Research Korner: British Airways Sample

Strategy of Virgin Atlantic Airlines

Strategy of Virgin Atlantic Airlines   Virgin Atlantic Airways is a British airline operating between the United Kingdom and North America, the Caribbean, Africa, the Middle East, Asia and Australia from its London Gatwick Airport and London Heathrow Airport bases, and using Airbus and Boeing wide-body aircraft. Most of these aircraft offer the Economy, Premium Economy and Upper Class configuration of cabins. The airline owned by Sir Richard Branson’s Virgin Group and Singapore Airlines registered an annual operating loss of 132 million pounds on a  2,357 million-pound turnover in the year to February 2010. From the beginning, Virgin Atlantic has been a rival of British Airways.[1]   Virgin Atlantic Airlines’ strategic mission is to grow a profitable airline that people will patronize and where people will like to work. A comparative analysis of the company’s strengths, weaknesses, opportunities and threats (SWOT) will help executives summarize the major facts and devise a course of action in the face of constantly changing external and internal factors. Virgin Atlantic’ strengths include its recognition by 98% of the British public, the expectation of good customer service by clients in each separate class and the firm’s introduction of innovations like in flight music, ice cream and games. Its weaknesses include flight delays and inefficiency, limited travel routes and the separation of Hot Air magazine from traditional advertising magazines. The opportunities open to Virgin Atlantic include the continued thrust toward innovative, good value, caring and quality services, providing in flight Internet connection and adding more airline routes. The threats it faces include the too rapid and global expansion of the Virgin brand image without focus on the important products, competition offered by British and United for routes and fluctuating fuel prices.[2] On the transatlantic front, Virgin Atlantic has declared the British Airways/American Airlines planned merger in 2008 as anti-competitive, because this will eliminate competition, raise prices and reduce service. The move is a reaction to the factor of rivalry in Porter’s 5 Forces business strategy framework. To maintain profitability, Virgin Atlantic has concentrated on its core competencies, including strategies on sustaining quality service and relationships with its Upper Class clients by way of route closures to Toronto, Chicago and Cape Town and reduction of flights and personnel across the North Atlantic. The latter is due to significantly less traffic following the September 11, 2001 incident in the US. The company has also introduced recycling initiatives on its aircraft and offices to declare its concern for the environment, cost effectivity and healthy and safe procedures. These moves are in line with the PESTLE business strategy model, which seeks to understand the operating environment of a business independent of its internal operations. To show the value Virgin Atlantic places on all stakeholders, it has attempted to keep all Virgin family members employed in the Virgin group by offering employment possibilities with the group’s leisure and health club and has also planned to rehire ex-employees once the airline industry resurges.[3]   Virgin Atlantic Airlines has chosen upper class customers who basically travel on business on transatlantic routes as its specific marketing target based on size and growth potential, competition, company objectives and feasibility of success in the market. The company offers fun, innovative and distinctive upper class service, including Internet capabilities and a high-tech inventory management system, at business class prices. The Virgin brand is one of the top 50 global brands, with people all over the world increasingly preferring the Virgin Atlantic brand image for its reputation of quality and experience in airline travel.[4] Virgin Atlantic Airlines has doubled its profits to more than $100 million in 2008 due to its fuel hedging and rising sales of first and business-class seats. The company is winning market share from competitors because of resilient load factors as travelers take advantage of bargain fares.[5]   While dropping unprofitable routes and reducing personnel, Virgin Atlantic has chosen not to cut back on its influential advertising campaigns. Its ’25 years and still red hot’ marketing thrust was able to resist the economic downturn and was successfully picked up websites, bloggers and cyber geeks worldwide.[6] 	   	 	 		 		 		 		 		[1] “Virgin Atlantic Airways”, 		Wikipedia, 16 June 2011, <http://en.wikipedia.org/wiki/Virgin_Atlantic_Airways> 		 		[accessed 23 June 2011] 	 		 		 		 		 		[2] Donal Manning et al, “Virgin 		Atlantic Marketing Case Study”, SalterQuest.com, pdf, 2005, <http://www.safarigraphics.com/salterquest/portfolioPDFs/ws_Virgin_Atlantic_Marketing_Case_Study.pdf 		 		[accessed 23 June 2011] 	 		 		 		 		 		[3] ibid 	 		 		 		 		 		[4] ibid 	 		 		 		 		 		[5] Sarah Arnott, “Virgin Atlantic 		Defies Airline Slump”, BloombergBusinessweek, 27 May 2009, <http://www.businessweek.com/globalbiz/content/may2009/gb20090527_747393.htm> 		 		[accessed 24 June 2011] 	 		 		 		 		 		[6] ASC Staff, “Interview: Paul 		Dickinson, Virgin Atlantic”, ArabianSupplyChain.com, 21 March 		2010, <http://www.arabiansupplychain.com/article-3760-interview-paul-dickinson-virgin-atlantic/> 		 		[accessed 24 June 2011]

Strategy of Virgin Atlantic Airlines

Strategy of Virgin Atlantic Airlines Virgin Atlantic Airways is a British airline operating between the United Kingdom and North ...