md ashiquzzaman

Strategic Management MGT 8002 MD.Ashiquzzaman

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Family Name/ Surname: Yap

First Names: Boon Hup

Student Number: 0050043257

Name: Md.AshiquzzamanPostal Address: SEGi University Malaysia Country: Malaysia

Faculty of BusinessSEGi

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No part of this assignment has been written for me by any other person except where such collaboration has been authorised by the examiner concerned.

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Name: Md.Ashiquzzaman

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the above declaration.

If the above declaration is found to be false, action will be taken in accordance with SEGi university regulations.

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Assignment 1

Question 1:

The aim of this assignment is to discuss about my organization based on the effectiveness

of the strategy formation and the planning processes that occur.

Introduction

Paramount Group (PG), founded in 1980s, has now become one of the leading education

organizations in Malaysia. I have chosen KDU Smart School (KSS), an associate

company of the group, established in 2002, as my main discussion.

Being one of the pioneering groups in Malaysia, KSS has set its vision and mission as an

on-going basis. The vision is to be the leading school for teaching and nurturing young

individual of our society. Its mission is to teach and coach students to think and learn

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independently, and to prepare them for their future careers and the making of future

leaders in the corporate field.

Wikipedia (2005) states, ‘ strategic management is the process of specifying an

organization’s objectives, developing policies and plans to achieve these objectives, and

allocating resources so as to implement the plans.’ KSS has laid down its strategies

including the direction and scope of the organization over a long term, matching its

resources to its changing environment, particularly its markets, customers in order to

meet stakeholders’ expectations.( Johnson et al 2005, p.13)

Strategy formation and strategic planning processes

The three-step strategy formation process is referred to as determining where we are now

… where we want to go, and … how to get there.( Gibson, 1998). These three questions

are the essence of the strategic planning.( Wikipedia, 2005)

The three strategy lenses (design, experience and ideas ) are vital of looking at the issues

of strategy development for an organization.(Johnson et al 2005, p.32). In pertaining to

KSS, the view of strategy as design, the top management’s ( particularly CEO )

responsibility is to lead the development of strategy and provides overall direction to the

whole organization. ( Wikipedia, 2005). According to Johnson, Scholes and Whittington

(2005),'the view of strategy as ideas emphasizes the very importance of innovation in and

around organizations…new ideas will emerge, they will provide insights into how

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innovation might take place.’ The Appendix 1 indicates the strategic plans from 2002 till

2006.

Mintzberg (1994) stated , ‘strategy formation is developed through quantifying the goals

of the organization. Having realized to meet the company’s objective, KSS aims to

recruit more new students each year.( Refer to Appendix 2 ). The accumulated gross

income of 4 years ( 2002 - 2005 ) from the students’ enrolment, KSS hopes to get a

break-even point (after deducting the expenditure cost ) at the end of 2006.( Refer to

Appendix 3 )

Wikipedia (2005) states, ‘strategy formation and planning is on-going, never-ending,

integrated process requiring continuous reassessment and reformation.’ Strategy is

developed by managers in an intended, planned fashion. The implementation of this

intended strategy is planned in terms of resource allocation, control system and

organizational structure. ( Johnson et al 2005, pp. 565-566 ). KSS needs to recruit and to

allocate new teachers each year so as to fulfill the ratio of one teacher to 25 students.

Seeing that the strategy formation and strategy planning processes should be matched

with changing needs of the organizations nowadays. In the 21st century where

organizations are changing at an increasingly rapid pace, it is essential to understand the

dynamics of an organization (Stacey, 1993). Managers need to understand the dynamics

of organizational strategy. They need to realize ‘ … the important relationships …

highlights is that the decisions made within the organization, … effect on external parties,

and the effect of actions in the external environment on the organization’s need to

change.’ ( Study Book, Strategic Management 2005, p.1.17)

By examining the model of the dynamics of strategy, the responses to change at points T

(past), T (current) and T (future), the top managements of KSS endeavor to identify the

dynamics of its past strategy, and use emerging patterns to evaluate their strategic

management process, or can use this as a means to predict the future actions. ( Study

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Book, Strategic Management, 2005, p.1.17). Appendix 4 explains the dynamics of

strategy.

