Tuesday, 14 May 2013

The mission and strategic objectives of Virgin Atlantic Airlines and its connection and importance towards the interests and expectations of the firm’s stakeholders

Virgin Atlantic Airlines

Introduction

            Currently, there are different factors that can affect the overall operation of each and every firm in any industry such as globalization, enhancement of technology as well as the ever-changing preferences of the customers. That is the reason why more and more companies are focusing on their strategies in order to maintain their competitive advantage and their position in the market.

            Most of the companies that have well-defined visions and mission statement, changes nothing. It is important to consider that the process of constructing them can be considered as a complete waste of time as well as talents, if the visions and mission statements are only used for nothing but being published in different annual report and as a display in a reception area. It is important to consider that one of the primary reasons for failure of the missions and visions in achieving the preferred objective of a company is the inexperience of most of the managers and executives of the company (Kotelnikov 2008).

            This paper will focus on analyzing the mission and strategic objectives of Virgin Atlantic Airlines and its connection and importance towards the interests and expectations of the firm’s stakeholders. It will also assess a recent strategic change by focusing on the suitability, feasibility and acceptability of the strategy.

 

Background of the Company

            Virgin Atlantic was developed as an offshoot of Richard Branson’s Virgin group, which was better known during that time as one of the leading figures in the world of pop and rock music. On June 22, 1984, the inaugural flight to Newark happened that is filled with friends, celebrities and the media. The company is based at the London’s Heathrow and Gatwick airports and Manchester and operates its long haul services from Heathrow to New York, Los Angeles, San Francisco, Washington, Boston, Miami, Chicago, Tokyo, Hong Kong, Johannesburg, Cape Town, Nairobi, Shanghia, Delhi, Mumbai, Lagos, Mauritius, Sydney and Dubai. Virgin Atlantic is also operating different services from Gatwick to Orlando, Barbados, St. Lucia, Antigua, Las Vegas, Grenada, Tobago, Cuba, Montego Bay and Kingston. It has a total of 30 routes in the world: 10 to the US; 6 to Asia Pacific; 4 to Africa; 1 in Indian Ocean; 1 to Middle East; and 8 to different Caribbean destinations (Virgin Atlantic 2008). 

 

Missions and Strategic Objectives

            The company believes that safety, security and consistent delivery are considered as the basic foundations of everything they do. Thus, Virgin Atlantic stated that the success of their company as well as their strategy requires them to build on the said foundation on the business and leisure markets that can help to drive and maintain efficiency and effectiveness. Thus, the company declared that their mission is simple: To grow profitable airlines, where people love to fly, and where people love to work.

            It is always important to consider the stakeholders requirements in different decision-making and changes of any company. Requirements are the expectations and demands of the stakeholders regarding what they expect the organization to achieve and deliver.  There are different stakeholders in an organization. Thus, the key stage in the process of setting the goals focuses on identification of the different stakeholders as well as their requirements towards the organization (O’Sullivan & Dooley, L 2008, p. 77). In addition to that, Virgin Atlantic focuses on working hard in order to build brand equity that involves people-friendliness and creativity, thus focusing on building an image of innovation, quality and sense of fun (Hofmann & Kelner 2004).

 

Stakeholders

            It is important for different organizations to recognize the rights of interests of the different stakeholders. Thus, it is important in the process of developing the mission as well as strategic goals of the Virgin Atlantic airlines. On the other hand, it is also important to focus on the requirements of the internal stakeholders such as the employees and stockholders; and the external stakeholders such as the customers, suppliers, governments, unions, competitors, local communities and the general public (Sims 2003).

            The company’s mission as well as strategic goal focuses on the importance of their employees. The primary requirement of the employees is to seek job satisfactions inside the organization (Sims 2003). Thus, this can be seen in different strategic decisions of the company in order to improve the quality of working environment inside the organization such as application of new and improved Information technologies as well as motivating their employees by flexible working time and open communications (Computer Weekly 2008).

            At the same time, the company’s mission and strategic goals focuses on giving the customers satisfaction and what they’d paid for (Sims 2003). This can be seen in the different strategies of the company of using updated IT applications and software in order to ensure efficiency and consistency of their service. The company is also focusing on offering services in low price in order to meet the demand of the customers for low fair flights. Thus, the company also focuses on the different external issues that are related to safety and security of the customers.

            The government is also one of the most important stakeholders. They want adherence to legislation (Sims 2003). This can be seen in the effort of the company in implementing rules and regulations that will ensure safety of their passengers.

            Above all, the company also focuses on the expectations of the general public, and that is to improve the quality of life (Sims 2003). This can be seen in the effort of the company in focusing on the different Corporate Social Responsibility. One of this is the Gold Standard Scheme, together with a Swiss based charity who fund clean energy solutions in different developing country, myclimate. The Gold Standard methodology was created in order to encourage a shift from fossil fuel based economy to a renewable economy (Virgin Atlantic n.d.).

           

 

Strategic Changes and Strategic Evaluation

Virgin Atlantic and Next-Generation Airline Reservation System

            Technology plays very important roles in different changes that are happening in all of the industries and fields in the world. It is considered as the solution for the altering environment such as the growing vitality of information in order to meet the ever-changing demands and needs of the stakeholders, particularly customers. Reservation system is the most vital system in Virgin, because it is considered as the starting point of the entire flow of data and information in the company.

            One of the major change or decision of the company is the application or implementation of the Next-Generation Airline Reservation System. In December 1, 2008, the company announced a new Information Technology or IT services agreement that extends the 25-years relationship of the company with EDS, an HP company considered as a leading global technology services provider that delivers different business solutions to its customers (EDS 2008).

