The company generally targets customers

Contents
Question 1........................................................................................................................................1
Question 02......................................................................................................................................4
Question 03......................................................................................................................................6
References........................................................................................................................................8
Appendices....................................................................................................................................11
SWOT Analysis- Appendix 1....................................................................................................11
PESTLE Analysis – Appendix 2...............................................................................................12
Porters five forces analysis – Appendix 3.................................................................................13

Question 1
Virgin Atlantic is a British airline which was established in 1984 as British Atlantic Airways by
Richard Branson, Randolph fields and Alan Hellary. The airline company is a long haul carrier
with a fleet of 45 (planned to cut down to 35) and flies from UK to the US, Asia, Africa and the
Caribbean and has key bases in Manchester, Gatwick and Heathrow. The company is controlled
by Virgin Atlantic limited which is a holding company and 49% of this holding company is
owned by delta airlines and 51% is owned by Virgin Group (Corporate.virginatlantic, 2021). The
vision of the company is to be the most loved travel company and the mission of the company is
to embrace the human spirit and let it fly; this mission statement of the company is devised from
the core values of the organization which are inclusiveness, optimism and adventurousness. The
company generally targets customers who are business travelers and the segmentation clearly
shows that middle class or upper class individuals are the primary target customers for Virgin
Atlantic. The major competitors for the company are Emirates and British Airways (Seatmaestro,
2021). The COVID-19 pandemic has had a huge impact on the profitability of airline companies
and Virgin Atlantic has experienced a big fall in profitability as a result, the company filed for
bankruptcy protection from creditors in US On August 4th 2020 (Rushe, 2020).
In order to recognize possible national and international strategies that Virgin Atlantic could
utilize based on the market conditions of 2019, the internal and external environment of the
company as well as the industry has to be analyzed. Analytical tools such as SWOT, PESTLE
analysis and Porters Five Forces have been utilized in order to determine useful national and
international strategies for Virgin Atlantic for the year 2019.
The SWOT analysis as mentioned in appendix 1 elaborates on the strength and weaknesses of
the company from an internal point of view as well as the opportunities and threats of a company
from an external point of view. With regards to strengths of Virgin Atlantic, perhaps the biggest
strength of the company is the excellent advertising and innovation led by the founder of the
company Sir Richard Branson. Through the leadership of Sir Richard Branson, Virgin Atlantic
has established a strong brand value with high brand recall (Feloni, 2015). Furthermore, the
company has a very strong Atlantic network, highly efficient services and customer base that is
satisfied and always prefer to fly Virgin Atlantic. The company also has a good public image due
to high involvement in corporate social responsibility activities led by Sir Richard Branson

(Dailey, 2016). The company also has strategic partnerships with companies such as Air China
and Singapore Airlines which enabled the company to access these markets and increased
profitability (Virgin Atlantic, 2021).
With regards to the weaknesses off the company, as per Gill (2020), the biggest strength off the
company which is the innovation and leadership ability of Richard Branson, could also be seen
as a major weakness as the company is extremely dependent on one individual and this does not
bode well for the future, the company could face a tough time after the exit of Sir Richard
Branson. Virgin Atlantic also faces difficulties in raising capital since it is privately owned and
as a result also lacks a global presence which competitors such as British Airways, EasyJet and
Emirates have. The high competition in the airline industry coupled with the fact that Virgin
Atlantic is a private company with limited global presence makes it extremely difficult for the
company to grow and increase their market share. Virgin Atlantic also has a poor record in its
profitability, recording losses in most of its years furthermore projects such as little red which
was a domestic airline operation; have been big failures which makes it hard for the company to
attract investors when they want to start up new projects. In relation to opportunities and threats,
the fact that Virgin Atlantic is a joint venture with Delta Airlines could drive cost synergies
which could be beneficial over time, Similarly Virgin Atlantic also has the opportunity to join
global alliances which could benefit the company in the long run. The company is also facing
some threats such as North Atlantic overcapacity which could cause a supply-demand imbalance
and have also faced problems due to Brexit and climate change (Caswell, 2021).
The PESTLE analysis which can be seen in appendix 2, identifies many external factors which
could impact the organization. The political environment of the UK; the country in which the
organization is based, has a large impact on the profitability of the company. Issues such as
Brexit and political instability have had a negative impact on Virgin Atlantic. Technological
factors play another major role as technology is vital in the Airline Industry since continuous
improvement in cost reduction and safety standards is what drives companies operating within
this industry, the current advancements in technology and digitization has driven air travel and
Virgin Atlantic has many opportunities to capitalize in this regard (BBC, 2020). Legal and
environmental factors are also extremely important to Virgin Atlantic as copyrights, patents and
data protection laws are crucial for ensuring safety of passengers as well as the ethical

responsibility of the company. Since the airline industry also has high impact of carbon
emissions to the environment it is the responsibility of the companies operating within the
industry to address these environmental issues both for the benefit of themselves as climate
change is detrimental to air travel; as well as everyone else (Nugent, 2021).
The porters five forces analysis (Appendix 3) concludes that the power of suppliers is high, the
power of buyers is moderate, the barriers to entry is extremely high and the threat of substitutes
is extremely low. Furthermore, the industry is extremely competitive ever since the emergence of
low cost carriers and tight regulations which leads to high operating expenses.
In terms of national strategies, the company has already invested in strategies such as Little Red
which targeted UK domestic mainland flights, however it lasted only three years until operations
were ceased. This was due to poor planning as the company were not able to sell enough seats to
make the flights profitable (Finlay, 2021). However, since the internet penetration rate and social
media platforms have become immensely popular over the last five years, it could be a viable
option at present to launch a project such as little red with increased focus on digital marketing
which is an extremely cost effective form of marketing. Furthermore, a domestic airline with
destinations throughout the UK could act as a feeder airline for Virgin Atlantic’s long haul
holiday destinations.
In terms of international strategies, the company needs to respond to increased competition from
low cost carriers; the company should focus on reconfiguring economy class cabins and
providing more benefits to potential customers in order to ensure customer retention,
Furthermore the company can tap into new markets and obtained cost benefits through
international partnerships with other organizations such as they already have with Air China and
Singapore Airlines.