Analyse The Current Strategy Of Ryanair Tourism Essay

Analyse The accepted Strategy Of Ryanair Tourism EssayYou argon to critically compendium the true scheme of Ryanair which comprises the fol exhaustcasting lines.Undertake an environmental analysis of the atomic number 63an air hose perseverance with implications for the budget sector and Ryanair in particular.Analyse how Ryanair has been successful in the European budget skyway industriousness.From the to a higher place analysis, critically assess the sustainability of Ryanairs schema. decision maker SummaryIn this recession period to sustain a c ar and make it different and unique id definitely a big task and to make it growing need to implement different Strategies. Strategy is the focal show up and purview of a line of reasoning nerve in long pelt along to achieve an advantage over other rivals by adapting with available resources and launch competency. to solar sidereal day we be dealing the Environment Analysis, strength and weaknesses and its dodge to sustai nability of Ryanair a pitiful live Airline.This assignment lead analyse the business environment of the airway industry in Europe, then it considers the rivalrous strategy and sustainability of Ryanair.IntroductionRyanair sire its business by Mr. Cathal and her wife with the financial helper of their father Tony Ryan with the natural capital of 1 in 1985. The comp all Head slip is in Dublin, Ireland. Initially Ryanair provide flights between Ireland and UK by using alternate drome referable to national air passages monopoly. In 1990 Ryanair loss was IR20 billion and at the end of 1990 the new prudence team under the surveillance of Michael OLeary adapted the ideal of S turn uphwest USA base air lane introduced the humiliated budget price concept in Europe and became grocery follow leader with no frills carrier. Gulf War 1 broke out in 1991 and air duct traffic all over the world distorted. Although the down turn in overall airline traffic, Ryanair made a ge t ahead of 0.3 million for the year and carry 651,000 passengers with a total work phalanx of 477 people. In 1997 Ryanair first time ranked in Dublin stock list exchange and London stock exchange and in 2002 on NASDAQ. Ryanair added function of aircraft and number of European destinations in 1999. And in 2000 Ryanair introduced Europe largest travel website, www.ryanair.com at bottom three months, the site was record 50,000 bookings per week. In 2005 May 26th Ryanair Holdings, PLC nonable its 20th birthday. At the celebration party Ryanair CEO Michael OLeary said that Ryanair leading be overtake British Airways by carrying 3.5 million passengers a month in 2005In June 2009 Ryanair is offering 1200 scheduled short haul flights per day along with 145 locations throughout Europe and Morocco with an operating fleet of 196 aircraft fast(a) approximately 845 itinerarys.Environment AnalysisThe away business environment of Ryanair nub the other European airlines and other inf luencing factors which happen upon the decision making, making of business strategy and the performance of Ryanair. There be number of impertinent environmental factors which affect the Ryanair like PEST (Political, stinting, social and technological factors) strategic management in any airline industry plays very(prenominal) important case to make them successful airline. The strategy of Ryanair is depends on the batch and mission its vision and mission which is based on the environment factors which are inseparable and external factors. These environmental factors normally called environmental analysis. In Strategic planning techniques environmental analysis plays very important character to evaluate or graze that business environment is suitable for business or not. In Ryanair these strategical policies clarify its resource strengths and deficiency, its market opportunities, the outside threats to its future success and its competitive status relative to rivals.Environ mental analysis in airline industry helps them to develop and change their strategy to meet the upcoming external changes and its help the company to lead. D. Stoffels 1994).Concept of Environmental AnalysisEnvironmental analysis bureau the environmental scanning or appraisal (L M Prasad).There are two types of for Strength, Weaknesses, opportunities and threats. In Ryanair Strength and weaknesses are internal factors whereas opportunities and threats are external factors. Ryanair environment is analysis based on following structure.Figure No 1 Ryanair Environment AnalysisExternal AnalysisThe external analysis is based on the opportunities and threats.ThreatsVolcano crises9/11 terrorist bangsWar in IraqOil pricesEconomic downturnsGovernment RegulationThe airline industry in Europe has always been under pressure from domestic and European compass north. At the end of 1980 E.U deregulate the airline industry and an array of liberalisation measures followed that were to be apply th roughout its territories. In 1997 E.U any airline can execute its business from anywhere at bottom Europe.CompetitionAt the start of twenty-first century challenger in airline industry exploded and this competition will continue to grow up new entrants to take this advantage. ascribable to price competition and frugal downturn and financial crises there is no entrants who want to enter in the market.Porters Five Forces Analysis of the low toll AirlineAccording to Porter 1985 Five force analysis is a means of