Strategic Choices and Change Management for Virgin Atlantic

This report discusses the strategic choices and change management for Virgin Atlantic, including diversification, vertical integration, acquisition, and joint venture. It also evaluates the application of the McKinsey 7S model to the organization.

Strategy and
Change

Table of Contents
INTRODUCTION...........................................................................................................................3
MAIN BODY..................................................................................................................................3
TASK 1............................................................................................................................................3
Strategic choices along with the recommendations for strategic choices..............................3
TASK 2............................................................................................................................................6
Recommend, support and justify appropriate options for strategic change within an
organisation............................................................................................................................6
TASK 3............................................................................................................................................8
Evaluate the application and relevance of change management theory to practice within
organisation............................................................................................................................8
CONCLUSION.............................................................................................................................12
REFERENCES:.............................................................................................................................13
Books and Journals...............................................................................................................13

INTRODUCTION
Strategic changes help organisation in formulating and executing various changes so that
they can achieve competitive advantages. Changes may include structure, policies or processes
of an organisation so that they can smoothly operate their business. Changes also assist in
overcoming various challenges and threats which can affect operations of business (Cao and
et.al., 2020). Changes are related to various operation such as inventory requirements, supply
chain, project scope or scheduling of activities so that company can achieve goals and target
without any disturbances. This report is based on Virgin Atlantic which is a British airways
company founded in 1984 and headquartered in London, UK. This report will include theoretical
strategic choices which an organisation a face along with the recommendations for is strategic
changes. Appropriate options for strategic changes are recommended, justified and provided
support for an organisation. Change model are discussed and strength and weaknesses are
evaluated of an organisation so that they can perform operations and considered direction.
MAIN BODY
TASK 1
Strategic choices along with the recommendations for strategic choices
Organisations need changes so that they can establish their brand image by providing
improved services and products to their targeted customers. It helps in making strategic
decisions so that they can smoothly run their operations. Virgin Atlantic opts various strategic
choices so that they can eliminate external and internal issues and threats. Some of the strategic
choices are discussed below:
Diversification
This strategy helps organisations in growth and expansion by offering new products and
services to new targeted customers. It assist in diversifying the portfolio of products and services
so that customers can satisfy their requirements (Dannenberg and et.al., 2019). Manager of
Virgin Atlantic also formulate strategies for the diversification so that they can grab
opportunities. There are various types of diversifications which are as follows:

 Horizontal diversification: It includes development of new products and services
which businesses offer to their existing customers. Virgin Atlantic also develop new
services for their current customers with the help of advanced technologies,
marketing approaches and skills so that they can enhance their profitability without
reaching to the new market.
 Concentric diversification: This is strategies suggest that organisations add new
products in their businesses for targeting new customers (De la Sota and et.al.,
2019). Virgin Atlantic use various promotional and marketing activities so that they
can reach new boundaries in order to target customers.
 Conglomerate diversification: Under this strategy business is manufactured
differently new products which is unrelated to their core business. It involves slight
risk as companies enter in new boundaries for selling their completely new products
to new customer base.
Vertical integration
This refers to the strategy where two organisations join each other for production
procedures and eliminate dependency on external suppliers and contractors. It helps in increase
of productivity and efficiency of business and eliminate the late delivery of resources, raw
materials and equipment. Virgin Atlantic can also opt for this strategy as it lower down the
power of suppliers which results in fast and effective services. There are three types of vertical
integration which can be discussed as:
Forward vertical integration: In this organisation acquires, mergers or expand their
operations with the company which is ahead in the supply chain. Supply chain includes various
elements like manufacturers, raw material extractors and retail distributors. It is difficult for
businesses to forward vertical integrate as end supply chain are generally condensed.
Backward vertical integration: When organisation joins with different companies who
are at a stage before from them in supply chain (Freilich, 2018). This is very common integration
which virgin Atlantic can also adopt in their operations as it results in lower down the power of
suppliers.
Balanced integration: This is a combination of forward integration and backward
integration where organisation merge with companies who are after supply chain and before

