Analysis of Ryanairs Strategy

Analysis of Ryanairs dodgingBusiness Environment-Strategy is the Scope and Direction of an shaping over the long term Which achieves advantages for the brass instrument through its configuration of resources Challenging Business Environment, to meet the needs of trade and Stakeholders expectations.Definition Business Strategy is a long term program of action designed to achieve a particular goal or set of goals or objectiveswww.rapid-intelligence- pedigree-sucess.comOrA course of action including the specification of resources necessitate, to achieve a specific objectivehttp//dictionery.bent.comStrategic management or short letter dodge is a level of managerial activity under setting goals and over Tactics. It provides overall direction to the strain enterprise and is related to the field of organizational studies.StrategicStrategic management or business strategy accommodatesFormulationEvaluationStrategic Formulation-Evaluation- Evaluation is divided into 3 partsIt is bu rning(prenominal) to conduct a deck up abstract to surface out the Strengths, Weaknesses, Opportunities and Threats. prepare abridgment may require taking certain precautions needed.suitabilityFeasibilityAcceptabilitywww.en.wikipedia.orgStrategies exist at variant levels in any organization.Corporate StrategyBusiness unit strategyOperational strategyCorporate Strategy-It is concerned with the overall purpose and mount of the business to meet stake holders expectations. This is the crucial level since it is heavily influenced by the investors in the business and acts to guide strategicalal decision making.Example of corporate strategy-Lets take an example of GE.To exculpate this clear, GEs corporate strategy is of inter relating business units. Consumer electrics, submarines, locomotives, light bulbs etc sh atomic number 18 some synergies and each part is a separate business unit. This is what corporate strategy about.Business Strategy-This is concerned to a greater extent with how a business competes fortunately in a business market. It concerns strategic decisions about pick of products, meeting needs of customers, gaining advantage over competitors, exploiting or creating new opportunities etc.Example of Business strategy-For example, here I am taking Tesco supermarkets business strategy.Tesco is a UKs largest retailer and one of the top supermarket operators in the world plans to open a thousand strong chains of discount stores in the US. This expansion plan and strategy places it directly against the competitor retail giant Wal Mart. The US retail market is most competitive in the world. This is a fact headspring know to British retailers Sainsburys and marks Spencer which failed to attract US customers.Tescos Business Strategy in the US Healthy food, no waiting-Fresh Easy stores Tesco Started operations in the US by opening its Fresh Easy stores in Las Vegas, Los angels, San Diego and Phoenix. By 2010 Tesco plans to open 200 more outlets to expand the retail network. Tescos basic US stores get out be similar to Europeans Discounters ASDA and LIDL though Tesco stores will be 75% smaller than most American super markets. Fresh Easy stores are about myriad square feet are one third the size of a typical super market, but four times that of a convenience store. Tesco is adopting a with child(p) discount model in the US. Tescos convenience stores modeled on the Tesco Express blueprint target US Grocers 7-Eleven and topical anaestheticlyrun stores.This case study covers the fol lowlylying issues.Asses Tescos globalization strategies take apart and analyze the entry and expansion strategies of Tesco in USStudy how Tesco localized its retail practices in USUnderstand Tescos efforts to integrate its global best practices with local Strategies in US.Operational strategy-Operational strategy is concerned with how each part of the business is organized to the deliver the corporate and business level strategic direction. Operational strategy digestes on resources, processes, plenty etc.Example-Here I am giving the example of Ryan air, which is a biggest low damage European air line.Ryanair was the first low budget airline in Europe, modeled after the successful U.S. low cost carrier, Southwest airlines. Ryanair is one of the oldest and most successful low cost airlines of Europe. This case study on Ryanair highlights its low transfers business model, its business strategies and operations. The case further incorporates the history and business description of Ryanair, its operations and challenges as a budget airline. Features and benefits of the low cost business model are as well discussed.Ryanair won, the Southwest of European Airlines in 2007. A year earlier, Ryanair hedged force out and a performance to envy. Ryan airs passenger Grown in Millions.History of Ryanair-Ryan airs initial efforts as a low cost carrier1990 Restructuring at RyanairThe growth of RyanairAnalyzing the low cost b usiness modelRyanair low