The Environmental Case Analysis Of Ryanair Commerce Essay

The Environmental Case Analysis Of Ryanair Commerce actIn an organisation the most(prenominal) important b mortified is its schema, because outline is the feature which gives the means to the firm to be successful. This is an effective long-term method to preserve an organisation to reach its objectives and goals to stay put on its warlike margeThe scope of this essay is to consult the strategical depth psychology of purlieu and the diligence unitedly with the companys present strategic choices, and also it is requested to recommend unuse strategic initiatives and argonas for improving strategy implementation for the senior management group of Ryanair.This is conducted with the use of six strategic models ( prep ar, bray, Porters louvre Forces, Strategic groups, nurture range and VRIO) that be recommended to be used to analyse the internal and international environment of the company.Each model go forth be nominaten in to retardation and discussed c arfully to high-pitchedlight what had begin the wooing for the negative perception and the exacting perception of both the nodes and the companies towards its addition and sustainability in that locationfore this case study will be analysed to pin bear down on what should be done for the forthcoming strategic management of the company.Out of all the low shape up flight paths in the europiuman pains Ryanair takes the lead. This air duct however is from Ireland and its head office is rigid in Dublin. London Stansted Airport in UK is its main op sequencetional base. Ryanair is named as the largest low constitute letter carrier and the is the third largest airline in the posting of rider public figures.To offer- secure, cost rivalrous and efficient in services in the aviation hauling and to retain their employees dedication and devotion to fulfil the objectives of the industry, to check minimum standard of on eon military operation rate darn complying will all application r egulations and to sustain an environments where dignity and family values ar cosmos utilized.ObjectivesTo achieve revenue growth annuallyTo aim on having a bigger market shargonTo pull in a absorb better customer service than their rival companiesTo fall in a stronger wrinkle throwReputations with clients than rivalsTo be accept as a loss leader among airline industriesTo fence in the globular marketTo have a stable competitive gain(Marivic .B 2009)3.0 Micro environment analysis (Internal analysis)Organisations create worth of customer value be measured by a product performance characterises and by the credits which customers be willing to pay, by utilizing the capabilities and resources that atomic number 18 set internally and reaching the pack of standard global opposition . These extra collection of capabilities and resources which gives the exclusive advantages to the organisation be thitherfore measured as core competenciesCarpenter, Bauer, Erdogan (2009)3. 1 SWOT analysis (Strength and Weaknesses)StrengthsThe concluding cost in credit line to all the former(a) LCC in EuropeThe low cost leadership had make it stand out from the arena of LCC industry in EuropeThe worlds most remunerative airlineAccording to the case Ryanair was the most profitable airline in the world on the basis of its operating and concluding profit margin, on per airline and passenger basis.Brand recognitionIt is claimed match to the case that Ryanairs website was the largest excursion website in Europe and the fifth most recognized cross off in GoogleThe attitude of No frill Low fareTo over pass the weakness of low passengers the airline restyled the system with this attitudeCompared to other LCC airlines Ryanair has the most passengers42 million passengers in 2007Most make out of bases with most enumerate of aircraftsAccording to the case study Ryanair has flown from 16 bases with over ascorbic acid vernal Boeing 737-800 ordering further 138 new air c rafts doubling the coatHighest control in the EU low cost market29.9% from the holy Low cost marketBeing the youngest fleet of all the major airlines in the EUReplacing its fleet of old aircrafts with new, more eco intimate aircrafts, minimizing the average age of its fleet to 2.4 years.WeaknessesWheelchair chargersBad reputation and ethical issues reflected when ryanair charged 18 pounds to use a wheelchair and in response to the protest it trim the charge to 50 cents wheelchair toll on e very passenger slatingPoor service qualityThe little legroom and unfriendly lag being the worst part of Ryanairs know-howExtra charge for food and luggagesCarryon luggages being shit and making them check in bags allowing the passengers to walk in with minimum of hold luggageBad relationship with the pi lucksRyanair has bullied pilots to force them to agree to new contracts wherer they would have to pay 15,000 francs for retraining on new aircrafts if they left the airline.Airports in t he suburbs away from the main city make the customers inconvenientNegative response by the passengers for the additional servicesAccording to the case non all ancillary services initiatives were successful in 2005, passengers were resistance to