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Rynair

In: Business and Management

Submitted By yyw1219
Words 433
Pages 2
Strategic Management: Principles and Practice

Case study A : Ryanair
Duration: 3 hours
Lecturers: M.H. Charki, V. Duplat, A. Perrin & M. Ouakouak

3 QUESTIONS:

1- You’re invited to use the Value Chain framework so as to explain the extent to which Ryanair has been able to propose low fares to its passengers.

2- Apply the SWOT analysis to the Ryanair case and figure-out four possible strategic options using the TOWS matrix (one possible option in each case).

3- Should Ryanair continue to pursue the Aer Lingus bid?

N.B : Before attending their case study sessions, students are asked to carefully read the case and to answer these 3 questions in teams. Please refer to the syllabus for the submission deadlines and guidelines.

Master 1 - Business Management Track
2012- 2013

NO. Accoring to the value network analysis we have done in the previous questions, It’s not suggested for Ryanair to continue its bid after Air Lingus. In fact, the majorties is not optimistic about this consolidation. Shareholders of Aer Lingus formed a alliance and went against the bid. This alliance presented 47% of Aer Lingus shares, including 25.4% retained by the Irish government and 12.6% controlled by ESOT (Aer Lingus Employee Share Ownership Trust). And apprantly, employees of Air Lingus hold a negtive attitude towards its rival: 97% members of ESOT voted for rejection. The orgnization cultures of Ryanair and Air Lingus can not combine well. As the former Chief Executive Dermot Mannion stated, merger of these two companies would be like merging Manchester United and Liverpool football clubs. Besides, Ryanair is facing stress from the European Commission.

Additionly, Ryanair and even the the whole industry is facing more and more challenges. So it’s advised to take conservative strategy and focus on itself. From the internal point of view, raising costs from additional marketing to promote new routes, chanllenges in human resource management , bad public brand image etc. And from the outside, the future of aviation industry is not optimistic. Recession, raising cost in fuels,emmision release regulations, airport charges and government taxes are leading to the shrink in profit.

But, it’s wise to keep the current shares of Aer Lingus. Adimit it or not, consolidation is the future trend. For example, Air France allied with KLM…………..
By combing Ryanair and Aer Lingus together, it helps to reduce operating cost and save Aer Ligus from continus declining. In return, Aer Lingus helps to expanding Ryanair by completing routes in main airports. A combined Ryanair-Aer Lingus would account for 80% of all flights between Ireland and other Eupopean countries.

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