MGBBT0UBN Case Study: Virgin Atlantic's Business Analysis

This case study provides an in-depth analysis of Virgin Atlantic, a leading British airline company, focusing on its organizational structure and business environment. The report identifies the hierarchical structure employed by Virgin Atlantic and its implications on communication and decision-making. It further examines the external factors impacting the company's performance through SWOT and PESTLE analyses, highlighting strengths such as its value-for-money positioning and weaknesses like financial challenges due to Brexit. The analysis also identifies opportunities and threats, including changing customer perceptions and intense competition in the airline industry. The study concludes that while Virgin Atlantic possesses significant strengths, it must address challenges posed by external factors like COVID-19, Brexit, and environmental concerns to maintain its competitive edge. Desklib offers a range of resources, including past papers and solved assignments, to support students in their academic endeavors.

Virgin Atlantic

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................3
MAIN BODY...................................................................................................................................3
Organizational structure of Virgin Atlantic.................................................................................3
Business environment analysis....................................................................................................4
SWOT Analysis of Virgin Atlantic..............................................................................................4
PESTLE Analysis of Virgin Atlantic...........................................................................................5
CONCLUSION................................................................................................................................6
REFERENCES................................................................................................................................8

INTRODUCTION
Virgin Atlantic is a well- established and a well- recognized company in particular. The
main name of the company is Virgin Atlantic Airways Limited. The company was founded in the
year 1984. Hence, it is operating in the market since almost four decades. The head office of the
company is in Crawley, England. The company basically is an airline company and has around
5000 employees. The major hubs of the company are London- Heathrow and Manchester. This
report in particular gives a brief discussion regarding the different aspects of the company 'Virgin
Atlantic'. Firstly, the report gives a description of the organizational structure of the company in
particular. Which means what kind of structure is followed by the company and the ways
through which the particular structure impacts the working of the company. Next, the business
environment of the company is analysed in the report in particular. Also, the factors impacting
the working of the business are identified. This is done through conducting SWOT analysis, for
analysing the strengths, the weaknesses, the opportunities and the threats of the company. And
also, PESTEL analysis is done, in which all the external environmental factors impacting the
working and the performance are evaluated.
MAIN BODY
Organizational structure of Virgin Atlantic.
The organizational structure is the way through which communication particularly flows
within the organization in particular (Ahmady. Mehrpour. and Nikooravesh., 2016). The
organizational structure are mainly of two types in particular. These two types are tall or
hierarchical organizational structure and the flat organizational structure in particular. In the
company that has been selected which is Virgin Atlantic, the most suitable structure of the
organization that has been selected by the company or implemented by the company is
hierarchical organizational structure in particular (Winnubst., 2017). It is also known as the tall
organizational structure. This structure is specifically used by the companies that have a wide
scale and work on a large level too. And this is a company that has a large number of employees
and also it works on a major level.
A tall organizational structure basically focuses on a business or a company having
different levels of the authorities inclusive of the chain of the command that basically connects
multiple levels of management within the organization in particular (Lee. and Edmondson.,
2017). In this structure the decision- making is mostly formal and it mainly flows top down.

In a big company like Virgin Atlantic, such a structure is most suitable. His is because, in
this structure, the chain of command is very clear and precise too. The paths of the advancement
are also clear (Catipon., 2017). This structure also allows better communication which is also
clear and for an organization that has around 5000 employees the communication is required to
be specific. But rather than the advantages this structure also has disadvantages,
The major disadvantage in this is the procedure and the communication is very time-
consuming. Due to which the situations become worse at times. Also, the structure leads to
reduction in the levels of innovation and creativity in the ideas. Also, the employees of the
company usually do not feel so involved.
Business environment analysis
Business environment means the aggregate of all the forces or factors which influence the
overall performance and operation of business (Abu-Rumman, 2021). These factors are basically
external for the company and also beyond the control of individual business. Hence, identifying
and understanding these external and internal factors impact over the company is important for
all companies including Virgin Atlantic.
SWOT Analysis of Virgin Atlantic
Virgin Atlantic is a British airline company that focused on creating differences in their
each services along with driving efficiency and effectiveness. The swot analysis of Virgin
Atlantic are as follows: Strength: Virgin Atlantic have cool image in the market because their focus on providing
quality service to passengers. Also, they are leading in setting a number of trends in the
airline industry. The company is positioned as a value for money brand that's why they
able to manage their sales after Covid-19 situation. During Covid-19 and temporary
restriction, the company unable to make income but because of its mastery in customer
satisfaction, Virgin able to enhance its sales and net income drastically after restriction.
Even the quality of service they offer help them to keep the customer satisfied even at
higher price during inflation situation (Sacco and et.al., 2022). Weaknesses: The key weaknesses of Virgin Atlantic are financial difficulty, poor
differentiation and expensive airline. Because of Brexit, the airline company have faced

