An Analysis Of The Company Virgin Marketing Essay

An abbreviation Of The association virgin merchandise Essay virtuous Atlantic, the UKs second largest long induce air lane, ope prescribes a fleet of 38 aircraft to 30 destinations in Africa, Asia, Middle East, Indian Ocean, North America, the Caribbean and Australia. In a deal which was finalized in 2000, Branson interchange 49% stake of gross(a) Atlantic to Singapore Airlines for 600.25 million to form a unique global componentnership. Richard Branson is still the controlling authority as he retains 51% stake in the air duct.This essay decomposes the chief internal and extraneous factors that contri barelye to the success of the governance as well as digest a critical sagaciousness on the effectiveness of the strategies employed. It further discusses a couple of strategic options that are operable to the sodding(a) throng for the succeeding(a) five years with reference to appropriate academic models and concepts.(Source http//www.virgin-atlantic.com/tridion/imag es/student readingkitmarch2009_tcm4-622791.pdf)Internal Analysis Of consummate(a) AtlanticIn aver to understand the strategies, it is important to analyse the internal milieu of the organisation. Internal analytic thinking is make by direction of the value chain of the Virgin Atlantic. look upon Chain AnalysisPorters (1990) Value chain frame spring is an interdependent model that helps to analyse specific activities by which an organisation tin green goddess create value and gain hawkish gain. (Pathania-Jain, 2001). To contend the value chain analysis, the company is split into primary activities (those that are link with production) and support activities (those that provide the background necessary for effectiveness and cleverness of the loyal identical human resources management) (Porter, 1985). These activates are discussed to a abjecter placePrimary activities1. Inbound and outward logisticsIn Inbound logistics, the key activities are those associated receivin g the raw materials from suppliers and managing them at bottom the firm. These activities includes bloodline Control (storing and managing fuel, snacks, food and drinks.), passenger gain system, facilities preparation and so forth(Fig. 1.1). It provides ample of facilities to its guests, it gives election of three entrees with main meal, free drinks, an amenity kit for outbound journey, panegyric crudespaper publisher of passengers choice. The facilities keeps on increasing if you move from economy to upper class. The wellborn passenger gets limo service to travel to airport where check in formalities are already completed before they check in hotel style lobby area and through a dedicated auspices area exclusively for virgin flight path guests. The upper-class UK passengers gets a complimentary airport transfer in chauffeur driven Volvo or Virgin Limo bicycle which makes thither outbound logistics quiet impressing to clients.(Source http//www.virgin-atlantic.com/trid ion/images/studentinformationkitmarch2009_tcm4-622791.pdf http//www.virginatlantic.com/en/gb/ eachaboutus/ourstory/forstudents.jspoperation)OperationsVirgin Atlantic is the second largest long haul airline in the UK and the third largest European carrier over the North Atlantic. It operates to many an young(prenominal)(prenominal) of the top destinations around the public including destinations in the Caribbean, US, India, Far east and Africa. It has win many awards almost in most categories that travel patience offers.3. marting and SalesVirgin Atlantic uses a wide range of foodstuffing techniques. Advertising activity includes magazines, TV, taxi sides press, outdoor posters and direct mail. besides promotional schemes plays life-sustaining role during traditionally low seasons. To encourage loyalty, Virgin Atlantic offers flying club fellow membership where in members gets free miles that can be exchanged for free flights and other rewards. In addition, Virgin Atlantic to a fault advertises through travel agents and runs wide range of promotional schemes, offers trade incentive, organises trips and genial/educational events.The website (www.virgin.com/atlantic) in addition plays vital role as it offers full electronic booking, give information on destination, informs mileage balance to members and different promotional schemes.(Source http//www.virginatlantic.com/en/gb/allaboutus/ourstory/forstudents.jspoperation)3.ServiceVirgin Atlantic has won numerous awards for its service and claims to set up b happen standards of service by pioneering range of innovations. For example, with wonder to comfort during journey, its upper-class suite has longest and most comfortable humdrum bed and seat in airline industry for which alone it won twelve awards. For travelling from airport, virgin Atlantic offers limousine service and Bike service to its customers.Support activitiesFirm InfrastructureIt includes planning and control systems, much(prenominal) as corporate outline, accounting and finance. (Lynch, 2003). Virgin Atlantic expends heavily on technological upshots and infrastructure. The Finance department analyse the expenses ascribable and financial cause of the group and accordingly plans the expenses necessary for developing of organisation.2. Human Resource counselVirgin Atlantic recruit people by means of new(a)spaper advertisements and through its website. Existing staff can also recommend and constitute incentive through the same. Virgin Atlantic gives initiative training to its employees and develops their employees from judgment of conviction to time by organising educational events. in like manner they recruit and train people with sign language skill to facilitate to disable passengers3.Technology ontogenesisVirgin Atlantic non lonesome(prenominal) considers technological organic evolutions as vital for maketh but also spends a lot on it. It has award agreeable in-flight entertainment system, travel seats and beds designed to give extra comfort. Also it is continuously working on innovative aircraft design and technological solution to clip carbon emission4. ProcurementVirgin Atlantic has an efficacious procurement department, which obtains quality goods and service at lowest impairment so that the passengers can avail these world-class facilities at competitive prices. The department takes advantage of large operations of and thus achieve economies of scale. The department also interacts with a number of organisations that provide handling services at airports, Including baggage handling, refuelling, maintenance, scrubbed services and security. These services are offered by a number of companies and can help in reducing costs.