pay additional amount because they thought it is non a worthwhile investment for a gyp flight.3.2 The Value chainInfrastructure of the firmAround Europe Ryanair has 16 bases having the main bases in Stanstead and Dublin. The chargers of Ryanair airports are low imputable to its use of airports that are signifi dejectiontly away from the congested main airports. As adaptation for surcharges are not included for fuel they have to reduce costs of on other ways with implementing chargers for the use of wheelchairs ,food and extra luggages. Ryanair having one part of aircrafts (boeing 737) they sole(prenominal) have to train the pilots to fly thos particular plane hence can cut down costs as they do not have to be sent to various courses.Th e hierachial structure of Ryanair is very effective as the managers have to report to the CEO to make decision from the information given. military man Resource managementHaving the employees sleep in the bases and not having them stay in hotels has do Ryanair reduce costs. Ryanair can make future plans since they have a good roster for most of their workers having 4 days on and 3 days off.Technological developmentOnline booking was introduced by Ryanair for the first time and thus they became eligible to reduce their costs. Self-check service enabling to the passengers was also introduced withal thus Ryanair was able to reduce staff and cost. Having the youngest fleets in the EU make Ryanair reduced in costs for the new airplanes.ProcurementRyanair only providing a service and having to outsource the material they need. in addition to that they have to bribe fuel and equipment collectively with leasing planes.Inbound logisticsOut sourcing of handling services is very common fir a business like thisI.e. cleaning service, food, medical checkup services and security/safety.OperationsBefore setting off it is a must to check out all the planes and equipments by the pilots and the airports used are not very congested and only make point to point tripsMarketing and gross revenueHaving the biggest website in Europe and having large advertizing boards made them increase in sales and marketing. but the attempt of introducing the entertainment readiness onto flights where customers had to pay more was failed as nation refused to pay due to swindle journeysServiceHaving tried to keep the fleet up-to-date and letting the staff go on course once a year to meliorate their knowledge and making sure they know all the new regulations made Ryanair queenful on services as closely.3.3 VRIO AnalysisResources and capabilities can be regard as things that an organization own. It is essential to narrow down and clear up the core competencies to netherstand the meaning of the different organizational performances. If an organizations resource and capabilities are valuable, exalted, inimitable and organized then it will direct to a sustainable competitive advantage. The internal analysis can thus be analyse through this base of VRIO simulation.Carpenter. M, Bauer. T, Erdogan .B (2009)Analysis of the caseRecoursesValuableRareInimitability organizeCompetitive Implication(1)Human ResourcesNoNoNoNoCompetitive disadvantage(2)Finance ResourcesYesYesYesYesSustainable competitive advantage(3) indubitable assetsYesNoNoYesCompetitive Parity(4)Intangible assetsYesYesYesYesSustainable competitive advantage(Table 1)The human resource of Ryanair is a competitive disadvantage as it highlights on bad relationship with pilots hence it is not valuable it is not rare it is inimitable and it is not organized as it is not in effect arranged and deployed in the market.The Finance resources of Ryanair is valuable, it is rare, it cannot be imitated by other airlines an d it is well organised and effectively arranged in the market thus it is a sustainable competitive advantage.The tangible assets of Ryanair i.e. the airplane types etc are valuable merely they are not rare they can recollect them anywhere and the planes are imitable as any other company could have the comparable kind-hearted of flights. They are very well organized with the youngest planes and eco friendly with better airlines to come in to the firm in the future. Thus it has a competitive parity.The impalpable assets of Ryanair especially the brand recognition are valuable they are rare and they are inimitable and they also effectively help the organisation to be organized. Thus it is a sustainable competitive advantage.4.0 External analysis4.1 SWOT analysis (Opportunities and Threats)OpportunitiesSales increases due to credit crunchAs a go of the recent recession the credit crunch made the sales increase as many customers wanted to reduce their costs.Can collapse the long h aul market penetration by the possibility of fetching over Aer LingusAs the result of losing the bid Miceal OLeary assumed that Aer Lingus can be bought over as it has no long term future.Most routes are being clear as other carriers start withdrawingAs the jolt change magnitude with the routes of Ryanair other airlines such as My Travel Light are avoiding the routes all together.ThreatsThreats due to accidentsIf an accident happen in a LCC airline it will Marjory affect the firm as there