Corporate Strategic Planning This assignment is due on 5:00 pm, 23th October 2015 This is an individual assignment contributes 15% of the total course grade. Answer ALL 5 questions from the case study named Ryanair European Pioneer of Budget Airline Travel. Objectives Successful students should be able to meet the following set objectives: Understand the strategic planning process in a entreprise level. Discuss the characteristics of three basic strategies: low cost, differentiation, and focus, and know when to employ them. Explain the think local and act local strategy, think global and act global strategy, and think global and act local strategy. Assessment Guidelines and instruction 1. Your essay should be typed. 2. A cover page should be provided for this essay. Ensure that your name is on it. 3. Your essay should be approximately 2000 words not including the cover page and references. 4. The essay should contain the following sections: cover page, overview of the case study, discussion of the 3 questions, conclusion and reference list. Headings are sometimes used in essays, you may put heading for these sections or questions. 5. Use 1&1/2 spacing with left hand 4 cm margins (all others 2.5 cm) on A4 sized paper with 12 point Arial font size. 6. Marks are allocate for correct use of English (grammar, punctuation, spelling, non-sexist language etc). 7. Marks are allocated for a correct reference list (these do not count in word count) Ryanair -- European Pioneer of Budget Airline Travel Ryanair was founded in 1985 by the Ryan family to provide scheduled airline service between Ireland and the UK as an alternative to Aer Lingus, the national Irish carrier. The company experienced significant challenges through the early 1990s when it appointed a new management team led by Michae O'Leary. Under O'Leary's leadership the airline remodeled itself after0020Southwest Airlines and became 1 Europe's first low fares, no frills carrier. By 2007 Ryanair flew out of 18 European airports with a fleet of over 100 new Boeing 737800 aircraft, and had placed firm orders for a further 138 new delivered the next six years In a bid to continue this aircraft to be over impressive growth Ryanair announced plans to double in size by 2012. Much of Ryanair's success was attributed to O'Leary who was referred to by supporters as a skilled leader who could motivate and energize people. He was credited with single-handedly transforming European air transport Detractors who referred to him in a number of ways, including as an "arrogant pig," still recognized the significant impact he had on European air transport. Under O'Leary's leadership Ryanair became the most profitable airline in the world, on the basis of its operating and net margin profit on a per-airplane and per-passenger basis. They have affirmed their commitment to continue to offer the lowest fares in every market. In an effort to keep costs down Ryanair reduced airport charges by avoiding congested main airports, choosing secondary and regional airport destinations that were anxious to increase passenger throughput. Not satisfied with their low cost position in 2006 Ryanair introduced cost-cutting/yield enhancing measures for passenger check-in and luggage handling. The fundamental premise was that the company would provide an exceptionally no frills, basic service and that customers would then pay for any additional products or services they needed such as excess luggage, snacks, or drinks. Not all of these measures were positively received by the public and some of the public resented what they saw as the company's obsessive focus on the bottom line. In one incident the company even charged a man with cerebral palsy to use one of the company's wheelchairs. Despite these and other criticisms O'Leary, the carrier's outspoken leader, declared customers chose Ryanair for its low fares and that customers could vote with their feet. Recognizing the challenges of solely relying on passenger revenues, Ryanair developed several additional revenue streams. Capitalizing on the fact that Ryanair's website was the largest travel website in Europe and the fifth most recognized brand on Google, Ryanair used this strong Internet presence to convert this traffic into e-commerce and advertising revenues. Success in these revenue streams encouraged Ryanair to continue to seek additional revenue streams including on-board and online gambling, and an in-flight mobile phone service. Despite the firm's widely recognized success, Ryanair was at a strategic crossroads in 2007. It is unclear what O'Leary will decide to do. In 2005 he publicly stated that 2008 would be his last year at 2 Ryanair in any capacity, but has since made statements alluding to how much he enjoyed his job. He also had led the company in an unsuccessful bid in 2006 to purchase Aer Lingus which had recently become public. His love for the business and passion for the carrier led analysts to wonder if O'Leary would really retire in 2008 and, so, what would happen to Ryanair and its ambitions. Inevitably, the