ryanair distinctive resources and capabilities

Building a social identity allows airlines to access the digitally-connected passenger. - High royalties for the sales Ryanair uses the strategy of cost leadership to target a wide segment of customer segment that are, highly sensitive to price. (Gillen & Lall, 2004) This advancement of analyzing and dynamically applying a new transformational strategy may be considered as Ryanair’s core competence, which is highly dependable on CEO Michael O'Leary’s views and guidance. Resources are a business's assets, capabilities are the ability to exploit its resources, and competency is a cross-functional integration and coordination of capabilities. Boeing 737 which. Objective. An organization’s resources which are critical in imparting it with competitive advantage are called distinctive capabilities. 1. The first part aims at understanding the strategic environment in which Ryanair operates. The Ryanair are in position to offer a low cost prices for, its customers which has allowed the company to attract a huge number of customers. We first have a look on the low-cost airline industry, its competitors and markets in order to understand the market-segmentation of the company. (O'Leary, 1994) Although the Southwest operational efficiencies were the key to its success, this cannot be viewed as a strategy, but operational efficiencies that the airline needed to meet. 1. The competency evaluation criteria of the two definitions for determining core competencies are mostly overlapping in there contexts, since they pose the questions of do the competencies help in the value delivery to the customers? Why? Key points from the article Ryanair’s Integrated Business Strategy Resource-Based View (Inside out) Marketing View (Outside in) Variety of Destinations &Routes Competitive Advantage Competitive position Low Cost Airline Business Model (Passes the costs directly to Ryanair’s customers) Intangible resources include Human Resources (experience and capacity for employees, trust, performance of team work and managerial skills), reputation resources (brand, reputation with suppliers, customers stability) Ryanair comes with an average of 6000 personnel working and are passionate about the work they actually. ... Also, on a worldwide basis Ryanair has a distinctive factor of deploying their services by incurring low costs. - Completely free - with ISBN Starbucks, the ubiquitous coffee retailer earned high profit and is forecasted to grow. Ryanair’s fleet is a valuable resources as its enables the firm to conceive. Ryanair launched its service focusing on delivering first-rate customer service and lowest – simple, single – fare @ I£ 98, compared to I£ 208 full fare and I£ 99 discounted fare offered by competition, Aer Lingus and British Airways. environments due to increasing competitions levels. Ryanair was founded in 1985 as a leading low cost airline that is located in Europe having won so many awards since its inception. - Publication as eBook and book Furthermore, Ryanair purchased more and new environmentally friendly and fuel efficient aircraft. Ryanair was founded in 1985 as a leading low cost airline that is located in Europe having won so many, awards since its inception. (Johnson, Scholes, & Whittington, 2008), The origins of core competencies were solely based on how advanced end product technology manufactures exploited their unique core skills and resources among the organization, and across their market. The four question that need to be asked when, evaluating the features and resources of an organization is based on the value of the resources, how the, information is rare, can we imitate the learning resources and is the source organized in a production, manner? Strategic Capability and Competitive Advantage Resources Competencies Threshold resources Threshold competencies Threshold - Aircraft - Online booking / website capabilities - Pilots, cabin crew (employees) - Point-to-Point routing - Finance resources - On time take-off and landing - Office equipment - Low cost operations Unique resources Core Competencies Capabilities for - … Dynamic capabilities (DC) are a … Threshold capabilities of Ryanair are: the ability to keep flying from A to B on a low cost basis and sustaining competitive ticket prices. The VRIO framework is a strategic analysis tool designed to help organizations uncover and protect the resources and capabilities that give them a long-term competitive advantage. translates to increased cost savings for the company. Ryanair Distinctive Competencies. The organization chosen to study in the light of the resource based theory and its evaluation with regards to its strategic capabilities is ‘British Airways’. This book is not just a list of concepts, models, and theories. This preview shows page 1 - 2 out of 4 pages. A resource is a competitive asset that is owned... A company’s business model and strategy must be well matched to its collection of resources and capabilities. (www.Ryanair.com, 2010) (www.corporate.easyjet.com, 2010) Never the less, Ryanair CEO has the vision of offering tickets for a zero cost (but with a criticized payment fee of below £5). 