are a very high percentage of significant reduce in demandAttacks of terroristsAttacks like 9/11 will reduce the demand for airlines.increase fuel determineRyanair limiting its ability to pass on increased costs to the passengers of low fare placing extra fare on the carriers as a policy to find cost saving in other spheres of its operations leading Ryanair for hedging.Possibility of taxation introductionDue to global warming there can be a environmental taxationIncreased competition from dev eloping countriesEasyjet having and extra skyttax starFor website booking and customer support Ryanair scored 1/5 in nine of the 16 criterias. (Bitterwallet nd)4.2 The PESTLE analytical technique(Figure 1) The Macro Environmental analysis, What makes a good leader?PoliticalOne of the significant advantages to Ryanair is its political environment as the majority of its procedures are controlled within Europe. This region maintains political stability and it was a fact that we all knew. Even when there is government instability Ryanair does not set about issues as an apprehension regarding passenger volumes or flight destinationsEconomicFor the airlines industry the increment of fuel price caused a major problem they had to cut corners if they did not hedge to accumulate cost on other areas. on that point can be seen a fall in demand for the flights due to the recent economic crisis. Hence job cuts increased and customers have low disposable income blocking them to spend on vacati ons. However this could be an advantage for other cheaper airline industries as there are people who are still able to afford a vacation as they are sounding for lower cost alternatives.SocialThis factor has generally impact Ryanairs business strategy. The prediction of Buyer behavior are becoming little by little more complex to forecast as loyalty are being shifted by the modern consumers from one brand to anther due to the differentiation of price and lack of basic buyer reliability. In addition to that the increasing competition among carriers with low cost fare is resulting in consumers mentally in which carrier to choose when traveling within Europe destinations.TechnologicalThe modern era is advance in technology which means that the entire industry is under change with more eco friendly and efficient. Online booking is one major progression Ryanair has technological wise having the most visited travel website in Europe together with the fifth most recognized brand on Goo gleLegalThe hard regulated industry with laws that are constantly adapting to new changers by not allowing liquid in the customers carry on luggages bring the legal position of Ryanair in to action. The new laws that implies to airline industries are the laws that are put across the industries to be more environmentally friendly. This will thus lead to companies advertize ting to reduce carbon procession and make the industry little harmful to the environment to meet the terms of EU regulations.EnvironmentalThe external environment of Ryanair is somewhat stable. Nevertheless apprehending the consumer behavior is Ryanairs biggest problem together with utilizing marketing applications to improve entire buyer patronage and sales performance.4.3 Porters Five ForcersThe case study will be discussed through the porters five forces analysis. This analysis is a very powerful yet simple technique to find out where the power stays in a business. This technique is used to comprehend the strengths of the present competitive position and the future where Ryanair is willing to go in.HighMediumLowHighMediumBargaining power of suppliersIn the airline industry there is a small number of low fare airlines, thus it shows a high threat jibe to the case Ryanair is being chosen by many customers for its lowest price. However by any happen if there is a price climb customers have a high potential of geological fault to another brand in brief customers have no loyalty towards one brand. Which gives the result as negociate power of the suppliers is low.Bargaining power of buyersThe potential of switching to other airlines are very common with LCCs since the customers are only looking for the cheapest. Therefore if Ryanair increase the cost under any circumstance there is a possibility of losing customer. In that case its evident that buyer bargaining power is high.Rivalry of competitorsAs a result of slow growth in the industry most carriers find it difficult to succeed th e chance of succession is limited to a few firms because of the competition for market share. The high fixed cost and low product differentiation leads to high rival threat. This shows with Air Ligus, GlyBe and Easyjet discovering the similar path of Ryanair.Substitution ThreatThere are many substitutes for long trip i.e. Trains Buses, cars, ferries. However one cannot equalise a plane with all of the above mentioned alternatives and a plane travel faster than any of them. Therefore substitute threat is moderate.The threat of new entryAirline industry is not the easiest to enter it has a lot of barriers. Ryanair is the market leader and with the implementations of new regulations and the pressure to reduce carbon emission