Strategic Management in Virgin Atlantic

This report explores the strategic management practices of Virgin Atlantic, a British airline company. It discusses the industry structure, market position, and company profile. It also compares Virgin Atlantic with its closest competitor in terms of innovation, strategic innovation, CSR, governance, and ethics.

Strategic management

Table of Contents
INTRODUCTION...........................................................................................................................1
MAIN BODY ..................................................................................................................................1
Establish a company profile with it industry structure, market position, country market, size
and brief of the company ............................................................................................................1
discuss the extent of the company has engaged with and comparison with the closest
competitor on the basis of innovation, strategic innovation, CSR, governance and ethics .......3
CONCLUSION ...............................................................................................................................5
REFERENCES................................................................................................................................7

INTRODUCTION
Strategic management is refers to the process of setting goals and objectives along with
the plan strategies that has been used achieve those goals. Strategic management is about
specifying the organisational mission, vision and objectives and description of the strategies that
managers can carry and also communicate to the workers in order to achieve better performance
and a competitive advantage for the organisation. In addition to this strategic planning is
described as the organisational process that defines the strategies, directions and decision making
relating to the allocation of the resources to follow up the strategies and plans to accomplish the
organisational objective effectively(Köseoglu, and.et.al., 2019). Strategic plan provides the space
to the company to record it mission, vision and values along with the long term goals and the
action plans that will help in to reach at the goals. This report is based on the virgin Atlantic
company which is an British based airline company with the headquartered in Crawley, England
and operates at the 30 destinations. This report is consist of the company profile on the basis of
its market structure, market position and size. Further more it includes the comparison of the
company with the closest competitor on the basis of various factors.
MAIN BODY
Establish a company profile with it industry structure, market position, country market, size and
brief of the company
Industry structure:
poster's five model: this is refers to the tool which is used as the framework to analyse the
competitive environment of a business. It has been draws from the industrial organisational
economic which have been drives the five forces that helps in to identify the competitive
intensity along with the attractiveness of the industry in terms of profitability. Its five forces in
context to virgin Atlantic company is discussed below:
bargaining power of buyer: this is refers to the ability of the buyer to drive the prices lower. In
the aviation industry this power of the buyer is low(Ateba, B.B. and Prinsloo, J.J., 2019). As this
is one of the premium service in which buyer has the low or no power to bargain over the tickets
prices of the aircraft.
Bargaining power of suppliers: this factors addressed that how easily suppliers drives up the cost
of the inputs or raw that is purchased by the airlines company as the parts of the aircraft. It has
1

been affected by the number of suppliers of the key inputs of the products and services through
out the services. Here the bargaining power of the suppliers are high, as there are few suppliers
in the industry that manufacture or sale the parts of the air-plans. The fewer suppliers in the
industry, the more will depends on them for the key inputs.
Threat of substitute goods: this refers to the goods or services that can be used at the place of the
company's product or goods , this factor poses the threat for the company. Business that produces
products and services which does not have an close substitute, that has more power to increase
the prices and that poses as the advantage for the company, in the aviation industry threat of the
substitute goods and services is moderate as people will prefer trains, buses or personal vehicle
to travel within the national boundaries. But for the international travel there is only one option
to move in which there is no threat of substitute product or service(Rudaya, 2019) .
Threat of new entrants: the company power is also depend upon the new entrants into the
market, the less time and money that is cost in entering in market then it would be an effective
competitor. In this industry threat of new entrants is low, as it needs lots of investment of time
and money. Which is not possible for the any of the entrepreneurs, this is an industry with the
strong barriers in which they are free to rise the prices and negotiable better terms.
Competition in the industry: this is refers to the number of companies available in the industry.
The rivalry in the aviation industry is very low for the many reasons. On of the key reason is that
it needs a Hugh capital to invest, time and planning. And also have the strong restriction and
many formalities to enter(Bogiday, 2019).
Along with the industry model, there is oligopoly market structure in the aviation
industry. In this structure there is an small number of the large firms and large number of buyer.
This market id dominated by these large companies, this has been reduced the market
competition which leads to the higher prices for the consumers, in this companies are considered
as the prices maker.
market position: this is refers to the place which is occupies by the company in the mind of the
customers(Bolland, 2020) Virgin airlines company has hold the great position as this is an
trendsetter company of this industry as it provides the services standards that are considered to
be as innovation. Along with this it has focused on the quality as it ave been diligently following
the total quality management process in its services so that customers get the best experience and
feel satisfied. It has been one of the leading premium airlines companies in which it has been
2

occupied the 31% share in the airline industry along with the £2.781 billion of annual revenue.
This has been carriers the 5.4 million passengers till date as this is the seveth largest company in
the world.
Country market: this has been operated in the various countries along with the 30 destinations. It
has the large market size as this operates internationally, it main hub is in the London and
Manchester, UK. In the aviation industry has the third largest network in the world and second
largest in the aerospace manufacturing sector, this market has the turnover of £60 billion, along
with contribution of over £22 billion I the GDP of the country and almost it has directly or
indirectly supported the one million jobs in UK (Stoyanova, and. et. al., 2019). The aviation
market in the uk is growing rapidly and this is an one of the key contributors in the growth of the
economy of the economy
brief of the company: virgin Atlantic is an British based airline company with the head office in
Crawley, England. This company was founded in 1984 by the randolph fields which is an
american born lawyer and alan hellary, he is an former chief pilot of for british provate airline.
with the name of British Atlantic airways and it was first fly between the London and Falkland
islands. Holding company virgin Atlantic limited as controlled the virgin holidays. In which 51%
hold by the virgin group whereas 49% is owned by the delta air lines. It uses the mixed fleet of
Airbus and Boeing wide-body aircraft which operates at the 30 destination sincluding north
America, Africa, meddle east and Asia from it main base at Heathrow, where it secondary base is
at Manchester. In addition to this, airline also operates its seasonal flights from Glasgow and
Belfast. Virgin Atlantic aircraft consist of the three cabins that are economic class, premium an
upper class. This company has announced that it will going to add the joint venture in July 2017,
but later in December 2019, this has been announced joint venture will not be taken in the stake
of the company. Recently on 5 may 2020, it was aanounced that company will laying out the
staff of 3000 people due to the COVID-19 pandemic attack and reducing the feet size to 35 by
the summer of 2022 (Andreeva, and. et. al., 2018).
discuss the extent of the company has engaged with and comparison with the closest competitor
on the basis of innovation, strategic innovation, CSR, governance and ethics
Strategic management of the company is the key factor in the sustainability and success of the
company. This is an process that has developed and implement the various strategies in order to
execute the plans in a effective manner so that goals and objectives can achieved with the
3

