Corporate Communication Plans - Essay Example

Table of Contents Table of Contents 2. Introduction 2 3. 2.0Analysis 4 2 0 Ryanair Airline 4 2 1. Power-Interest Matrix 4 2 2. StakeholderSalience Model 4 2.1.3. Corporate Identity Mix 5 2.1.4. Corporate Reputation 5 2.1.5. Symbolism 5 4. 2.2. Current situation 6 2.2.1 Ryanair Organizational Model 6 2.2.2. Perception and Evaluation of Stakeholders 6 5. 3.0 The Challenge 7 3.1 Ryanair main challenge 7 3.2 Impact of the reputation issues. 7 6. 4.0 Proposal 8 7. 5.0 Conclusions and recommendations 9 8. 6.0 References 10 Introduction The report is focusing on the corporate communication plans. In details, it has expounded the element involved in corporate communication; corporate identity, corporate branding and corporate reputation. The combination of three elements forms the corporate communication of any organization or company. This report broadly examines the implementation of the items in case of Ryanairs airline and efficient the airline has used the strategy of the corporate communication in promoting the brand, name, image and their reputation to their customers. Ryanair has faced challenges of its reputation that have led to continuous poor performance meeting its goals. In the analysis using the various model such as power- interest matrix and stakeholder salience model, it shows the areas in which the Ryanair airline need to improve and change to be able their customer satisfaction. The report has put an effort to help the Ryanair Company to address the challenge by outline several proposals that can improve its reputation, quality of customer services and promotion of the company in the market by using its corporate communication effectively. Corporate communication is the strategy that organizations manage and plan both internal and external communications aiming at creating favorable and reputable view among its stakeholders. It is an integrative communication structure linking stakeholders to the organization, through it, stakeholders perception of the organizations identity and image and reputation are formed (John& Balmer, 1999). Corporate communication is considered key management function. It all about managing the relationship with a company with stakeholder to maximize the corporate reputation capital. Corporate communications have the significant role in creating and maintaining businesses images of corporate entities. It is an efficient strategy organization uses to communicate the brand value and reputation to its customers, stakeholders and the target audience. Corporate reputation is the major pillar that builds the image and distinguishes an organization from its competitors. Organizations with the good reputation have developed a picture of their customers mind that help in identifying the brand, logo, product and services an organization offers. The perception of financiers, customers, and stakeholders of any organization is based on the elements of corporate communication, where the corporate reputation is the core and enormous impact on both internal and external environment of the organization. However, when applied excellently, it will help in promoting of new products and services to the consumers The airline industry can be considered in the modern age as one of the fastest and growing businesses, since it can create at the same time economic growth, increased trade and facilitate tourism and job opportunities (Topham, 2013). This report focuses on Ryanair, the first and most well-known economic budget airline in Europe, founded in 1985, which offers cheap ‘no-frills flights with low-quality service (Ryanair, 2015a). Ryanair performs very well, and it is at the moment the biggest budget airline firm in the European marketplace (Smith, 2012). However, during the last financial period, the company faced a decreased growth rate respect to the previous years, leading the shareholders to review the organizational values in terms of customer service and negative corporate image and reputation (Humphries, 2013). Therefore, this report will aim to identify and analyses in the specific the various issues of Ryanair, with the main purpose to suggest future strategies and recommendations for the Irish organization to improve its corporate reputation, which can affect how the various stakeholders behave towards a firm, and regarding employee retention, customer satisfaction and customer loyalty (Chun, 2005) 2.0Analysis 2.1.0 Ryanair Airline Ryanair is European airline operating over 1600 daily flights that connect 189 destinations in the 30 countries. The airline has employed more 9500 skill aviation professionals. The numbers of passengers annually are ranging to 81.7 million by the end of the year 2014. Ryanair has been in the air travel industry for 30 years. Last year the company was rank position 69 in the industry. This is a rise by active three compared to the previous year performance. The performance of this airline has continuously been challenged by poor customers with unfavorable policies that have led to small corporate reputation. 2.1.1. Power-Interest Matrix A model to describe this strategy is the Power-Interest Matrix Model (Mendelow, 1991), as showed in the table 1 below: Level of Interest max max Power Keep Satisfied: Passengers and Employees Key Players: Shareholders Min Minimal Effort: Political institutions and Government Keep Informed: Social Network and Media Table 1: Ryanair’s Power-Interest Matrix Model From this table emerges that the Irish firms have to make an extra effort to have both passengers and employees satisfies. Also, as stated in the table 1, all shareholders have obviously a high level of power and a considerable degree of interest since they are financially involved in all situations related to the business. 2.1.2. Stakeholder Salience Model This can be considered as a strategy that would allow Ryanair to obtain the trust and confidence of its shareholders about the organization. In this manner the organization, according to Cornellissens theory (2011), will obtain a persuasive strategy, which involves a two-way asymmetrical communication. This latter considers the existence of feedback during the exchange of information between the organization and the various stakeholders (Vickers, 2013). 