An Analysis Of The Company Virgin Marketing Essay

Virgin Atlantic, the UK ‘s 2nd largest long draw air hose, operates a fleet of 38 aircraft to 30 finishs in Africa, Asia, Middle East, Indian Ocean, North America, the Caribbean and Australia. In a trade which was finalized in 2000, Branson sold 49 % interest of Virgin Atlantic to Singapore Airlines for ?600.25 million to organize a unique planetary partnership. Richard Branson is still the commanding authorization as he retains 51 % interest in the air hose.

This essay analyses the main internal and external factors that contribute to the success of the administration every bit good as supply a critical appraisal on the effectivity of the schemes employed. It farther discusses a twosome of strategic options that are available to the Virgin group for the following five old ages with mention to allow academic theoretical accounts and concepts.A

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Internal Analysis Of Virgin Atlantic

In order to understand the schemes, it is of import to analyze the internal environment of the administration. Internal analysis is done by agencies of the value concatenation of the Virgin Atlantic.

Value Chain Analysis

Porter ‘s ( 1990 ) Value concatenation model is an mutualist theoretical account that helps to analyze specific activities through which an administration can make value and derive competitory advantage. ( Pathania-Jain, 2001 ) . To carry on the value concatenation analysis, the company is split into primary activities ( those that are related with production ) and support activities ( those that provide the background necessary for effectivity and efficiency of the house like human resources direction ) ( Porter, 1985 ) . These activates are discussed below:

Primary activities

1. Inbound and Outbound logistics:

In Inbound logistics, the cardinal activities are those associated having the natural stuffs from providers and pull offing them within the house. These activities includes Stock Control ( hive awaying and pull offing fuel, bites, nutrient and drinks. ) , rider service system, installations be aftering etc ( Fig. 1.1 ) . It provides ample of installations to its clients, it gives pick of three main courses with chief repast, free drinks, an agreeableness kit for outbound journey, complimentary newspaper of rider ‘s pick. The installations keeps on increasing if you move from economic system to upper category. The upper-class rider gets limo service to go to airport where cheque in formalities are already completed before they check in hotel manner anteroom country and through a dedicated security country entirely for virgin air hose clients. The upper-class UK riders gets a complimentary airdrome transportation in chauffeur driven Volvo or Virgin Limo Bike which makes there outbound logistics quiet affecting to clients.

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Operationss:

Virgin Atlantic is the 2nd largest long draw air hose in the UK and the 3rd largest European bearer over the North Atlantic. It operates to many of the top finishs around the universe including finishs in the Caribbean, US, India, Far E and Africa. It has won many awards about in most classs that travel industry offers.

3. Selling and Gross saless:

Virgin Atlantic uses a broad scope of marketing techniques. Ad activity includes magazines, Television, cab sides imperativeness, out-of-door postings and direct mail. Besides promotional strategies plays critical function during traditionally low seasons. To promote trueness, Virgin Atlantic offers winging nine rank where in members gets free stat mis that can be exchanged for free flights and other wagess. In add-on, Virgin Atlantic besides advertises through travel agents and tallies broad scope of promotional strategies, offers trade inducement, organises trips and social/educational events.

The web site ( www.virgin.com/atlantic ) besides plays critical function as it offers full electronic engagement, give information on finish, informs milage balance to members and different promotional strategies.

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3.Service:

Virgin Atlantic has won legion awards for its service and claims to put up new criterions of service by open uping scope of inventions. For illustration, with regard to comfort during journey, its upper-class suite has longest and most comfy level bed and place in air hose industry for which alone it won 12 awards. For going from airdrome, virgin Atlantic offers limousine service and Bike service to its clients.

Support activities:

Firm Infrastructure:

It includes planning and control systems, such as corporate scheme, accounting and finance. ( Lynch, 2003 ) . Virgin Atlantic expends to a great extent on technological solutions and substructure. The Finance section analyse the disbursals due and fiscal status of the group and consequently plans the disbursals necessary for growing of administration.

2. Human Resource Management:

Virgin Atlantic recruit people by agencies of newspaper advertizements and through its web site. Existing staff can besides urge and gain inducement through the same. Virgin Atlantic gives first preparation to its employees and develops their employees from clip to clip by organizing educational events. Besides they recruit and train people with gestural linguistic communication accomplishment to ease to disable riders

3.Technology Development:

Virgin Atlantic non merely considers technological developments as vital for growing but besides spends a batch on it. It has award winning in-flight amusement system, travel seats and beds designed to give excess comfort. Besides it is continuously working on advanced aircraft design and technological solution to cut down C emanation

4. Procurement:

Virgin Atlantic has an efficient procurance section, which obtains quality goods and services at lowest monetary value so that the riders can avail these world-class installations at competitory monetary values. The section takes benefit of big operations of and therefore achieve economic systems of graduated table. The section besides interacts with a figure of administrations that provide managing services at airdromes, Including luggage handling, refuelling, care, cleaner services and security. These services are offered by a figure of companies and can assist in cut downing costs.

