The Effectiveness of the Analysis Strategies for the Virgin Atlantic Airways Business Unit

Introduction

In the emerging challenge of globalization or international markets, the businesses are bound to cut the costs in different areas, promoting the training and development for the workforce and the change management initiatives. The business that are not strong enough to ride in the current of the competition are drastically failed and the other remained strong are continued to push their effort to provide the most desirable service or product available to the market. In that strategy, the business can gain the loyalty of the customers and earn profits. But the international market is not an ordinary competition, gaining an advantage is one of the most essential ingredients to pro-long the life of the business.

Background of the Study and Problem Statement

Virgin Atlantic Airways is one of the leading airlines and just like the other companies that plays in the game of the international market, the challenges and different changes came along their way. But unlike the other business’s ideas, the VAA believed in the option that it is more positive and much less risky to invest in a long-term change program to satisfy the need to grow in the future (Blue Sky, 2009). But aside from their answer in the industrial challenges, the company also establishes analyses, but on what point will the analyses such as pest analysis and porter’s analysis create effectiveness as a strategy for the company?

Research Objectives

The research has a two main objectives and the first is to understand on how competitive the structure of an industry. The competitive advantage can be gained through the in-depth analyses of the consumer’s needs and preferences. In the relation of the first statement, the second objective is concern on the corporate strategy to develop an appropriate solution in the industry. It is believed that through the strategies, there is a creation of a sound decision that requires the attractiveness of different industries in terms of the profits.

Research Questions

The entire study is guided by the research questions which are in relation to the main topic of the research.

1. What are the outcomes of the analysis of the Virgin Atlantic Airways?

2. How wide a range of the substitutes or competitors are available in the market?

3. What is the present capability of the business in terms of answering the customers’ demands and competition?

Literature Review

The Virgin Atlantic Airways had serious cultural challenges to overcome but the business never changes their focus on the customer service. There are evidences that show the lack of focus on balancing the sales. There are challenges in any organization to manage an operation that lacked the knowledge, skill and experience (Blue Sky, 2009). Through the different analysis, the company expected to create a strategy in different part of their business aspect (Taylor, 2002). The PEST analysis is the short-term applied to the political, economic, social, and technological conditions or influences in the environment. Through the systematic and continuous scanning of the external influences, an organization might see an opportunity such as attempting to direct the business to be more cost-effective. Meanwhile, the center of the Porter’s Five Forces Analysis is to develop a systematic approach through analyzing and evaluating the industry’s environment and exploring the economic factors in terms of its profit potential and identifying the sources of the competitive advantage (Marks, 2002; Blackwell, 2004).

Methodology

The applied method that serves as the engine of the research is the comparative case study. Through the past literature or reports about he Virgin Atlantic Airways, the research can identify the different strategies applied by the business to gain the advantage in the market. Furthermore, through the applied method, the research can have an opportunity to analyze the important points on the effectiveness of the strategies.

Conclusion

The PEST analysis and Porter’s Five Forces analysis are important to identify the right position of the firm in the industry to outperform the other rivals. In fact, those analyses are not always meant to measure the uncertainties or threats in the market but to reduce the impact it might bring in the business. It is expected that the changes economic trends, changes in social, political, and technology can serve as a threat or part of the weakness of the business, but knowing this weaknesses is the key of the business to open and manage the opportunities for their future.

References:

Blackwell, 2004. Industry Analysis: The Fundamentals. [Online] Available at: http://www.blackwellpublishing.com/grant/pdfs/CSA5eC03.pdf. [Accessed 01 Feb 2010].

Blue Sky, 2009. Sales and Service Performance Improvement Virgin Atlantic Airways. [Online] Available at: http://www.blue-sky.co.uk/casestudies/Virgin_Atlantic.pdf. [Accessed 01 Feb 2010].

Marks, R., 2002. Industry Analysis - Porter’s Five Forces. [Online] Available at: http://www.agsm.edu.au/bobm/teaching/ECL/lect02.pdf. [Accessed 01 Feb 2010].

Taylor, K., 2002. Customer Success Story Virgin Atlantic Airways. [Online] Available at: http://www.sun.com/datacenter/consolidation/docs/virginatlantic.pdf. [Accessed at: 01 Feb 2010].

