Business strategy is art and science of formulation, implementation and evaluation of various functional decisions which will help the organisation in achieving their long term goals (Hermann and Rammal, 2010). This process identifies the mission, vision and objectives of company in managing the policies and plans which are framed for achieving these goals. In the present report the various strategic planning adopted by Ryan air has been studied for achieving its objectives and the problems related to accomplishing those targets. The company goal is to expand their operation in entire Europe as a biggest passenger airline. For this they have improve and expand offerings at low fare price for their flights. This helps them in increasing their passenger traffic and maintains focus on cost control and operating efficiency.
Ryanair has to grow as a major passenger airline across the world. Their mission is to use latest technological driven planes to please their customers. They are trying to provide the services to all age class of people at cheapest cost (Ahmed, 2008). By making travel low price they are dedicated in helping out their community and the management hopes that organisation will grow with the help of their marketing plan. Ryanair also provides the best work experience to their employees and treat everyone equally with upmost respect. Cooperation is even considered for their shareholders by providing them with 2x of return on their investment. This enhances the performance of company in a positive direction. Company also provide 30% of higher return to take measures for their certain financial resources (McKechnie, Grant and Katsioloudes, 2008). These objectives are helping them in working in an efficient manner and fight against their competitors in a strategic manner.
Ryanair has to properly analyse their issues for strategic planning. These issues if not solved can affect the functioning of airlines (Lawton, Rajwani and Kane, 2011). There is a requirement to develop proper understanding between the top management to the lower management. The communication flow is lagging on account in improper strategic planning (Jackson, 2007). There are diversified culture of people who use to travel implementation which is making the Employee take training to handle the customer properly by providing them with proper services according to their need. Management is facing a difficulty in deciding about the employees whom they have to keep in their team for strategic decision. These issues must be considered by Ryanair for the proper implementation of their strategies and to overcome over issues relating to it.
Every company adopt some strategies for the effectiveness of their operation. This helps them to compete in the market against their competitors (Joo and Fowler, 2014). Ryanair planning can be understood through Profit impact of marketing strategy model (PMIS). It includes:
Market structure- Company has differentiated the price of their flight according to the age of the customers. Low price fares are the major growth rate strategy adopted by Ryanair for increasing the market share as compared to its competitors.
Competitive position- Ryanair considers commitment of safety and quality as a primary objective for their operation (Rajasekar and Fouts, 2009). This starts with proper training of their pilots and attendants. They also maintain the standard of their aircraft according to the highest European airline.
Strategy and Tactics- There low prices are designed for increasing the demand particularly for the customers who are price conscious and for the business class. They might travel through another medium of transportation or may not travel at all using the mode of airlines (Zagelmeyer, 2009). Company sets the prices according to the demand of the customer for the particular flight. There management tries to keep their operating cost to minimum from their competitors. Ryanair tries to reduce their charge by scheduling low cost aircraft equipment, by maintaining their personnel costs, maintain the rate of services provide to their customers and access their airport handling charge.
Performance- Profitability of Ryanair has kept on increasing and they have given good returns to their shareholders (Stonehouse and Houston, 2003). From year to year they have expanded their operations in many countries. This has increased the cash flow and share price of the Organisation.
SWOT analysis of the company can be done in order to understand the internal environment of the Ryanair (Cento, 2008). This gives an idea of the strength, weakness, opportunities and threats of the cooperation.
Strength- The internal strength of the company is that they are the low cost leader of the market. Ryanair have the innovative way of reduction of their charges and also have first mover advantage with a newer technology (Hill and Jones, 2009). They have good market shares which are leading to substantial growth of the organisation.
Weaknesses- Ryanairs refuses to recognise their unions. Due to low price they have volatile relationship with their customers. With their competitors they have an antagonistic relationship.
Opportunities- They have an opportunity to expand their operation further (Fojt, 2006). Tourist destination will be an added advantage if the expansion is into these areas.
Threats- Major threats for Ryanair are the competition which they are facing by the new entrants with low fare price. There are many competitors merging together which is also creating problems for the company (Gross and Schröder, 2007). If the customer adopts the different mode of transportation it also creates a threat for the airlines.
Ryanair external environment can be analyzed through PESTEL for the operation which affects their external factors (Harvey, 2009). These have to be analyzed properly so that it does not affect its operation.
Political- European union expansion has affected the activity of the Ryanair. Their expansion has lead to the increase in migration of thepeople (Saglietto, 2009). Due to tighten security they have to providea strong security system. This has lead to increase cost as this has to be monitored and maintained on the regular basis.
Economical- Ryanair was facing the problem related to the increase cost of fuelsand ensuring the employee productivity and maintenance of large fleet for their growth. There are many airlines which functions in the same root were the company operates so it is becoming hard to compete against the rivals (Nataraja and Aali, 2011). There was a heavy fluctuation in the aviation turbine fuel costs due to economic and political situations and the increasing demand for fuel in the market.
Social- This factor are connected with both the political and economic. Due to expansion of European Union people tend to move for enhancing their social lifestyle. The expansions have lead people to move from one place to another for their graduation and leisure.
Technological- Innovations of the technology has reduced their dependency on third party due to online booking (STRATEGY, 2013). It has increased the Ryanair competition and they are fighting against it by keeping their prices to be low.
Environmental- Ryanair must look after the various environmental concerned issues which are relating to noise, green house effect and corporate social responsibility. They must implement some strategy to reduce the pollution and must practise good business policies for their sustenance and continuous performance.
Legal- Company must look after to the various legal issues which can occur due to wrong practises. Ryanair must take this seriously into consideration as this may affect its image and reputation in the market.
Stakeholder analysis of Ryanair can help them in formulation of a new strategy for their organisation (Jain and Cox, 2011). This helps them in proper framing of their strategies by taking the views of their customers, employees and government.
Consumer- Ryanair can take the feedback of their customers on regular basis so that proper strategies can be adopted according to the need of the patrons (Annual report, 2013). This helps them to make the correct pricing for their airlines so that there is proper demand for their services.
Employee- On regular basis companies must take the suggestions from their employees. They are the person who gives there time to the customer in the flight (Jackson, 2007). They can study the likings and disliking of the patron and can suggest management in taking the strategic decision with respect to the proposal.
Government- Policies of the government must be analyzed by the management on the regular basis. The strategy must be such that it does not affect the operation of the business.
From the above study it can be concluded that Ryanair has adopted a good strategy to fight against their competitors. They have kept their prices as low and have provided the services of high quality. But they must be aware of the new entrants with low price as a competitor. There strategic decisions are mainly taken by analyzing the customer feedback regarding the services received. There employees are trained in such a way that they are able to meet the international requirements. For a proper functioning Ryanair must follow the government policies so that there is no affect in their operations.