fares strategy and standardized Operational modelAdvantages of using secondary or airports located alfresco cityLow wage billsRyanair.com and online bookings of ticketsThe easy jet challengeRyanair failed merger bid and other controversiesRyanair/Aerlingus merger failureRyanair and EUSome low fare carriers around the worldExhibit 1 Features and benefits of low fares business modelExhibit 2 Oil prices comparison, 1994 2009Exhibit 3 List of approved and out(p) merges by the EU in the airline industryExhibit 4 Comparative performance data of some major European LFAExhibit 5 Map of the European UnionIntroduction to Ryanair The southwest of European airlines in 2007Ryanair, Europes biggest low fares airline (LFA) reported its third quarter progenys for 2007 with net profits falling 27 percent compared to a net profit of 48 million a year earlier. Ryanair cited poor market conditions, fuel costs and concerns on recessional in the UK and many other Europea n economies for its current performance and non so strong future profit expectations. With average winter fares dropping approximately 5 percent its underlying net profit in the three moths to end December fell to 35 million Euros. Ryanair net profit act excluded a one off gain of 12.1 million Euros arising from the disposal of 5 Boeing 737- 800 aircraft.History of RyanairRyanair was set up in 1985 and is one of the oldest and most successful low cost airlines of Europe. In fact, Ryanair was one of the first independent airlines in Ireland. Ryanair transformed the Irish air services market where other airlines like Avair failed to compete with the more mesomorphic national carrier Aerlingus.Ryan airs initial efforts as a low cost carrierRyan air began by offering low cost no frills services between Ireland and London. Ryan brothers Catlan, Declan and Shane Ryan were the founding share holders of Ryanair. Ryanair was set up with a share capital of undecomposed 1, and a sta ff of 25. Tony Ryan, their father and the chairmen of Guinness Peat melodic line (GPA), an aircraft leasing company lent Ryanair its first airplane, a fifteen seater turbo prop commuter plane. Ryan airs first cabin crew recruits had to be less than 5ft 2ins. tall so as to be able to operate in the tiny cabin of aircraftStrategic Analysis-Strategic analysis is all about the analyzing strength of business position and reason the Copernican impertinent factors that may influence that position. The process of strategic analysis can be assisted by a deed of tools, includingScenario Planning This technique that builds various plausible views of possible futures for a business.Scenario Planning or scenario thinking is a strategic supply tool used to make flexible long term plans. It is a method for learning about the future by understanding the nature and carry on of the most uncertain and important driving forces guessing our world.Many of the regular methods for strategy devel opment assume that the world in three to ten years time will not significantly differ from that of today and that an organization will have a large impact on its environment.Although the method is most widely used as a strategic management tool, it can also be used for enabling other types of group discussion about a common future. The legal opinion process involved in getting to the scenarios have the dual purpose of increasing knowledge of the environment in which you operate and widening the participants perception of remove action plans can be considered.www.jisinfonet.ac.ukwww.en.wikipedia.orgPest analysis This is a technique for understanding business environment.Pest analysis stands for Political, Economic, social and Technological analysis and describes as a frame work of macro environmental factors used in the environmental scanning component of strategic management. Some analysts added Legal and rearranged the mnemonic to SLEPT. Inserting environmental factors expanded it to PESTLE or PESTEL, which is popular in the UK. The growing importance of environmental or ecological factors in the first decade of the 21st deoxycytidine monophosphate have given rise to green business and encouraged widespread use of an updated version of the PEST framework.Political factors are how and to what degree a disposal intervenes in the economy. Specially, political factors include areas such as tax polity, labor law, environmental law, trade restrictions, traffics, and political stability.Economic factors include economic growth, interest rates, substitution rates and inflation rate.Social factors include the crucial aspects and include health consciousness, population growth rate, age distribution, career attitudes and emphasis on safety.Technological factors include ecological and environmental aspects.Environmental factors include weather, climate and climate change, which may affect industries such as tourism, farming, and insurance.Legal factors include di scrimination law, consumer law, antitrust law, calling law, and health and