2. FIGURE 5.1 Analyzing resources and capabilities: the interface between strategy and the ﬁrm CSAC05 1/13/07 9:21 Page 125. state of ﬂux, the ﬁrm itself, in terms of its bundle of resources and capabilities, may be a much more stable basis on which to deﬁne its identity.3 Identifying resources and capabilities with the help of the VRIO framework Analysing defined core resources and capabilities for finding Ryanair’s competitive advantages Fleet: This is the tangible resource of the company which could be quantified and observable and it is also the core … A brief intro of British Airways (BA), it is the flag carrier airline of the United Kingdom& the largest airline in the UK based on fleet size, international flights and international destinations. Whether via phone, text, chat, email or social media, passengers expect omni-channel availability. The Strategic Capabilities of Dyson Johnson describes a company’s strategic capabilities as “the capabilities of an organisation that contribute to its long-term survival or competitive advantage” (2014). Establish as Europe’s leading low-fares scheduled passenger airline through continued improvements and expanded offerings of its low-fares service. Jaramogi Oginga Odinga University Of Science And Technology School, Jaramogi Oginga Odinga University Of Science And Technology School • BUSINESS A MISC, Edinburgh Napier University • MBA HRM11120, San Jose State University • BUSINESS ITM 300, University of Nairobi • BUSINESS STRATEGIC, Competitive Advantage Virgin Atlantic and Ryanair.docx, Jaramogi Oginga Odinga University Of Science And Technology School • FINANCE ABA 205, Jaramogi Oginga Odinga University Of Science And Technology School • PHILL 543. The framework should be put into play after the creation of a vision statement, but before the strategic planning process. (Johnson, Scholes, & Whittington, 2008) Interestingly, while being profitable, Ryanair retains lower average fares compared to its rivals such as Easyjet and Aer Lingus, who also inherits most of the above minimal functional requirements. Following the financial losses in 1990, Ryanair still had the courage to be the first European carrier to restyle itself into a low-cost airline model, which was base on the successful Southwest Airlines in America. has helped the company negotiate low maintenance and leasing rates for its aircrafts. One of the significant facts in the transformation into a new European low-cost airline would be the unique no-frills specialization that Ryanair extended from Southwest. (Johnson, Scholes, & Whittington, 2008), Interestingly, while being profitable, Ryanair retains lower average fares compared to its rivals such as Easyjet and Aer Lingus, who also inherits most of the above minimal functional requirements. This. The dynamic capabilities framework analyzes the sources and methods of wealth creation and capture by private enterprise firms operating in environments of rapid technological change. It is the first undergraduate textbook to introduce a theory-based, multi-chapter organizing framework to add additional structure to the field of strategic management. We will go deeper in this analyse through a PESTEL analysis. (Prahalad & Hamel, 1990) The tests that are put to identify core competencies are firstly, they need to provide potential access to large markets, secondly, must significantly contribute to the customers perceived value of the end product and finally must be difficult to imitate by competitors. Identify Ryanairs distinctive resources & capabilities and analyse them using the VRIO framework to determine the organisations competitive advantage. Using this technique, they prefer using a single aircraft, i.e. Put the raw analysis in an appendix and, based on the output of this, explain the resources and capabilities that Ryanair possesses that are distinctive as opposed to threshold. PART A Identify Ryanair’s distinctive resources & capabilities and analyse them using the VRIO framework to determine the organisation’s competitive advantage. 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. (Lawton, 2002) More or less, these techniques may appear as threshold capabilities that any low-cost airline may need to survive in the business. Immobility - these capabilities and resources are difficult to transfer. Durability - their life span is longer than individual product or technology life-cycles, as are the life spans of resources used to generate them, including people. - It only takes five minutes The 5 year long term revenue growth has been. (Coyne, Hall, & Clifford, 1997). (Hitt, Ireland, & Hoskisson, 2004), The Core competency in effective remodeling. - Every paper finds readers, Business Management, Corporate Governance. The company employs a deliberate strategy, that is related to a single class of passenger, assigning no seats and serving no meals as it offers a low, and simple fare structure. Swot Analysis Ryanair 3506 Words | 15 Pages. When the organization which holds a distinctive capabi… Intransparency - it is difficult for competitors to imitate these competencies quickly. Training costs: They only have one kind of plane, so all of their staff are trained to handle only that kind of plane. In this essay, we shall discuss Ryanair’s strategic approach from a perspective of the core competencies, together with the related competitive strategy that they have implemented by it. That’s a