(Source http//www.virgin-atlantic.com/tridion/images/studentinformationkitmarch2009_tcm4-622791.pdf http//www.virginatlantic.com/en/gb/allaboutus/ourstory/forstudents.jspoperation)External analysis of Virgin AtlanticTo have a grasp of the exist ing market as well as consumer and stakeholder perception, an awareness of external factors is essential. This section pass oning highlight the position that Virgin Atlantic holds with respect to competitors, social perception, etc.PESTEL AnalysisAn organisations phone line environment is invariably governed by external factors which can be broadly analysed as Political, economicalal, Social and Technological factors. To gain an advantage in the present and future market the organisation needs to reduce inefficiency and retain cost effectiveness (Grant, 2005). As Virgin Atlantic operates within Europe, North America, Africa, Asia and Oceania, these factors differ to a certain degree and the manner in which competitors, political bodies and social groups react and respond to the sword has to be evaluate with some care.Political and Legal factorsAs Virgin Atlantic operates across the globe, it has to adapt its practices to suite home(a) and international laws as well as domest ic aviation rules and regulations. The manner in which competitors react to new market shares may also involve political influences. When the United Kingdom unfastened Heathrow Airport to Virgin, thereby abolishing the London Air Traffic Distribution Rules, furious the chairman of British Airways and lead to BAA donations to the Conservative Party organism halted. Virgin also incurred the wrath of Lord King when two refreshed slots held by BAA at Tokyo Narita International Airport were awarded to the airlines (BAA, 2009).Economic factorsIt must be stated that the brief financial crisis of the early mid-nineties forced the then Conservative British government to open Heathrow to Virgin despite opposition from BAA. This shows how external economic conditions can sometimes be favourable to a rising organisation in grabbing a until now in glide slopeible monopolised market. One of the main economic factors that affect the airline industry in general is the fuel hike. Conrady (2009) notes that the low cost fuel prices provided to the UK airline industry has greatly assisted in it escaping the fate of many of its European counterparts.Social factorsThe social perception and acceptance of a brand is of vital importance to any organisation and Virgin Atlantic has managed to do that in a relatively short period. Virgin Atlantic has been vying for the position to instill in the British public the brand image of a national and international organisation. When British Airways announced in 1997 that it will remove the wedlock Flag from its tailfins in favour of more than international images, Virgin was loyal to introduce the Union flag prominently in its winglets and noses with the tagline Britains Flag attack aircraft carrier thereby challenging BAs traditional role as UKs Flag Carrier.The training of its staff is also a major issue and is vital in gaining stakeholders and achieving stakeholder targets (Nadal, 2009). The service staff need to have proper trainin g to conglomerate the high standards of service which is expected of it by the consumers as a assay-mark of the airline industry.Technological factorsAs an industry that heavily relies on technology, the technological factor is the most essential factor in improving efficiency in the longer term. Virgin has managed to introduce more than 700 next generation aeroplanes, which provides a marking contrast to most of its competitors. According to Briggs and Burke (2009) this also minimises maintenance and training costs in the long run. Virgins initiative to focalize on providing online service will also have a marked benefit as more and more consumers are creation introduced into the beingness Wide Web on a daily basis. Consumers are thereby allowed to get up-to-date information regarding flight schedules and compare airline prices.environmental factorsEnvironmental concerns have also been a frequent issue as the airline industry is notorious as a major polluter. many an(prenomin al) campaigns have tried to befriend or at least calm down the environmental lobbies but more effort must be allot into projecting the image of an organisation that is doing its bit for the environment. Virgin has tensioned on informing consumers about the CO2 pollution before each flight. The transaction free bags are now composed of a significant ratio of recyclable material in compliance with the Ministry of Agriculture (Wheeler and Elkington, 2001).Critical assessment of the virgin Atlantics strategiesThe above-defined analysis conforms the dodging of Virgin Atlantic as being excellent service provider, it makes its path by providing distinct service. The corporate dodging of the organisation is to provide world-class service at a competitive price. The companys strategy is well supported by statement of Porter (1996), which says that kill the same activities in a different way than that of traditional competitors helps in achieving better position in sustainable