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External analysis of Virgin Atlantic

To hold a appreciation of the bing market every bit good as consumer and stakeholder perceptual experience, an consciousness of external factors is indispensable. This subdivision will foreground the place that Virgin Atlantic holds with regard to rivals, societal perceptual experience, etc.

PESTEL Analysis

An administration ‘s concern environment is constantly governed by external factors which can be loosely analysed as Political, Economical, Social and Technological factors. To derive an advantage in the present and future market the administration needs to cut down inefficiency and retain cost effectivity ( Grant, 2005 ) . As Virgin Atlantic operates within Europe, North America, Africa, Asia and Oceania, these factors differ to a certain grade and the mode in which rivals, political organic structures and societal groups react and respond to the trade name has to be anticipated with some attention.

Political and Legal factors

As Virgin Atlantic operates across the Earth, it has to accommodate its patterns to suite national and international Torahs every bit good as domestic air power regulations and ordinances. The mode in which rivals react to new market portions may besides affect political influences. When the United Kingdom opened Heathrow Airport to Virgin, thereby get rid ofing the London Air Traffic Distribution Rules, angered the president of British Airways and lead to BAA contributions to the Conservative Party being halted. Virgin besides incurred the wrath of Lord King when two fresh slots held by BAA at Tokyo Narita International Airport were awarded to the air hoses ( BAA, 2009 ) .

Economic factors

It must be stated that the brief fiscal crisis of the early 1990s forced the so Conservative British authorities to open Heathrow to Virgin despite resistance from BAA. This shows how external economic conditions can sometimes be favorable to a lifting administration in catching a hitherto unaccessible monopolised market. One of the chief economic factors that affect the air hose industry in general is the fuel hiking. Conrady ( 2009 ) notes that the low cost fuel monetary values provided to the UK air hose industry has greatly assisted in it get awaying the destiny of many of its European opposite numbers.

Social factors

The societal perceptual experience and credence of a trade name is of critical importance to any administration and Virgin Atlantic has managed to make that in a comparatively short period. Virgin Atlantic has been competing for the place to instil in the British public the trade name image of a national and international administration. When British Airways announced in 1997 that it will take the Union Flag from its vertical stabilizers in favor of more international images, Virgin was speedy to present the Union flag conspicuously in its winglets and olfactory organs with the tagline ‘Britain ‘s Flag Carrier ‘ thereby disputing BA ‘s traditional function as UK ‘s Flag Carrier.

The preparation of its staff is besides a major issue and is critical in deriving stakeholders and accomplishing stakeholder marks ( Nadal, 2009 ) . The service staff need to hold proper preparation to run into the high criterions of service which is expected of it by the consumers as a trademark of the air hose industry.

Technological factors

As an industry that to a great extent relies on engineering, the technological factor is the most indispensable factor in bettering efficiency in the longer term. Virgin has managed to present more than 700 following coevals airplanes, which provides a taging contrast to most of its rivals. Harmonizing to Briggs and Burke ( 2009 ) this besides minimises care and preparation costs in the long tally. Virgin ‘s enterprise to concentrate on supplying on-line service will besides hold a pronounced benefit as more and more consumers are being introduced into the World Wide Web on a day-to-day footing. Consumers are thereby allowed to acquire up-to-date information sing flight agendas and compare air hose monetary values.

Environmental factors

Environmental concerns have besides been a frequent issue as the air hose industry is ill-famed as a major defiler. Many runs have tried to befriend or at least quiet the environmental anterooms but more attempt must be put into projecting the image of an administration that is ‘doing its spot ‘ for the environment. Virgin has focused on informing consumers about the CO2 pollution before each flight. The responsibility free bags are now composed of a important proportion of reclaimable stuff in conformity with the Ministry of Agriculture ( Wheeler and Elkington, 2001 ) .

Critical appraisal of the virgin Atlantic ‘s schemes

The above-defined analysis conforms the scheme of Virgin Atlantic as being first-class service supplier, it makes its way by supplying distinguishable service. The corporate scheme of the administration is to supply first service at a competitory monetary value. The company ‘s scheme is good supported by statement of Porter ( 1996 ) , which says that put to deathing the same activities in a different manner than that of traditional rivals helps in accomplishing better place in sustainable mode. The company enters oligopoly market where client normally receives hapless trade and there is a range of geting market by giving better services.