feat airlines must practice to build brand equity and mindshare with travelers. When a distinctive capability is able to continue functioning over a period of time it is said to be sustainable. To mention a few of them would be having a route plan of a point-to- point network (in contrast to the hub and spoke form of traditional carriers), focus on cost cutting and reduced operational expenses by trading between service quality, avoiding major airports as landing points, uniformed aircraft types, online ticketing, maintaining trips with higher load factors and reducing ground turnaround time. Ryanair embraced, the hassle free low cost concept. To create brand equity through reliability, airlines must be present on channels passengers use. Ryanair no-frills meant no sweets, newspapers, free food or beverage service, no seat allocation, no business class service. In addition to having a distinctive characteristic it should also be sustainable and appropriable. … Group Project - Corporate Audit Ryanair Group members: Paul Carty Brian McCabe James McGinley Anthony Monahan Micheal Power History and major events (1985-present) Ryanair Ltd. is a low cost airline founded by the Tony Ryan, Liam Lonergan and Christopher Ryan in 1985, growing from a single aircraft family run operation employing only 25 … (Lawton, 2002) More or less, these techniques may appear as threshold capabilities that any low-cost airline may need to survive in the business. (Prahalad & Hamel, 1990), Due to the nature of the specific (manufacturing) industry segment from which this concept was pointed out from, there seems to be many inconsistencies regarding the separation of what real core competencies are and what appear to be generic skills that companies are quite good at. The VRIO framework is an instrument used by an organization to assess the internal environment of an, organization and views an organization as a combination of various tools. A company’s strategic capabilities are either resource or competency based and a summary of Dyson’s follow: Strategic Capabilities 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. This is in line with, its objective of keeping its aircraft fleet young and reduce the overall fleet fuel consumption. Among the recent innovative airline s… Value- Ryanair has created value by combining subsidiaries from government, reductions in airport, charges and a business model that is low priced. It has no frills offerings to ensure efficiency is very high in every of its, business operations. However, with the emergence of airlines having low fares and which pose a stiff, competition compared to international carriers, the current model of business of the company and their, implementation may be less robust to face the fast changing, turbulent, uncertain business. What does it take to be in the low-fare airline business in Europe? Does the competency give an advantage of superiority to competitors? When the capabilities originate from an attribute which other firms do not have then they form an organization’s distinctive capabilities. What Is It? The revenue, growth of Ryanair has increased by 14% since 2019. Since then, Ryanair turned out to be the Europe's most profitable airline, ironically once outperforming Southwest in profit margin percentages. The company has employed, several strategies to achieve the objective of cost leadership. (Coyne, Hall, & Clifford, 1997) This writing also provides a check-list to evaluate core competencies with regards to the superiority and sustainability of the competence, the value generated relative to competitors by it and the ability to commercialize the competence (if it is an insight or foresight). The resource-based view (RBV) argues that valuable, rare, inimitable resources and organization (VRIO) lead to competitive advantage. Examining Ryanair’s Launch Strategy Ryanair was set up in 1985 by Cathal and Declan Ryan, as one of the first independent airline servicing the Dublin-London (Luton) route. The company focuses on cost reduction strategy by always devising ways of, rethinking their secondary and primary activities to reduce operational cost. Presentation Ryanair’s major resource capabilities include the physical resources such as its headquarters in Dublin, a younger aircraft fleet policy which leaves lesser carbon footprints hence spends only lesser taxes and penalties and using secondary airports. How ever the former discussion of core competencies may not directly apply to the Ryanair situation, since it does not focus on competencies at a SBU level. Rather they are the complementary factors that supported the airline to function as a short-haul point-to-point operator, which was their actual strategic choice of operation. (Porter, 1996) Ryanair took a few steps further than Southwest, by deciding to provide completely no-frills services to its customers, to outsourcing all possible operational services, expanding routes in Europe and most importantly they gained the first mover advantage in the sector when signing long term contracts with secondary air ports. Critically evaluate the VRIO framework and discuss which other model or framework could be associated to VRIO to overcome its limitations. (money.cnn.com, 2006) Clearly, Ryanair’s adopted business model played the key role in