Ryanair is one of the leading airline companies in Europe. This airline company is known for its low-cost and high-quality service. It "operates more than 1,400 flights per day from 44 bases and 1100+ low fare routes across 27 countries, connecting 160 destinations" (Ryanair-a, n.d.). This paper endeavors to analyze Ryanair, with special emphasis on situation analysis, decision making, planning, and controlling process, leadership, and organizational structure. This paper will conclude with some plausible recommendations for future growth and progress. BFBRDO Situational Analysis SWOT is a very helpful management tool for analyzing the situation of a company. Ryanair was established in 1985, and despite its shortcomings, it established a strong position in the market. Strengths Weakness
• Ryanair has developed a strong brand name in the airline industry as a low-cost service provider.
• To save cost, Ryanair charges its passengers for services like refreshments, wheelchairs, etc.
• Ryanair has been in the airline company for the last 25 years and has gained sufficient experience in it.
• It is not a preferred airline with the high-class passengers.
• Ryanair has developed its internet facilities and has made it an important selling point. This helps the company to eliminate the costs of agents.
• Ryanair's fleet includes aircraft with high sitting capacity and low maintenance costs.
• Ryanair's service performance is of a high standard with punctual fleet timing. Opportunities Threats
• The European Union market is expanding with time and most of the passengers prefer low fares for their air travel.
• The existing airline companies are following strategies that lower the cost and hence competition within the industry is increasing with time.
• Regions like North America and Asia have greater scope for low-cost providers like Ryanair.
• The oil market is a major supplier to the airline business. In recent years, the price of oil has increased significantly.
• The customers are becoming very price and service sensitive. Porter's 5 Forces The bargaining power of suppliers is very high as the number of aircraft manufacturers and oil suppliers is very less in the market. The availability of proper airports is also very important for this industry. However, airports' bargaining power is quite low as they depend on aircraft companies. The bargaining power of customers is very high as they have many airline service providers to choose from. The barrier to entry of the airline industry is quite high as it requires heavy investments and technical expertise. The airline is the fastest mode of transportation for overseas and long-distance travel. No other substitute can match the service of the airline industry. Competition among existing rivals is the most important factor in this industry. The rivals are competing with each other for increasing their market share. In the European Union, Lufthansa, Ryanair, Easy Jet... etc. are leading airline companies. Decision Making Decision Making Process in Ryanair Ryanair provides low-cost and high-quality airline services to its customers. It places customer satisfaction above all other priorities. The decision-making process is primarily centered on concerns regarding ways to provide higher customer services. Fleet planning, airline fare, fleet scheduling... etc. are some of the chief aspects of Ryanair's effective decision-making process. Decision-Making Approach Decision-making approach can be defined as a strategic approach of an organization. Ryanair's management team aims to follow 'a rational decision-making approach. The rational decision-making approach is an ongoing and dynamic process. This approach helps to identify the underlying problems and to find relevant solutions (Kroon, 1995 p. 187).
For example, in 2004, when the company was passing through a financial crisis, a rational decision-making approach not only helped it to overcome it but also paved the path of growth. Types of Problems and Decisions Making In Ryanair In 2004, Ryanair was one of the worst performers in the FTSE Eurotop 300 index. During that period, competition in the airline industry was very high in the European nations as many new Types of Goals in Ryanair The primary goal of Ryanair is to become the lowest cost airline service provider in Europe. The idea of offering low fares proved successful for the company. However, initially, it failed to understand the necessity of good service for customers. Currently, the company is committed to providing lower fares, high-quality service, and a punctual air schedule (Ryanair-b, n.d.). Types of Plans in Ryanair Ryanair's decision-making process follows a rational approach and it also follows the rational model for its planning process. Basically, planning can be divided as a short-term goal and a long-term goal. The company's management team was concerned only with the short-term goal. The company often changes its plan as per the requirements of the market. In 2002, the company's plan was to provide low-cost fare and after 2004, its planning process also took note of service quality Contingency Factors in Planning Ryanair faces three major contingency factors. Firstly, the organizational level affects the operational planning of middle and low-level managers. Secondly, the uncertainty of macro- environmental or other external factors affects the planning process. Therefore, Ryanair aims to develop a flexible planning system. Thirdly, the long and short-term objectives of Ryanair affect its planning process. The company always tries to concentrate on its current objective. Objectives The primary objective of Ryanair is to attain cost leadership in the European airline market. However, to achieve this objective, the company needs to concentrate on another long-term goal. These include increasing its operational activities to enter new markets like North America, developing a customer-centered business model, and increasing the use of the internet as a major selling point (O'Cuilleanain et al, 2004).