identifying the forces which affect the level of competition in an industry. Porters five forces mould is based on the opportunities and threats of Ryanair from the external environment. Here porter analysis is applied on Ryanair external business environment. Porter five forces analysis are as under.Porter Five Forces AnalysisBargaining Power of SuppliersBoeing is the briny supplier of Ryanair AirlineRegional airports are mostly dependant on oneness airlineBargaining Po wer of CustomersCustomers are price awareLack of consignmentSwitching airline is comparatively easy without any representThreat from brisk EntrantsHigh capital investment slightly barriers to entryThreat from SubstitutesLack of brand loyalty for customersNo superfluous cost for customer to switchingOther methods of transport like Euro train, cars, Ferries and Euro lines rivalrous RivalryThe low cost airline industry is highly competitivePESTEL AnalysisPESTLE analysis is the most appropriate beat to discuss the Political, Economic, Social, Technological factors, Environmental factors and legal factors.Political FactorsPolitical factors means presidency regulations like tax policies, environmental virtue, employment law, trade restriction by government and political instability.Change of Government taxation policiesAn international ecesis like Ryanair may effect by regulate the Government and taxation policies and few time these policies are in favourable and sometime in o pposibe favour.Political changes in countries where Ryanair build routesLike in United realm election are coming and may be new party change their business policies.Political instabilityPolitical stability plays very important role in an international company like Ryanair. at present a day in United Kingdom if government will be labour party then the policies will be in favour of the business community.Terrorist attacks on airline businessStarting of twenty-first century the mode of terrorism is totally changed and now terrorist attacks through aeroplanes and object airline industry. Considering the events of 9/11 in USA, Manchester Airport chemical attack in UK its totally change the strategy of industry.Local government office may object to noise and new runway projectsCurrently Ryanair is face up Legal issues and disputes with Government.Economical FactorsThese factors are purchasing power of consumer and Ryanair, capital cost, economic process, inflation rate, bank interes t rate and currency exchange rate.Economic condition may affect irrefutable or negative in the airline industry tally to the country economic situation. If consumers standard of biography will be high automatically they will use airline for holidays and other purpose.Fuel prices are rising day by dayIn these days enkindle prices are going up and up and it may affect the consumer purchasing power.Social FactorsIn Social stack Ryanair will affect by peoples attitude towards luxury class, population growth and health matters.Ryanair do not offer luxury class so business trips are frequently possible to mortify company cost. rapidly increase in travelling life styleLack of consumer loyaltyRyanair low budget airline means to attract more consumers slightly the globe.TechnologicalEvery business organize one unique clay to operate its businessRyanair principal(prenominal) supplier is Boeing and Boeing have less carbon emission and les noise pollutionGood relationship with custom ers by maintaining online availOnline sales/ expediencyEnvironmental FactorsEnvironmental factors plays very important role in external environmental of airline industry. The important factors are as under.Natural disastersIn Iceland Volcano ash disturb the whole Europe flights and airline and still writing these word almost 70,000 flights are cancelled. It will affect the airline industry around the globe.Health problemsDuring flight some people feel really bad depression and its can simplification the profitability of the airline industry.Legal FactorsImmigration lawImmigration law is very major barrier in legal factors. There are some restrictions on the peoples to travel to other some certain countries. zephyr safety rulesEvery country has its own aviation and safety rules which affect the airline of other country.Swot Analysis of RyanairSWOT analysis shows the organization existing strategy and position. SWOT analysis based on strength, weakness, luck and threats in any organ ization. In Ryanair this tool is employ to analyse the internal strengths and weaknesses and external opportunities and threats. The current scenario of Ryanair on the basis of SWOT analysis is as under.StrengthsBrand Name Ryanair spent 15 years in the LCC market to develop its brand nameLow airport charges will automatically reduce the cost of fare.All Boeing aircraft Uniform fleet save training cost and technical costHigh help performance low baggage loss, in time, high rate of flight completion it gave the skillful image of the Ryanair performanceHigh Aircraft UtilizationPoint to point serviceSmall Headquarters Ryanair try to reduce its administration cost due to small officesWeaknessesBad press imageRestricted intricacy porta due to budget costLack of skill staffOpportunitiesNew routes and new destinationProvide best and updated customer services may affect the number of customersThreatsThreats from competitors like BMI, Easy jet, Air Asia, Atlantic and fly sheet be.Econo mic downturn may affect disposable income.European Union may put