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

Essay by stanlevskiUniversity, Bachelor'sA, May 2009

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IntroductionRyanair 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.

Value Chain AnalysisFirms make products or provide services by engaging in many different activities. The basic structure of these activities is embodied in the firm's value- chain. Value-chain activities are of two types: primary activities and supportive activities. Primary activities include inbound logistics, operations, outbound logistics, marketing and sales, and services. Support activities include human resources, accounting and finance operations, technology, and procurement. All the activities -primary and support are potential sources of competitive advantage or disadvantage of any firm.

In Ryanair case, parts of the inbound logistics are Ryanair's low-cost deals, negotiated against promise of large and growing volume of business.