retirement of O'Leary would be a major obstacle for the company. O'Leary was widely recognized as the driving force in Ryanair and as the face of the company replacing him would be a strategic inflection point. This case provides an excellent vehicle to drill students in identifying and evaluating a company's strategy, evaluating the role of the CEO in the strategy-making/strategy-executing process, and how well top management has performed each of the five component tasks that comprise the process o crafting and executing strategy-forming a strategic vision of where to take the company, establishing objectives, crafting a strategy, implementing and executing the strategy, and making corrective adjustments as needed. The Ryanair case contains a wealth of detail about the tactics and functional strategies used to implement the company's low cost generic strategy and how O'Leary's strategic leadership helped build a corporate culture that was conducive to implementing its strategy. All things considered, we think the Ryanair case can serve as a summary n the strategy execution module, after case to tie together the materia i students have been exposed to the material in Chapters 10-13. The content of the case makes it a good vehicle for giving students insight into how to build a powerful strategy. Alternatively there is sufficient information in the case to allow you to position it earlier in the course to examine issues in Chapters 1 and 2 (e.g., the role of the leader in strategic management) or to explore the role of generic strategies in the strategic management module (i.e., Chapter 5). The Ryanair case provides an excellent tool for either an oral presentation or a written case analysis. A good assignment question is: Micheal O'Leary, the CEO of Ryanair, has employed you as a consultant to evaluate the future growth and expansion opportunities for the company. Please prepare a 3-5 page report evaluating the European airline industry and Ryanair's current situation and lay out your proposal for how Mr. O'Leary or his successor can sustain the success of the company. Your situation analysis should include an examination of the industry's dominant economic characteristics, the driving forces impacting the industry, the industry's key success 3 factors, and a summary of the factors acting to make the industry environment favorable and those making it unfavorable n addition, your analysis should include an assessment and identification of the company's current strategy, financial performance and position, a thorough analysis of its strategy implementation activities to date, an identification of which of them have been key to the company's success, and an evaluation of its market opportunities. Your recommendations should clearly identify a specific course of action that Ryanair should pursue and be well supported with arguments and justifications from your analyses for each. Your report should include at least one page of specific recommendations that logically flow from your analyses and problem identification and whatever supporting charts, tables, or exhibits you deem helpful. Assignment Questions 1. What are the key elements of Ryanair's strategy as of 2007? What type of competitive advantage is Ryanair trying to attain over rivals? Which of the five generic competitive strategies discussed in Chapter 5 best matches the competitive strategy that Ryanair is employing? 2. What grade would you give Michael O'Leary for the job he has done as CEO of Ryanair? Be prepared to support your answer based on how well (or not so well) he has performed the five tasks of strategic management discussed in Chapter 2. 3. What was Tom Ryan's original strategic vision for Ryanair? How does Michael O'Leary's strategic vision for Ryanair differ from Ryan's? Why did the strategic vision change? Is the company's strategic vision likely to undergo further evolution? 4. What are the key policies, practices, business principles, and procedures that underlie how Michael O'Leary and Ryanair's management have implemented and executed the chosen strategy? 5. What recommendations would you make to Michael O'Leary to sustain the company's growth and support continued strong financial performance in the years ahead? Does the acquisition of Aer Lingus make sense? How does O'Leary's impending retirement in 2008 impact the company? MARKING CRITERIA SHEET FOR CASE STUDY MARK CRITERIA Introduction (5%) Coverage of background of case. 4 Brief summary of the case problems. Question Question Question Question Question 1 2 3 4 5 (15%) (15%) (15%) (15%) (15%) Conclusion (10%) Summarizes issues Summarizes solutions References (5%) Adequate & appropriate in-text referencing Consistent referencing style used (i.e. consistent style used throughout text and in the reference list) In-text references match reference in the reference list Formatting of proposal (5%) Includes cover page Proper headings, fonts & spacing Includes page number on the report Includes an appropriate title of the project Appropriate use of appendix 5