some type of restriction if Ryanair do not accept the rules and policies.Mostly hotels are four stars due to low cost package is riskyChange the choice of consumerChange the status of sparing may change the situation of business policies.Question No 2. Ryanair European low cost airlineCompetitive Strategy of RyanairCompetitive strategy is key factor for the success of Ryanair. Ryanair followed different types of strategy which kept itself one step up from its competitor. Ryanair aim was establish itself Europes low fares leading airline through improvements and expanding day by day of its low fares services. The Ryanair strategy was aboveboard to focus on low fares and catch more and more passenger traffic.At the end of 20th century the European aviation industry changes its cost strategy and focused on low budget model and now whole industry became low cost airlines. Ryanair based on low fares airlines and growing r apidly due to its environment friendly policies. Ryanair strategy is to provide their customers latest aircraft and advance technologies facility in their aircraft that reduce fuel burn and emissions of CO2 as much as possible.Figure No 2 Ryanair Business ModelRyanair plan to invest 17bn Euro on expansion programme of fleet replacement and now all Ryanair old Boeing 737-200 aircraft have replaced with the new Boeing 737-800. Here are the key elements of Ryanair Strategy who make itself European leading low cost airline.Low fares Low fares are the main focus of Ryanair strategy. Ryanair sets its fares on the basis of demand of that flight.Frequent point to point Flights on short haul RoutesCommitment to Safety and quality alimentAncillary servicesChoice of routeLow operating beMaximizing the use of the internetQuestion No 3.Sustainability of RyanairRyanair business model is adapted from the Southwest airline of USA. Ryanair focused on the subaltern airports because legal age of t he national airlines concentrated on hub airports. At hubs airport acquired a scarcity value and were typically allocated to incumbent airlines in order of seniority at the airport by a scheduling committee presided over by the home country national airline. First time Ryanair used London-Luton route to promote its strategy in 1986 because slots were not available due to belt at Heathrow airport. Ryanair played a vital role to use these secondary airports and make itself a successful low cost airline. On secondary airports the deregulated market brought the opportunity to progress business with the new market entrants alternatively than remain underutilised. due unused airports substantial reductions was given to new airlines which they used form the expansion of passenger numbers by low cost would be financially worth it.The Ryanair productAt the starting of Ryanair airline business in Europe its strategy was very simple to reduce its cost and sustain itself in the long term in airline industry was to use secondary airport. All major airports was under monopolistic condition of national airlines so Ryanair target secondary airports and its affect on Ryanair the low congestion charges, low landing charges and low rate of absent bags per passenger. Due to this situation Ryanair fully focused on its customer services.The Ryanair airport productThe strategy of Ryanair was using secondary airports affect very positive result on consumer. Ryanair offers point to point flights and secondary airports become the hub airports. In secondary airports the consumption of time, cost reduce like less travel time within terminals, less waiting time for baggage suppose and very cheap car parking.The Ryanair cost baseRyanair becomes the cost leader with very small labour force and fully focused on costs and productivity.Ryanair Europe No 1 in customer serviceIn February 2010 Ryanair ranked No 1 around the Europe airlines. unaccompanied Ryanair is guarantee about the low c ost and best customer services. These figures are published in customer service statistics in very month. node SERVICE STATS FEB20092010On-time flights87%83%Complaints per 1,000 pax1.390.86Baggage complaints per 1,000 pax0.350.23Complaints answered within 7 days99%99%External factorsRyanair is world accelerated growing airline companyAccording to Ryanair statistics in 2006 42.5 millions peoples travel in Ryanair airline and in 2007 it was 51 million and in 2008 the passengers was 59 millions.Ryanair rider Growth in Millions in 2006, 2007Pax ChartConclusionThe above report examines the environmental analysis of European airline industry and discussed the strategy and sustainability of Ryanair in that environment. Ryanair is using very simple and good strategy according to economic condition at this time which is simple product, strict cost control over airports like aircraft suppliers and distribution costs. Ryanair focused on secondary airports that reduce its operating cost.BIBLIO GRAPHYL M Prasad, Business Policy Strategic Management, New Delhi Sultan Chand Sons, Educational Publishers, 2005An Analysis of European low-cost airlines and their networks accessed on April 10, 2010. From www.sciencedirect.comNigel Evants and David Campbell, Strategic Management for Travel and Tourism, 2003, Pages375-378www.ryanair.comR. Casadesus-Masanell, Joan Enric Ricart, From Strategy to Business Models and on to tacticLong Range Planning (2010)Jay b. Barney William S. Hesterly Strategic Management and Competitive Advantage(concepts and cases) third Edition, Pearson