2.1.3. Corporate Identity Mix Corporate identity mix focuses on several aspects of the business, such as culture, strategy, structure and corporate background, which contribute to building the organizational distinctiveness (Van Riel, 1997). Therefore, the central questions related to the organizational characteristics of an organization are based on background, strategy, goals to achieve and overall business. For instance, the corporate identity mix of the Irish firm can be identified with the colour and design of the company, which through their extreme simplicity can offer the customers the idea that Ryanair is a low-cost organization that does not waste a lot of money in marketing campaign that can have as resulted from an increase on the final ticket. For instance, the first TV ads have been developed only in 2014 (Birkigt & Stadler, 1986; Faull, 2014). 2.1.4. Corporate Reputation Corporate reputation can be referred to all those useful customers perceptions inherent brand image, prices, service and product quality (Balmer, 2001). This aspect of the business involves all stakeholders and expects that they provide a strong support for the help an organization to succeed in the market. The brand core of Ryanair, low cost flights for all", aims to offer to different categories of people (according to their social class and income) the best products and services available. The final result of this communication process is due to the difference between last performance and expectations created by reputation and communication it. However, most of the customers of Ryanair are low budget, which dont have a lot of expectations about their travel. 2.1.5. Symbolism Regarding the symbolism, even if it were stated that logo and design reflect the idea that Ryanair is a low-cost airline company, the Irish firm should improve its logo and design. Also, the management needs to focus on TV advertising to improve the perception that customers have regarding the quality of service and the overall safety (Birkigt & Stadler, 1986; Faull, 2014). 2.2. Current situation 2.2.1 Ryanair Organizational Model Even if the Irish brand can be pointed as a successful company, due its exceptionally performances and growth since its founding in 1985 (White, 2013), regarding both overall profits and customer number, there are some factors that need to be carefully considered (CAPA, 2014). Ryanair has a bad reputation with all stakeholders, as it is considered the worlds most hated airline company (www.ihateryanair.org). The perceived negative reputation derives from the model on which is based the entire organization, and that focuses on keeping low costs: Attract customers who want to travel on a budget (Ryanair, 2015a) Affect the perceived brand image and sales of the company, since the Low Cost Carrier (LCC) European market is becoming increasingly saturated by several low budget airlines which offer same price and higher service (Jarach, 2005). 2.2.2. Perception and Evaluation of Stakeholders A perceived positive customer service can create loyalty toward the brand, products and services in the medium and long period. Therefore, since Ryanair is not considered a reliable company in terms of customer service and punctuality, even if they offer some of the cheapest prices in the market, they hardly will achieve customer loyalty and positive brand image (Berry, 1983; Lawton, 1999). The Ryanairs stakeholders can be considered all those people or groups who are related and depend on a specific organization, with the main purpose to meet and satisfy their personal needs and those of the organization itself (Johnson & Scholes, 2008). The principal stakeholders of Ryanair can be divided into external (competitors, suppliers and customers) and internal (shareholders and employees) (Ryanair, 2014b). According to the definition provided by Cornellissen (2011) and the organizational approach of the CEO, Ryanair adopts and "Input-Output" strategy. This strategy states that the power lies within the organization, and, therefore, the various companies’ stakeholders depend on Ryanair. Regarding the audience and target market (customer), Ryanair, due to its cheap ‘no-frills flights with low quality service, mainly focuses on budget passengers, such as leisure traveller category and who have as main purpose to visit family and friends (Coles & Hall, 2008). 3.0 The Challenge 3.1 Ryanair main challenge As stated previously, the main challenge is to create a new corporate brand image and a positive reputation, in terms of quality and service, towards its internal and external stakeholders. Since a positive corporate image of the brand and its reputation derive from organizational identity, Ryanair has to change its brand core with the main aim to have different target markets (Roberts, 2009). Ryanair needs to change what is offered in terms of service quality, which is affected by the gap between customer expectations and the final experience delivered by Ryanair. For instance, the main challenge of Ryanair could be considered the change of its current negative perceived customer service image, also caused by incidents that involved the planes of the Irish firm, such as in Dublin (RTE, 2015) or in Lanzarote (The Journal, 2014), which can be considered real crisis in terms of corporate image. As stated by Coombs (2007), these incidents can be categorized as internal, which can be also divided in unintentional (accidents) and intentional (transgressions). However, they need to be allocated to the carelessness of the company and its staff. 