International Business Environment Assignment_University of Sunderland (GC01013)

Table of Contents

Introduction.

Background of Ryanair

Analysis of Ryanair’s business environment

PESTLE Analysis.

Porter’s Five Forces analysis on Ryanair

Background of the emerging economy (China)

Application  of Hofstede’s Model to emerging country (China)

Conclusion and recommendation.

References.

Introduction

Globalization and the advancement of both worldwide transformation and communication facilities are, nowadays, providing huge opportunities for domestic companies to emerge in global marketplaces (Kotler et al., 2014). However, cultural differences from country to country influence the operations and success of international firms. Most essentially, cultural factors come under deep consider in multinational companies when dealing with people who come from diverse cultural backgrounds (Hofstede, 2015). This means businesses’ success and cultural factors are closely related. Therefore, it is very significant for multinational companies to understand the cultural differences and their impact on business success in international marketplaces. A cultural framework developed by Hofstede (2015) provides huge knowledge and understanding of cultural differences in the country to country and guides the multinational companies to improve their intercultural communication among the employees who come from diverse cultures.

This essay critically discusses the extent to which business and cultural factors influence European multinational enterprises’ (Ryanair’s) operations in emerging economies using Hofstede’s cultural framework. In the first section, this essay conducts an analysis of Ryanair’s business environment applying PESTLE and Porter’s Five Forces Model. Then, the essay defines Ryanair’s background in Europe and cultural practices as a European country. Next, the essay discusses Ryanair’s operation in an emerging economy (China). Following this, the Hofstede cultural model is applied to Ryanair’s emerging country, China, focusing on cultural differences and the difficulties faced. Finally, the essay concludes the findings and recommend Ryanair on how it can succeed in the emerging country, China.

Background of Ryanair

Ryanair is a low-cost airline company based in Ireland. It commenced its operation in 1985 in Ireland, and now it is operating in most of the European countries. Ryanair has more than 300  Boeing 737-800 aircraft. It severs about 1500 flights every day from 51 bases on above 1500 routes for around 165 destinations in the whole of Europe. By 2020 it will have about 520 aircraft that will serve above 160 million passengers in a year. Ryanair has been a successful company that is floating and quoting on European stock exchanges and has increased its provide by 25%, revenue increased by 19%, and traffics increased by 5%, and share price increased by 20%. Ryanair has been using modern and advanced technologies in its operations. It has built up a dynamic website including a tracking system, booking system, ticketing system, and paying system, where 99% of total passengers book their tickets through its website (Ryanair Annual Report, 2015).

As Ryanair is operating in most of the European countries, it is dealing with people who come from diverse cultural backgrounds. Ryanair has more than 9000 employees including pilots and cabin crews who come from different cultures and backgrounds.   Ryanair has introduced an effective compensation strategy including attractive incentives and rewards system to motivate and retain its skilled and experienced employees who have come from diverse cultural backgrounds. In addition, Ryanair provides effective training and development programs to improve employees’ skills and experiences (Ryanair Annual Report, 2015)………….

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