Several critical issues face Ryanair Airline Company. The company is located in Europe. The company was founded in 1985 to give well-established scheduled passenger services (Kangis, and O'Reilly, p 106 2003). The founders were the Ryan Family with the leading airline way moving between UK and Ireland. Ryanair Airline was formed to counter the monopoly that had been created by Aer Lingus Company (Lawton, p 575 1999). The attempt to outsmart the Aer Lingus Company was the basis of the several key challenges that has since faced Ryaniar Company. The company has realized the drastic change of leadership, as a result, to bring change into the company (D'Alfonso, Malighetti, and Redondi, p 119 2011).
There are generic and external factors that faced the company. The factors include price and the accessibility of the aircraft. Secondly, the company has ever since realized instability in capital and credit markets hence the company should develop stability through various strategies in the two markets (Malighetti, Paleari, and Redondi, p 200 2009). Third, the company has over-relied on the individual employee who is a risky take and for that reason; it should find a way of having a body that can serve best like Michael O'Leary (O'Connell, and Williams, p 250 2005). Forth the company has shown signs over depending on the external service providers and website on the sales of its products and tickets (Malighetti, Paleari, and Redondi, p 38 2010). The remedy for this is that the company should find alternative best ways of boosting sales (Casadesus-Masanell, and Ricart, p 198 2010). Last but not list is that the company might be faced with the challenge of increased taxation on the Irish Corporation (Lawton, p 20 2017). This can be remedied by finding the best ways to deal with the situation of bailouts.
Nevertheless, this paper seeks to discuss and assess the strategic plans and models that can be put into action to implement the workability of the current and plans of Ryanair (Grant, p 1 2016). Additionally, the paper will also address the STEEPLE/PEST (EL) analysis of the macro environments, followed by the framework five forces of the microenvironmental study (Creaton, 2007). The third part of the paper seeks to address the change models, and the last part of the paper will discuss two scenarios situation that should aim at building Ryanair.
The Ryanair Company has attempted various strategies to ensure that the company's stability is attained. The company has been headed by several CEOs who have aided the process. There are reasons behind the success and hitches that the company has realized that the paper will address as a way of bringing recommendations and shading light to the departments of the company. Thus the paper sorts to understand the strategic plans that have been developed by the company and after that evaluate them in relations to the general goals of the company. Various strategic plans and models have been captured in the paper to help in elucidating the strategic plans that the company has put in place in addition to the ones recommended. The various assessments of the company and analysis areas showed below. The last part offers the conclusion and the recommendations that the Ryanair Company should applaud.
Macro Environmental Analysis of Ryanair using STEEPLE/ PEST (EL) Analysis
A PEST or referred to as PESTEL analysis is a useful and simple tool that is used by strategists to identify the critical elements of an existing macro environment of an organization. This fact forms the forces that affect the company of Ryanair or any other competitor in the European Zones. The forces have created both threats and opportunities within Ryanair and also other companies such as British Airline Company that is a serious competitor of Ryanair. Therefore the aim of performing a PEST analysis and evaluation seeks to establish the current factors that affect the Ryanair Company. The study also finds the out the changes that are likely to happen to the external environment of European business competitors of Ryanair and also exploiting the differences or defending the changes in a manner that the competitors would have done so.
The macro environment forces that revolve around the European and UK businesses include the following PEST: Legal, demography, ethical and environmental. These are the primary factor that revolves around Ryanair among many other macro environments (Ab Talib et al., p 110 2014). To perform a successful PEST or STEEP analysis, the requirement is that the several managers of Ryanair Company must adhere to the steps as follows: First, they should gather information concerning political, social, technological and economic factors in Europe that revolves around Ryanair (Halik, 14 2012). Secondly, the managers should identify the PESTs factors that pose threats or opportunities that revolve around Ryanair. The economic factors in the UK include but not limited to taxation, market shares, etc. The political is based on the government budgets and enacts each year and summit meetings by the government officials in Irish Land and European nations at large.
The Five Forces Framework which forms Micro Environmental Analysis of Ryanair Company.
Michael E. Porter developed five forces framework that is currently used to analyze most competitive business organizations. Like in this case, the paper takes into consideration the five forces behind the microenvironments of Ryanair Company. The model takes into account the various industrial economic drivers that determine the competitive nature of businesses that aid in its profitability. The unattractive industry is one in which the effects of Michael Porters five models tends to reduce its overall profitability. According to Porter, the Ryanair's Company is attractive since it does not approach real competition in that otherwise falls the profit of the company hence the company has ever since struggled to an average profit level.