To raise consciousness of their merchandises and services and new paths, Virgin Atlantic advertises through Television, imperativeness, magazines etc. Another scheme that administration usage is to do clients loyal by doing them member of there winging nine. The winging nine offers legion world-class installations which will non merely assist in fulfilling the client but besides deriving client trueness. The more clients travel through them, the more stat mis they get which can be exchanged with free flight and other wagess. They besides get particular support service and clubhouse entree.

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Besides during traditional low seasons, tactical publicities and monetary value advertisement are done to a big extent to maximise the aircraft capacity. In add-on to all these, Virgin Atlantic besides market through travel agents by offering them familiarization trips, trade inducements.

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Effectiveness of schemes chosen

SWOT Analysis

Harmonizing to Johnson ( 2005 ) SWOT ( Strengths, Weaknesses, Opportunities, and Threats ) is a utile tool to analyze fiscal histories and developing healthy work environment of a company. It is a major measure towards any strategic planning in a concern. It is considered to be really of import beginning of information for judgment and understanding any kind of state of affairss in the administration. Given below is the SWOT analysis for Virgin Atlantic.

Strengths

Virgin Atlantic is headquartered in state where competition is enhanced and tolerated due to deregulation

The virgin Atlantic has the caput office in the state where the competition is heightened and tolerated due to the deregulating, which means the concern is managed without the assistance of following authorities limitation. The of import characteristic of the Virgin Atlantic is the coaction with Singapore air hoses that made them one of the best air hoses in the universe. This has proven to be advantageous for virgin in many ways like immense market entree, restructuring, meeting engineering to develop new one, deriving cognition and widening supply etc.

The strength of the Virgin group possibly, is its importance to outdo client service and invention combined with trade name name gives a large advantage to Virgin Atlantic. Virgin believes in creativeness, adding its importance to client service and invention with the trade name name virgin proves out to be the biggest strength of Virgin Atlantic. Its has introduced many number ones in the concern like first to establish amusement systems, onboard bars which increased societal activities in-flight, supplying complimentary limousines services, beauty interventions in-flight. It farther introduced concern economic system cabin. It besides has a web site that dedicated to what a client can anticipate from the air hose and all other conclusive inside informations of involvement.

Virgin has a powerful e-business construction that makes communications simpler and easier with the clients. They continually measure the public presentation delivered by each crewmember on flights. An extra plume to their cap is the exceeding service Sn supplying aid to disabled/visually-impaired riders. It non merely helped in gaining good repute but besides winning EASE award consecutive four old ages.

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Failings

The major drawback Virgin Atlantic faces is limited market range as unlike other major international air hoses. It operates in limited states merely like UK, Caribbean, South Africa, India, Australia, and US

The companies reach in codification sharing is limited hence it is non able to bask the benefits of codification sharing which the members of taking Global confederation are able to make such as deficiency of movable precedence position, deficiency of seamless travel, deficiency of enhanced frequent-flier plan benefits, limited drawn-out sofa entree and deficiency of greater web entree. This is because Virgin Atlantic is non portion of any taking planetary confederations.

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A Opportunities

Virgin Atlantic is one of the few air hose companies runing successfully in African states, gradual liberalization in UK/south African market taking to 53 % rise in flights and 62 % addition in riders. The concern has increased improbably.

There are few more metropoliss, which can be considered for cordial reception service based on the smooth record of the air hose. Some of the really good known and big air hoses have experienced bankruptcy in recent times supplying them a great chance. Besides the European Union is on their side supplying to a be great support.

Traveling frontward, Virgin still have a great range to turn in African market as merely the British and African air passages in ruling the continent and virgin comes at 3rd place. It should concentrate on increasing the market portion in Africa. Another chance available with Virgin Atlantic is pulling clients by sharply advancing the clubhouse installations and debut of its latest Heathrow clubhouse. The figure of tourer coming to UK is increasing twenty-four hours by twenty-four hours which is an chances available to them but in competitory environment, its quiet tough but strategic and aggressive selling can do it possible. A

A

A Menaces

The current state of affairs all over the universe has lead to increase in competition so there is high possibility of menace due to competitiveness in the market which in bend creates force per unit area to keep uninterrupted net income. This would in bend lead to forceful confederations, amalgamations and acquisitions which might non be in the involvement of the company. Other issue of concern is adjustment of riders on the aircraft. Other menace may be the statute laws i.e. altering policies and regulations by authorities in the state where Virgin Atlantic operates. This may lag the operations and concern of the company. Another major menace is outgrowth of new air hoses, which can increase competition. Besides if new air hoses or bing rivals adopt Virgin Atlantic ‘s construct and construction, it will be a major menace to the company

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Strategic options for Virgin media:

Ansoff Matrix:

The Ansoff matrix ( Ansoff, 1957 ) invented by Igor Ansoff who is besides known as male parent of Strategic Management and was foremost published in Harvard concern reappraisal in 1957. It presents the merchandise and market picks available to an organisation. In this markets may be defined as clients and merchandises as points sold to clients ( Lynch, 2003 ) .