manner. The company enters oligopoly market where customer usually receives poor deal and there is a scope of acquiring market by giving better services.To raise awareness of their products and services and new routes, Virgin Atlantic advertises through TV, press, magazines etc. Another strategy that organisation use is to make customers loyal by making them member of there flying club . The flying club offers numerous world-class facilities which will not only help in satisfying the customer but also gaining customer loyalty. The more customers travel through them, the more miles they get which can be exchanged with free flight and other rewards. They also get special support service and clubhouse access.Also during traditional low seasons, tactical promotions and price advertising are done to a large extent to maximize the aircraft capacity. In addition to all these, Virgin Atlantic also market through travel agents by offering them familiarisation trips, trade incentives.(Source https// www.virgin-atlantic.com/en/gb/frequentflyer/index.jsp http//www.virginatlantic.com/en/gb/allaboutus/ourstory/forstudents.jsp) long suit of strategies chosenSWOT AnalysisAccording to Johnson (2005) SWOT (Strengths, Weaknesses, Opportunities, and Threats) is a utilizable tool to examine financial accounts and developing healthy work environment of a company. It is a major step towards any strategic planning in a lineage. It is considered to be very important source of information for judging and understanding any sort of situations in the organisation. Given below is the SWOT analysis for Virgin Atlantic.StrengthsVirgin Atlantic is stagequartered in unsophisticated where competition is enhanced and tolerated due to deregulationThe virgin Atlantic has the head office in the country where the contest is heightened and tolerated due to the deregulation, which means the business is managed without the aid of following government restriction. The important feature of the Virgin Atlanti c is the collaboration with Singapore airlines that made them one of the ruff airlines in the world. This has proved to be advantageous for virgin in many ways like huge market access, restructuring, converging technology to develop new one, gaining familiarity and extending supply etc.The strength of the Virgin group perhaps, is its importance to best customer service and innovation combined with brand name gives a big advantage to Virgin Atlantic. Virgin believes in creativity, adding its importance to customer service and innovation with the brand name virgin proves out to be the biggest strength of Virgin Atlantic. Its has introduced many starts in the business like first to launch entertainment systems, onboard bars which increased social activities in-flight, providing complimentary limousines services, beauty treatments in-flight. It further introduced business economy cabin. It also has a website that dedicated to what a customer can expect from the airline and all othe r decisive details of interest.Virgin has a powerful e-business structure that makes communications simpler and easier with the customers. They continually measure the performance delivered by each crewmember on flights. An additional join to their cap is the exceptional service tin providing assistance to disabled/visually-impaired passengers. It not only helped in earning good reputation but also winning EASE award consecutive four years.(Sourcehttp//www.virgin-Atlantic.com/en/gb/whatsonboard/index.jsphttp//www.virgin-atlantic.com/en/gb/allaboutus/ourstory/history.jsp)WeaknessesThe major drawback Virgin Atlantic faces is trammel market grasp as unlike other major international airlines. It operates in limited countries only like UK, Caribbean, South Africa, India, Australia, and USThe companies reach in economy sharing is limited hence it is not able to enjoy the benefits of formula sharing which the members of jumper cable Global alliance are able to do such as lack of tr ansferable priority status, lack of unseamed travel, lack of enhanced frequent-flier program benefits, limited extended lounge access and lack of greater network access. This is because Virgin Atlantic is not part of any leading global alliances.(Source http//www.virginatlantic.com/en/gb/allaboutus/ourstory/forstudents.jsp)OpportunitiesVirgin Atlantic is one of the few airline companies operating successfully in African countries, gradual liberalisation in UK/south African market leading to 53% rise in flights and 62% increase in passengers. The business has increased incredibly.There are few more cities, which can be considered for hospitality service based on the smooth record of the airline. or so of the very well known and large airlines have experienced nonstarter in recent times providing them a great opportunity. Also the European Union is on their side providing to a be great support. breathing out forward, Virgin still have a great scope to grow in African market as only the British and African airways in dominating the continent and virgin comes at third position. It should reduce on increasing the market share in Africa. Another opportunity available with Virgin Atlantic is deplumateing customers by aggressively promoting the clubhouse facilities and entryway of its latest Heathrow clubhouse. The number of tourist coming to UK is increasing day by day which is an opportunities available to them but in competitive environment, its quiet big but strategic and aggressive marketing can make it possible. ThreatsThe certain situation all over the world has lead to increase in competition so there is high possibility of threat due to competitiveness in the market which in turn creates pressure to prolong continuous profit. This would in turn lead to forceful alliances, mergers and acquisitions which might not be in the interest of the company. Other issue of concern is alteration of passengers on the aircraft. Other threat may