Trains Maglev

RYANAIR

CASE STUDY

Outline

We used the generic outline to analyze of an academic case study:

Page (s)

Introduction 3

I) Audit 4-13

1. External diagnosis 4-9

1.1. Macro-environment (PESTEL) 4-6

1.1.1. Key factors 4-5

1.1.2. Ranking of factors/impact 6

1.2. Competitors’ analysis 7-9

1.2.1. Five forces for a global battlefield 7-8

1.2.2. Strategic groups 9

2. Internal diagnosis 10-13

2.1. SWOT analysis 10-11

2.1.1. Strengths and weaknesses 10

2.1.2. Opportunities and threats 11

2.2. Resources and competences 12-13

2.2.1. Core resources 12

2.2.2. Cores competences 13

II) Strategic recommendations 14-15

Conclusion 16

Bibliography 17

Introduction

Since the introduction of the liberalization of European airlines and competition policies in the European Union, competition in the airline industry exploded, especially in the past ten years.

Following this deregulation process, a whole segment of the European airline sector, the low-cost airlines, was born. The first low-cost airline to emerge in Europe was Ryanair and it remains leader in this field with a strategy of low fare services.

The Company operates a low-fares scheduled passenger airline serving short-haul, point-to-point routes primarily between Ireland and the UK. In operation since 1985, the Company began to introduce a low-cost operating model under a new management team in the early 1990s.

Ryanair’s objective has been to establish itself as Europe’s leading low-fares scheduled passenger airline through continued improvements and expanding offerings of its low-fares service.

Our analysis develops Ryanair’s long term vision by verifying the reasons for its success, its strategy and by analysing current threats and future possibilities: how the airline will have to perform and what strategy will have to be adopted in order to stay in a strong position in the low-cost airlines market. Our diagnosis suggests options that the company should pursue.

I) Audit

1. External diagnosis

1.1. Macro-environment (PESTEL)

1.1.1. Key factors

➢ Political/legal factor

* Political trend of protection of customers

- The European Commission ruled about illegal state subsidies from airports (such as publicly-owned Charleroi airport in Belgium). The formerly booming market of lowcost airlines “caught” the eye of political institutions, now checking the transparency of partnerships between low-cost airlines and regional airports.

- Central London County Court handled the case of a disabled man who had been charged for wheelchair service. He was awarded a compensation paid by Ryanair, upon the Court’s decision.

* Political trend of unification of Europe

- The Union is expanding towards the Eastern part of Europe.

- Duty free sales within the European Union have been abolished.

➢ Environmental factor

- The European Commission is about to impose a “Climaate Protection Charge” on aircraft taking off and landing in the EU. It affects airlines mainly operating within Europe more than regular airline companies.

➢ Economic factor

- The price of fuel keeps on increasing, making the business model of low-cost airlines less and less profitable.

- The US dollar keeps on decreasing. As Ryanair is engaged on Euro, Sterling and Dollar foreign exchange hedging, it makes less profits from its investments.

- Additional costs are becoming unavoidable because of recent European rulings. Now, Ryanair has to award financial compensation to denied (for seat overbooking or flight cancellation) or delayed passengers

➢ Social factor

* Internal factors, affecting the organizational management

- A threat of trade union by pilots to protect their collective contract (low impact as direct rival is overstaffed with pilots) is emerging.

- There is no labor issue (outsourcing of staff management)

* External factors, affecting the reputation of Ryanair

- Problems of misleading advertising lowered custormers’ trust.

- Denying constantly responsibility makes them appear as a company that has low business ethics (e.g. Ryanair rejected the responsibility of wheelchair service on the airport).

* External factors, affecting the behaviors of consumption

- The number of business travellers is increasing due to globalization and the relocation of companies.

- The growing “green” consumption may transfer part of the customers to cleaner means of transportation (trains running on electricity, green cars, etc.)

- The changing lifestyle may transfer part of the customers to more authentic means of transportation for close destinations (trains, buses, etc.).

➢ Technological factor

The Internet originated

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