A strategic appraisal
of Ryanair and the implications of it’s strategy
Table of Contents
Introduction 03
External Environment 04
PESTEL Analysis 04
Porter’s Five Forces 06
Resource Audit 08
Value Chain 08
Conclusion 09
Appendices 10
Introduction
Ryanair is originally an Irish airline which successfully competes and dominates in the
European airline industry. Michael O’Leary has famously been quoted as saying:
‘If you find a flight cheaper elsewhere, we will give you a refund’.
Due to O’Leary’s continual innovation – and drawing on his persuasive strengths – he has
managed to create a new cost leadership benchmark which he has successfully emulated
from SouthWest airlines’ operations in the United States. O’Leary honorably set out to
create real value for money for the customer, making air travel available to a greater and
ever-expanding customer base. His perseverance has made it easier and a lot more
affordable to travel across the EU.
This report consists of a critical strategic appraisal of all relevant aspects of any key player
such as Ryanair, in the airline industry. Ryanair has revolutionised air travel in an industry
which was once heavily monopolised. The airline industry is ever-evolving and therefore
fascinating to study; especially since the downturn of the 2008 financial crisis.
This Strategic Appraisal will look at Ryanair’s present strategy and shows how the way it
does business has an impact on Ryanair’s customers and it’s quest in being a cost leader.
External Environment
PESTEL Analysis
Focussing on the external environment using the PESTEL analysis, we can identify the six
strategic areas for change in Ryanair. All these different areas can potentially change the
dynamics for Ryanair’s competitive environment:
Political
Political factors offer a huge advantage for Ryanair. Ryanair is affected by airports that
raise taxes, avoids large airport charges by choosing secondary destinations and avoiding
main airports. Also, due to the European Union growing in size there are many new
markets Ryanair can explore, especially in potential customers in new EU member
countries. Ryanair played a key part in liberating the European Union of many monopolies
that were preventing a competitive market.
Recent recession raised questions about the treatment and working conditions of Ryanair’s
staff and their refusal to recognise unions. It was ruled by the high court that Ryanair had
‘bullied pilots into signing new contracts. Events like these lead to court actions being
taken and can cause huge legal costs to Ryanair.
Government policies and EU regulations affect the aviation industry. Ryanair have to
