Create a report analysing two specific strategy tensions of an organisation of your choice - Essay Example

Ever since, they have been leaders in the budget airline but the recent losses and competition in budget airline industry, suggest that the airline needs to rethink its strategy to sustain in the competitive environment. 2.0 Industry Logic or Strategic Choice When firms enter a new market or have to reinvent their strategy, they can either comply with industry norms or make their own strategic choice. If the company has the ability to adapt itself to the environment then it is said to comply with the industry environment.

However, if it has the ability to act without regarding the rules of the game, it has made a strategic choice. The business model that a firm pursues can be the “logic of the firm, the way it operates and how it creates value for its stakeholders” (Baden-Fuller, MacMillan, Demil, and Lecocq cited in Casadesus-Masanell and Ricart, 2009). The business models according to the authors operate on two sets of elements – choice made by management in every business function (policies, assets and governance) and the consequences of the choice. 3.0 Ryanair – strategic choice Ryanair demonstrates choice over compliance thereby demonstrating industry leadership.

Ryanair has demonstrated that it has the ability to act without regarding the rules of the game, thereby suggesting it is capable of making a strategic choice. For instance, its pricing policy (choice) resulted in high sales volume, achieving economies of scale, and it also increased the bargaining power of the firm. Using secondary airports (choice) reduced costs of operation (consequence) and standardized fleet (choice) meant higher bargaining power with suppliers (consequence). Large sales volume is the result of the policy (choice) of low fares.

Ryanair has the ability to create a fitting environment and the creation process is controllable. The success of Ryanair lies in its ability to manipulate industry demand. It has amply shown its ability to innovate processes and the change the rules of the game. Ryanair has the ability to shape the industry norms at a fast pace. They follow a divergent development path as they constantly innovate or create new design, which according to Baden-Fuller and Stopford (2010) is possible only when the firm has the dynamics to change the rule of the game. 4.0 Dimensions of strategic choice Two core dimensions of strategic choice – value proposition (focus on external customer) and value chain (focus on internal operations) – are linked (Leavy, 2013).

Ryanair’s value proposition is clear and distinctive. Ryanair focuses on lowest fare, safety and on time. Because of a distinctive value proposition, Ryanair is able to translate this onto a meaningful strategy. They are thus able to deliver better and faster than its rivals. The value proposition is aimed at not just being different from competitors but to make a difference in the lives of its customers. The firm’s profitability is largely firm-dependent. Ryanair was one of the most profitable low cost airlines in the market in 2005 (Strategic Direction, 2006) because of the discontinuous innovation which