T-507-8228 Business Level Strategy Of Ryanair For Air Transportation : Essay Fountain

Answer:

Introduction

Ryanair is the Europes first low-cost airline and became the seventh largest company in terms of the generation of revenue. Air transportation is one of the major industries that provide important inputs in wider political, social and economic progress. There are some small businesses that try to break out of their domestic territory that needs this kind of low-cost carrier so that they can spread their business globally (Ryanair.com 2018). The main reason behind Ryanair instant success is the low fare rate. The airline is able to charge £99 for a flight, on the other hand, British Airways’ charged £209 for the same route. The first airfare war in Europe has broken out for that reason as Ryanair created a tough situation for other airline companies. Ryanair follows Southwest Airlines in the model and align their infrastructure like Southwest airlines model and establish their market in the UK. The company tries to attract more people and influence them to trust their brand. In most of the cases, £99 charge falls down to £59 and people line up for three days for those tickets. Thus, a good public relation and steady growth of the company sustained Ryanair through their effective low price fare strategy.

 

Forcefield analysis of Ryanair

Forcefield management creates a change in Ryanair management and this change influenced the global market as well. In case of Ryanair upgrade of technological innovation is the proposed change planned (Rothaermel 2015). So, due to this change planning there are lots of forces backing up the situation and some other forces drives towards the drawback situation.

In case of strategic planning, Ryanair has taken some innovative attitude towards their low fare presentation. Upgrade in new technological and manufacturing machinery is important as the company delivers the cheapest fare in Europe, so they need to sustain their business as well. In the force field analysis certain factors evolved during the discussion and stated the good forces for change and defense against forces for the required change as well. The positive aspect of that forced change is,Customers demand is the most important aspect (Alderighi, Nicolini and Piga 2016). Customers want innovative practices and services and if Ryanair able to deliver innovative changes at this low fare price rate then it will be a huge bonus for customers. The forced change also influence positive aspects like production speed as the innovative technologies deliver better production and that impacted over the company’s economy. A better volume in production can be gained in that situation and for that reason minimum resources are needed for creating better amount of production. Some technical tools are cost worthy and those take lots of money for maintenance issues (Furrer 2016). When implemented new technologies will reduce maintenance costs and that extra money can serve another purpose. These are the force changes that influence better productivity, volume and reduced costs as well. The negative aspect is loss of staff to implement the new technologies. This is a key concern for the company. The huge amount of employees’ are not needed in occasions when there is no work to do (Saebi and Foss 2015). Ryanair delivers the lowest fare tickets to their customers and for them they have to implement innovation, so the company will think twice before it implements such new innovation. Sometimes, staff are frightened due to the innovation. Sometimes they are not capable enough to understand the dimensions procedure or  are not trained enough to control or formulate the technology. There may be some environmental impact over the situation and for that reason sometimes new techniques are not allowed by the organization. In most of the cases, innovative procedures are impacted over the environment and this is creating an environmental hazard. This is another reason the company is making lots of discussion and needs to take permission from the government to implement the project. Disruption is another force responsible for employees’ failure.  Lack of knowledge about tools, new resources are not supplied in the desired form these are the possible cases where innovative production has been hampered (Lawton 2017). These are the only reason disruption in work happen. Therefore, Ryanair is one of those companies who know their strategic placement and deal with the quality maintenance so that sustainable market position can be retained by them.

New Vision, Mission, and Objectives

The changed mission of Ryanair is to offer low fares that generate an increased number of passengers and implement some better service in terms of technology and manufacturer machinery so that company always focus on cost and provide efficient operation process in all over the world.

The vision of the company is to make some special airline which serves business class people only at a low range of price (Ryanair.com 2018). The company is also trying to enhance their business market by serving globally. So after five years, the company can perceive their production at the highest level in business by serving more people and maintain their low cost as well.

The prime objective of Ryanair is to focus on their low fares rate and maintain their low fare so that their existing customers are not attracted by the other companies. There are some other objectives also for making the company innovative and technologically strong. These are:

  • To increase the production level by implementing the technological innovation.
  • To achieve lowest operating cost and maintain their advantage situation in the market.
  • To collaborate with global small-scale business companies in the different nations and enhance their business.
  • To focus on the growth in the target market and extract results through ancillary services.
  • To provide exceptional offers in the new business market in different countries and attract people to use their services.  
  • To attach with global technological aspect by connecting with internet facility and promote their business in an extensive way.  

These are changed objectives that Ryanair should use to penetrate their business in other countries and earn a good amount of revenue from those sectors.    