Ideally, strategy planning process should represent the systematic formulation of

techniques which the company has itself found successful over the years.( Parag Diwan

1999, p.114). In certain circumstances, KSS sometimes practises some of its traditional

planning strategies. Mintzberg (1994) stated that conventional strategic planning explains

that objectives over strategies ( together called formulation) and these over programs, all

three of them driving budgets. Programs and actions are known as implementation

strategy. ( Refer to Appendix 5). Further, Parag Diwan (1999) pointed out the

implementation plan that emerges from the planning study must be realistic in terms of

the organisation’s ability to carry out.

Organisational effectiveness

Generally, if an organization is performing well, it must be using an effective strategic

planning process. According Johnson et al ( 2005), organizational effectiveness is based

on assessing the suitability, acceptability and feasibility of the strategy. Suitability is

about matching environmental conditions and organization’s resources. In KSS, teachers

as the organization’s resources should teach the students according to their learning needs

and abilities. Besides, managers must be able to identify market needs to make the

organization’s planning process more effective. ( Robbins et al, 2002). In fulfilling the

market needs, managers often need to keep in line with environment, whilst maintaining

efficiency and keeping stakeholders ( particularly parents and students) happy. This is an

incrementalist view of strategic management. ( Johnson et al 2005, p.579)

Systems approach is essential in the increase of the long-term survival of the

organization. ( Robbins et al 2002 ). According to them, systems approach evaluating an

organization’s effectiveness by its ability to acquire inputs, process the inputs, then

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channel the outputs and maintain stability and balance. ( Basic Systems Model, Millet,

p.3) Appendix 6 exhibits the Basic Systems Model.

In KSS, the Digital Academic Dashboard affectionately called “DAD” is a portal for

communication with parents, students and teachers. This system will be the platform that

acquire inputs from parents and provides regular updates to parents after processing the

inputs. Then the school channel the outputs by providing the progress of their children

and it ultimately helps to maintain stability and balance among teachers, parents and

students.

Managers who practice a systems approach to organizational effectiveness seldom look

for instant results. Their decision-making will not trade-off against the organization’s

long-term health and survival for ones rather than make them look good in the near term.

Furthermore, this systems approach enhances the managers’ awareness. ( Robbins et al,

2002, pp 75-76 )

Various perspectives on Strategic Planning Process

The traditional perspective of strategy according to Lynch ( 2003) stated that employees

must always ruthlessly eliminate market competition with the prescriptive strategy that

has been drawn up by the top managers.

Resource-based theories and competition based theories by Lynch ( 2003) are more

suitable to be used in KSS. Resource-based theories emphasize on the internal aspects of

the organization as the starting point. KSS as an associate company of the PG uses the

benefit bought by the organization’s customers as a starting point. PG, had for past 25

years, enjoyed a reputation as a provider of high-quality, value for money education. It

had developed many new features which had been protected by patents and a PG was

thought of as the pioneer of twinning-programme with foreign universities in Malaysia.

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As such, the starting point in developing strategies is in the belief that are fundamental to

any long-term success. ( Study Book, Strategic Management, p.1.12 )

Other than internal aspects of the organization need to be considered, the external

environment is also the focus of discussion. According to Lynch ( 2003 ), by first

scanning the external environment for opportunities, a strategic plan will be drawn up to

influence on this situation. As one of the goals to venture into the global market in the

future, PG has set up the International New Product Department to explore possibilities in

the foreign market. PG has planned to venture into China market since the year 2004.

They have been doing a three-year market research mainly in Shanghai and Beijing. It is

expected by the end of 2006, PG would be able to set up the international smart school in

both cities in China.

It is likely that the prescriptive models are for the traditional planning and are deemed as

‘long-term’ (Lynch, 2003). According to Mintzberg’s term ( 1991), emergent planning is

more reactive than prescriptive, due to the fact that strategy as a perspective where

culture and values are basis for strategy direction, they tend to involve shorter time-

frames and are flexible enough to move forward. ( Study Book, Strategic Management,

p.1.14 )

In pertaining to the emergent strategies, Lynch ( 2003) also mentioned that the

perspective of survival-based theories of strategy relies on profit-maximization and

competition-based approaches. The theorists argue that the strategy is based on survival

of the fittest in a marketplace that is shifting and changing. KSS is a good example. A

strategic location is one of the criterions in marketplace as far as survival-based theories

of strategy are concerned. Thus, a good demographic spot will become more convenient

and accessible for the customers to get their products or services.