            EDS will provide the next generations of the Virgin’s Airline Reservations solution and EDS Reservation Services considered as a part of EDS’ Transportation Applications that hosts and maintains on behalf of the clients. In addition, different features will also be added in the solutions such as the Electronic Miscellaneous Documents or EMD that will allow the employees of Virgin Atlantic to electronically capture and account for ancillary sales, together with the Ticket Re-issue and Refund or TRR software that automates the previous labor-intensive function. As a result, it will help to improve the customer service and customers relation of the company (EDS 2008).

            The following are the strategic evaluations of Next-Generation Airline Reservation System of Virgin Atlantic Airlines based on the SWOT analysis of Hofmann & Kelner (2004).

 

Sustainability

            Sustainability or strategic fit focuses on how the strategy can adds value to the extent to which a proposed strategy fits the situation identified in the strategic analysis. It also focuses on how the strategy will be able to sustain and even improve the competitive position of the company in the market (Lundy & Cowling 1996, p. 133).

            The application of improved technology, particularly application of IT in majority of the company’s system helps them to use their strengths to the fullest as well as to improve some of their weaknesses. Due to the application of the new features in the system, the company will be able to maintain their strength in terms of differentiation that is based on their value, service and price.  By applying the said technology, the area regarding the TRR will be improved, thus it will improve the service of the employees towards the customers. Furthermore, it can also help the company to maintain their universal appeal to the wide varieties of customers. This is due to the fact that more and more customers are becoming aware of the advantages of updated technologies; people tend to believe that companies that are implementing and using new technologies are effective and efficient. The said innovative features will help to distinguish or differentiate the name of the company to its competitors. Above all, it can help to support the effective management team of the company. Thus, it will help to improve one of the weaknesses of the company that is the underdeveloped distribution system (Hofmann & Kelner 2004).

            On the other hand, the said change can also enhance the services and overall structure of the company in order to take advantage of the opportunities that can be seen in the growing Asian Market. By the said system, it will help the company to cater more numbers of customers from different part of the world. On the other hand, it can help the company to enhance their service in order to compete with the growing number of Internet booking due to greater price transparency (Hofmann & Kelner 2004).

 

Feasibility

            Feasibility focuses on to the extent the capability of strategy can be implemented. It focuses on the achievement of the performance, achievement of the market position, dealing with the competitive reactions as well as the availability of the funding, skills and technology (Lundy & Cowling 1996, p. 133).

            In terms of the issue about funding, it can be said that it is not a big issue due to the fact that the company and EDS have been into agreement for a long time, thus it can be considered that there are agreement between them with accordance to price. In addition, the performance of the company shows that there will be enough money in order to fund the said project or program. In terms of availability of different resources such as skills and technology, the company won the Computer Weekly’s Best Places to Work competition this year. The main reason behind the said success is due to the commitment of the company to motivate the staffs that helps them to work at their best (Computer Weekly 2008). The said event shows that the company employs the best employees in different position, aside from that, the service of EDS is enough in order to consider the said project, due to the fact that EDS offers different solutions to their clients that matched the overall business rules and business resources. In addition, the fact that the company still gets hold of the service and agreement with EDS shows that there is a great sense of trust between them.

 

Acceptability

            Acceptability pertains on the extent where in the strategy has the ability to satisfy the expectations of the stakeholders of the organization. It focuses on the issue of profitability, level of risk and even its effect on the capital structure. In application of a change, particularly the process of implementing new technology, it is important to consider not only the source of the funding, but also focus on how it will affect the financial interest of the major stakeholders of the company, particularly the customers.

            The change will not be a big problem towards the employees, this is because, the employee understands that the said change is important in order to improve the quality of their service, at the same time lessen their effort in particular task. Training and coaching will be helpful in order to ensure the cooperation of the employees. On the other hand, it will also be acceptable with the customers because it will help to improve the quality of the company’s services, particularly in the area of TRR.

 

 

References

 

Computer Weekly 2008, Virgin Airlines Focuses on Being a Great Place to Work, viewed 15 December 2008, <http://www.computerweekly.com/Articles/2 008/11/11/233308/virgin-airlines-focuses-on-being-a-great-place-to-work. htm>

 

EDS 2008, Virgin Atlantic Selects EDS, and HP Company, for Next-Generation Airline Reservation System,

 

Kotelnikov, V 2008, Corporate Vision, Mission, Goals and Strategies, 1000ventures.com, viewed 15 December 2008, <http://www.1000venture s.com/business_guide/crosscuttings/vision_mission_strategy.html>

 

Lundy, O & Cowling, A 1996, Strategic Human Resource Management, Routledge

 

O’Sullivan, D & Dooley, L 2008, Applying Innovation, SAGE

 

Hofman, K & Kelner, A 2004, Like a Virgin: The International Airline Industry Versus the Strategic Role of Virgin Atlantic Airlines, American, viewed 15 December 2008, <http://www.american.edu/honors/Honors%20Acti vities/2004%20capstones/Kristina%20Hofmann%20&%20Anna%20Kelner.pdf>

 

Sims, R R 2003, Ethics and Corporate Social Responsibility: Why Giants Fall, : Praeger, Westport C

 

 

Virgin Atlantic, Carbon Offsetting, viewed 15 December 2008, < http://www.virgin-atlantic.com/en/gb/allaboutus/environment/carbonoffsetti ng.jsp>

 

Virgin Atlantic 2008, Virgin Atlantic Airways – Company Overview, viewed 15 December 2008,  <http://www.virgin-atlantic.com/tridion/images/factsheet companyoverview_tcm4-426059.pdf>

 

 

 

Appendices

 

SWOT Analysis of Virgin Atlantic Airlines by Hofmann & Kelner

 

Credit:ivythesis.typepad.com

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