lots of financial challenges as they spend in dollar but received the revenue in pound.
That difference in exchange rate causes financial loss to company. Also, many passengers
consider the company as expensive airline as compared to other airlines. Opportunities: Change in customer perception is the key opportunity for Virgin Atlantic
with the help of which they can even attract large customer. As per this factor, the
company able to attract the customer towards its new, unique and differentiated products
and services.
 Threat: The high level of competition in airline industry is the biggest threat for the
company (Muthee, 2019). Virgin Atlantic have faced lots of competition from the brands
such as Lufthansa, Emirates, Air France, British airways etc. Further, the Brexit decision
has result into the sudden dip in the number of passengers who are travelling abroad.
PESTLE Analysis of Virgin Atlantic
To analyse the various external factors and its impact on Virgin Atlantic is favourable or
not, Pestle analysis is used. The Pestle analysis of Virgin Atlantic are as follows: Political factor: The slowdown in various countries people have created issue for Virgin
Atlantic in the term of low revenue. It is because due to slowdown in various countries
people, the airline companies required to opt for the low-cost services because of cash
crush problem. Further, Brexit is also a political factor which has causes loss of revenue
to company because of decline in the number of passengers. Economic factor: The economic factor includes inflation rate, interest rate, spending
pattern of customer etc. impact on the business performance. For example, in the covid-
19 situation, Virgin Atlantic has decided to lay off 3000 staff because of the low revenue
(Camillo and Kim, 2021). The impact of which customer also started spending money in
low cost airlines due to low salary in Covid-19 situation. In this way, the covid-19 and
inflation has poses threat on Virgin Atlantic. Social factor: The social factor impact over Virgin Atlantic is high. It is because the
company operates in various countries and for this they also required to keep their eye
close to different culture, spending habits, gender ratio etc. The Air traffic control is a
major threat for Virgin Atlantic as this creates difficulty for the company to operate.

Hence, in order to convert threat into opportunities, the company is required to conduct
market analysis properly. Technological factor: The continuous technological development is also a significant
factor which need to be considered by the airline company to became successful. As per
this factor, involving safety standards, reducing cost of operations are some measure
taken by Virgin Atlantic company. They have implemented software and systems to
complete the targets more easily and quickly along with reducing the cost of wastage of
resources. Legal factor: The legal factors as per Pestle analysis includes copyrights, patents, data
protection, intellectual property etc. Virgin Atlantic always follow each law formulated
for airline industry which indicate the great opportunity for company. In case if the
company fails to follow the same, then it might cause heavy penalty to Virgin Atlantic
company (Pestle and et.al., 2021).
 Environmental factor: This factor is most significant in the present time. It is because
many companies forget about the environmental protection while delivering its products
and service. This is a threat for Virgin Atlantic because airline industry is highly
criticized for the higher carbon emission.
CONCLUSION
After summing up the above information, it has been concluded that Virgin Atlantic is
one of the leading British airline company. From the information, it has been also identified that
the organization structure followed by Virgin Atlantic is hierarchical structure where top
management give direction to company and lower level employees report their daily work to
superior. This is best for completing the day to day targets easily and quickly but not sufficient
for keeping employees motivated. Further, the report has been also covered the SWOT and
PESTLE analysis of Virgin Atlantic company to assess the factors affecting company overall
performance. Further, it has been also evaluated from the business environment analysis that,
Covid-19 and Brexit are the two key situation that have poses threat on the company. It is also
summarized from the pestle analysis, that higher carbon emission because of airline industry has
created bad image of Virgin company in the eye of stakeholders. Further, it is also analysed from
the report that high quality and value of money is a position are the strength of Virgin Atlantic

company. With the help of these factors, company can adopt appropriate strategies to became
successful not only in UK but also all over the world.

REFERENCES
Books and Journals
Abu-Rumman, A., 2021. Transformational leadership and human capital within the disruptive
business environment of academia. World Journal on Educational Technology: Current
Issues. 13(2), pp.178-187.
Ahmady, G.A., Mehrpour, M. and Nikooravesh, A., 2016. Organizational structure. Procedia-
Social and Behavioral Sciences. 230. pp.455-462.
Camillo, A. A. and Kim, W. G., 2021. An Assessment of the Competitive Position of the
Emergent Uruguayan Wine Industry: A Preliminary Netnographic Baseline
Study. Beverages. 7(2). p.26.
Catipon, J.M.N., 2017. Introversion in Relation to Job Performance of Subordinates in a Tall-
structured Organization (Doctoral dissertation).
Lee, M.Y. and Edmondson, A.C., 2017. Self-managing organizations: Exploring the limits of
less-hierarchical organizing. Research in organizational behavior. 37. pp.35-58.
Muthee, D., 2019. Keiretsu business structure in Virgin group: A literature review of advantages
and disadvantages of Keiretsu.
Pestle, W. J. and et.al., 2021. Shellfish Collection Practices of the First Inhabitants of
Southwestern Puerto Rico: The Effects of Site Type and Paleoenvironment on Habitat
Choice. Latin American Antiquity. 32(4). pp.850-857.
Sacco, R. L. and et.al., 2022. Unconventional sources of gaseous energy in the Southern Region
of Brazil: A comparative SWOT analysis. Revista Brasileira de Energia| Vol. 28(2).
Winnubst, J., 2017. Organizational structure, social support, and burnout. In Professional
burnout (pp. 151-162). Routledge.