Business Strategy of Virgin Atlantic Airlines Contents 1) Introduction to airline industry 2) Drivers of globalisation using yip’s model 2.1 Market globalisation 2.2 Cost globalisation 2.3 Globalisation of government policies 2.4 Globalisation of competition 3) Localisation- arguments against globalisation 4) Pestle Analysis 5) Porter’s 5 forces analysis and their application to Airline industry 5.1 Rivalry amongst Existing Firms 5.2 Threat of substitution 5.3 Threat of new entrants 5.4 Power of customers 5.5 Power of buyers 6) Opportunities and Threats of Airline industry 7) Internal analysis of Virgin Airlines: Strengths and Weakness 8) Financial Statics of Virgin Atlantic Airline 9) Strategic Changes of Virgin Atlantic Airline 10) Conclusion 11) Bibliography *1) INTRODUCTION TO *AIRLINE INDUSTRY http://www.investopedia.com/features/industryhandbook/airline.asp 2) DRIVERS OF GLOBALISATION USING YIP’S MODEL {draw:frame} 2.1 Market Globalisation: 2.2 Cost globalisation: http://adg.stanford.edu/aa241/intro/airlineindustry.html 2.3 Globalization of Government policies: http://findarticles.com/p/articles/mi_qa3766/is_200110/ai_n8986735 2.4 Globalisation of competition: http://adg.stanford.edu/aa241/intro/airlineindustry.html 3) LOCLISATION- ARGUMENTS AGAINST GLOBALISATION Asia is the most regulated market and is dominated by national flag carriers. Domestic fares are strictly regulated but international fares are less so. The US, by contrast, has been deregulated since 1978 and it is a market-driven industry. Domestic traffic is almost completely deregulated (except for specific issues like safety), but international traffic is governed by constraining bilateral agreements www.vocationallearni... ... middle of paper ... ...tlantic---Strategic-Memo/143561 http://www.virginatlantic.com/en/gb/allaboutus/pressoffice/presskit/index.jsp http://www.m-travel.com/news/2006/06/business_travel.html http://findarticles.com/p/articles/mi_qa3766/is_200110/ai_n8986735 http://findarticles.com/p/articles/mi_qa3766/is_200110/ai_n8986735/pg_2 http://www.virgin-atlantic.com/en/gb/allaboutus/ourstory/history.jsp http://web.ebscohost.com/ehost/pdf?vid=5&hid=21&sid=6829bffb-c97f-4d74-afff-b2827304add8%40sessionmgr3 http://www.virginatlantic.com/en/gb/allaboutus/pressoffice/presskit/index.jsp http://www.bashares.com/phoenix.zhtml?c=69499&p=irol-reportsannual http://news.delta.com/article_display.cfm?article_id=10959 http://www.datamonitor.com/companies/company/?pid=C00F1CDB-4C6F-4BA5-997B-A82D60E1071C http://news.bbc.co.uk/1/hi/uk/7259004.stm http://www.abcmoney.co.uk/news/272005315.htm
... amid nations (Gerber 2002, p. 29). Although there has been a major decrease of barriers to trade liberalisation concerning flight amenities in the last century, there are imperative uncontrollable external factors a business must assess and weigh before entering international borders and becoming a prosperous globally identified firm (Ramamurti & Sarathy 1997). Qantas, a highly esteemed patriotic and iconic Australian brand has demonstrated accomplishment intercontinentally. The ultimate success of their business, in order to sustain competitiveness in their global market, will rely heavily on their continuous assessment of combined political and legal reforms, economic dynamics, sociocultural influences, technological modifications and environmental concerns and their interlocking marketing strategies to gain the most beneficial opportunities that come their way.
After September 11th, 2001, the airline industry experienced a significant drop in travel. The reasons for the airline industry downfalls also included a weak U.S and global economy, a tremendous increase in fuel costs, fears of terrorist's attacks, and a decrease in both business and vacation travel.
Despite the growth in the market, Qantas International’s market share has been falling over the past 10years, from 34% in FY02 to 16% in FY13. The entry of Virgin Australia in 2000 in part explains this, however Virgin’s growth also coincided with the demise of Ansett in 2001 “… Virgin Blue will initially increase capacity on existing routes while evaluating what c...
In the Travel Pulse article "Airlines Leaving Us Little Choice – Like A Monopoly," posted by Rich Thomaselli, the practice of monopolization is observed in the airline industry. The author criticizes large airlines on their growth that has led to at “93 of the top 100 [airports], one or two airlines controlling a majority of the seats” (Thomaselli). The scornful article was written after recent events that have caused the Department of Justice and five States to sue two of the biggest U.S.
One of the many influences that affect Qantas is the presence of globalisation, which has heavily affected the airline both positively and negatively. Globalisation is a process which refers to the increased integration between different countries and economies as well as the increased impact of international influences on all aspects of life and economic activity. Globalisation is responsible for the removal of many trade barriers and the increased level of competition that Qantas has been exposed to. The increased levels of competition has increased consumer sovereignty and forced Qantas to implement strategies to gain a competitive advantage in order to redirect consumers towards their business. Qantas has implemented a cost leadership strategy as a response to globalisation and the influence of cost based competition. One way that Qantas achieved this was by using Globalisation itself to the business’ advantage. Globalisation ha...
In Europe airline, local government can prevent new entrants appear in the market. Suppliers bargaining power is not strong. Buyer can easily to switch to another airline. And, airline industry needs to face substitute by ferry, train and car.
