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Internal Analysis of "Ryanair-The "Southwest"of European Airlines" case

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Introduction

Stanislav Boyadjiev BUS-450 Prof. Voyer 05/23/2009 Assignment I Internal Analysis of "Ryanair- The "Southwest" of European Airlines" case Introduction Ryanair was founded in July 1985 by the three brothers, Catlan, Declan, and Shane Ryan, with the financial assistant of their father Tony Ryan. As a beginner commercial carrier, its operations began with 25 staff and a single 15-seat turbo-prop commuter plane between Waterford in the southeast of Ireland and Gatwick Airport, the second busiest airport in London after Heathrow. Later on, regulatory authorities permitted the Ryanair Airlines to have at least four flying flights a day on Dublin-London route, with more seating capacity. Nowadays, Ryanair, with its rapid growth, occupies the most sought position in its own field, being "Britain's favorite airline" and the oldest-low cost air carrier in Europe. The goal of my internal analysis on Ryanair is to focus on resources and capabilities as internal sources of uniqueness that allow firms to beat the competition. This analysis is often called the resource-based view of the firm. By theory, a firm gains an advantage by obtaining valuable and rare resources and developing the capability to utilize these resources to drive customers toward their products and services at the expense of competitors. As a result, firms with superior resources and capabilities enjoy competitive advantage over other firms. ...read more.

Middle

Resource Analysis Resources and capabilities are the fundamental building blocks of a firm's strategy. The resource-based view presents a perspective of competition that portrays the value of a resource or capability as derived from the dynamic interplay of market forces. While the market and environment establish external constraints and pressures, a firm's response through resource allocation and capability development become a source of competitive advantage. The resource-based perspective views a firm as an organization that has a bundle of protective resources and capabilities. Resources are tangible and intangible assets a firm uses to choose and implement its strategies. Capabilities are the skills a firm uses to bring its resources to bear. Ryanair's tangible resources include all Boeing 737 airplanes the company uses, as well as the company's headquarter building in Dublin and all other buildings the company uses. Part of the tangible resources also are all of the supplies, food, drinks and duty-paid products company holds in inventory, as well as fuel. Intangible resources contain bigger part of the business. They include all the intellectual capital, like expertise and accumulated knowledge, experience, skills, abilities and talents that every employee in Rayanair possesses. Here I could include also the company's brand recognition, customer loyalty, investors' confidence and the good reputation. ...read more.

Conclusion

Their use of secondary airports means that they are able to negotiate deals with the airports, in contrast to larger airlines unwilling to split their operations between two or more airports. Ryanair does not pay dividends to its shareholders. All profit is reinvested back into the business, which means a higher profit margin. Ryanair is unable to expand its home market industry, because of airport taxes. Passengers having their own luggage carried at their own risk could mean a loss of reputation if any major scandal is to occur in terms of loss of luggage. Increasing its fleet could mean that it might incur more losses. Reference: Thompson, A.A., Strickland, A.J., & Gamble, J.E. (2008), Crafting & executing strategy; The quest for competitive advantage. Boston: McGraw- Hill Irwin. Ryanair Holding PLC, (2007). The World's Favorite Airline. Retrieved May 20, 2009, from Ryanair Web Site: http://www.ryanair.com/site/about/invest/docs/2007/070920annualreport.pdf Ryanair Holding PLC, (2007). Strategy. Retrieved May 20, 2009, from Ryanair Web Site: http://www.ryanair.com/site/about/invest/docs/Strategy.pdf Google (2009). Ryanair Holdings plc (Public, ISE: RYA). Retrieved May 20, 2009, from Google Finance Web site: http://www.finance.google.com/finance?q=ISE:RYA Lavarack, M & P. M. Brown. (1992) Benchmarking: Learning from Best Practice. Business Studies, Vol 5, No.2. Thompson, J. L. (1997) Strategic Management. International Thompson Press: London. Carpenter, M.A. and Sanders, W.G. Strategic Management: A Dynamic Perspective Concepts and Cases, 2nd edition. Upper Saddle River, NJ: Pearson Prentice Hall, 2009 ...read more.

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