Virgin airlines

Virgin airlines

Executive summary

The Virgin Atlantic is an international airline that offers quality services its customers. The company has gained popularity in the globe due to its differentiation strategy. The company has reaped greatly from the unique brand name it possesses. Most people in the globe have attached value to the world virgin. Some interpret it to mean innovation, others interpret it to mean quality, and others view it to mean something of value. This has resulted in most people perceiving the airline to providing quality services that are coupled with innovativeness. For sure, their perspective is right because the airlines are designed in such a way that one is made to feel special and comfortable. Individuals can enjoy themselves while abroad through the various services provided. The airline has ensured that people can work while on board, watch videos, play games, listen to music and so on. This leaves the customers with the willingness to travel again with Virgin Airline. The airline ensures that each person who interacts with them never regrets the experience. The management style is also another different strategy that has been applied.  The workers are allowed to have the freedom of being creative and innovative so that they can add value to the organization.

Introduction

Virgin Atlantic airlines are one of the ventures of the Virgin Group which are the largest private company in the United Kingdom. The group has been gained its popularity from the impact the Airways had on the international airline business. The airline has gained popularity in the world because of the services it offers as well as to the innovation attitude of its members which is focused on ensuring the business achieves its success and delivers exceptional services to its customers (Leitch, & Richardson, 2003). Virgin Group has been able to expand its operation and businesses in the world through joint ventures. This has seen it operate in more and more countries. This report aims at discussing the key international corporation strategies the group has applied and how they have contributed to the success of the airline.

Differentiation

Differentiation in the business world is very important. It has helped many businesses to achieve success. Differentiation is aimed at ensuring the company is distinct from the rest. It is focused on ensuring that customers can easily identify with the product and services offered by other companies. Customers will prefer an organization that has unique products that cannot be easily imitated by other organization. This makes it easy for customers to identify the products and services from the producer they trust. Differentiation strategy has ensured the Virgin Atlantic airline to soar high in the business world. The company has been able to compete favorably with its competitors. The airline has implemented its differentiation strategy and has reaped greatly from it (Leitch, & Richardson, 2003). The report will indicate how the Virgin airline has managed to apply the differentiation strategy in its international airline business.

Brand name

One of the strategies that make the airline business to succeed is the brand name. It is difficult for other r business to imitate the name of the airline. The name virgin makes the airline competitive in the business arena because customers can easily identify and differentiate it with other companies (Argenti & Druckenmiller, 2004). Researchers have identified that brand name contributes to the competence of a company. They consider brand name an important resource to the company because it makes it serve its customers with loyalty. According to most customers, the world virgin has remained to be valued in the society, and different people attach different value to it. People link the world with innovativeness, unique, successful, value of money as well as trust. The Virgin Atlantic airline was in a position to create for itself a good reputation from the start. This enabled it to capture the attention of many customers making it hard for other airlines to match to its competence (Leitch, & Richardson, 2003).

Quality services

Virgin Atlantic has been able to create competitive advantage among its competitors by ensuring they offer quality services to their customers. The company has embarked on innovativeness to ensure that all their products, as well as services, cannot compare with those of other competitors. This has ensured that customers perceive that any services they receive from the virgins, it is worth the price charged. The company is mandated to ensuring they provide services that are a little bit different from those offered by its competitors. This ensures they add value to the services they offer. The airline has engaged in in-depth research to find ways in which it can increase the customer satisfaction. This is achieved by ensuring there is a follow-up on the customer feedback. This has helped the airline in improving and making their services better day after day (Aaker,& Joachimsthaler, 2012).

Training of employees,

The Virgin Atlantic has invested in training its employees to ensure they learn the culture of the corporation. During the training, the individuals are informed of the policies that govern the corporation that has seen it achieve the success that they have in the present. The training aims at ensuring the individuals adopt a positive attitude that will ensure anything they do is meant to add value to the company. The trainees are encouraged to adopt the innovative culture which will help the organization forge forward.

Differentiation has greatly contributed to how the airline has been able to overcome the various challenges it has faced and finally able to establish a good reputation for itself. The legal and political environment has made it easier for airlines to find their way into the areas of interest. Research shows that more and more countries have come together to abolish trade barriers which may affect the economy of the countries. This has created leeway through which the virgin airways can expand its business in other areas. This aligns with factors that result from differentiation. The airline has been able to identify niches in the new markets where it brings with it a new experience to the customers. The conducive political and legal framework in different countries has enabled the Virgin airlines to serve its customers conveniently and offering them value added services (Leitch, & Richardson, 2003).