Management by Objectives (MBO) Management by objective (MBO) approach of management leads to an increase in the performance of the organization. "MBO is a result-oriented, non-specialized managerial process for the effective utilization of organizational resources by integrating individuals with the organization and the organization with the environment (Goyal, 2005, p.304). In 2004, in order to overcome its crisis situation, the company introduced the MBO approach to improving its performance. Strategic Management Process Ryanair's strategic management process is based on its objective of achieving cost leadership in the European airline industry. The company has improved its positioning by implementing a proper strategic management process. The key elements of its strategic management include low fares, high frequency of point-to-point flights within short routes, proper route choice, reduction in operating cost, increase internet use for selling, maintenance of safe and high-quality service, etc (O'Cuilleanain et al, 2004) companies entered the market. Despite the stiff competition, the company enjoyed a healthy growth rate till 2003. But the management's inability to understand and rectify the inherent weakness of its decision-making process stunted its growth. Decision-Making Conditions in Ryanair While framing the strategic move for any decision-making process; Ryanair's first priority will be to analyze the elements of external competition. The European airline industry is crowded with many leading companies like Lufthansa, Virgin, Aer Lingus, British Airway, etc. Consumers' needs are also very important for Ryanair's decision-making. Prior to 2003, the company's concern for customer service was very low, except for the low fare advantages. Decision-Making Styles The decision-making style of Ryanair's management team seems to be affected by different factors. However, the decision-making methods are quite flexible. After analyzing its rapid growth during 2002-2003, it can be claimed that it focuses on the short-term objectives rather than long-term goals. Creativity is another major feature of its decision-making style.
Decision-Making Biases and Errors Ryanair's temporary fall in 2004 brought to the forefront many drawbacks of its decision-making process. Robbins has identified some unexplained prejudices and errors of decision making like biases relating to overconfidence, anchoring, confirmation, availability, escalation of commitment, etc (Robbins, 2009, p.126). Ryanair's decision was affected by two major biases i.e. anchoring biases and status quo biases. Its decision-making was based on past success that failed to take into account unfavorable macroeconomic conditions resulting from the 9/11 attack on World Trade Centre. Planning Vision and Mission Statement Vision and mission statements help an organization prepare a roadmap for its operational activities. Ryanair's official website does not have the vision and mission statement of the company. However, the public statements of Michael O'Leary and other higher executive members of Ryanair indicate that it aims to achieve growth and success by being the lowest cost provider in the airline industry (Box and Kent, 2007). Purposes of Planning In general, the purpose of planning is to bring effectiveness and efficiency to the operational activities of a business. The implied mission and vision of Ryanair clearly state its purposes of planning. To counter the increasing competition, the company has decided to follow a low-cost strategy. Hence, its planning is designed after taking into consideration this objective. Planning And Performances in Ryanair According to Riezebos, planning is a very crucial element of operational activity that affects the performance level (Riezebos, 2001. p. 12).
Planning is one of the major tools for motivating participants to achieve a common organizational goal. Due to a rational decision-making approach, the company is able to plan its operational and strategic activities properly. Ryanair is able to achieve its target with the help of an efficient planning process.
Questions: 1. Explain the terms vision, mission, and goals.