Marketing Strategy of Virgin Atlantic Airways

The Organization

In 1980s, Richard Branson who is well-known for the Virgin Records decided to put a pot of big money in the airline industry. After three or more months, the Virgin Atlantic Airways was born (Rifkin, 2004). It began operating with the support of the celebrities and continuously shaking the entire hospitality industry as the first airline that offers different services to their passengers such as the built-in TV for the business class passengers and variety of food for the passengers. Today, the Virgin Atlantic is one of the world’s most recognized brands and being recognized and trusted through their winning awards for their products and innovative marketing (Lothian, 2008).

The Industry

The airport dominance has grown competitive in the hospitality industry. In the accommodation of this competitive growth, the aviation or airline industry plays an essential role in helping the economy to survive although this type of business is a huge investment. The strategies applied in this kind of industry can help the entire organization in finding the dominant position (Bilotkatch, 2007). The connection of the Virgin Airline is outrageous because of the media that serves as a huge market competency advantage. Their strategy is using the media such as television, radio, internet, and even newspaper gave the business an opportunity for promotion.

The Current Strategies

Despite of the advantages and healthy revenues of the organization, the entire leaders still needed an innovative, fast and cost effective way to get their customers. Like many airline, the Virgin Atlantic established the strategy in promotion. They need to communicate with their customers for their initiatives in offering special offers that effectively make an appeal to their customers (Lothian, 2008). The organization’s investment in the market can capture the entire market because the airline is popular because of their services offered and which in return can increase the rate of customers (Dunlea, 2000).

Recommendation

There is no doubt that the organization’s campaign for the promotion can bring certain benefits. The benefits are expected to gain the Airlines 3-month payback on their investment; can utilize the advantage of the company over the technology such as computers; lowering the costs of the promotional materials because of the interaction of the business in the different forms of media; prioritizing the communication to the customers; and having the complete control on the advertising campaigns (Lothian, 2008). Although the advertising is effective, the organization has other options in adding intensity to market competition. With that, the organization can keep the business above the standard. The main aim of the organization is to have an innovation as a strategy. It is possible as well as increasing the rates, revenues, and profitability of the airline as part of the cost effective solution.

Since the aviation is one of the largest industries, it is also the largest industry that is engaged in greenhouse gases emissions that contributes to the climate change. This is the very obvious change that affects not only the industry but also the entire nation. The produced tons of carbon dioxide in the world slowly turns into worse and the organization, with respect to the awards and recognitions they received, should not keep themselves blind. This is a bad news. And many of the scientists and associations are working together to reduce the harmful gas emission.

Developing a carbon-free future is impossible if people will not give it a try. The Virgin Atlantic recently tested the innovation and can continuously apply this in all their system. This strategy deals with the climate change has a great impact in the internal operation of the business such as the investment in the additional technology, better flying planes, building and operating an efficient infrastructure, and positive economic arrangements.

This research can help develop an industry with the carbon-free ad and best work with the airlines, airline, and air navigation which is the Virgin Atlantic has a great advantage. Aside from the intense marketing and promotions, biofuels can be the key to establish the latest technology and equipment such as in engines or ne aircraft and there is a significant growth in the industry (Steele, 2009).

Of course, in every innovation there are big challenges that the organizations have to solve. Some challenges involve the production of the biofuels which is particularly come from the plants. This might trigger to the competition of the crops but can also produce opportunities or jobs for the community. The cost maybe another factor but that is not a problem if there is also a support coming from the government.

References:

Bilotkatch, V., 2007. Asymmetric Regulation and Airport Dominance in International Aviation: Evidence from the London-New York Market. Southern Economic Journal, Vol. 74, No. 2.

Dunlea, et al., 2000. Virgin Atlantic Case. [Online] Available at: http://www.depts.husson.edu/cookc/marketingcourses/virginatlantic.ppt. [Accessed 02 Feb 2010].

Lothian, K., 2008. Case Study: Virgin Atlantic Flies Beyond E-Mail With Skinkers. [Online] Available at: http://www.skinkers.com/file_uploads/0000/0036/Skinkers_Casestudy_VirginAtlantic.pdf. [Accessed 02 Feb 2010].

Rifkin, G., 2004. How Richard Branson Works Magic. [Online] Available at: http://www.startupjunkies.org/Branson%20Case%20Study.pdf. [Accessed 02 Feb 2010].

Steele, P., 2009. Will Plant Fuels Fly? The World Today, Vol. 65, No. 3 Royal Institute of International Affairs.