The five forces of behind Ryanair's predicaments include the threat of new entrants, industry rivalry, threats of a substitute, and the bargaining power of both suppliers and customers (Thompson, Strickland, Gamble, and Zeng'an Gao, 2008). The drive behind the five forces has mad Ryanair Company to compete favorably within the airline markets. First, the threats of new entrants have been a major course of the worry of Ryanair. The company has realized that the airline industry is very profitable and thus it is likely to invite more competitors like British Airline, and thus the company has developed to prepare itself for the incumbent companies by upgrading their operations and technologies. Similarly, Ryanaiar Company has developed luxurious after sale services and low fare charges to minimize the threats of substitutions (Dalken, 23 2014). Additionally, the customers and suppliers of the Ryanair industry have placed the firm under pressure to cope with the current markets like for instance the company has been forced to buy new international aircraft, employing expertise, etc. to meet the customer's choices (Afuah, 2014). The five persons and elements within the five Porters forces form the major stakeholders within the airline budget of Europe at large. Additionally, the five forces had dictated the times when Ryanair realized prosperity, recessions, depression, and
John P. Kotter's 8-Step Change Model
There are various change and strategic models that can be used to analyze the Ryanair Company. The model that this paper seeks to use about the company's strategy is limited to John P. Kotter. This part gives eight essential elements that lead to a successful organizational change. The following are the eight change strategy that needs to be addressed or emphasized by the Ryanair Company for a better successful change (Janke, Traynor, and Boyle, 222 2013). First, Ryanair needs to establish urgency; this means that the company must applaud and examine the competitive markets and current realities. The current markets of Ryanair are in Europe at large and thus to improve, the company needs to extend its market across the continents (McKinney, and Morris, p 185 2010). The company needs to identify and discuss the opportunities in the airline that competitors are not offering, potential crises and current crises like turnover of the top management and fuel crises. Lastly, in the urgency, the company needs to catalyze the changing processes.
Secondly, an element of change is that Ryanair Company needs to form powerful coalitions. The coalition needs to be regarding powerful groups that can lead to change. Additionally, Ryanair needs to have a clear vision with a team that can aid in realizing the vision (Kotter, and Cohen, 2002). The change process should be compost of employee fraternity and headed by a change manager. The third element is that Ryanair should create a clear vision, which bears the direction of change. The vision should be accompanied by a strategic plan that helps realize the vision. The fourth element is the communication of the vision (Varkey, and Antonio, p 275 2010). The channel should be communicated through the website and social media. The fifth element of change should be to empower others to work and act on the vision that the company shall have created. This step involves eradicating the change obstacles, changing structures of Ryanair and also encouraging risk-taking efforts. The six element of change is planning for short-term wins and also creating the gains. This is done through rewarding employees. Seven, consolidation and production of more change and finally, the last element is by the institutionalization of new dynamic approaches to boost the ongoing transformation.
Scenarios and Building and Strategic Recommendations
The pessimistic scenarios include but not limited to increase flight charges and increased competitions. First, the flight fare charges are likely to shoot because the price of fuel is rising and there is a series of the energy crisis in the world. Secondly, competitors are finding the airline so lucrative and thus more effort to outsmart each other is likely to increase. The middling scenario is that there is going to be the development of more sophisticated technologies that are going make Ryanair spends more to compete favorably hence the company's spending must rise shortly. An optimistic scenario that I anticipate is that Ryanair Company is going to hit the airline industry in the world since it is growing at a very rate and embracing the world's standards demands like purchasing world-class aircraft and developing booking websites and spreading its wing across the globe. The scenarios are envisioned beyond 2020 airline markets.
The generic recommendations that are in line with Bowman's Strategic Clock are as follows. First, the company should use a low price strategy by appearing as the lowest cost leaders to deal with competitors (Shakhshir, 2014). Secondly, it should apply the hybrid position three which suggest that Ryanair should have some elements of lowering products and charges (Carlisle, and Faulkner, p 420 2005). Lastly; the company should use the differentiation position four which suggests that Ryanair should offer customers with the highest perceived values that scare lures the customers of competitors such as Aer Lingus Company. Porter's generic recommendations are not limited to developing a competitive advantage by being unique, being cost leaders, focusing and the use of differentiation strategy to render the competitors too common.
Summary and Conclusion
In conclusion, Ryanair Company has been faced with several challenges that acted both positively and negatively on its micro and macro environment...
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