Advertisement

The Virgin airlines also have achieved huge success resulting from how the company advertises its services. It has been using the social platforms to advertise itself. This has facilitated to its popularity around the globe. Their advertisement makes people desire to experience their services. The use of the social media has given it a chance it frequently interacts with its customers. This allows the airline to get direct feedback as well as answer the various queries the customers may be having. The sweet words used in the advertisements such as an office in the air, fly like a boss and so on, has contributed much to the success of the airline (Aaker & Joachimsthaler, 2012).

Technology

The Virgin Airways has integrated a technical aspect in its services. It has ensured that their customers can book and get their tickets online. This has cost efficiency in its operations. It has introduced a set of complete facilities that make flying an exciting experience (Kim & Mauborgne, 1997). Availing a wide range of music selections, games, satellites television and movies has made their customers enjoy their services. This has enabled the airline to have consistent and loyal customers leading to a boom in the business. As part of its innovativeness; the airline became the first airline to work with the Google Gogo program that allows customers to enjoy in-flight Wi-Fi. This attracts more and more customers because those working can continue with their tasks in the flight.

Environmental consideration

The Virgin airline commitment to maintaining a healthier environment has also greatly contributed to its success. The airline has been using biofuel on some of their flights to ensure the air is not polluted. This is a differentiation strategy which focuses on ensuring that it complies with the environmental set standards that advocate for safer as well as the cleaner environment. This helps it to keep off from the long arm of the law. Being environmental sensitive makes the airline attract the customers who advocate for the same. This has seen the airplane achieve its success in the world (Heracleous & Wirtz, 2012).

Prices

The Virgin airlines are known to be charging a relatively low price for their services. This has contributed to the worldwide reputation the company enjoys (Graham & Vowles, 2006). Therefore, this gives the airline a competitive advantage over the other airlines. The airline is not likely to encounter a threat of new entrant because of the reputation created over the years and also due to the excellent customer services it offers to its customers, such as online ticket buying (Bilotkach, et al., 2010).

Skills and experience

The airline has also gained an added advantage because of employing only the qualified personnel. This has raised the level of confidence people have on the Virgin airline because they believe that qualified personnel will offer quality services and they will behave ethically. The management style within the airline also contributes to the skills and experience that the personal gain. The airline ensures that there are few bureaucracies to adhere to when making a decision. This gives the workers the freedom to be creative and innovative (Kim & Mauborgne, 1997). The management style applied helps the airline to have a wide pool of talents that makes it easy to uniquely serve its customers. Employing qualified workforce is paramount in ensuring the success of the airline because despite the fact that most of the resources can be imitated the personal factor in an organization cannot be imitated. Therefore, the more talents and experienced staffs an organization has is an added advantage to the airline.

According to Hamel and Prahalad (1994), an organization core competency is found in the technology it uses, the resources at its disposal, and the skills that help an organization to deliver its desired benefits to its clients. An organization cannot boast of being competent in a particular product rather it should boast on factors that are less imitable by other organizations. The core competence of the virgin airline has resulted from the uniqueness it possesses when offering its services to its clients. This makes it possible for the airline to enjoy the benefits resulting from its workforce continually (Flenskov, 2005).

SWOT Analyses

Virgin airlines have made progress in the recent years, and the same is expected to continue in the foreseeable future. Therefore, the SWOT analysis needs to be done to recognize the strength, weakness, opportunities as well as the threats of the airline. This will guide in the giving of the recommendations.

Strengths

The airline enjoys a high brand awareness resulting from its reputation all over the globe. This has enabled it to succeed with ease in the various new markets. It has made the airline to be received warmly even when it enters a new market. Besides the brand name of the airline, the reputation and acceptance may have resulted from the vigorous social media campaign by the airline. The services offered by the airline which is meant to give customers an exceptional experience adds weight to the strengths that the airline has. It is noted that the airline charges relatively low cost on its services. This has enabled it to attract all potential customers in the world. The airlines have ensured that it increases the benefits that its customers derive from using their services and this gives it a competitive advantage over the other businesses.  Being a leader in technology in the airline industry has also contributed to its strengths which make it deeply rooted in the industry (Ng, et al., 1999).

