬â¢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 Ryanairââ¬â¢s strategies are suitable to what is happening in its task environment. Ryanair is Europeââ¬â¢s largest low-fares, no-frills short-haul carrier. The organisation was founded in 1985 as a conventional airline but re-launched itself in 1990/1991 as a low-cost carrier, replicating American Southwest Airlinesââ¬â¢ business model. Since then Ryanair has grown substantially and successfully. The company currently has 146 routes to 84 destinations in 16 countries, and carries more than 15 million customers annually. Ryanair aims to be Europeââ¬â¢s largest airline in 8 years (www.ryanair.com). 2 ANALYSIS OF THE EXTERNAL ENVIRONMENT This is a crucial part of a strategic analysis because ââ¬Ëâ⬠¦organisations do not exist in a vacuum, they are part of a complex worldââ¬â¢ (Bowman 1987:61) and many factors can influence operations, beneficially and unfavourably. However, these can be difficult to comprehend due to their complexity, diversity and fast changing nature. Necessarily a number of techniques have been developed to facilitate the process and to ââ¬Ëâ⬠¦contribute to answering the key managerial questionâ⬠¦Ã¢â¬â¢of what ââ¬Ëâ⬠¦opportunities and threats might arise in the futureââ¬â¢ (Johnson & Scholes 2002:99). 2.1 PESTEL analysis This identifies the main micro-environmental influences by classifying them into six groups: Political, Economical, Sociocultural, Technological, Environmental and Legal. By applying this framework to Ryanair it is possible to summarise the key forces in the general environment (see appendix A) likely to present opportunities and threats to the organisation (Johnson & Scholes 2002). Political à ·Ã à à à à ââ¬ËSaturday May 1 will mark one of the most important days in recent European historyââ¬â¢ (http://europa.eu.int). The continent will see the biggest expansion of EU to date when ten states become new members. For Ryanair new markets will open which suits its growth plans (www.ryanair.com). à ·Ã à à à à Stansted airport, owned by BAA, is one of the most rapidly growing airports i... ...al Times Gow, D. (16/02/04)ââ¬â¢Ryanair plans zero frills and faresââ¬â¢, The Guardian Hotten, R. (13/03/04) ââ¬ËNo-frills deal has impact on bmiââ¬â¢, The Times Insley, J. (18/01/04) ââ¬ËHappy New Year for second homesââ¬â¢, The Observer Insley, J. (08/02/04) ââ¬ËYou can make it if you tryââ¬â¢, The Observer Newman, C. (03/12/03) ââ¬ËTravellers face big rise in air passenger levyââ¬â¢, The Financial Times Pratley, N. (05/02/04) ââ¬ËClipped Wingsââ¬â¢, The Guardian Tait, N. (03/12/03) ââ¬ËRyanair in court over wheelchair feeââ¬â¢, The Financial Times Tran, M. (03/02/04) ââ¬ËRyanairââ¬â¢s airport subsidiesââ¬â¢, The Guardian Wright, R. (01/12/03) ââ¬ËBA threat to sue if Stanstead gets runwayââ¬â¢, The Financial Times PESTEL ANALYSIS à à à à à à à à à à à à à à à à à à à à à à à à à à à à à à APPENDIX A Political à ·Ã à à à à The expansion of the European Union (EU)à ·Ã à à à à BAAââ¬â¢s proposed Stanstead expansionà ·Ã à à à à CAAââ¬â¢s new regulations on airport charges Economicalà ·Ã à à à à High oil prices Socioculturalà ·Ã à à à à Increasing second-home ownershipà ·Ã à à à à Europeââ¬â¢s increasingly ageing populationà à à à à Technologicalà ·Ã à à à à New satellite technology Environmentalà ·Ã à à à à The Global emissions-trading scheme Legal à ·Ã à à à à The European Court of Justice ruling Strategic Analysis of Ryanair Essay -- European Carriers Business Airl 1 INTRODUCTION The aim of this report is to carry out a