its achievements and there is more to than just copying another airline’s tactics. Ryanair.docx - PART A Identify Ryanair\u2019s distinctive resources capabilities and analyse them using the VRIO framework to determine the, 15 out of 15 people found this document helpful, Identify Ryanair’s distinctive resources & capabilities and analyse them using the VRIO framework to. determine the organisation’s competitive advantage. The focus was to operate on an average number of passengers per flight, with more seats per aircraft archiving a higher load factor. “Ryanair” Brand name | Unique(Core) competencies Innovative cost cutting Alternative revenue generation | Ryanair’s Strategic Capabilities and Competitive advantage can be attributed to its Unique Resources and its Unique(Core) Competencies;Management and Leadership: Michael O’Leary, the CEO of Ryanair is instrumental in the Low Cost Strategy of Ryanair. (Coyne, Hall, & Clifford, 1997), For the analysis of Ryanair’s core competencies, the later definition tends to attracts more preference based on the categorization under ‘Insight/foresight’ - “competencies enabling a company to discover or learn facts or patterns that create first-mover advantages” and the wider range of service industries considered, in contrast to the specificity of technological manufacturing. The main vision was on the “collective learning of an organization, especially how to coordinate diverse production skills and integrate multiple skills of technologies”, and a model for transforming competencies into end product through the development of core products was presented. Authentic relationships form when stepping out of the corporate comfort zone with real-time engagement. The distinctive resources include James Dyson himself, the high-end brand, an headquarters building related laboratory which are designed to promote innovation, product portfolio and related patents, huge investment in R&D to improve the product features, extensively in PR & advertising have been use to promote their products, can control over working conditions of employees. Ryanair must therefore be able to provide customers with lower fares than their competitors. Course Hero is not sponsored or endorsed by any college or university. Is their strategy underpinned by rather inimitable capabilities or perhaps, core competencies which other European air lines fail to emulate? (Gillen & Lall, 2004) Similarly, when Ryanair remodeled into the Southwest airline of Europe, they had to ‘strategically fit’ into the local market, imitating only what is required to be competitive. Industry The low-cost airline industry in Europe is based on offering an easy access to regular flights on point-to-point short and medium-haul airliner for very cheap prices and exempt of any complementary service u… Read More. The fleet for the airline has been increasing at rapid rate with fleet consisting, of Boeing 737 aircraft as new routes and new bases are being added to its operations. (www.bbc.co.uk - watchdog, 2008) Therefore it is worthwhile assessing what lies behind the success of Ryanair apart from the list of survival skills of a low cost carrier. Ryanair 's mission statement is to offer low fares that generate increased passenger traffic while maintaining a continuous focus on cost containment and efficiency operation. Throughout the industry and business developments in this sector, many air lines have learned to transform certain operations to favor their service role as low-cost flyers. 2. When it comes to the company’s human resources it has 7245 employees. Hence core competencies were redefined in a much broader view as the embedded complementary skills or knowledge within a group that results in ‘executing critical processes’ to a ‘world class standard’ in the form of either “Insight/foresight” or “Frontline execution competences”. Adopting the Southwest Airline model was a careful step that the Ryanair CEO, Michael O'Leary had to perform in 1991. Ryanair is an amazing airline, if you understand the model. Evidently Ryanair’s dynamic capabilities and “complexity” are superior in terms of the number of the strategies used in a LCC market: Customer acquisition strategy is based on a featured web site which has on a top advertising of the lowest flight fee, easy accessible links to the most valuable services for the travelers (flight info, tracing a baggage, renting a cars and hotels). Intangible resources include Human Resources (experience and capability of employees, trust, effectiveness of team work and managerial skills), reputation resources (brand name, reputation with suppliers, customers reliability) Ryanair has an average of 6000 staff working and are passionate about the work they do. If you provide a yes answer to the above questions, then that will imply that they are offering a. competitive benefits compared to its competitors. And are the competencies sustainable along time and difficult to learn and practice by competitors? “VRIO” is a mechanism that … The ability to generate income from ancillary services (in order to subsidise the lowest ticket prices). If the organization correctly, utilizes these resources, they will gain a competitive advantage and VRIO tools will help to determine, whether the advantage is ecological or momentary.