supply chain. When a company opts for balanced integration, they involve two transactions one
is upstream and second is downstream.
Acquisition
When an organisation purchases 50% of shares or other assets in order to control the
operations of another company is referred as acquisition. It assists companies in diversification,
economies of a scale, increased synergy, greater market share, new niche offerings and cost
reductions which are positive factors of acquisition. Virgin Atlantic can reduce their excessive
capacity and also eliminates the level of competition in international market with the help of
acquisition with other firms. Businesses enjoys large growth exposures in the assistance of
acquisition which results in higher success (Ghazouani, Farah and Solaiman, 2019). Virgin
Atlantic can effectively enter to new markets and offer their products and services to new
customers with the help of acquisition. It increases their market power which helps in capturing
large market share in effective and efficient manner. Resources can be easily accessed by an
organisation in lower prices which results in higher revenue generation.
Joint venture
This strategy refers to the agreement which is agreed by two or more parties in order to
share their ownership, governance, returns and risk, profit and losses. It results in combination of
expertise and resources of unrelated companies so that they collectively achieve their task and
targets. It helps Virgin Atlantic in building relationships with other companies which helps in
expansion in new market. This strategy helps organisation in working in flexible manner with
the collaboration of different products and services which are required by their targeted
audience. It assist in maintaining unique identity of the business which results in establishment
of brand image in global market by introducing various innovative and creative ideas. Virgin
Atlantic also enjoys various availability of resources including technology, finance and human
resource which results in higher quality of operation and services. With the help of joint venture
they get employees who possess a higher expertise in knowledge, skills and talent so that they
can eliminate errors and mistakes from the operation.

TASK 2
Recommend, support and justify appropriate options for strategic change within an organisation
Changes are very important for every organisation so that they can sustain for a longer
period of time in international market. It improves the performances and productivity of overall
organisation so that they can achieve various competitive advantages (Haltinner and
Sarathchandra, 2018). Virgin Atlantic also implement changes in their operations so that they
can may match the current market trends in desired manner. It helps them in creating various
new opportunities for themselves and formulation of innovative ideas which helps in acquiring
large market area. Virgin Atlantic should opt strategic changes which are as follows:
Acquisition
Acquisition is a very attractive way for organisations so that they can introduce rapid
growth in cost effective manner and short period of time. This growth strategy helps
organisation in achievement of synergies in their activities, improve their market share and help
in enhancement of control of assets. Virgin Atlantic should acquire other forms so that they can
enjoy benefits of their assets and shares which improve the productivity and performance of the
company. There are various reasons which support that acquisition is suitable option for Virgin
Atlantic for strategic change which are as follows:
Increasing market power: Organisation can formulate strategies and policies with the
help of collective decisions so that two or more companies relatively overcome the challenges
and threats of competition (Larsen, Boje and Bruun, 2020). Virgin Atlantic can also buy their
competitors so that they become the leading company in all over the industry which results in
higher profitability and revenue generation. This also helps in increasing bargaining power of
company over their suppliers and customers which is positive factor of acquisition. Organisation
can add value to their supply chain which help in effective operations which assist in better
growth and expansion.
Overcoming entry barriers: Acquisition allows a company in entering to new market
without involvement of huge resources and capital. Virgin Atlantic can acquire organisation
which effectively operate their business in different boundaries so that they can expand their
business in all over the world. This helps them in established their brand image and also increase
brand awareness among targeted audience which results in effective growth and success. It