 

Suitable change in organization and responsible agents

Ryanair follows the traditional model of business where customers have to come for their ticket booking or any kind of information. This systematical change is needed to be introduced by the company. The company needs to take digital technology so that growing medium like the internet or mobile devices can be introduced by the company and customers also book their ticket through the mobile or internet devices (Johnson 2017). The technological aspect of the company changes if those effective technological perspectives can be used in an effective manner. On the other hand, some technological innovations are needed to be implemented so that airlines can continue their operation in the turbulent environment. This is another noteworthy aspect that Ryanair wants to use in their airline process and for that reason, people also choose that airline instead other companies (Pereira and Caetano 2015). Systematic seat arrangement is another change that Ryanair can place in their organization so that a systematic manner will be presented to customers. Formal people love to use systematic policies and behavior so if the company starts this procedure from this moment a better business extension is possible. Ryanair needs to take a slightly higher price to provide drinks and beverages to passengers and people will happily accept that change. More flights need to take off Ryanair so that passengers need not wait too long for the next flight. High-frequency flights are needed for that reason(Morlotti et al. 2017). A good business atmosphere can evolve if the company maintains this high-frequency policy and in one of the point of service, this high-frequency level is becoming natural and relevant because of customers demand and competitors activities such as Southwest Airlines.

The company is on the benefiting side as there is a major increase in earnings by the extension of their business market. Customers are also getting benefits in that process so also the resource supplier and their collaborating companies. In case of the internet or mobile access, Ryanair has to make collaboration with certain companies to synchronize their software and this company becomes the agent of that business strategy (Morecroft 2015). Airbus Production companies need to take extra initiative for making aircraft with a better rate of production and through the production high-frequency flights. New technologies and production level enhancement is the ultimate initiative has taken by the Ryanair company.

Implementation of strategy

Ryanair has to implement these strategies so that in a bigger perspective they can manage their low fare rates for all times. Ryanair has to face huge competitive rivalry as other airline companies also dropped their fare rates and that influenced customers to use their companies. There are some other facilities like booking or seat arrangement even the service like food or beverages are provided by other companies (Kesting and Günzel-Jensen 2015). Technological change needs to be implemented.Mobile booking or internet bookings and check-ins are some intelligent aspects that the company must impute into their process. Ryanair can also add up some airports for their own purpose, increase the number of routes and aircrafts as well. The company also provides the pioneering concept of web checking, this is a kind of technological invention that all aircrafts are not able to do the same. But with this speculated given low cost the company still baring this thing (Nielsen and Lund 2014). Cost leadership strategy has been taken by Ryanair. This strategy is implemented by the low fare carriers and focus on offering specialized service in a niche market. Cost focus and differentiation focus are the two aspects of this strategy and implementing this process is important for the company (Kew and Stredwick 2017). Leader involvement is needed for creating new techniques and provides better product quality and service by their business involvement. In addition to that, Ryanair charges for luggage and this is another strategy for revenue generation. Ryanair can gain higher profitability and get increase market share by the effective use of their strategy (Nagle, Hogan and Zale 2016). 

 

Key success indicators

Key success indicators of Ryanair help to bring new aspects in management and motivate employees’ to maintain the low fare rates.

Low price is one of the prime factors which are liable for more customer accumulation and help all kinds of people to access their service. For this reason, an 8.7% increase of passengers’ every year is noted (Wirtz et al. 2016). Service level maintenance and showcase their death in business can understand the increase revenue generation by the company in the business market.

Choice of routes is another success indicator that Ryanair implements in their Airbus process. Routes are very important for passengers, and airlines have to allocate more airbus in high-frequency routes. Ryanair has done exactly like this and by implementing this process they get a competitive advantage as well.

Brand and Technology is another success key indicator in their business. Ryanair is now a global brand and the company has their brand reputation and they maintain this reputation throughout the season. Technological innovations like web-based check-in or mobile booking or seat selection by internet facility all these are important for an upgrade (Grant 2017). Maximum profit can be earned through this process and staff cost or the potential increase in customers connection has maintained in that scenario.

The resource is another key factor for continuing the operation. In most of the cases, resources are available in the regional sites and that also help to increase the revenue and it grows by 36%. Ryanair has around 800 aircraft and their stock was up to increase by 12% in a year (Sung and Ashton 2014). As per the production growth, the company also tries to engage better and efficient people with them and the number is 3500 employees.

Core competencies in business always present what will encourage the company to move into better production. Ryanair already has an asset of low fare rate which is not comparable to other companies (Taneja 2017). Now, the company just needs to implement some possible small aspects that enhance better customer and add on new customers along with the existing one. Collaboration with other companies from different countries also helps to increase the range of the company (Schuetz and Schrefl 2017). They can do their business in global range and this is the most important aspect for them.

Potential risks

Ryanair has to take care of their passengers and have to take effective steps to mitigate possible risks. The physical safety of passengers is the first aspect of risk. The fare is so low that people may think about the passengers’ safety and risk management. Ryanair assures their passenger that a high care security brand is already allocated to the entire passengers so that an effective protection shield can shade them in any adverse condition (Pereira and Caetano 2015). Risks include crime, political issues or economic aspects are the major issues that may consider as potential risks. Consumers’ change preference is another risk that Ryanair may have faced if people are not feeling the service is not quite enough to bare. So this change can trouble the company and influence other factors also. In case of recession, people cannot afford to take Airbus and Ryanair will not be in a situation to change their pricing strategy again. This will be a risk for the company to deal with (Warren 2015). After the immediate effect of disaster people are not willing to take Airbus so this time the economic crisis may register in the company and their active business market threatened due to that.