Another basic set of emergent strategies by Lynch ( 2003) are related to innovation and

knowledge-based theories of strategy which stress the need for radical new strategic

thinking in order move ahead of rivals. According to Johnson, Scholes and Whittington

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( 2005), ‘ a company seeking to develop new and innovative businesses … might

accepting high risk at business level…to offset such risk by encouraging new and

innovative ideas.’ That is why the growth of the firm sometimes is determined by a

combination of the speed of technology transfer and of imitative efforts of rivals. ( Bruce

et al 1997, p.29 ). As far as innovation issue is concerned, when dealing with the

competition between the innovator ( KSS ) and imitator ( rival ), KSS will normally

tighten its patent in order to make the strategy planning process more effective.

Moreover, the sharing of knowledge through information and communication ( internet )

is also an essential part of such a process. ( Lynch 2003, p.60). For instance, Stan Rapp

and Thomas Mullin ‘ In the age of the database’ ( 1994) stated that new cable television

technology will give marketers a chance to reach the consumers in dramatically new

ways. Based on this fact, it is obvious that innovation and knowledge are interrelation and

interdependence.

Knowledge is only maximized if the organization can learn. ( Michael 1999, p.11 )

Several perspectives which could be drawn upon here from Argyris’ research on

organizational learning ( Argyris et al ,1978 ) to Senge’s ( 1990) more recent

development work on enabling organizations to learn. ( Michael 1999, p.11) ‘The

learning organization is a metaphor… to promote individual self-development within a

continuously self-transforming organization. Consequently, learning is the very heart of

strategic planning. ’ ( Starkey et al 2004 ).

According to Arie de Gues ( 1996), he indicated that Shell as one of the leading oil

companies which view planning as learning and corporate learning as institutional

learning. Seeing that the importance of learning in the organization, PG has been

spending a big sum to all teachers to undergo forty hours of retraining annually such as

smart teaching and learning methodology. The main aim is to regenerate from variety of

knowledge, experience and skills of individual within a culture which encourages mutual

questioning and challenge around a shared purpose or vision. ( Johnson et al 2005, p.589)

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As strategy is about preparing for an unknowable future, it is important to turn future

planning into a on-going learning proposition. ( Van de Heijden, 1996) In order to make

the planning processes to be effective, the leadership plays a vital role in the learning

organization. In relation to learning as planning, Bruce Millet ( 1999) pointed out that

employees empowerment, self-managed work teams and organizational learning will be

helpful in reinforcing the effectiveness of performance management system.

Fritz wrote in Corporate Tides ( 1993) that ‘ interest gives us freedom… this type of

motivation yields higher levels of participation, not only individually, but within the

entire organizations.’ Nevertheless, to cultivate the interest in learning is not easy task

especially if the organization comprises of various cultures, it give rises to different ways

of thinking in strategy development. Apparently, KSS is facing such a problem mainly

among the re-employed retiree teachers which are difficult to accustom to the shift from

traditional strategic planning to the high performance strategy formulation. Their learning

process in ICT is slower than the young teachers.

Conclusion

In order to be fit for survival, KSS or PG need to be frequently in the adaptation to

various types of strategy planning process, from the conventional or prescriptive

strategies to the emergent strategies which emerge new ideas. As today’s education is one

of the fast changing industries, KSS is required to partake of the dynamics of strategy.

Due to this, its strategy formation and strategic planning processes need to be carrying

on and updating on an on-going basis so as to achieve its effectiveness.

( 2197 words )

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Appendix 1:

Strategy Plans of KDU Smart School

Year Strategy PlansYear 2002: 1st Year - High expenditure

- Manpower planning- Sales and promotion (advertisement spending)- Number of classroom and student

Year 2003: 2nd Year - Gain some kind of response- Expenditure is still high- Create value differentors- Make customers happy (joint partnership)- Student exchange programme- School trip

Year 2004: 3rd Year - Cash flow stabilised already- Maximum capacity in student intake- Maintain at what it is- New block is being built- More comprehensive facilicities- Create more public confidence

Year 2005: 4th Year - Finding new location ( same features)- Franchising

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Year 2006: 5th Year - Copy the new model to the old

(Source: Paramount Group of Malaysia, 2005)

Appendix 2:

Student enrolment for the period of five years

Year 1 st Year( year 2002)

2 nd Year ( year 2003)

3 th Year( year 2004)

4 th Year (year 2005)

5 th Year(year 2006)

Level Primary 1-5;Secondary 1-2

Primary 1-6;Secondary1-3



All primary;All secondary;A-level

Studentenrolment

7 00 1 200 1 500 1800 2 000

( Source: Paramount Group of Malaysia, 2005 )

Appendix 3:

Expenditure cost and gross income for 2002-2006

Year 2002 2003 2004 2005 2006

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Expenditure

(in RM)