safety law.Market segmentation A technique which seeks to identify similarities and differences between groups of customers or users.A market segment is a group of people or organizations sharing one or more characteristics that cause them to have similar product and/or service needs. The purpose for segmenting a market is to pass on your marketing program to focus on the subset of prospects that are most likely to purchase your offering. When numerous variables are combined to give an in depth understanding of a segment, this is referred to as depth segmentation. When enough information is combined to create a clear picture of a typical member of a segment, this is referred to as a buyer profile. A statistical technique commonly used in determining a profile is cluster analysis.Once a market segment has been identified and targeted, the segment is then subject to positioning. Positioning involves ascerta ining how a product is perceived in the minds of consumers.www.businessplans.orgFive forces analysis A technique for identifying the forces which affect the level of competition in an industry.This analysis helps the marketer to contrast a competitive environment. It has similarities with other tools for environmental audit, such as PEST analysis, but tends to focus on the single, stand alone, business or SBU (Strategic Business Unit) rather than a single product or range of products. Five force analyses looks at quin key areas namely the threat of entry, the power of buyers, the power of suppliers, the threat of substitutes, and competitive rivalry.Threat of entry Economies of scale. Ex the benefits associated with bulk purchasing2) The high or low cost of entryCost advantages not related to the size of the companyGovernment actionThe power of buyers-This is high where there a few, large players in a marketCost of switching between suppliers is lowThe power of suppliers-Where t he switching costs are highPower is high where the brand is powerfulCustomers are fragmentedThe threat of substitutes-Where there is generic substitutionWhere there is product for product substitutionCompetitive Rivalry-This is most likely to be high where entry is likelywww.mareketingteacher.comCompetitor analysis a wide range of techniques and analysis that seeks to summarize a businesses overall competitive position. Competitor analysis is an important part of the strategic planning process. Competitor analysis in marketing and strategic management is an assessment of the strengths and weaknesses of current and potential competitors. This analysis has some(prenominal) important roles in strategic planning.To help management understand their competitive advantages or disadvantages relative to competitors.To generate understanding of competitors past, present and future strategies.To provide an inform basis to develop strategies to achieve competitive advantage in the futureTo help forecast the returns that may be made from future investmentsCompetitor analysis is an essential component of corporate strategy it is argued that most firms do not conduct this type of analysis systematically enough. Instead, many enterprises operate on what is called everyday impressions. A common technique is to create detailed profiles on each of your major competitors. These profiles give an in depth description of the competitors background, finances, products, markets, facilities, personnel and strategies.Directional policy matrix A technique which summarizes the competitive strength of a businesses operation in specific markets.This matrix measures the health of the market and your strength to pursue it. The result indicates the direction for future investment. The recommendation may be to invest, grow, harvest or divest. Most businesses have more than one product and operate in some(prenominal) markets. One effective approach to ensuring that objectivity has an in put into such prioritization is the directional policy matrix (DPM).www.brs-inc.comCritical success factor analysis A technique to identify those areas in which a business must outperform the competition in order to succeed. Critical success factors are the critical factors or activities required for ensuring the success your business. The term was initially used in the world of data analysis, and business analysis. Critical success Factor is the term of an element that is necessary for an organization or project to achieve its mission. It is a critical factor or activity required for ensuring the success of your business. A critical success factor is not a key performance indicator. CSFs are elements that are vital for a strategy to be successful. KPIs are measures that quantify management objectives and enable the measurement of strategic performance.The term was initially used in the world of data analysis, and business analysis. Critical success factors (CSFs) are tailored to a firms or managers particular state of affairs as different situations to different critical success