becomes opportunity for Virgin Atlantic to establish their business overseas without much
difficulties and formalities which turns out better option for strategic change.
Access to talent: Organisations can hire a new and fresh talent from other organisations
with the help of acquisition. Virgin Atlantic can hire the best talent from the industry so that they
can contribute their positive efforts in the success and expansion of the company. This becomes
more easier and cost effective manner of recruiting people from different regions of world.
Joint venture
This strategic change also helps organisation in gaining various advantages which helps
them in achievement of their success. It involves joining hands with other companies so that they
can collectively share profit and losses, risk and threats so that both the companies can grow
side-by-side (Maimon, 2018). Virgin Atlantic can also adopt this strategy for their further
growth and expansion in new boundaries as it helps in overcoming challenges of competition
which results in capturing large market share without much difficulties. Some of the reasons are
mentioned below why Virgin Atlantic have to choose joint venture are as follows:
Economies of scale: Limited capacity of production of goods and products can be
increased by organisation with the help of joint venture. Two companies can contribute with
each other in effective production and manufacturing so that they can reduce the cost and
increase their revenue in effective manner. Virgin Atlantic enjoys economies of scale as both the
companies can collectively invest capital and resources which becomes positive factor.
Innovation: Joint venture assist companies in grabbing new opportunities in order to
adopt advanced technology in cost-effective manner. Virgin Atlantic can add various new
features in their product and services with the help of technology which other company use so
that they can attract a large number of customers. New ideas help them in providing higher
quality of services which satisfy the requirements of customers in all over the world in efficient
manner.
Brand name: Organisations may create their brand name in separate manner with the
help of joint venture in selected and targeted market areas. Virgin Atlantic can gain recognition
in market with the help of joint venture with well established company. Higher goodwill can be
created by providing collective services with the help of utilisation of other company’s image so
that organisation can attain success and growth in positive manner.
Recommendations

 Virgin Atlantic should opt for joint-venture and the acquisition because both helps in
increasing the brand awareness in cost-effective manner which is important factor in
growth and expansion in new boundaries (Teece, Raspin and Cox, 2020). These strategic
changes can help in attracting new customers which results in higher sales and
profitability of their organisation.
 These strategic changes are suggested because they help in lower down in production
cost of organisation by contributing capital and investment. Virgin Atlantic should join
hands with other companies so that they can maintain higher quality of their products and
services which is required for establishment of a positive image in large market area.
TASK 3
Evaluate the application and relevance of change management theory to practice within
organisation.
Change management refers to the process of altering various approaches, methods and
policies of company which affect their external and internal processes. Successful adoption of
various changes are necessary in organisation as it helps them in achieving competitive
advantages. Virgin Atlantic can match their operations with current market trends with the help
of involvement of support of other organisations and adoption of new approaches so that they
can offer required services and products to targeted customers (Wu and et.al., 2021). Virgin
Atlantic can use McKinsey 7S model which assist in the development of future success of an
organisation. This model comprises of hard elements and soft elements which are influenced by
corporate culture. McKinsey 7S model is described below in context to Virgin Atlantic is as
follows:
Strategy: This refers to the plans and procedures which the company formulate for
sustaining for long-term in market. It involves mission, vision and values of company which
helps them in achievement of their goals and objectives. Virgin Atlantic formulate is shortages
and consideration to their long-term and short-term achievements so that they can operate their
operations in a smooth manner.
Structure: Organisations structure suggest how they commence their operations on
regular basis. Structure involves a chain of command, corporate hierarchy and divisional make
up that assist employees how to coordinate and communicate with each other regarding

