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Assignment preparation(2)(1)

发布时间:2014-02-08 15:02:11  

Business Strategy
Assignment preparation

INTRODUCTION: A DEFINITION OF STRATEGY Strategy is the direction and scope of an organisation over the long term which achieves advantage for the organisation through its configuration of resources within a changing environment to meet the needs of markets and to fulfill stakeholder expectations. (Johnson & Scholes, 2001)

Assignment questions
1. Identify Ryanair’s strategic position? (Bowman’s strategy clock; strategic group mapping) 2. How do the key external drivers of change affect Ryanair? (PEST(EL); Five forces Framework) 3. How does Ryanair add value to its strategic position? (Resource audit; Value chain) 4. Identify and evaluate strategic options for the company (this is the conclusion of the analysis)

Hybrid 3

Differentiation 4

Focused 5 differentiation


Low 2 Price



7 8

Low Low

‘No frills’

Strategies destined for ultimate failure


Exhibit 6.4a The strategy clock: Bowman’s competitive strategy options



Example Mapping for Supermarket sector

Tesco; Carrefour; Spar; Walmart
LIDL; Aldi Minor International Brands Multinational Brands

Geographical coverage (% of European Community)

Regional Brands MiniMarts
0 0

Morrison; Sainsbury’s; Waitrose

National Brands

Store size (sliding scale)


Strategic Group Mapping

Strategic Group Mapping: some possible characteristics of Organisational Difference for the airline industry

? ? ? ?

Extent of geographical coverage Number of market segments served Product or service quality R&D capability (extent of innovation in product or process) ? Cost position (e.g. extent of investment in cost reduction) ? Pricing policy ? Size of organisation

Strategic Group Mapping
Quality of service



PEST for Airline Industry


taxes and policy ?Expanding of countries into the European Union ?Concern over incentives in regional areas

in some areas/Growth in

others ?Increasing energy costs – oil prices ?Disposable income may drop as prices increase



mobility of population ?Improved fuel economy of aircraft ?Expansion of second homes in ?Increasing use of IT for business Europe communication ?Increasing size of population - obesity ?Mobile communications utilised on flights. ?Perceived risks of terror attacks

Which are the long-term drivers of change?

New Entrants:

Are there high barriers to entry (e.g. capital; branding?

Rivalry: Are there high barriers to entry? Powerful suppliers ? Powerful buyers/? Threat of substitution? Is there growth in the market?

Suppliers: Are suppliers powerful (e.g. are inputs rare;?; are airlines dependent upon a small number of?)

Buyers: Are buyers powerful (e.g. are there numerous individual customers;?; are air fares a high cost item?)

Are there a number of ‘equally balanced ‘airlines in competition with each


Are there a range of products which meet the same customers needs?

New Entrants: High barriers to entry in terms of: ?Capital outlay ?Economies of scale ?Established brands ?Expected retaliation Rivals: ?High barriers to entry ?Many suppliers lack power ?Recession may reduce global demand for air travel ?Market differentiation e.g. ‘no fills’ BUT: ?Buyers are powerful ?Needs/products can be easily substituted ?Recession may encourage passengers to seek low fares ?Numerous airlines Substitutes: ?Different forms of transport ?Different types of airline ?Different low cost airlines

Suppliers: ?Reliant upon fuel companies ?As large purchasers of aircraft and air routes, manufacturers and airports can be squeezed


Power of individual domestic & business passengers increased by: ?High cost encourages buyers to seek best deals ?Low switching costs

Which are the key forces?

Resources, competences and competitive advantage
SAME AS COMPETITORS/ EASY TO IMITATE Necessary resources e.g. Computers & booking system Cash/Debtors/ creditors Pilots, Cabin crew & admin. staff Passengers (leisure & business travellers) BETTER THAN COMPETITORS Unique resources e.g. Aircraft (designed for cost efficiency) High level of capital reserves Experience & entrepreneurship of SMT Loyal customers/ reputation for low fares Aggressive ‘cost cutting’ culture e.g. wellpriced contracts for air routes Threshold competences e.g. Core competences e.g.

Customer service systems
Training programmes

Pre-printed boarding passes
Fast turnaround of aircraft Free publicity & sales bonus systems

Value chain: Ryanair
Firm infrastructure e.g. planning; finance HRM e.g. training; employee reward schemes (sales bonuses etc.)

Support activities

Technology development e.g. aircraft design Procurement e.g. aggressive negotiation of air routes; purchasing aircraft & goods for resale Inbound logistics e.g. Flight scheduling; warehousing of aircraft; stock control of goods for resale Operations e.g. Baggage drop/ handling; aircraft cleaning & refuelling etc.; passenger boarding Outbound logistics e.g. Flying the plane; safety demo; sale of food, drink & ‘duty free’ items Marketing and sales e.g. Website & online promotions; free publicity Service e.g. (basic) complaint handling; Car rental


Primary activities

Which linkages add value?

Supplier value chains

Distribution value chains

Customer value chains

Supplier of aircraft

Leisure travellers


Business travellers

Suppliers of goods for resale

The value system: Ryanair



Points to remember
? 3000 words (+/- 10%). ? Word-processed & proof-read ? Submitted via Turnitin by 11:59pm on June 10th 2013. ? Report format, appropriately referenced in Harvard style ? The report must not only describe but the models used but interpret them as well ? Use examples but not too many

Assignment Brief: Example report structure


– This section will NOT contribute to the word count

– What will the report cover? – Definition of business strategy

Example report format
2.0 Ryanair’s strategic position 2.1 Bowman’s strategy clock 2.1 Strategic group map
3.0 Key external drivers of change 3.1 PEST(EL 3.2 5 forces

Example report format
4.0 How Ryanair adds value 4.1 Resources Audit 4.2 Value Chain
5.0 Ryanair’s strategic options (conclusion) References (Harvard style) Appendices (if applicable)

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