Accumulatedgross income( in RM)

100

million

60million

90

million

75million

80

million

80million

80

million

90million

60

million

105million

( Source: Paramount Group of Malaysia,

2005 )

Appendix 4

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Dynamics of strategy

( Source:

Stacey,1993 )

Appendix 5:

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Conventional Strategic Planning

Objectives

} Formulation

Strategies

Budgets Programs

Actions } Implementation

( Source: Mintzberg, p.82 )

Appendix 6

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Basic Systems Model

( Source: Bruce Millet, p.3 )

REFERENCING

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Acquire the inputs Process the inputs

Channel the outputs Maintain stability and balance


Argyris, C. & Schon, D.A. 1978, Organisational Learning: A Theory of Action Perspective, Addison-Wesley, Reading.

Bruce, K. & Udo, Z., 1992, Knowledge of the Firm. Combinative Capabilities, and the Replication of Technology, USA, pp383-397

Bruce, M. & 1999, Understanding Organisations: the Basis For Managing Change, p.3

Bruce, M. 1999, Performance Management: A Strategic Human Resource Function, p79

de Geus,A1996, ‘Planning as learning’, in K. Starkey(ed), How organizations learn, International Thomson Business Press, London, pp.92-9.

Electronic Sources: Strategic Management, viewed 21 December 2005, http://en.wikipedia.org/wiki/Strategic Management

Gerry, J.,Kevan, S., Richard, W. 2005, Exploring Corporate Strategy, 7th edn, Financial Times, Prentice Hall, Harlow, pp.13,32,565-566

Gibson, R. 1998, Rethinking the future, Nicholas Brealey Publishing, London.

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http://en.wikipedia.org/wiki/Strategic%20Management


Lynch, R 2003, Corporate Strategy,3rd edn, Financial Times, Prentice Hall, Harlow.

Michael J.Earl, 1994, Knowledge as Strategy: Reflections on Skandia international and Shorko Films, John Wiley & Sons Ltd, p.11

Mintzberg, H 1994, The rise and fall of strategic planning, Prentice Hall, New York, pp.35-89.

Parag, D. 1999, Strategic Management, 1st edn, Pelanduk Publications Ltd, Kuala Lumpur, p.114

Robbins, S. & Barnwell, N. 2002, Organisational theory, 4th edn, Pearson Education Australia, Frenchs Forest, NSW, pp. 63-90.

Senge, P.M.1990,The Fifth Discipline, New York: Doubleday.

Stan, R. & Thomas. L. Collins 1994, In the age of the database

Starkey, K., Tempest, S & McKinlay, A 2004, How organizations learn, managing the search for knowledge, Thomson Learning, London.

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Study Book, Strategic Management, University of Southern Queensland, Toowoomba, Australia, Semester 3, 2005.

vander Heijden, K 1996, Scenarios: the art of strategic conversation, John Wiley & Sons, Chichester, New York.

Assignment 1

Question 2 (case study)

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1) One of the important factors in the external environment to the strategic positioning of both case organizations is political influence. In Ryanair’s case, its political influence comes from European Union (EU). Ryanair as the most successful airline in Europe in early 2004. In response to various EU issues, Ryanair promoted the formation of a budget airline lobbying group, the European Low Fares Airline Association (ELFAA). By lobbying, Ryanair would be able to use its political influence to strengthen the strategic positioning in Europe.

Economics factor is also influencing the strategic positioning in both cases. A big market size in US creates money making opportunity for VSM, for instance the US people are willing to pay 5-6000 dollars on three-day sewing training course. But for Ryanair’s market is different from VSM, they rather sell the lowest fares at all times on all routes and match competitors’ special offers, as a result, the net margin increased from 24.0% ( 2002) to 28.4% ( 2003).

Technology is another environmental factor in strategic positioning on VSM. The customers of VSM managed to download via internet site of the Designer I was a new technology for sewing machine, each customer was a given a unique code linked to the area retailer. It opened up completely new ways of customer support and area retailer.

Social and cultural factor is also determined the strategic positioning on Ryanair. The entry of Ryanair into the Ireland-UK market, originally dominated by Aer Lingus, was followed by more competitors, which led to substantially lower fares and significantly increased traffic on the routes serviced by Ryanair. Consequently, Ryanair expanded its airline territory in the Europe countries. In legal aspect, the legality of the new arrangement by EU was apparently underpinned by adjusting local taxes for all carriers. Ryanair maintained the new arrangement applied by the Commission.