activities. Virgin Atlantic follow structure according to their business environment so that they
eliminate difficulties and disturbances.
Systems: This involves decision making, planning and daily activities of a business.
Managers of virgin Atlantic should majorly focus on their systems during organisational change
because this area is highly affected because they are responsible for operations.
Skills: This refers to the competencies and capabilities of the employees who are working
in an organisation. During the time of organisational changes and a virgin Atlantic they focus on
the skills that their employees can effectively carry out new structure and new strategy so that
they can smoothly operate business. Skills are required so that they can effectively adopt
changes which results in higher profitability.
Staff: This factor comprises about the personnel which work which are involved in
organisation’s operations. Managers of Virgin Atlantic focus on their employees so that they can
motivate them and train them according to the requirements. They also provide them various
benefits and rewards which satisfy the needs of the employees working in an organisation.
Style: It represents the behaviour of managers who are at the top level which involves how
they interact with their respective subordinates. Managers of virgin Atlantic coordinate and
communicate with their employees in a better manner so that they can achieve collective targets
and goals.
Shared values: These are the foundation of organisation which suggest the behaviour and
actions of the employees in an organisation (Yi-Jian, 2020). Virgin Atlantic maintains standard
and norms in their organisation which results in higher productivity of employees along with
maintaining positive work environment.
Strengths and weaknesses of an organisation during organisational change
It is important to evaluate the strengths and weaknesses which affect the external and
internal environment of an organisation. During organisational changes there are various
processes and strategies underwent changes which results in disturbances in day to day activities.
Virgin Atlantic uses McKinsey’s 7S model in order to commence effective changes in their
operations. To evaluate the strengths and weaknesses of Virgin Atlantic SWOT analyses is used
which is as follows:
Strength Weaknesses

 Brand image: Virgin Atlantic have
maintained their image in all over the
world by providing high-quality
services to all their targeted audience.
They have loyal customer base which
help in higher revenue generation.
 Multiple customer categories: They
provide services according to the
categories which includes but premium,
economy and luxury segments. Virgin
Atlantic believes in offering
personalised services to their customers
which becomes their strength.
 Perception of public: Many customers
believed that Virgin Atlantic is slightly
expensive service providers which
results in lower sales. Customers
thought that the other airlines can
provide same quality services in lower
prices which shift their interest towards
other companies.
 Private ownership: Due to private
ownership, Virgin Atlantic face
challenges in raising large amount of
capital from the public. This becomes
weakness as they access limited
resources.
Opportunities Threats
 Customer attraction: One of the most
attractive opportunities of Virgin
Atlantic is Heathrow terminal is large
hub among various lines in all over the
world which attracts large number of
populations. They also provide various
attractive offers to their regular
customers which helps in engaging
them.
 Change in preferences: Most of the
people prefer comfort table travel
which helps Virgin Atlantic in
increasing their sales and profitability.
There can be seen rapid changes in
preferences which requires higher
comfortable aeroplane seats which are
 Competition: There are large number
of emerging airlines in industry which
become threat for virgin Atlantic. They
provide equal services which results in
a higher competition in market. There
are various competitors of virgin
Atlantic’s which includes Emirates,
British Airways, Air France, Lufthansa
and Cathay Pacific.
 Legal laws: Various countries follow
their own policies, rules and regulation
which become threat for virgin Atlantic
is as it is not possible to operate
services according to each and every
country. Rising labour cost, changes in
aviation regulation and alterations in

offered by Virgin Atlantic. policies of European market affect the
profitability of organisation.
It is evaluated that McKinsey 7S model helps Virgin Atlantic is in maintaining their
organisational culture in positive manner. The operation become more smoother during the
changes and alterations of various strategies and policies with the help of model. In order to
sustain for longer time period it is important that organisation should implement is strategic
changes which attract large number of customers (Chin, 2021). Virgin Atlantic studied their
internal and external environment of business so that they can effectively formulate and
implement policies so that they can engage the targeted audience in effective and efficient
manner.

CONCLUSION
From the above report it can be concluded that organisation planned their policies and
strategies according to the requirements so that they can increase their competitive advantage is
in desired manner. They can implement various alterations which helps them in overcoming
various challenges, risks and threats and make them efficient in grabbing different opportunities
in best possible manner. It makes operation more easier and smoother which engage their
targeted customers for longer period of time and helps organisation in maintaining their
sustainability. This report includes theoretical and strategic choices which company can adopt
along with recommendations for the best strategic change. Recommendations and support are
mentioned in order to the appropriate options for a strategic change which company can
implement in their operations. Change management theories also discussed along with their
strength and weaknesses of an organisation is also mentioned in this report.

REFERENCES:
Books and Journals
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University Press.
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