SOE 08701 Business Management Report - Virgin Group

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Business and Management Challenges (SOE 08701)

Added on 2020-05-28

SOE 08701 Business Management Report - Virgin Group

Business and Management Challenges (SOE 08701)

Added on 2020-05-28

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BUSINESSMANAGEMENT

1ContentsINTRODUCTION.....................................................................................................................................2External environment of Virgin Atlantic............................................................................................2Five Forces analysis of Virgin Atlantic................................................................................................4SWOT Analysis of Virgin Atlantic.......................................................................................................5Decision making in Virgin Group........................................................................................................7Selection of strategy..........................................................................................................................7Generic strategies that Virgin group followed...................................................................................8New issues that company will be facing in the coming years............................................................9Conclusion...........................................................................................................................................10REFERENCES........................................................................................................................................11

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2INTRODUCTIONIn the present business environment it has become essential for the companies tomanage its business in a proper way (Achtenhagen, Melin & Naldi, 2013). For doing so theyhave to gather resources, makes effective plans and develop strategies. This helps in havingedge over others. It is essential for the Companies of the scale of Virgin. Any strategicformulation must be based on the business environment it is surrounded by as well ascompetencies of the company. It is essential that company understands its position within thecompany and takes measures accordingly so as to ensure sustainable growth in the industry.It is the role of the leader to ensure that business is managed in a proper way. They have totake strategic decisions focusing on their plan for development. Virgin group is one of the biggest organisations that have many kinds of businesses (Ball,Geringer, Minor & McNett, 2012). It is basically British multinational corporation venturecapital conglomerate. Its business products includes banking, books, commercial spaceflight,films, health care, internet, commercial airlines, internet, mobile phones, retail, jewellery,music, travel etc. It is having large employee strength of around 71000.This report highlights position of virgin in market as well as the competencies that group isusing for ensuring their sustainable growth. This report also underlines the generic strategiesthat are used by the company for making its position in the market. Apart from this it alsothrows lights on internal and external environment in which company is operating.External environment of Virgin AtlanticThere are many companies that come under the Virgin Group. One of the company inthis regard is Virgin Atlantic. It is the British airlines company and has been successful overthe years in their business operations. It is essential for the company to understand its externalenvironment which helps it to make decisions accordingly. For this purpose PESTLE analysiscan be highly beneficial. Political: There have been many kinds of changes in the political scenarios all overthe world which has affected the business of Airlines industry. Many of the politicalties have made and broken and hence Visa rules have also changed (Bereznoi, 2015).

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3This has the severe impact on the operations of the firm. Decisions such as Brexithave completely changed the scenario for the Virgin Atlantic and negotiationsbetween British Government and EU will decide free trade and movement rules.Apart from this there are many kinds of policy changes that is done by theGovernment and the increase in Taxes has reduced the profit margins of the company.Economic: There have been many kinds of economic hiccups which have beennoticed in several parts of the globe (Campbell, Edgar & Stonehouse, 2011). Thiseconomic instability has reduced the profit margins of the firm as people do not wantto spend lot on luxury services like Traveling. Decreasing pound value and slowdownin the American economy has reduced the revenue of the firm. On the other handpound has been on the lowest value in last 30 years. Fuel prices have gone up in lastfew years which are a serious challenge for the whole industry. It is been notice thatthere was loss to the company that accounts to around 50 million pounds.Social: Society is changing all around the world and so is their need (Chun & Lee,2013). This change in the demand of the society has affected on the business of thefirm. People are demanding for high quality services at lower rates which is achallenge for the company in the growing financial distress. On the positive side therehave been increase in the number of people that are opting for travelling across theborders; this is the positive sign for Virgin Atlantic. Increasing Per capita income ofthe people in many parts of the world has supported the Airlines industry. VirginAtlantic need to make travel plans according to the requirement of the people so as tosucceed in the industry.Technological: One of the most significant changes that are noticed is in technologythat is used in the Airlines industry (Franz & Kirchmer, 2012). Aircrafts have becomemore automated. These type of technological changes need to be continuouslyadopted inside the firm so as to make sure that they do not lag behind in thecompetition. These technologies have reduced the cost of operations as well as haveincreased the efficiency of the overall firm. Since the changes in the technology is toorapid and hence company need to invest a considerable part in such kind ofadvancements. Virgin airlines investing a lot in the IT based passenger service systemlike Apps.Legal: There are various types of legalities that is involved in the Airlines industry(Galbraith, 2014). Since Virgin Atlantic is a multinational firm and hence it has tocomply will all the rule changes in every country it is operational in. Most significant

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SOE 08701 Business Management Report - Virgin Group