josemtejedor - assignment 2 - strategic management in action - ryanair
TRANSCRIPT
Course: Strategic Management in ActionAuthor: José Miguel Tejedor Fernández
• Ryanair’s Vision & Values• The Leadership in Ryanair• Evolution of Ryanair• Contingency/Situational Manag.• Key performance indicators.• Recommendation
Outline
• Started in 1985• Leading European carrier flying 72 million passengers, 80%
passenger loading on aircraft• $ 528 million net profit 2011 • Currently in 26 European countries, 1000+ routes• 289 aircraft
Ryanair
Vision
standardization on one type of aircraft
Quick gate turnarounds
Non-union operations
performance-based incentive compensation plans
Low-cost performance in every element of the value chain
be the Low Cost Leader and high punctuality
• Unethical Human resources management Taoiseach described O’Leary’s orientation toward labor as
“tooth and claw capitalism” compensation for pilots and flight attendants based on
efficiency issues
• Poor customer service refusal to supply wheel chairs for disabled passengers
2004, the European Commission ruled that 4 million of the 15 million in incentives paid to Ryanair constituted illegal state aid
Business Ethics
Charismatic Leadership
Michael O’Leary on Ryanair’s Stakeholders European Commission
…”morons” BAA …”overcharging
rapists” UK air traffic control
…”poxy” Travel agents
…”f***ers who should be taken out and shot”
but…open to interpretation
Transformational leadership
Transformational leadership
• Little chance of new entrants• High ticket prices• Limited availability of purchasing tickets-Travel
Agents, Airports• Limited choice of departure airports• No choice of airline
Pre 1990 Airline Industry
• No aggressive competition• Sharing Routes• Fixing Prices• Dominated by a few “global players”• Government intervention• Generally aimed at the “business flyer”
The Airline Environment-pre 1990
• Dominated by big national airlines
• Cartels
• Route Monopoly
Pre-1990 Airline Industry
• Privatisation• Deregulation
Relatively free market
More choice for the consumer!!
1990s-change in the environment
On-Line BookingNo Seat ReservationPay for Seat onlyLed to:Entrance of new players-Go, Wizzair, Easyjet and Ryanair
Birth of the “Low Cost” Airline
• 60 across Europe• Easyjet, Ryanair, BMI Baby (U.K.)• Air Berlin, Germania Express (Germany)• Wizzair (Poland & Hungary)• Air One, Volare (Italy)2007 22.7% growth in seats
The “ No Frills” Industry
• More competitive• Lower Prices• Alliances between “big players”• Emphasis on short-haul due to decline on
long-haul• Increase in low cost carriers• Many airlines copying “low cost model-e-
booking
The airline environment now
Milestones
Contingency/Situational Management
Personnel. Cabin Crew
Personnel: Pilots
Airports
Performance measures
Ryanair’s performance
Financial Perspective
RevenuesExpensesProfitsFuel Costs
Customer Perspective
Types of cuisine offered Baggage rates Response Time for queriesCancelled FlightsNo. of complainsSatisfaction
Service Indicator
Passenger Seats OccupiedNo. of partners in supply-chainNo. of accidentsPercentage of Flights Departures Delayed > 15 minutesCrew productivity and costCrews per aircraftAmount of lost baggage on connecting flights
Flight Operations
FlightsPassengersAvailable Flying TimeAircraft utilisation
KPI - Key Performance Indicators
BSC Designer PRO
Balanced Scoreboard
Performance: 46,02%
Final assessment
Ryanair’s performance
Customer satisfaction assessment
• more focus on leadership vision reflected in useful mission
• develop culture values to place customer service at the heart of their business
• put employees in first place • serve customers with better quality of service• adapt to business changes if deemed
necessary (decrease in subsidies)
Recommendations