be the legislations i.e. changing policies and rules by government in the country where Virgin Atlantic operates. This may lag the operations and business of the company. Another major threat is emergence of new airlines, which can increase competition. Also if new airlines or existing competitors exact Virgin Atlantics concept and structure, it will be a major threat to the companyStrategic options for Virgin mediaAnsoff MatrixThe Ansoff ground substance (Ansoff, 1957) invented by Igor Ansoff who is also known as father of Strategic Management and was first published in Harvard business review in 1957. It presents the product and market choices available to an organization. In this markets may be defined as customers and products as items sold to customers (Lynch, 2003).Main aspects of Ansoff AnalysisThe Ansoff matrix provides the basis for an organizations accusative setting handle and sets the foundation of directional policy for its future (Bennett, 1994). The four strategies entailed in th e matrix are elaborated below.Ansoff Product-Market Growth Matrix(Ansoff, 1957)Market PenetrationIt occurs when an organisation accesses a market with its recent services products. The market penetration strategy begins with the existing customers of the organization. This strategy is often use by companies in order to increase sales without wandering from the original strategy of product-market. (Ansoff, 1957).Product DevelopmentFirm develops new products catering to the same market. This strategy refers to the significant new instruction of products not just minor changes to the existing products (Lynch, 2003).Market developmentIn this particular strategy, a company moves beyond its existing customer base in search of new customers for its existing products and services. This strategy involves look for of new segment of a market, searching of new area to attract new customers, different/new use of products and services. (Lynch, 2003).Another good strategy that comes under marke t development is selling existing products in new international markets. (for example British firms can consider of selling there products in complete European markets).DiversificationLevitt (1983) rightly whispered that world these days is becoming common market and people no liaison where they live are demanding similar product and lifestyle. There has been a abundant raise in international trade because of globalisation and liberalization. Diversification strategy essentially involves movement of current products and services in new markets (Lynch, 2003 Macmillan et al, 2000). either four strategic options defined above in the Ansoffs model bears risk element with them. Although Market penetration is often considered as a low risk strategy but diversification is considered as a uncollectible growth strategy as it involves huge investment that increases due to concurrently movement into new products and new markets. When applied to Virgin Atlantic, this model results in to two vital strategic options available. Product development strategy and the Market development strategy, to become the most successful organization Virgin Atlantic should follow both of them.The product development strategy suggested through Ansoffs matrix can be a very good strategy for Virgin Atlantic because of the type of customer base, the company possess. The company has good customer base of upper class families and corporate tycoons. If the company introduce new products or sub products, they can market it to these existing customers. The company should focus on strengthening the relationship with existing clients often known as Relationship marketing. One of the ways to achieve it is being in contact lens with them, giving them special offers, and at times offering them concession. If they are disposed(p) special facilities and excellent services then it will develop brand loyalty in them.Another option available with Virgin Atlantic is market development strategy which invo lves search of additional geographical regions and additional market segment. If we compare the flights/services offered by Virgin Atlantic with British airlines, there is a large gap. Although Virgin Atlantic is UKs second largest airline but it operates flights to only 26 major destinations whereas against BA has flights to more than cl odd destinations. Virgin Atlantic should increase the number of destinations, which can be done by and by carefully analysing the facts and figures about the population, operations, flights of competitors etc.Also Virgin Atlantic group should focus on developing country (Asia Pacific Region) as the growth prospects ate higher than developed countries. China and India are two developing countries with highest population and expected compounded growth rate in this region in 2007-2012 will be 5.2%. The manufacturing cost is comparatively low in these countries making them attractive destination for business. Also it will be a sound decision to outso urce operational work to these countries.Virgin Atlantic is famous for luxurious flights as it offers world-class facilities to their passengers but in this competitive environment they are not offering anything price conscious economy class passengers. They should introduce no frills flight with the objective of earning profits on economy of scales. With this strategy they will not only diversify their risk but can potentially capture a new segment using their brand name and service.ConclusionTo conclude, after analysing internal and external factors of the Virgin Atlantic, it has been observed that Virgin group has adult massively and became world-class brand following the path of virgin group but it is still in path as there is a massive scope of growth which can be realised by combination of two strategies. They are product development and market development and market development. If used appropriately, they can help Virgin Atlantic to