AnalysisofRyanair’sStrategy.doc

BSP028 Strategic Management Analysis of Ryanair’s Strategy Peng Sun A912911 Word count: 5396 Contents Introduction ………………………………………………………… 3 1.1. Industry background………………………………………………………….…… 3 1.2. Ryanair overview………………………………………………………………..…. 3 1.3. Research questions…………………………………………………………… 3 Strategic Position Analysis…………………………………………4 2.1. Environment analysis……………………………………………………………….4 2.1.1. Macro-environment analysis………………………………………………...4 2.1.2. Industry analysis ……………………………………………………………..7 2.2. Ryanair’s strategic capability………………………………………………………9 2.2.1. Resources audit………………………………………………………………9 2.2.2. SWOT analysis………………………………………………………………11 Strategic Options Analysis………………………………………..13 3.1. Business level strategy……………………………………………………………13 3.1.1. Cost reduction strategy…………………………………………………….14 3.1.2. Ancillary service strategy…………………………………………………..15 3.2. Corporate level strategy………………………………………………………. 17 3.2.1. Strategic development directions……………..…………………………. 17 3.2.2. Portfolio analysis………………………………...………………………….20 3.3. Strategy evaluation……………………………………………………… ……….21 3.3.1. Evaluation of operational strategy…………………...…………………22 3.3.2. Evaluation of development direction strategy………...………………….23 Conclusion……………………………………………………….…24 Reference………………………………………………………..…25 1. Introduction 1.1. Industry background Low fare airline firstly emerged in the US with Pacific Southwest Airlines, pioneering the concept in 1949. [1] In 1991, Ryanair re-established the airline as the first European company following the low fare strategy implemented by Southwest Airlines. Nowadays the growth of low fare airline (LFA) is currently focused on the European market, where LFA s stood for 19.5% in 2007 of the total air transport supply according to seats. [2] According to the European Low Fares Airline Association (ELFAA)’s expectation, the total share of low fares traffic in Europe is expected to reach over 40% by 2010. [3] Ryanair and EasyJet are the largest