Conclusion

Therefore it can be concluded that new and innovative business level strategy is important for any kind of business. In case of Ryanair better chances can be extracted from the situations as the company has the lowest fare rate and people love to use their facility. Aircraft have a much extended sensible life-extending numerous decades. Furthermore, Ryanair has entered into positive contracts with Boeing, dropping costs connected with additional parts storage, guidance, and continuance. Ryanair’s objective has been to set up itself as Europe’s foremost low-fares listed traveler airline throughout continual improvements and increasing contributions of its low-fares examination. Ryanair aims to present low fares that produce augmented passenger transfer. An incessant focus on cost suppression and working efficiencies is a fundamental element of the Ryanair way of liability belongings. In most of the cases people love to use their facility due to the low fare rates but if the additional process can be included then the company may become the best ever airline company in the entire world. 

 

Reflection on change model

Most of the organizations have to go through a change as they are in a fast-moving business environment and external environment is changing constantly. The changes are associated with global economies, technological advancement, and national factors. Ryanair airline has been going through the change of culture, technological upgrade and improving customer service. As Ryanair provides low-cost service, the customer service of the organization is not highly developed. Recently, customers started opting Ryanair as they have improved the customer service in long route airlines. I have noticed that CEO is trying to craft right culture for the organization. Change management of an organization supports the smooth transition and it ensures the employees must go through the journey. Ryanair needs to define the change in a correct way that must align with the business goals. I think Ryanair management should need to determine the impact of the changes and affected area. The technological upgrade will eventually ease the customer service and it will help to communicate with the customers. I recommend Ryanair needs to give effective training to the employees so that they implement a good support structure.

Lewin’s Change model is associated with three steps, unfreezing, change and freezing. Before a change can be implemented within an organization, it needs to go through unfreezing step. In this stage, employees and customers may resist the change in Ryanair. Ryanair management must make them understand the benefit of customer service and technological innovation. I think creating an awareness of the change will make the situation heal. In the change stage, transforming of the change is done. Software engineers and developers must initiate the change and most of the employees within Ryanair may feel uncertainty and fear. In the last stage, refreezing symbolizes reinforcing and solidifying the change. Technological innovation helps the organization to provide better service in ticket booking, making better organizational culture and communication betterment. Customers and employees need to accept the change within Ryanair.

McKinsey 7S is one of the most popular strategic planning tools. This model shows the process of making change within an organization using 7S, structure, skills, strategy, staffs, style, shared values, and systems. These seven areas are interconnected and these areas are required in change. In the Hard S section, structure, strategy, and systems are there, Ryanair needs a change in the system as technological change will make easy to communicate within workplace system. In Soft S section, skills, style, and staffs are there and Ryanair brings change in staffs’ numbers as they want to reduce their operational costs.

Kotter’s 8 Steps model develops the change in an organization and I think, Ryanair’s change process can be clearly described using this model. Ryanair needs to bring urgency first and build a team to foster the technological change. Developing a vision will help to understand the change and Ryanair management communicate for buy-in. Empowering action will eventually help the organization to create short-term wins. Management must make change stick as they need technological changes and upgrade process.  

In Ryanair, technological innovation is needed in Big Data as the data needs to be stored in clouds for access anywhere in the world. Air Transportation always depends on data and Ryanair will need social CRM to communicate with customers. Each organization experiences change and leaders play an important role in shaping the change of the organization. I as a leader will try to be comfortable with innovation as change always bring resistance within the organization. In leadership, leaders do not like to work in status quo; they try to explore the risks and change. I like the struggle and my role in change within an organization will be in unfreezing stage. I would like to people make understand why the change is needed for the organization. Creativity is needed in leadership while managing the change as the leaders apply the source of information to create values. During the change process, I would communicate openly with employees. Information in this stage will fill in the blank for the employees. Leaders in the change must equip the employees with information and show support. 

 

References

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  6. Kew, J. and Stredwick, J., 2017. Business environment: managing in a strategic context. Kogan Page Publishers.
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  8. Morecroft, J.D., 2015. Strategic modelling and business dynamics: a feedback systems approach. John Wiley & Sons.
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  12. Pereira, B.A. and Caetano, M., 2015. A conceptual business model framework applied to air transport. Journal of Air Transport Management, 44, pp.70-76.
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  14. Rothaermel, F.T., 2015. Strategic management. McGraw-Hill Education.
  15. com 2018. Official Ryanair website | Book direct for the lowest fares | Ryanair.com. Available at: https://www.ryanair.com/gb/en/ [Accessed 16 Jan. 2018]
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