SIM 336 Strategic Management with Ryanair’s (GC0376)
Executive summary
The finding of this report says Ryanair’s success in its current markets is low-cost strategies. However, the competitors are also emphasizing low-cost strategies, which is giving challenges to Ryanair. According to Single Diamond Analysis, although Ryanair’s factor condition is good and demand conditions and supporting industry are high, the government policies are given hard time through their strict rules and regulations. On the other hand, the Double Diamond Model analysis shows that in comparison with the current local markets in the EU the proposed international market in Australia would more challenging for Ryanair. Although the related and supporting industry in Australia is high, the factor conditions and competitive rivalry and strict government rivalry might provide hard times to Ryanair. According to the situational analysis on Ryanair, although Ryanair has some weaknesses and potential threats in the international marketplace of Australia, it has huge opportunities to gain success in Australia’s market because of Ryanair’s huge strengths.
Table of Contents
1.0 Introduction.
2.0 Single diamond model
2.1 Single Dimond Model Analysis for Ryanair
3.0 Double diamond model
2.1 Double Dimond Model Analysis for Ryanair
3.0 Evaluation of Ryanair’s SAFe Criteria.
3.1 Suitability Analysis.
3.2 Acceptability Analysis.
3.3 Feasibility Analysis.
4.0 Analysis of Ryanair’s HRM strategies in its internationalism factors.
4.1 Cultural Factors.
4.2 Economic factors.
4.3 Labour cost factors.
5.0 Conclusion.
6.0 Recommendation.
References.
1.0 Introduction
In the current digital world and rapid technological development, many companies extend their businesses from local markets to international marketplaces. There is a variety of reasons for going to the international market by local companies, where the key goal is to grow and expand the business. However, before expanding the company’s business in the international market, it must undertake an effective strategic business plan based on the target marketplace and potential customer segment (Elmuti and Kathawala, 2011).
The aim of this report is to analyze and evaluate the business activities of a company named “Ryanair”, which would like to grow and extend its business in the international market, in Australia. This report assesses the ways in which the Australian marketplace can impact the business and corporate strategies of Ryanair. Therefore, the study emphasizes the implication of corporate strategy formulations and the nature of cultural diversity in the international market of Australia. As a result, the first section of this report analyses the activities of Ryanair using the Single Diamond Model developed by Roger. The second section emphasizes the proposed international market in Australia compared with the local market in Ireland and the EU using Double Diamond Model developed by Roger. The third section focuses on the suitability analysis, acceptability analysis, and feasibility analysis for Ryanair. For conducting suitability analysis, the study emphasizes PESTLE and SWOT analysis techniques.
For doing acceptability analysis, the study conducts risks and challenges analysis and the possible return and reactions taken by Ryanair. For doing feasibility analysis, the study focuses on physical resources analysis, human resource analysis, technological resource analysis, and financial resources analysis. The fourth section of this report analyses and evaluate the strategic human resources management activities of Ryanair based on current local markets and the potential international market in Australia. The fifth section of this report concludes the study summering the findings. Finally, the report recommends Ryanair on how it can achieve its organizational goals and objectives in the international marketplace of Australia.
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2.0 Single diamond model
The single diamond model refers to an economic model developed by Michael Porter in 1990. This model helps organizations to analyze and improve a country’s role in global competitive marketplaces. This a proactive economic theory that supports businesses to quantify comparative advantages for a nation or region (Grant, 2011).
The Single Diamond Model focuses on six factors: 1) Factor conditions: includes several resources of business including knowledge resources, physical resources, technological resources, financial resources, human resources, and infrastructural resources; 2) Demand conditions: analyze the home market for creating competitive advantages through innovative products; 3) Related and supporting industry: analyze cost-effective inputs for innovation and internationalization; 4) Firm strategy, structure, and rivalry: define business strategies to meet the organizational goals and objectives; 5) Government: analyze the governments’ initiatives which influence the demand and supply condition of the products and services; and 6) Chance: define the factors which are out of control of the business but affect the competitive positions of the business (Porter, 1990).
The key advantage of this model is it can be applied to clusters successfully grouping firms where one’s performance is related to another’s performance. However, the key disadvantage of this model is it cannot be applied in the international success of a multinational company (Henley Business Review, 2013).
2.1 Single Dimond Model Analysis for Ryanair
| Variables | Conditions | Evaluations |
| Factor conditions | Good | Available skilled and experienced labor and good communication infrastructure. Approximately 9000 staff are currently working in Ryanair’s operation. Although the crew has to pay for their induction, initial training, and uniforms, Ryanair provides pilot training by its licensed approved companies in Holland and Sweden, and based on performance trainee pilots are offered positions in Ryanair. |
| Demand conditions | High | The high density of people, huge potential market, and target customers. By 2014, Ryanair will have more than 520 aircraft, which will be able to carry over 160 million passengers per year. |
| Supporting industry | High | Available stakeholders. Ryanair’s share price increased to 5.75 Euro with a P/E ratio of 14.9 in 2013 from 4.20 euros with a P/E ratio of 13.0 in 2009, which has attracted more investors than ever before. |
| Government policies | Strict | Ryanair faces unexpected airport charges very often in different airports mainly at Dublin and Stansted. In addition, it is vulnerable to extra charges as well as taxes. For example, tourist taxes imposed by several governments. |
3.0 Double diamond model
The double diamond model developed by Alan Rugman in 1993 is applied to analyze the international competitiveness of multinational organizations focusing on its uniqueness, capabilities (firm-specific advantages, FSAs), and home country asses (country-specific advantages, CSAs). The factors which are focused on this model are grouped into two categories: domestic diamond and international diamond. The domestic diamond includes business contexts, factors condition, demand conditions, and related industry, where the international diamond includes political and juridical issues, worker issues, professional issues, and entrepreneurship issues. In other words, the domestic diamond mainly focuses on the physical factors of a firm, while the international diamond mainly focuses on human factors of the firms (Henley Business Review, 2013)………………
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