Strategic management ryanair
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Strategic management ryanair Presentation Transcript

  • 1. Ryanair – The Low Fares Airline
    Strategic Management
    Team members:
    Ivan Martinov
    Sabbir S. M.
  • 2. Agenda
    Company Overview
    1
    Strategic Analysis
    2
    3
    Strategy Formulation
    4
    Organizing for Strategy
    5
    Conclusion
  • 3. Company Overview
    1985, first route with daily flights on a 15-seater Bandeirante aircraft,
    In 1986 launch fare of £99 return, less than half the price of the BA/AerLingus lowest return fare of £209. First European fare war
    In 1990, losses of £20m. Adopt Southwest Airlines low fares model.
    In 1997, Ryanair launches its first four European routes
    By 2009, traffic grew to 14% compare to 2008, resulting 66.5m passengers in response of reduced of just €35.
    Covering 44 bases, 27 countries, 160 airports with 254 Boeing 737-800’s
  • 4. Agenda
    Company Overview
    1
    Strategic Analysis
    2
    3
    Strategy Formulation
    4
    Organizing for Stratgy
    5
    Conclusion
  • 5. Porter’s Five Forces - Supplier
    • Boeing is main suppliers
    • 6. Only 2 possible suppliers of planes – Boeing and Airbus
    • 7. High switching cost
    • 8. Price of aviation directly related to the price of oil
    Threat of
    Entry
    Buyers
    Suppliers
    • Regional Airports depends on one airline
    • 9. Bigger airports have competitors of Ryan Air
    Rivalry
    Substitutes
  • 10. Porter’s Five Forces – Threat of entry
    • High capital investment
    • 11. Restricted slot availability makes it more difficult to find suitable airports
    • 12. Immediate price war if encroaching on existing LCC route
    • 13. Need for low cost base
    • 14. Flight Authorization
    Threat of
    Entry
    Buyers
    Suppliers
    Rivalry
    Substitutes
  • 15. Porter’s Five Forces - Buyers
    • Customers are price sensitive
    • 16. High Switching tendency
    • 17. Customers know about the cost of supplying the service
    • 18. No loyalty
    Threat of
    Entry
    Buyers
    Suppliers
    Rivalry
    Substitutes
  • 19. Porter’s Five Forces - Substitutes
    • No brand loyalty of customers
    • 20. No ‘close customer relationship’
    • 21. No switching costs for the customer
    • 22. Other modes of transport: Eurolines, ferries etc.
    Threat of
    Entry
    Buyers
    Suppliers
    Rivalry
    Substitutes
  • 23. Porter’s Five Forces - Rivalry
    • The LCC market is highly competitive
    • 24. Most cost advantages can be copied immediately
    • 25. the two major low-cost airlines have avoided direct head to head competition by choosing different routes to serve
    Threat of
    Entry
    Buyers
    Suppliers
    • Following Ryanair strategy will create heavy pressure on prices, margins,
    • 26. Price is the main differentiating factor
    Rivalry
    Substitutes
  • 27. SWOT Matrix
  • 28. PESTLE Analysis
    Legal
    Social
    Political
    • Emission constraints
    • 29. Corporate Lawsuits
    • 30. Strong Political Environment
    • 31. EU Expansion
    • 32. Trade Union Pressure
    • 33. Global Carbon Tax
    Changes in demographics and consumer preferences
    Frequent short-term trips
    Threat of terrorist attacks
    Increased environmental awareness
    Technological
    Economic
    Environmental
    • Rising fuel prices
    • 34. Weak US dollar
    • 35. Global crisis
    • 36. High rates of unemployment
    • 37. Global warming and CO2 emissions
    • 38. Noise pollution
    New aircrafts; with much more efficient engines -> reduced CO2 emissions and fuel consumption
    Internet
    High speed trains
  • 39. Conclusion of PESTLE Analysis
    Conclusion:
    Positive sociodemographic factors supported by strong technological innovations
    Bad legal and environmental aspects
    Mixed political and economic environment
    Result of analysis:
    The Macroenvironement is contradictory
  • 40. High
    Keep satisfied
    Key players
    Power
    Minimal effort
    Keep informed
    Low
    Low
    High
    Level of Interest
    Stakeholder Mapping
    • NGOs
    • 41. Shareholders and Investors
    • 42. Creditors
    • 43. Government
    • 44. Customers
    • 45. Employees
    • 46. Competitors
    • 47. Local communities
  • Stakeholder Expectations
    EUR 17 billion for fleet replacement
    Higher fuel efficiency
    45% reduction in CO2 emissions
    Average age of aircraft fleet 2.5 years (average industry 11 years)
    Noise reduction - fulfilled noise requirements, winglets, operational measures
    Waste reduction – no free meals, drinks or newspapers
    Regular financial reports
    CSR Campaigns – Girls of Ryanair Charity Calendar 2011
  • 48. Agenda
    Company Overview
    1
    Strategic Analysis
    2
    3
    Strategy Formulation
    4
    Organizing for Strategy
    5
    Conclusion
  • 49. Vision
    Become Europe’s Leading Passenger Carrier
    Mission
    No. 1 for offering cheapest air fare
    No. 1 for punctuality
    No. 1 for service commitment
    Vision and Mission
  • 50. Offer the lowest fares at all time on all routes
    No fuel surcharge guaranteed
    Honor the agreed fare after payment
    Minimize the numbers of passengers facing delays
    Allow reservation changes
    Respond quickly to passenger complaints and provide prompt refunds
    Take measures to speed up check-in
    Minimize the number of passengers who are involuntarily denied boarding
    Minimize the number of passengers who are involuntarily denied boarding
    Ryanair will provide the following information to passengers at the time of booking
    Ryan Air Passenger Charter
  • 51. Product Development
    Diversification
    New
    Products
    Market Penetration
    Market Development
    Existing
    Existing
    New
    Markets
    AnsoffMartix
    • Increased number of passengers
    • 52. Frequent flights
    • 53. Increased number of routes offered
    • 54. Eastern Europe expansion: new EU countries
    • 55. Turkey?
    • 56. North Africa – Morocco, … ?
  • High
    Stars
    Question Marks
    Market
    Growth
    Cash Cows
    Poor Dogs
    Low
    High
    Low
    Market Share
    Boston Consulting Group Matrix
    • Hot new destinations:
    Croatia
    • Unknown popularity:
    Morocco
    • Small unnecessary destinations
    • 57. Popular destinations:
    London, Paris, Milan
    Madrid, Rome, Barcelona
  • 58. Strong
    Globalization
    forces towards
    standardization
    Weak
    Weak
    Strong
    Localization forces towards customization
    Global integration/local responsiveness grid
    Global Strategy
    Transnational Strategy
    Multidomestic Strategy
    International Strategy
  • 59. Agenda
    Company Overview
    1
    Strategic Analysis
    2
    3
    Strategy Formulation
    4
    Organizing for Strategy
    5
    Conclusion
  • 60. Strategic Goals
    Offering Low Fares
    Frequent point-to-point flights on short-haul routes
    Choice of routes
    Low operating cost:
    Aircraft equipment cost
    Personnel expenses
    Customer service cost
    Airport access fee
    Maximize the use of internet
    Commitement to safety and quality maintainence
    Focused criteria for growth
  • 61. Overall cost leadership by:
    Low Aircraft maintainence cost
    Lowering Personnel expenses
    Lowering Customer service cost
    loweringAirport access fee
    Business Level strategy
  • 62. Positioning
  • 63. Balanced Scorecard I
  • 64. Balanced Scorecard II
  • 65. Thank you for your attention!