Weakness

Virgin Airways have not been able to expand its operation to many countries as compared to other airlines. Its markets are limited unlike some of its competitors. This affects the profits it makes. For example, in a year when it is operating in its market share now, it will earn less unlike if it would expand its operation to more and more companies. Also, the company has not invested greatly in advertising its business. This makes it not to reach out to all potential customers. The marketing it does also make people perceive it to be an expensive and luxurious airline based on the influence from its parent company as well as the additional and exceptional experience it offers to its customers (Kim & Mauborgne, 1997).

Opportunity

The Virgin Airline should consider purchasing of airplanes that save on fuel. The airplanes should have engines that consume less fuel. This will help it attain more than one objective one is saving on the cost incurred when buying the fuel and the next help in achieving it objective of maintaining a healthier environment. Both objectives are achievable because the fuel used is less as compared with what the other airplanes are consuming. Also, the airline can expand its operation to more countries which in return will lead to more profits for the company. The company should consider that expansion calls for more advertisement, but as long as the benefits outweigh the cost, the airline should consider going for new opportunities. Getting into new markets may require the company to partner with other businesses in the areas it aims at entering. This will enable it to have guidance on the matters related to the new market (Flenskov, 2005).

Threats

The only threat the airline may face is the fuel prices. Research shows that the fuel cost accounts the higher expense in the airline industry. It accounts for around 34% of the virgin Airline revenue; therefore, if the prices of fuel increase it, means the company will have less profit. This threat can be controlled by ensuring the company continues to hedges against future fluctuation in the fuel prices. This is done by buying the fuel when the prices are low to be used when the fuel prices will be high. This helps the business to continue operating without any problem (Kim & Mauborgne, 1997).

Recommendation

Based on the discussion above about differentiation strategy of virgin airways, the following recommendations have been developed. Firstly, the airline should consider expanding its operation in other countries. This move is expected to generate more revenue to the virgin airline. It will also give the airline the chance to compete with other airlines efficiently especially those that have more routes than it.  Secondly, the airline should consider finding alternative fuels such as the biofuel which will help it reduces the environmental hazard that results from using the normal fuel. It is expected that the cost of biofuel will not fluctuate as compared to that of the fuel. Hence there will be no need for the airline to hedge against the increase in fuel prices. Thirdly, the company should engage in more and more advertising to ensure it reaches to all potential customers. It should utilize all the channels possible that can help it reach to more customers. This will help the company to increase its revenue.

Conclusion

Virgin Atlantic is one of the international airlines that has gained much popularity due to the quality services and experience they offer to their customers. The airline has used the differentiation strategy to ensure it maintains its market share and popularity. The differentiation has been attained from the manner in which the airline is managed. The management of the airline believes in reducing the bureaucracies in management so that workers can get the chance to be innovative and creative while offering services to the customers. This has made the airline unique in its operations because it focuses on ensuring the customers are happy with the services they receive. To ensure the differentiation strategy is implemented to the latter, the management of the airline ensures that all the staffs are well informed about the corporate culture. This ensures that they all work together towards a common goal.

References

Aaker, D. A., & Joachimsthaler, E. (2012). Brand leadership. Simon and Schuster.

Argenti, P. A., & Druckenmiller, B. (2004). Reputation and the corporate brand. Corporate reputation review6(4), 368-374.

Bilotkach, V., Gorodnichenko, Y., & Talavera, O. (2010). Are airlines’ price-setting strategies different?. Journal of Air Transport Management16(1), 1-6.

Flenskov, K. (2005). From production-orientation to customer-orientation–modules of a successful airline differentiation strategy. Strategic management in the aviation industry. Aldershot: Ashgate.

Graham, B., & Vowles, T. M. (2006). Carriers within Carriers: A Strategic Response to Low‐cost Airline Competition. Transport Reviews26(1), 105-126.

Heracleous, L., & Wirtz, J. (2012). Strategy and organisation at Singapore Airlines: achieving sustainable advantage through dual strategy. In Energy, Transport, & the Environment (pp. 479-493). Springer London.

Kim, W. C., & Mauborgne, R. (1997). Value innovation: The strategic logic of high growth. Harvard Business School Pub..

Leitch, S., & Richardson, N. (2003). Corporate branding in the new economy. European Journal of Marketing37(7/8), 1065-1079.

Ng, I. C., Wirtz, J., & Sheang Lee, K. (1999). The strategic role of unused service capacity. International Journal of Service Industry Management10(2), 211-244.

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