Assignment
Corporate Strategic Planning
This assignment is due on 5:00 pm, 23th October 2015
This is an individual assignment contributes 15% of the total
course grade.
Answer ALL 5 questions from the case study named Ryanair
European Pioneer of Budget Airline Travel.
Objectives
Successful students should be able to meet the following set
objectives:
Understand the strategic planning process in a entreprise level.
Discuss the characteristics of three basic strategies: low cost,
differentiation, and focus, and know when to employ them.
Explain the think local and act local strategy, think global and act
global strategy, and think global and act local strategy.
Assessment Guidelines and instruction
1. Your essay should be typed.
2. A cover page should be provided for this essay. Ensure that your
name is on it.
3. Your essay should be approximately 2000 words not including the
cover page and references.
4. The essay should contain the following sections: cover page,
overview of the case study, discussion of the 3 questions, conclusion
and reference list. Headings are sometimes used in essays, you
may put heading for these sections or questions.
5. Use 1&1/2 spacing with left hand 4 cm margins (all others 2.5
cm) on A4 sized paper with 12 point Arial font size.
6. Marks are allocate for correct use of English (grammar,
punctuation, spelling, non-sexist language etc).
7. Marks are allocated for a correct reference list (these do not
count in word count)
Ryanair — European Pioneer of Budget Airline Travel
Ryanair was founded in 1985 by the Ryan family to provide scheduled
airline service between Ireland and the UK as an alternative to Aer
Lingus, the national Irish carrier. The company experienced significant
challenges through the early 1990s when it appointed a new
management team led by Michae O’Leary. Under O’Leary’s leadership
the airline remodeled itself after0020Southwest Airlines and became
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Europe’s first low fares, no frills carrier. By 2007 Ryanair flew out of 18
European airports with a fleet of over 100 new Boeing 737800 aircraft, and had placed firm orders for a further 138 new
delivered the next six years In a bid to continue this aircraft to be over
impressive growth Ryanair announced plans to double in size by
2012. Much of Ryanair’s success was attributed to O’Leary who was
referred to by supporters as a skilled leader who could motivate and
energize people. He was credited with single-handedly transforming
European air transport Detractors who referred to him in a number of
ways, including as an "arrogant pig," still recognized the significant
impact he had on European air transport.
Under O’Leary’s leadership Ryanair became the most profitable airline
in the world, on the basis of its operating and net margin profit on a
per-airplane and per-passenger basis. They have affirmed their
commitment to continue to offer the lowest fares in every market. In
an effort to keep costs down Ryanair reduced airport charges by
avoiding congested main airports, choosing secondary and regional
airport destinations that were anxious to increase passenger
throughput. Not satisfied with their low cost position in 2006 Ryanair
introduced cost-cutting/yield enhancing measures for passenger
check-in and luggage handling. The fundamental premise was that
the company would provide an exceptionally no frills, basic service
and that customers would then pay for any additional products or
services they needed such as excess luggage, snacks, or drinks. Not
all of these measures were positively received by the public and some
of the public resented what they saw as the company’s obsessive
focus on the bottom line. In one incident the company even charged a
man with cerebral palsy to use one of the company’s wheelchairs.
Despite these and other criticisms O’Leary, the carrier’s outspoken
leader, declared customers chose Ryanair for its low fares and that
customers could vote with their feet.
Recognizing the challenges of solely relying on passenger revenues,
Ryanair developed several additional revenue streams. Capitalizing on
the fact that Ryanair’s website was the largest travel website in
Europe and the fifth most recognized brand on Google, Ryanair used
this strong Internet presence to convert this traffic into e-commerce
and advertising revenues. Success in these revenue streams
encouraged Ryanair to continue to seek additional revenue streams
including on-board and online gambling, and an in-flight mobile phone
service.
Despite the firm’s widely recognized success, Ryanair was at a
strategic crossroads in 2007. It is unclear what O’Leary will decide to
do. In 2005 he publicly stated that 2008 would be his last year at
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Ryanair in any capacity, but has since made statements alluding to
how much he enjoyed his job. He also had led the company in an
unsuccessful bid in 2006 to purchase Aer Lingus which had recently
become public. His love for the business and passion for the carrier
led analysts to wonder if O’Leary would really retire in 2008 and, so,
what would happen to Ryanair and its ambitions. Inevitably, the
retirement of O’Leary would be a major obstacle for the company.