Main facets of Ansoff Analysis

The Ansoff matrix provides the footing for an organisation ‘s nonsubjective scene procedure and sets the foundation of directional policy for its hereafter ( Bennett, 1994 ) . The four schemes entailed in the matrix are elaborated below.

Ansoff Product-Market Growth Matrix:

( Ansoff, 1957 )

Market Penetration:

It occurs when an administration accesses a market with its recent services & A ; merchandises. The market incursion scheme begins with the bing clients of the organisation. This scheme is frequently use by companies in order to increase gross revenues without rolling from the original scheme of product-market. ( Ansoff, 1957 ) .

Merchandise Development:

Firm develops new merchandises providing to the same market. This scheme refers to the important new development of merchandises non merely minor alterations to the bing merchandises ( Lynch, 2003 ) .

Market development

In this peculiar scheme, a company moves beyond its bing client base in hunt of new clients for its existing merchandises and services. This scheme involves seeking of new section of a market, seeking of new country to pull new clients, different/new usage of merchandises and services. ( Lynch, 2003 ) .

Another good scheme that comes under market development is selling bing merchandises in new international markets. ( for illustration British houses can see of selling there merchandises in complete European markets ) .

Diversification

Levitt ( 1983 ) justly whispered that universe these yearss is going common market and people no affair where they live are demanding similar merchandise and lifestyle. There has been a monolithic rise in international trade because of globalization and liberalisation. Diversification scheme basically involves motion of current merchandises and services in new markets ( Lynch, 2003 ; Macmillan et Al, 2000 ) .

All four strategic options defined above in the Ansoff ‘s theoretical account bears risk component with them. Although Market incursion is frequently considered as a low hazard scheme but variegation is considered as a bad growing scheme as it involves immense investing that increases due to at the same time motion into new merchandises and new markets. When applied to Virgin Atlantic, this theoretical account consequences in to two critical strategic options available. Product development scheme and the Market development scheme, to go the most successful organisation Virgin Atlantic should follow both of them.

The merchandise development scheme suggested through Ansoff ‘s matrix can be a really good scheme for Virgin Atlantic because of the type of client base, the company possess. The company has good client base of upper category households and corporate barons. If the company present new merchandises or bomber merchandises, they can market it to these bing clients. The company should concentrate on beef uping the relationship with bing clients frequently known as Relationship selling. One of the ways to accomplish it is being in contact with them, giving them particular offers, and at times offering them grant. If they are given particular installations and first-class services so it will develop trade name trueness in them.

Another option available with Virgin Atlantic is market development scheme which involves hunt of extra geographical parts and extra market section. If we compare the flights/services offered by Virgin Atlantic with British air hoses, there is a big spread. Although Virgin Atlantic is UK ‘s 2nd largest air hose but it operates flights to merely 26 major finishs whereas against BA has flights to more than 150 uneven finishs. Virgin Atlantic should increase the figure of finishs, which can be done after carefully analyzing the facts and figures about the population, operations, flights of rivals etc.

Besides Virgin Atlantic group should concentrate on developing state ( Asia Pacific Region ) as the growing chances ate higher than developed states. China and India are two developing states with highest population and expected compounded growing rate in this part in 2007-2012 will be 5.2 % . The fabrication cost is relatively low in these states doing them attractive finish for concern. Besides it will be a sound determination to outsource operational work to these states.

Virgin Atlantic is celebrated for epicurean flights as it offers world-class installations to their riders but in this competitory environment they are non offering anything monetary value witting economic system category riders. They should present no frills flight with the aim of gaining net incomes on economic system of graduated tables. With this scheme they will non merely diversify their hazard but can potentially capture a new section utilizing their trade name name and service.

Decision:

To reason, after analyzing internal and external factors of the Virgin Atlantic, it has been observed that Virgin group has grown massively and became first trade name following the way of virgin group but it is still in way as there is a monolithic range of growing which can be realised by combination of two schemes. They are merchandise development and market development and market development. If used suitably, they can assist Virgin Atlantic to