3.2 Impact of the reputation issues. Ryanair airline is facing the consequences of low corporate reputation that have a heavy hit on organization and stakeholders at large. The quality of the service is still wanting despite launching a service charter to help curb poor customer service. This has led to negative publicity in the airline market that promoted to 8% decrease the net profit for the year 2014. This decrease in margin compare to the previous years show the negative impact due to it deteriorating reputation despite the company lowered fares. The organization and stake holders have the direct impact when the profits go down as the company share will decrease in its market value. Where an organization reputation is not well regarded, potential customers scare away to deal with that organization. This doesnt only goes to customers; investors are many alerts on the risky it poses when an organization does not have a good reputation. They monitor the organization progress financial reports and evaluate whether to take the risk investing with such a company. Suppliers are part of the financial stakeholders; they will be less inclined to trust an organization whose reputation is a contributing factor to losses. 4.0 Proposal In order, to increase its growth rate in terms of customers (or sales) and overall profits, Ryanair needs to offer a new and different real and perceived brand image, through which the Irish firm can attract a wider number of customers (in addition to low-budget travellers also business people) and increase its market share (Bensoussan & Fleisher, 2002). This method that will cater for the decreasing corporate reputation of the airline. There will be the new perception of customers and other stakeholders. Second, the most affecting challenge is the complaints that come from the poor customer service. The reason is the employees of the Ryanair Company. The customer service experience is indigent that is contributed by the poor quality of service offered by the airline employees. To make Ryanair a successful company from the customer service viewpoint, there is the critical need for understanding the changed in the organization itself and which current issues need to be addressed. In order, to develop a companys long-term corporate reputation, Ryanair has to radically change the values of the service culture offered within its structure and create a customer service oriented organization (Melewar & Jenkins, 2002). Defining the corporate identity construct. Corporate Reputation Review, 5(1), 76–90). These values are outlined in the form of value and mission by the higher managers or board of directors, who should ensure to have a specific service orientation and attitude. The main and natural consequence of this higher values and customer service will create higher quality customer service, increased loyalty and profits. Therefore, the customer service culture comes from the top of the hierarchical pyramid, the companys CEO, and goes down through the various classed of employees, who have to diligently follow that (Fombrun et al., 2000) At the moment, as proved by the bad reputation inherent the services offered by Ryanair, the Irish organization dont own this service culture, which allows to ensure satisfaction (even about the other stakeholders, and not exclusively the customers). To develop a service culture and a customer service orientation, Ryanair has to pay more attention to its employee (safe and comfortable working environment, higher wages, etc.), who in turn will offer an outstanding service that will attract a wider share of customers, creating a substantial competitive advantage over its main direct competitors. Thirdly, the Irish firm should focus on its CEO, who has a bad business relationship with the main stakeholders of Ryanair (IUC, 2012). It has the high contribution to the lack of trust and confidence on him by the shareholders and other stakeholders. When the relationship is improved, it can help the stakeholders to be more involved in the overall organization. Another fundamental step is to build a strong, open and honest communication system with all shareholders, and particularly with the customers. In the specific Ryanair need to rebuild its image, and this could be even achieved through the customers complaints if properly addressed (Davies et al., 2003) 5.0 Conclusions and recommendations Ryanair is the first and most well-known low-cost airline firm in the entire European market (Ryanair, 20140; Ryanair, 2015b). Due to these assumptions, and considering that the Irish organization had a strong position in the market, the Irish organization can easily succeed in the airline industry. However, since Ryanair is considered as one of the worst worldwide companies, due to its poor customer service and negative brand image, there is the fundamental need to change in order its relations with all stakeholders (www.ihateryanair.org). In the specific, Ryanair, which focuses on how reduce and cut costs, regardless how the various customers or employees are treated, has to rectify its core values to have in order and increased employee satisfaction, which can create a more attentive oriented customers service, and increased market share and profits. However, as suggested by this report, the organizational outlines and tasks to define the customer service need to be issued by the CEO of the company, who should also create and ensure an effective communication among the various main internal and external stakeholders. Also, Ryanair has to (re)build its relationship and corporate reputation with all its stakeholders (Cornelissen, 2011). This can be achieved through a new CEO (since the current has a not good relationship with the Ryanairs stakeholders) and an open and honest two-way communication with customers. This strategy, which can aid the business to expand and genera higher profits, needs to be considered in the medium / long-period and can create effective profits depending on how well it is developed and performed (Davies & Chun, 2002). 6.0 References Balmer, J.M.T. (2001). Corporate identity, corporate branding and corporate marketing: seeing through the frog, European Journal of Marketing, 35(3-4), 248-291. Bensoussan, B. 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Corporate identity& corporate communications: creating a competitive advantage. Corporate Communications: An International Journal, Volume 4: Issue 4, 171-177. Read More