An assessment of Michael O’ Leary and his performance as CEO of Ryanair spans the extremes of great points, good application, poor application, and controversial point. My grade for his performance will be notes at the end of the five tasks of strategic management assessment. In the process of strategic thinking the administrative process of creating and executing the Ryanair’s organization’ strategy consists of the five integrated stages: development of a strategic vision, setting objectives, crafting a strategy, implementing and executing the chosen strategy, and evaluating the performance and initiating corrective adjustment. In the first four stages, the strategic administrative process may require revision as situations arise in the actual performance, changing conditions, as new opportunities come to view, and with new ideas.
Of the five generic strategies the specific focus of O’Leary’s strategy vision was to be the low cost provider and establish the lowest budget airline globally. Ryanair’s primary objective was a ruthless cost reduction strategy to be ranked as the world’s low budget airline. This strategy made Ryanair the most profitable airline in the world based on net profit margin on a per person basis. The key success in crafting the strategy in the cost reduction activities can be outlined into the three generic strategies: cost leadership, differentiation, and focus. The cost leadership encompassed having a the lowest cost base per passenger which was achieved by excluding fuel costs, airplane fleet consisted of one type of aircraft, creating cost advantage by reducing eliminating airport and handling charges, and utilizing smaller lower cost airports with quicker turnaround times. In differentiation from other airlines, Ryanair cultivated ancillary revenues from ancillary products and services. The Ancillary products and services included excess bag charges, travel insurance, vehicle driver rental, hotels, ground transportation, and in-flight sale of products. Ryanair was always trying to sell their custumers services. They were the first airline to introduce inflight call, online gambling, and other gaming or movie products.
O’Leary’s focus of the cost reduction strategy was the no thrills customer who wanted to get from one point to another as cheaply as possible. The focus was the opposite of being unique against its competitors and achieved lacking differentiation. Being the cost leader was their entire strategy in its segment. The maniac obsession with low cost strategy was the key focus for management and their activities to constantly pursue everyway aspect of business to cut cost. Their innovation would be no exaggeration when