positive outcomes. This is an internal part of the organisation which is differ from company to
company as per their nature and structure. Companies are different in many as they are having
their own vision, mission and objectives that has been achieved with the different ways and
through the strategic planning(Mahsud, Imanaka, and Prussia, 2018). There are various
differences between the companies in terms of various factors that are discussed below in context
to virgin Atlantic company.
Basis Virgin Atlantic company British airways
Innovation The company uses the concept of
artificial intelligence through which
they expanded their growth as well as
positive customer experience. The
industry is using this technology to
initiate various offers as well as services
for the benefit of individual travellers.
Through this technology data
management services and all tasks were
easily managed(Karpenko, and. et. al.,
2019).
British airways uses beacon
technology which led their company
to great success as by using this
innovative technology, travellers felt
very good because all navigation
details were sent to them on
personal basis. All important
information all send to them which
involve baggage details, status of
flights, boarding gate number.
Strategic
innovation
The company use biometric technology
which improve and enhance traveller
processing and better customer
experience. Through biometric
technology, passengers are identified by
fingerprints, video cameras which led to
growth in their airline companies. It
provided high security to people and
fast customer experience which is most
for organisation to enhance their
growth.
The british airways enhanced the
concept of voice technology which
is very interactive for airline
industry. It has become convenient
for travellers to ask for their flight
information, any updates if there are
many changes then passengers can
easily get those details. The startegic
innovation of voice technology has
made great impact on interaction
between customers as well as airline
4

industry (Fontrodona, J., Ricart and
Berrone, 2018).
CSR The virgin atlantic company use
concept of reducing carbon foot prints
by using sustainable fuels which was
very much effective for airline industry.
Due to use of sustainable fuels they
have gained lot of importance as no
company or individual would like to
travel in those airlines which is
hazardous to environment.
The british airways developed the
concept of lighter as well as
aerodynamic airplanes which
provide fuel efficient engines as
well as bio fuels which reduced
negative impact on environment.
They trained pilots for fuel
efficiency, used bio-degradable
products as well as recyclable
products.
Governance
and ethics
In case of virgin atlantic company, they
don't do false advertising. They don't
believe in being dishonest with their
customers and always provided correct
details for their passengers.
British airways never did
discrimination among all passengers
as they made their seats available
for every type of passenger whetehr
they have any disease or not so all
travellers were happy by travelling
with those airlines.
CONCLUSION
From the above analysis it has been concluded that strategic is refers to the key factor that
provide support in to the sustainability and success of the company. This has been the ongoing
process that formulates and implement the strategies and plans into the cation to achieve the
objective and goals of the company. Further this report has included the structure of the aviation
industry along with its market position, country market and size. In addition to this, it has been
included the brief of the virgin Atlantic company which is an British based airline company, and
5

what the strategies it use to maintain the market position and the longer sustainability at the
market place. Moreover there is comparison of the airline companies n the basis of their there
various strategies such s innovation, CSR, governance and ethics.
6

REFERENCES
Books and Journals
Köseoglu, and.et.al., 2019. Evolution of strategic management research lines in hospitality and
tourism. Journal of Hospitality Marketing & Management, 28(6), pp.690-710.
Ateba, B.B. and Prinsloo, J.J., 2019. Strategic management for electricity supply sustainability in
South Africa. Utilities Policy, 56, pp.92-103.
Rudaya, I., 2019. Issues of strategic management of Russian innovative organizations’
intellectual property. Upravlenie, 7(1), pp.50-59.
Stoyanova, and. et. al., 2019. Strategic Management of the Personnel Development of Industry
Andreeva, and. et. al., 2018. Integration of strategic and quality management in oil and gas
companies of Russia. Calitatea, 19(163), pp.81-84.
Bolland, E.J., 2020. Evolution of Strategy: Origin, Planning, Strategic Planning and Strategic
Management. In Strategizing. Emerald Publishing Limited.
Karpenko, and. et. al., 2019. Strategic management of entrepreneurship based on smart
technologies. Journal of Entrepreneurship Education, 22(5), pp.1-6.
Mahsud, R., Imanaka, J.L. and Prussia, G.E., 2018. Authenticity in business sustainability:
overcoming limitations in strategic management constructs. Sustainability Accounting,
Management and Policy Journal.
Fontrodona, J., Ricart, J.E. and Berrone, P., 2018. Ethical challenges in strategic management:
the 19th IESE International Symposium on Ethics, Business and Society. Journal of
Business Ethics, 152(4), pp.887-898.
Bogiday, I., 2019. Clusterization of agro-industrial enterprises of Ukraine as the basis of
effective strategic management. Agricultural and Resource Economics: International
Scientific E-Journal, 5(2), pp.86-98.
7