makes it a moderate threat of new entry to the market.4.4 Strategic groups lineament321CostAccording to the dimensions of quality and cost of the entire industry (Refer appendix 1)1st group move under the same(p) strategic group as they have same strategy of low cost leadership.2nd group mainly serving to the people with a moderate income levels and moderate cost therefore they have the same strategy of medium cost leadership strategy.3rd group falls under the same strategic group, as they have the same strategy of high cost high quality.Profitability321Number of passengersAccording to the dimension of profitability and number of passengers of Budget airline industry(Refer appendix 1)1st group falls under the same strategic group as they have low profit and lowest number of passengers2nd group falls under the same strategic group as they have medium profitability and medium amount of passengers travelling3rd group falls under the same strategic group as they have high profitability and the highest number of passenger5.0 Strategic choices and the recommended strategyThe strategic framework of change managementThis framework helps Ryanair to understand the substantial change over recent years and the greatness of organisational culture to o rganizational analysis. It also can be used to lay the key steps that could improve the management of change. However according to the Ryanair case study management is up to a good standard and therefore change management is least importantThe strategic framework for advertising challengersThis framework can be implemented to Ryanair as it had an incident with a customer where she was mislead by an advertisement, yet this framework is also a less importantThe strategic framework for client Relationship focussingThis framework is used to broaden the understanding of CRM.Negative response by the passengers for the additional servicesBad relationship with the pilotsPoor service qualityThese are some of the weaknesses Ryanairs CRM come across thus to fill the span of the cranny between negative attitude towards Customer relationship and to make it more favourable it is a must for ryanair to focus on the CRM.If Ryanair take this strategic frame work in to action they will be able toB ecomeThe most favourable airline in the industryThe most profitable budget airlineThe positive word of oral fissureThe well recognized brand in the industryMoreover with Customer relationship management the internal market will be looked in to with a positive perspective when the employees are motivated and when there is a beginning for employment recognition thus employees will be hardened well which will lead to an overall success of the airline6.0 remainderRyanair case study was analysed through six analytical techniques (SWOT, PESTLE, Porters five Forces, Value chain, VRIO and strategic groups).Based on the analysers the management can now understand that in order to improve the strategic implementation they must follow the strategic framework of Customer relationship managementIt helps to bridge the gap and to meet their objectives.Therefore when the recommended framework is implemented the vision of Ryanair can be reached easily.7.0 ReferencingBeamish. H.R, 2008 Strategic m anagement, 3rd edition, Pearson Prentice HallBourgeois L.J, Duhaime.I.M, Stimpert J.L, (1999) Strategic prudence a managerial perspective, 2nd Edition, Dryden press, USABourgeois L.J, Duhaime.I.M, Stimpert J.L, (1999) Strategic commission a managerial perspective, 2nd Edition, Dryden press, USACarpenter. M, Bauer. T, Erdogan .B (March 2009), Developing strategy through internal analysis Principles of management, ,Retrived on 15th April 2010 fromhttp//www.flatworldknowledge.com/pub/1.0/principles-management/29045Carpenter. M, Bauer. T, Erdogan .B (March 2009), Developing strategy through internal analysis, Principles of management and Organisational Behaviour, ,Retrived on 15th April 2010 fromhttp//www.flatworldknowledge.com/pub/1.0/principles-management-and-orga/32825De Puget.G, 2003, cut Accent Ryanair Slow on Emotion, Brandchannel, Retrieved on 11th April 2010 fromhttp//www.brandchannel.com/brand_speak.asp?bs_id=72Eerste. 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London Prentice HallJohnson G, Sholes K, Whittington R, (2005) Exploring Corporate system text and cases 7th Edition, London Prentice HallMarivic.B, 2009,Ryanair financial objective, thinking made easy, Retrieved on 11th April 2 010 fromhttp//ivythesis.typepad.com/term_paper_topics/2009/03/ryanairs-financial-objectives.htmlMun.J, (2008) Analysis of Ryanairs Competitive Advantages Business HYPERLINK http//www.associatedcontent.com/business/?cat=3HYPERLINK http//www.associatedcontent.com/business/?cat=3 Finance , Retrieved on seventeenth April 2010 fromhttp//www.associatedcontent.com/article/1159874/analysis_of_ryanairs_competitive_advantages.htmlPorters five forces, Mind Tools retrieved on 12th April 2010 fromhttp//www.mindtools.com/pages/article/newTMC_08.htmRyanair,Airfearsflights nd retrived on 10th April 2010 fromhttp//www.airfaresflights.co.uk/airlines/RyanairFigure 1http//www.whatmakesagoodleader.com/macro-environment-analysis.html8.0 Appendixes