Resources are being classified into tangible and intangibles assets as the followings: *Resources of *Virgin Group Tangible Resources Intangible Resources Capabilities of Virgin Group are established by the integrated resources that assisted it to stay competitive and to outdo its competitors. Valuable capabilities will aid Virgin Group to effectively tap and explore spotted opportunities as well as to minimize threats in the external environment. Should capabilities are consistently and effectively utilized, they will turn significant and be difficult to be imitated or substituted. With the resources discussed above, 3 capabilities of Virgin Group are identified as follows: - *Capabilities 1: Unique C*ulture of *"Making difference and creating uniqueness"* (*Contributed Resources: *Financial, Organizational, Human, Innovation*, Technological*) Creativity, Innovation are the foundations to Virgin and Richard Branson’s success! Technology push is the spine for innovation and likely to simulate process innovation in how service is provided when looking into Virgin. Technology is more likely to simulate process innovation. Every turn and businesses Branson venture has been with some kind of innovation or creativity element if not something unique, something that has not been seen or heard of before in the relevant market. Virgin Group has achieved a competitive advantage among its competitors by uniformly followed its culture in all business in serving good value and service to the customers in different ways. The basic and the core competence of all Virgin Group's business ventures are to do things just a little bit differently from the rest. And also they always tried to add value by adding a little fun to the business. By differentiating in strategy itself to fit of the activities and the ways of doing business have also differentiated itself from the rivals and make it difficult to imitate Virgin’s strategy. Hence, they have established their business to an untouchable position. How would you characterize the corporate strategy of Branson's Virgin Group? The answer to that question will not be so different from the ones above. However to better understanding we can characterize the corporate strategy of Virgin Group as "Making difference and creating uniqueness" in any kind of customers' service. They are not stuck to any business field so that makes them flexible of thinking and creating new ideas for their customers and the whole consumers around the world who need (or will need) Virgin's service.
In my discussion I will use the Australian airline industry to present how oligopolies operate, and to show the different behaviours and strategies that arise from the interdependence of firms. I will mainly concentrate on the domestic airline market in Australia. The domestic airline market consists of a duopoly of two firms, Qantas and Virgin Blue. Since Qantas and Virgin are the only two Airlines supplying domestically in Australia, they account for all of the profits in the market and consequently they are in direct competition with each other. Because only two firms are competing, each firm must carefully consider how its actions will affect the other, and how its rival is likely to react. Thus, strategic considerations regarding the behaviour of competitors in this duopoly are essential in order for Qantas and Virgin to set prices.
The article by Creedy looks at the newly announced expansion of Jetstar Airline services from its current domestic Australian flight service to its penetration of the trans-Tasman market. Jetstar’s original purpose was to provide Qantas (Same Ownership) a cost-effective alternative for the provision of domestic flights around Australia while also giving customers a cheaper and somewhat “no frills” option when flying locally. The article outlines the considerations and specifications that Qantas and thus Jetstar have undertaken in order to accomplish its “first foray overseas” as part of its “segmentation strategy”. Jetstar’s expansive venture is then obviously significant and relevant to the study of international business’s (any business transaction which involves a cross-border commercial transaction) and the goals and barriers achieved and endured.
HausAir fixed base operation will provide the highest quality of flight instruction and comfortable charter services to the public; without compromising an ounce of safety, at a price lower than the competition.
Airline and travel industry profitability has been strapped by a series of events starting with a recession in business travel after the dotcom bust, followed by 9/11, the SARS epidemic, the Iraq wars, rising aviation turbine fuel prices, and the challenge from low-cost carriers. (Narayan Pandit, 2005) The fallout from rising fuel prices has been so extreme that any efficiency gains that airlines attempted to make could not make up for structural problems where labor costs remained high and low cost competition had continued to drive down yields or average fares at leading hub airports. In the last decade, US airlines alone had a yearly average of net losses of $9.1 billion (Coombs, 2011).
Air Canada should pursue revenue generating and cost reducing opportunities by investing in new technology, implementing effective and efficient projects and concentrating on employee productivity through contract negotiations and continuous improvement that goes hand in hand with its long term goals. The announcement of the launch of “Air Canada RougeTM “ will aid as Air Canada’s competitive advantage with the “new low-cost leisure airline”. It will help increase its revenue, lower its costs and enhance its profits. Also, to better manage its fleet, they should soon implement the “new five-year collective agreement with the Air Canada Pilots Association (ACPA)” that can help the airline increase its productivity and better its competitive position while maintaining a low budget. Air Canada is expected to implement a new “revenue management” that will help optimize its profits based on passenger revenue.
You are required to undertake a detailed examination of the changing nature of the long-haul transatlantic airline market. The market you are required to investigate comprises only the international passenger market (i.e. excluding the movement of goods by air) and will require you to discuss the existing market structure, examine the changing external environment and consider the emerging strategy of the airline operators in this sector.
When an airline does not have a sustainable competitive advantage, it does not have any properties of differences from there competitor and turns to a dangerous price war. The sustainable ...
In 2011, Malaysia had the fourth largest air passenger traffic in the South and Southeast Asia region. Nonetheless, Malaysia stood first in terms of passenger traffic to population ratio among the emerging markets of Asia. Based on this data, it is clear that Malaysia has emerged as a major air transport hub in Asia, as many international passengers are using Malaysia as a base from which they travel in Asia (Malaysia Industry Research Aviation Industry, 2012).