Strategic Business Plan for Ryanair

Strategic Business Plan for

Ryanair Airlines

The following document is comprised by a 'Strategic Plan' developed specifically with Ryanair Airline in focus and is of the nature that makes a review of Ryanair in terms of its 'Strengths' 'Weaknesses', 'Opportunities', and 'Threats' (SWOT Analysis) and as well this work presents a series of fundamental statements relating to the organizational vision, mission, values and objectives of Ryanair Airline while setting out the proposed strategies, goals and action programs of Ryanair Airline.

Key Strategies

Identified as 'key' elements of Ryanair's strategy are those as follows:

(1) low fares;

(2) customer service;

(3) frequent point-to-point flights on short-haul routes

(4) customer service;

(5) frequent point-to-point flights on short haul routes;

(6) low operating costs;

(7) aircraft equipment costs;

(8) personnel productivity;

(9) Airport access fees;

(10) Taking advantage of the internet; and (11) Commitment to safety and quality maintenance.

II. Vision

The promoters' vision of Ryanair Airlines in 3-4-year's time is to, through Ryanair's strategic objective, stated to be specifically identified as being firm establishment of Ryanair as the leading low-fares European passenger airline and to do this through the method of ongoing improvements and a larger range of low-fare service offerings. Through the means of low fares passenger traffic will be increased with cost-containment and effieciency in operation firmly in place.

III. Mission Statement

The central purpose and role of Ryanair Airlines is the provision of a leader of low-fare, passenger service airlines in European countries.

IV. Key Strategies

The following critical strategies will be pursued by Ryanair Airlines:

No Frills, Low Cost Approach

Point-to-point Short Haul Flights

Regional and Secondary Airports

Ryanair has a key attribute in its attraction and penetration of the market through its offerings of many varied destination and location choices and simultaneously offers differentiation in pricing and this will be the key business strategy of Ryanair because at present a primary issue in the business environment of today's airlines is that of 'Oil' due to political instability in the majority of countries that are oil producing countries and this will remain the same for the foreseeable future.

Oil prices will specifically be a problem for today's airlines. . Exacerbating the issue is in the inability to predict the fluctuations in the exchanger ate of currency and specifically since the prices of aircraft fuel is in the denominations of U.S. dollars. This problem however will be mitigated through business involving exchange rate differentials However, the dollar, while presently weak has been when compared to the exchange rate of sterling to positively impact Ryanair.

IV. Strategic Analysis

A. Ryanair Airline - Porter's Five Forces

Pictured in the following chart is Porter's Five Forces analysis applied to Ryanair Airline as stated by Ryanair (2009).

Figure 2

Ryanair Airline -- Porter's Five Forces Analysis

Source: Ryanair (2009)

1. The degree of existing rivalry

Highly competitive market

Any company does decide to compete on the same basis as

Ryanair there will be heavy pressure on price, margins, and hence on profitability.

Price is main differentiating factor

Most cost advantages can be copied immediately increased competition

50 budget airlines flag carriers

Low cost affiliates

Alliances

Air France / KLM merger

2. Threat of new entrants limited, but has happened recently

BMIBaby. Com My TravelLite.com monarch.com flyBe.com compete on limited routes capital intensive

Some barriers to entry

Restricted slot availability makes it more difficult to find suitable airports

3. Bargaining power of suppliers

Price of aviation fuels is directly related to the cost of oil.

Regional airports have little bargaining power as they are heavily dependent on one airline.

4. Bargaining power of customers

Customer are price sensitive and switching to another airline is relatively simple

5. Threat of substitutes

a. UK -- none

b. Europe

c. Driving holidays

d. High- speed trains

e. No loyalty of customers (Ryanair, 2009)

B. Ryanair - Value chain analysis

Cost-containment is the focus of the low cost airline and includes the following:

Cost containment realized through spending as little money possible for advertising with all marketing identified as 'in-house' marketing to customers to increase turnover;

Cost containment realized through turning the costs of food and drinks on a flight into a revenue stream through making drinks and a selection of food available at a reasonable price;

Cost containment realized through creating additional revenue through such as car rental, travel insurance and travel reservation services;

Cost containment realized through exploiting the lack of provision of airport air bridges;

Cost containment realized through enforcing strict policy that is a 'no refunds' policy;

Cost containment realized through maintaining a homogenous fleet that results in maintenance efficiency and lowers pilot/employee training costs;

Cost containment realized through not selling tickets for connecting flights; and Cost containment realized through primarily flying to secondary airports offering lower landing and handling fees. (Ryanair, 2009)

C. Ryanair -- SWOT Analysis (Strengths, Weaknesses,

Opportunities & Threats)

This strategic plan addresses the following key strengths, weaknesses, threats and opportunities which apply to Ryanair Airlines now and in the foreseeable future:

1. Strengths

Low cost leader

Innovative cost reduction

First- mover advantage

Established market share

Substantial growth

High load factor

Established image

Established routes / network

Major earning from innovative ancillary scheme

Single model of aircraft reducing training, maintenance and supervisory costs

High turnarounds resulting in maximum aircraft utilization

100% e-tailing eliminating intermediaries and distribution costs

Lowest labour costs due to non-unionized labour forces. (Ryanair, 2009)

2. Weaknesses

Poor employee relations

Volatile customer relations