( 305 words )

2) The main focuses in discussing internal capabilities of both organizations are to recognize their strengths and weaknesses.

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VSM recognized its strengths by producing at lower cost that it concentrated the manufacturing of electronic models at the Husqvarna plant in Sweden, while low-priced machines and over-lockers were sourced from Asian manufacturers. Secondly, their huge markets in US and Europe were built upon the customers became a targeted area for VSM and to transform the retailers into the concept ‘Dealer-Partners’ which encouraged them to carry the Husqvarna Viking product line exclusively.

On the contrary, the German plant in Karlsruhe gave a setback to VSM as this plant incurred a higher cost as the rejection rates on some German-made parts were soaring and caused hiccups in the production system.

Ryanair was founded in 1985 by Ryan family to provide scheduled passenger airline services between Ireland and UK. In the early 1990s, the airline restyle itself to become Europe’s first low fares, no frills carrier, and headed up by Michael O’Leary.

The strengths of Ryanair were to maintain its position as Europe’s leading low fares airline, operating frequent point-to-point short-haul flights mainly out of regional and secondary airports. The heart of its strategy is designed to stimulate demand, especially from budget conscious leisure and business travelers. Meanwhile, the group’s market capitalization had grown from €392m in 1997 to €4.73bn by 1 July 2003.

According to the Holiday Survey in airline ratings ( shown in Exhibit 4a), there were six areas that Ryanair had to improve in terms of catering, cleanliness of interior, legroom, seat allocation, seat comfort and toilets. Seeing that these weaknesses would tarnish the image of Ryanair, whether in short run or in long run, hence all those areas would be a barrier in the internal capabilities of Ryanair. ( 298 words )

3) The PESTLE and Porter’s five forces are useful tools to make such an environmental assessment for both cases.

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By using PESTLE tool, the analysis are on political influences, economics influences, social influences, technological influences, legal aspects and environmental influences. It can scan the external environment for warning signs and possible environmental changes that will affect the business.

This can be used in monitoring environment for specific trends and patterns, or forecasting future direction of environmental changes, or assessing current and future trends in terms of effects such changes would have on the organization.

Even though PESTLE is an useful tool in assessing environment of an organization, those managers that are concerned with the strategic analysis must:. be aware of the limitations and inaccuracies of macro-environmental analysis. frequently carry out analysis. constantly seek to improve information and techniques for its analysis. use the information as a source of organizational learning. use the information for future strategy

Porter’s five forces industry analysis is used and to analyze the nature of the competition in the industry, its profitability and then competitive position of the business. The five forces are:- the threat of new entrants to the industry;- the threat of substitute products;- the bargaining power of buyers or customers;- the bargaining power of suppliers;- rivalry among businesses in the industry

By determining the relative ‘power’ of each of these forces, an organization can identify how to position itself to take advantage of opportunities and overcome the threats. Then the organization can design its strategy to exploit the competitive forces at work within an industry.

Despite the five forces are used as a tool for managers seeking to assess the environment, Porter’s framework is subject to several important limitations. ( 296 words )

4) Strategic capability is concerned with the adequacy and suitability of resources

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and competences required for an organization to survive and prosper. The strategic capability of VSM has changed from 1997 to 2003 by means of its internal capability matched with its external environment.

The resources of VSM comprised of tangible and intangible resources. The tangible resources were physical resources such as the sewing machines, production plants; intangible resources were the knowledge, skills and intellectual capitals of human resources. The competences refer to the activities and processes through which VSM deployed its resources effectively.

With his vast experience in marketing and in CEO, Runnquist held its first meeting on strategic position while refinements and changes were made during the summer of 1997. With the new CEO, retailers were very important to VSM for future profitability. The customers became a targeted area for VSM. As one of the mission statement VSM, ‘ To be a consumer-driven company, securing growth, profitability and success by providing superior satisfaction to the Customer and our Dealer-Partner, and by continuously adding value to our brands.’

Within 2 years, VSM managed to penetrate its market in US through cooperation with Jo-Ann Fabrics & Crafts. By May 1999, VSM had opened 47 exclusive shops in the US. Europe was the second biggest market through a retailer with 3-4 brands.

In March 1999, VSM declared that they had acquired the small British producer of software for PC-controlled professional sewing. People could exchange embroidery patterns through the internet or download them at the VSM websites.

There were also changes in operating systems. One of these was the installation of a new accounting system in May 1999. VSM needed to assess the accounting information in new ways to keep track of the various activities in the value chain.