strategic analysis of Ryanair. This will involve investigating the organisationââ¬â¢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 Ryanairââ¬â¢s strategies are suitable to what is happening in its task environment. Ryanair is Europeââ¬â¢s largest low-fares, no-frills short-haul carrier. The organisation was founded in 1985 as a conventional airline but re-launched itself in 1990/1991 as a low-cost carrier, replicating American Southwest Airlinesââ¬â¢ business model. Since then Ryanair has grown substantially and successfully. The company currently has 146 routes to 84 destinations in 16 countries, and carries more than 15 million customers annually. Ryanair aims to be Europeââ¬â¢s largest airline in 8 years (www.ryanair.com). 2 ANALYSIS OF THE EXTERNAL ENVIRONMENT This is a crucial part of a strategic analysis because ââ¬Ëâ⬠¦organisations do not exist in a vacuum, they are part of a complex worldââ¬â¢ (Bowman 1987:61) and many factors can influence operations, beneficially and unfavourably. However, these can be difficult to comprehend due to their complexity, diversity and fast changing nature. Necessarily a number of techniques have been developed to facilitate the process and to ââ¬Ëâ⬠¦contribute to answering the key managerial questionâ⬠¦Ã¢â¬â¢of what ââ¬Ëâ⬠¦opportunities and threats might arise in the futureââ¬â¢ (Johnson & Scholes 2002:99). 2.1 PESTEL analysis This identifies the main micro-environmental influences by classifying them into six groups: Political, Economical, Sociocultural, Technological, Environmental and Legal. By applying this framework to Ryanair it is possible to summarise the key forces in the general environment (see appendix A) likely to present opportunities and threats to the organisation (Johnson & Scholes 2002). Political à ·Ã à à à à ââ¬ËSaturday May 1 will mark one of the most important days in recent European historyââ¬â¢ (http://europa.eu.int). The continent will see the biggest expansion of EU to date when ten states become new members. For Ryanair new markets will open which suits its growth plans (www.ryanair.com). à ·Ã à à à à Stansted airport, owned by BAA, is one of the most rapidly growing airports i... ...al Times Gow, D. (16/02/04)ââ¬â¢Ryanair plans zero frills and faresââ¬â¢, The Guardian Hotten, R. (13/03/04) ââ¬ËNo-frills deal has impact on bmiââ¬â¢, The Times Insley, J. (18/01/04) ââ¬ËHappy New Year for second homesââ¬â¢, The Observer Insley, J. (08/02/04) ââ¬ËYou can make it if you tryââ¬â¢, The Observer Newman, C. (03/12/03) ââ¬ËTravellers face big rise in air passenger levyââ¬â¢, The Financial Times Pratley, N. (05/02/04) ââ¬ËClipped Wingsââ¬â¢, The Guardian Tait, N. (03/12/03) ââ¬ËRyanair in court over wheelchair feeââ¬â¢, The Financial Times Tran, M. (03/02/04) ââ¬ËRyanairââ¬â¢s airport subsidiesââ¬â¢, The Guardian Wright, R. (01/12/03) ââ¬ËBA threat to sue if Stanstead gets runwayââ¬â¢, The Financial Times PESTEL ANALYSIS à à à à à à à à à à à à à à à à à à à à à à à à à à à à à à APPENDIX A Political à ·Ã à à à à The expansion of the European Union (EU)à ·Ã à à à à BAAââ¬â¢s proposed Stanstead expansionà ·Ã à à à à CAAââ¬â¢s new regulations on airport charges Economicalà ·Ã à à à à High oil prices Socioculturalà ·Ã à à à à Increasing second-home ownershipà ·Ã à à à à Europeââ¬â¢s increasingly ageing populationà à à à à Technologicalà ·Ã à à à à New satellite technology Environmentalà ·Ã à à à à The Global emissions-trading scheme Legal à ·Ã à à à à The European Court of Justice ruling
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