factors. Five key sources of CSFsThe industryCompetitive strategy and industry positionEnvironmental factorsTemporal factorsmanagerial positionwww.rapidbi.compulverization analysis This is a useful summary technique for summarizing the key issues arising from an assessment of a business internal position and external environmental influences.SWOT analysis is a strategic planning method used to evaluate the strengths, Weaknesses, Opportunities, and Threats involved in a project or in a business venture. It involves specifying the objective of the business venture or project identifying the internal and external factors that are the favorable and unfavorable to a convention at Stanford University in the 1960s and 1970s using data from fortune 500 companies.A SWOT analysis must first start with defining a desire end state or objective. A SWOT analysis may be incorporated into the str ategic planning model. An example of a strategic planning technique that incorporates an objective driven SWOT analysis is Strategic Creative Analysis (SCAN). Strategic planning, including SWOT and SCAN analysis, has been the subject of much research.Strengths attributes of the person or company that are helpful to achieving the objective.Weakness Attributes of the person or company that are harmful to achieving the objectiveOpportunities External conditions that are helpful to achieving the objective.Threats External conditions which could do damage to the objective.Identification of SWOTs is essential because subsequent steps in the process of planning for achievement of the selected objective may be derived from the SWOTs.The SWOT analysis is ofttimes used in academia to highlight and identify strengths, weaknesses. Opportunities and threats. It is particularly helpful in identifying areas for development.Another way of utilizing SWOT is matching and converting.Matching is u sed to find competitive advantages by matching the strengths to opportunities.Converting is to apply conversion strategies to convert threats or weaknesses into strengths or opportunities.An example of conversion strategy is to find new markets.If the threats or weaknesses cannot be converted a company should try to minimize or avoid them.Evidence on the use of SWOTSWOT analysis may find out the strategies considered in the evaluation. J.Scott Armstrong notes that people who use SWOT might conclude that they have done an adequate job of planning and ignore such sensible things as defining the firms objectives or calculating ROI for alternative strategies. As an alternative to SWOT, Armstrong described a 5 step approach alternative that leads to better corporate performance.These criticisms are addressed to an old version of SWOT analysis that precedes the SWOT analysis described above under the heading Strategic and Creative use of SWOT analysis. This old version did not require t hat SWOTs be derived from an agreed upon objective. Example of SWOT analyses that do not state an objective are provided to a lower place under Human Resource and Marketing.Internal and external factorsThe aim of any SWOT analysis is to identify the key internal and external factors that are important to achieving the objective. These come from within the companys unique value chain. SWOT analysis groups key pieces of information into two main categories.Internal factors The strengths and weaknesses internal to the organization.External factors The opportunities and threats presented by the external environment to the organization. Use a PEST or PESTLE analysis to help identify factors.The internal facts may be viewed as strengths or weaknesses depending upon their impact on the organizations objectives. What may represent strengths with respect to one objective may be weakness for another objective. The factors may include all of the 4Ps as well as personnel, finance, manufactur ing capabilities, and so on. The external factors may include macroeconomic matters, technological change, legislation, and socio results are often presented in the form of a matrix.SWOT analysis is just one method of categorization and has its own weaknesses. For example, it may tend to persuade companies to compile lists rather than thinking about what is actually important in achieving objectives. It also presents the resulting lists uncritically and without clear prioritization so that, for example, weak opportunities may appear to balance strong threats.It is prudent not to eliminate too quickly any candidates SWOT entry. The importance of individual SWOTs will be revealed by the value of the strategies it generates. A SWOT item that produces valuable strategies is important. A SWOT item that generates no strategies is not important.Conclusion-Here I am concluding that my assignment was completed. Strategy at different levels of management was explained including different met hods like SWOT analysis, CSF, DPM, etc. I have tried my best to compete this assignment with the help of some online resources.