In the period 2000 to 2003, VSM expanded the number of software engineers from 3 to 17, not counting the new R & D director that was also hired from the software industry.

Based on the financial overview of VSM, the company has changed from 1997 to 2003 in terms of positive sales growth and gross margin, the profitability (ROC)

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at least reached 30% annually. In overall, VSM had achieved a moderate change in its company profitability. Nevertheless, in terms of product development, the change was still low as pointed by Mr. Runnquist.

( 390 words )

5) Core competences are defined as the activities and processes through which resources are deployed in such a way as to achieve competitive advantage in ways others cannot easily imitate.

The core competences in VSM were the functions of Designer I and processes of its web-shop. The new model of Designer I in early 1999 made extensive use of software to control the machine and contained more than eight motors to cater for all functions. Several features were the new sensor control for the needle plate with an automatic thread cutter, the built-in disk drive and a ‘flash’ memory made for re-definition of what a sewing machine really is.

All the functions of the Designer I were controlled by a micro-processor, it opened up new ways of customer support. The customers were able to download the upgrade from internet site, saved it onto a floppy and slid it into the built-in disk drive of the Designer I. This method of upgrading performance was new for sewing machines.

VSM did start a web-shop for low bulk accessories and software on their website. Its intention was to stay on good terms with their exclusive retailers, a bonus clearing system on internet sales was instigated. Each customer was given a unique identification code linked to the area retailer.

The core competences of Ryanair were its online services and lowest fares. Customers would allow to discounted rates of lower fares through internet booking in its www.ryanair.com website launched in January 2000. This has had the effect of saving money on staff costs, agents’ commissions and computer reservation charges, while significantly contributing to growth. By 2003, www.ryanair.com accounted for over 95% of bookings, its website is acclaimed as being one of the most user-friendly in Europe. Advertising on Ryanair’s popular website also provides ancillary income. In May 2003, Ryanair won the Best Online Services Award.

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http://www.ryanair.com/

http://www.ryanair.com/


In the early 1990s, Ryanair restyled itself to become Europe’s first low fares and no frills carrier. In July 1998, the company placed 9.1m shares on the London Stock Exchange. In 2002, the company was listed in Nasdaq-100. Despite of lowest fares, at the end of 2003, Ryanair had become the most profitable and the most highly valued airline in Europe, surpassing the giant German flag-carrier Lufthansa and doubling in value over British Airways.

Assessing from the above facts, those sustainable competitive advantages of both companies were difficult to be copied by its rivals.

( 404 words )

6) There are five forces of competition in both cases, basically are from rivalry, threat of new entrants, threat of substitutes, bargaining power of buyers and bargaining power of suppliers.

Rivalry of VSM was moderately high given there were three major competitors, like Brother, Janome and Juki. Janome alone produced over 1.5 million units of sewing machines in 2003. Not only in terms of high-volume, they also sported their own R & D facilities capable of developing sewing-embroidery machines.

Threat of new entrants were not likely given the predominance of VSM in manufacturing sewing machines was still in Europe.

There was no close substitute of VSM in manufacturing sewing machines with fine embroidery patterns.

Bargaining power of VSM buyers was high, especially there was a price war in Germany during the process of integrating Pfaff into the VSM group.

Bargaining power of VSM suppliers was low, especially the Far East suppliers did not bargain, parts were sourced locally, therefore had low bargaining power. However, the German suppliers had high bargaining power as the parts were sourced with high-cost. No development or sourcing was done locally.

Rivalry of Ryanair was high given there were six main competitors like easyJet, Virgin Express, bmibaby, flybe, My TravelLite and Aer Lingus. All these competitors were to sell the lowest airfares in budget airlines operating in Europe.

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Threats of new entrants were not likely given the Ryanair was still predominated the budget airlines in Europe.

The closest substitute of Ryanair was high as there was a speed rail plan in Benelux. Bargaining power of Ryanair buyers was considerably high, as there were many budget airlines lower airfares, hence the customers had high bargaining power..

Lastly, bargaining power of Ryanair suppliers was low. Ryanair renegotiated its contract with its supplier Boeing, not only were new aircraft available at a bargain price, but also the nearly-new ones. Hence, the supplier of Ryanair had a low bargaining power.

( 319 words )

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md ashiquzzaman

Documents

development of strategy

view of strategy

intended strategy

strategy planning processes

strategic management

strategy lenses design

issues of strategy development

assignment coversheetfamily