O’Leary was widely recognized as the driving force in Ryanair and as
the face of the company replacing him would be a strategic inflection
point.
This case provides an excellent vehicle to drill students in identifying
and evaluating a company’s strategy, evaluating the role of the CEO
in the strategy-making/strategy-executing process, and how well top
management has performed each of the five component tasks that
comprise the process o crafting and executing strategy-forming a
strategic vision of where to take the company, establishing objectives,
crafting a strategy, implementing and executing the strategy, and
making corrective adjustments as needed. The Ryanair case contains
a wealth of detail about the tactics and functional strategies used to
implement the company’s low cost generic strategy and how
O’Leary’s strategic leadership helped build a corporate culture that
was conducive to implementing its strategy.
All things considered, we think the Ryanair case can serve as a
summary n the strategy execution module, after case to tie together
the materia i students have been exposed to the material in
Chapters 10-13. The content of the case makes it a good vehicle for
giving students insight into how to build a powerful strategy.
Alternatively there is sufficient information in the case to allow you to
position it earlier in the course to examine issues in Chapters 1 and 2
(e.g., the role of the leader in strategic management) or to explore
the role of generic strategies in the strategic management module
(i.e., Chapter 5).
The Ryanair case provides an excellent tool for either an oral
presentation or a written case analysis. A good assignment question
is:
Micheal O’Leary, the CEO of Ryanair, has employed you as a
consultant to evaluate the future growth and expansion opportunities
for the company. Please prepare a 3-5 page report evaluating the
European airline industry and Ryanair’s current situation and lay out
your proposal for how Mr. O’Leary or his successor can sustain the
success of the company. Your situation analysis should include an
examination of the industry’s dominant economic characteristics, the
driving forces impacting the industry, the industry’s key success
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factors, and a summary of the factors acting to make the industry
environment favorable and those making it unfavorable n addition,
your analysis should include an assessment and identification of the
company’s current strategy, financial performance and position, a
thorough analysis of its strategy implementation activities to date, an
identification of which of them have been key to the company’s
success, and an evaluation of its market opportunities. Your
recommendations should clearly identify a specific course of action
that Ryanair should pursue and be well supported with arguments and
justifications from your analyses for each. Your report should include
at least one page of specific recommendations that logically flow from
your analyses and problem identification and whatever supporting
charts, tables, or exhibits you deem helpful.
Assignment Questions
1. What are the key elements of Ryanair’s strategy as of 2007? What
type of competitive advantage is Ryanair trying to attain over rivals?
Which of the five generic competitive strategies discussed in Chapter
5 best matches the competitive strategy that Ryanair is employing?
2. What grade would you give Michael O’Leary for the job he has done
as CEO of Ryanair? Be prepared to support your answer based on how
well (or not so well) he has performed the five tasks of strategic
management discussed in Chapter 2.
3. What was Tom Ryan’s original strategic vision for Ryanair? How
does Michael O’Leary’s strategic vision for Ryanair differ from Ryan’s?
Why did the strategic vision change? Is the company’s strategic vision
likely to undergo further evolution?
4. What are the key policies, practices, business principles, and
procedures that underlie how Michael O’Leary and Ryanair’s
management have implemented and executed the chosen strategy?
5. What recommendations would you make to Michael O’Leary to
sustain the company’s growth and support continued strong financial
performance in the years ahead? Does the acquisition of Aer Lingus
make sense? How does O’Leary’s impending retirement in 2008
impact the company?
MARKING CRITERIA SHEET FOR CASE STUDY
MARK CRITERIA Introduction (5%)
Coverage of background of case.
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Brief summary of the case problems.
Question
Question
Question
Question
Question
1
2
3
4
5
(15%)
(15%)
(15%)
(15%)
(15%)
Conclusion (10%)
Summarizes issues
Summarizes solutions
References (5%)
Adequate & appropriate in-text referencing
Consistent referencing style used (i.e. consistent style used
throughout text and in the reference list)
In-text references match reference in the reference list
Formatting of proposal (5%)
Includes cover page
Proper headings, fonts & spacing
Includes page number on the report
Includes an appropriate title of the project
Appropriate use of appendix
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