The External Environment Of Ryanair

In a business the external environment contains events, conditions and factors that lie outside the organisation. It helps determine opportunities and risks. A company has to react to what happens outside the business. It cannot determine the likes of a recession or boom. The external environment will alter the internal elements of the business and their objectives and strategic could potentially change. “It includes all efforts made in perfecting the product, economising the cost and maximising the benefits to customers” [13].

The factors affecting the external environment of a business are Political, Economic, Social and Technological. The political are based on how government policies affect a business. The economic are how the economy affects the business; inflation, interest rates. The social are how consumers and communities act and their opinions. Finally the technological shows the fast pace of change in processes and innovation that can affect the business.

By looking at the Political factors of Ryanair’s external environment it can be seen that they can create a competitive advantage by transatlantic flights to USA. Michael O’Leary told the Irish Hotels Federation that he is planning on charging as low as €10 for tickets to New York and Boston. Ryanair however have to bring in long-haul aircrafts to make these transatlantic flights go ahead. Ryanair are already looking into switching their plane supplier to lower their costs. By doing this they could also speed up the process of acquiring long-haul aircrafts.

Another strategy Ryanair could develop is to collaborate with another company. This way Ryanair has the capability of gaining more and the financial risk is lowered. Ryanair could test out the market, gain in...

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...ights comparison site which will attract even more customers to their airline.

To also gain an advantage they are developing the technology to allow everyone to pay using their mobiles onboard the flight. People can pay for food, drinks, upgrade bookings and check where the plane currently is as they are flying. It will be a very exciting venture that will gain Ryanair a huge advantage over its competitors.

“Shorter product life cycles, the pressure on prices, or the high costs of research and development for better products have made it difficult for today’s companies to prevail against their competitors in the contest for profits” [15].

Also the objection to meet high customer service has depleted a company’s capability to separate itself from its competitors. These factors help find new and different ways in creating a competitive advantage for a company.