Micro Analysis of Virgin Group

Micro Analysis of Virgin Group

Introduction

The hospitality industry was acknowledged by the organizations; hence, they implemented the strategic approaches in order to gain the advantage even in the competition. One of the most recognized hospitality businesses is the travel sector in which many competitors participates just to gain the favor of the customers and be profitable in the long run.

 Analysis on the Organization

The airport dominance has grown competitive in the hospitality industry of every country. Accommodating this competitive growth is the role it plays in the helping the economy to survive. There is always a different philosophy in every business venture in the heads of the entrepreneurs and airlines are a huge investment that still on the case-to-case basis for survival. In addition, there is a regulation that is strictly implemented in the market which makes the competitive advantage hard to catch. The specific strategy that can be applied is out of interest in finding dominant position. This is the evolving issues for the changes that might happen inside an organization. The similarities, differences and crossing out of the unlikely process and procedures are the continuous methods applied in the intermediate term of the company’s existence (Bilotkatch, 2007).

 

 

Virgin Group’s Strategy

Through the expansion of partnerships there is a broaden service of the Virgin Alliance and start providing the quality of service in smaller markets. Investing in the possible markets creates a good impression to capture the market. The airline became popular because of their service offered they can answer the needs of the customers in the cities where there is a large group of jetsetters and business class which is another advantage to increase the rate of return of the customers (Dunlea, 2000). In the continuous practice of the organization, they became the industry’s most favorite in airlines and second largest long-haul carrier on the route of London to New York (Rifkin, 2004).

SWOT Analysis

First is the Virgin Airlines’ Strengths, there is no doubt that influence, values and legacy of Mr. Bronson is one of their major strengths. Other advantage is that the business is privately owned which means they can manage the business well without the aid of following the government’s restrictions. The business also set the good image and good marketing strategy which reflects in promoting each other’s business as part of the alliance. Since it is the first company that offers low prices, they also get a chance to lease the aircrafts. Another factor is the strong leadership team of the seniors who are qualified enough in leading the entire organization toward the competency.

Second are the Weaknesses behind the Virgin Airlines. Because of the different business try-outs of MR. Branson, he is also part of his business’s weakness. All of his proposed projects or business’ strategies affect his other business although it is successful and stable. Another weakness is the low return of cash flow because they offer low prices for the passengers and there is a high expenditure for maintenance of the aircraft and sustaining the quality of their service. The direct route from London to New York is also considered as part of the weakness because it only promotes the limited destinations.   

Third are the Opportunities for the Virgin Airlines. There are more cities open for another hospitality service and based on the smooth record of the airline, it is another success for them. Some of the large airline companies had experienced bankruptcy and it is a great opportunity and in addition, the European Union is on their side to support.

Threats are the fourth analysis on the airlines. The rapid growth and change in the world economy is a factor of threat because of the New Airline Restrictions. Another is the competition and high prices on the cost of fuels, threats on the terrorism, over flight restrictions, and the new airline companies are the other existing threats.  

Conclusion

In investigating the small section of the Virgin Group organization, the SWOT analysis is used. However, the PEST analysis and Porter’s Five Forces analysis are also important to measure the macro environment and identify the right position of the firm in the industry to outperform the other rivals. In fact, those analyses are not always meant to measure the uncertainties or threats in the market but to reduce the impact it might bring in the business. It is expected that the changes economic trends, changes in social, political, and technology can serve as a threat or part of the weakness of the business, but knowing this weaknesses is the key of the business to open and manage the opportunities for their future.    

References:

Bilotkatch, V., (2007) Asymmetric Regulation and Airport Dominance in International Aviation: Evidence from the London-New York Market, Southern Economic Journal, 74(2)

 Dunlea, (2000) Virgin Atlantic Case. [Online] Available at: http://www.depts.husson.edu/cookc/marketingcourses/virginatlantic.ppt [Accessed 11 August 2010].

Rifkin, G., (2004) How Richard Branson Works Magic [Online] Available at: http://www.startupjunkies.org/Branson%20Case%20Study.pdf [Accessed 11 August 2010].

 

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