Article Review
Article Review
being the lowest cost producer” presented the strengths, weaknesses, opportunities and threats (SWOT) of Ryanair . The air travel organization was pegged as the leading short haul carrier in Europe. The current discourse hereby summarized the SWOT of the organization through an in-depth analysis of the key elements of its internal and external environment.
Strengths
The strengths of Ryanair are identified through the following categories: (1) lowest cost per passenger; (2) lowest fare; (3) offering the largest short haul network; (4) maintaining the newest fleet which provides them with greater fuel efficiency, lowest maintenance costs, and exemplary perceptions from customers; (5) it boasts of having 178 airports providing more alternatives to passengers; (6) provision of the fastest turnaround time of 25 minutes; (7) greater options for generating revenues from ancillary sources; (8) focus of management of sustaining lowest cost advantage; (9) innovating the short haul model; and (10) exhibiting profitable financial performance over its competitors. These confirm the core competency and strong competitive advantage over other air travel organizations that ply similar routes. The key internal factors that contribute to these strengths include efficient use of resources which contribute to the ability to minimize costs. Likewise, the ability of their fleet to manifest the shortest turnaround time proves that current resources (personnel and assets) have reached optimum efficiency and enables them to maximize the use of time. Further, effective management, strategies, policies and procedures are key elements of the internal environment that contribute to these strengths.
Weaknesses
Ryanair’s weaknesses included the seasonality of travelling that contributes erratic
earnings; manifested lower frequencies in routes; poor perception of the customers contribute to the weak brand reputation; and apparent notorious attacks from European Commission and EU bodies . Gauging from the assessment, these weaknesses should be addressed as the comments and perception relayed to the public could contribute to a bad image for the organization. The internal factors include inefficiencies in focusing on customer satisfaction and lack of training to exhibit professionalism in dealing with other stakeholders. There might be some requirements for regular training and development of personnel and leaders to address identified weaknesses.
Opportunities
The opportunities deemed to be available from the external environment include the lucrative growth prospects, projected prospects for joint acquisition of other air travel organizations; continued business deals with the Manchester Airport Group (MAG); and sustained advantage to increase market share due to increased trends during economic downturn . One of the key elements of the external environment that impinge on these opportunities focus on the economic condition which favors Ryanair’s lowest fare offer. Likewise, other air travel organizations that aim to ride on Ryanair’s leadership position contribute to facilitating the forging of joint ventures.
Threats
The threats facing Ryanair included geopolitical events, natural disasters, increases in airport fares and taxes, increases in fuel prices, the reported loss of capacity of air travel competitors, as well as a loss of focus and commitment by management. The key elements of the external environment that contribute to these identified threats are many. One is that the impact of climate change could increase propensities for air disasters. Likewise, global increases in fuel costs and other related expenses (airport charges or air fare taxes) could result in an unavoidable increase in Ryanair’s air fare and cost per passenger. Finally, the loss of management focus, could actually be seen as an internal factor. However, since the distraction could be due to external forces (competitors’ reaction or strategies), the effects or implications to Ryanair could be challenging and beyond their internal control.
Reference
Center for Aviation. (2013, February 6). Ryanair SWOT analysis – Michael O'Leary's maniacal focus on being the lowest cost producer. Retrieved from centerforaviation.com: http://centreforaviation.com/analysis/ryanair-swot-analysis--michael-olearys-maniacal-focus-on-being-the-lowest-cost-producer-96465
