Strategic Analysis of Virgin Australia Airlines:
Following its merger with Pacific Blue, Virgin Australia that was previously known as V Australia rebranded to Virgin Australia Airlines. In addition to being the newest international airline owned by Richard Branson, Virgin Australia is headquartered in Sydney Airport. The airline company has developed an airline experience that is based on a simple idea in which flying is considered to something great. Virgin Australia Airline has brought back style into travel through its attentive in-flight service, unique mood lighting, gourmet meals, top class in-flight entertainment, boutique bars, and generous legroom ("Virgin Australia Flights," n.d.). The merger with other airlines firms has enabled Virgin Australia to fly into several regions like Australia, the Pacific Islands, Thailand, New Zealand, Indonesia, and Papua New Guinea.
Internal Analysis of the Firm:
Virgin Australia Airlines holds a strong market position in the region's airline industry because of its internal factors that have enabled it to develop various key competitive advantages over its rivals. Some of the firm's main competitors include Tiger, Qantas, and Jetstar Airways that have continued to penetrate the airline market and industry. Some of the internal factors that have enabled Virgin Australia to establish competitive advantages over its rivals include its key capabilities and strengths. The strengths and key capabilities of the company include
Membership to a Big Family:
Virgin Australia Airlines belongs to a very big family known as Virgin Group that is regarded as the most highly respected international brands across the globe ("The Virgin Family," n.d.). The group has established over 300 branded organizations across the globe with a workforce of approximately 50,000 employees in 30 countries. Membership to the big group has given the group a major competitive advantage and strength since the Virgin Family emphasizes on principles of value for innovation, money, quality, fun, and competitive challenge.
Strong Working Relationship:
The other strength and key capability of Virgin Australia Airlines is its commitment to strong working relationships with the industry partners that it's currently partnering with (Eliezer, 2012). The strong working relations with industry buddies emanate from the firm's belief that a group of companies represents a huge range cross-section of the industry. Moreover, these relations are fueled by the need to partner with others in order to understand the changing needs of the industry for the improvement of service level.
Cost Advantage:
As compared to its competitors the domestic strength of Virgin Australia Airlines is attributed to its cost advantage. While the firm has frequent and daily flights across major cities, it provides discount flights to several key destinations and regional centers across Australia ("Virgin Blue," n.d.). It's a great choice for flights across Australia because of daily low fares that result in a strong market position in the industry. Virgin Australia Airlines adopted low-cost airfares strategy after analyzing the Australian airline market and identifying its flaws. The company has the ability to lower the costs of its airline tickets because of its lower operating costs that gives them a competitive advantage in the region's airline market.
Efficient Customer Service:
Virgin Australia Airlines is renowned for its efficient customer service, which is one of its major strengths. In addition to having a good human resource management department, the firm's operations are characterized by very relaxed and young people who speak on Virgin's customer service phone lines. Consequently, the company is the most on-time airline firm in the Australian airline industry coupled with a good flying record and aircraft (Dayal, n.d.).
Strong Financial Position:
Due to its cost advantage and membership to the huge Virgin Group, Virgin Australia Airlines has a strong financial market in the domestic airline industry. The low fares have made the company an attractive choice for many customers in the region, especially those flying the vital Melbourne and Sydney business route. As customers continue to stream for Virgin's services, it makes profits that result in a strong financial position and competitive advantage.
However, despite of these major strengths and key capabilities that have enabled Virgin Australia Airlines to maintain a strong market position and competitive advantage in the airline industry, the firm also has some weaknesses. The two main weaknesses of Virgin Australia Airlines are the company's lack of diversity and weak management team. The firm's lack of diversity is evident from the fact that it has emphasized on staying in the leisure market and invasion of the corporate sector. As a result of the focus on these two segments, Virgin Australia Airlines has adopted the strategy in one airline instead of the dual brand strategy used by two of its major competitors...
The company's promotional literature emphasizes the synergistic effects of this corporate structure: "IAG combines the two leading airlines in the UK and Spain, enabling them to enhance their presence in the aviation market while retaining their individual brands and current operations. The airlines' customers benefit from a larger combined network for both passengers and cargo and a greater ability to invest in new products and services through improved financial
Qatar Airways: Strategic Management Qatar government owns Qatar Airways, which is one of the world's 5-star airlines operating on both international and domestic destinations. The airline provides amongst the most reliable and best comfort to passengers in the industry. The services offered by the airline are excellent both on ground and in air. The airline target groups are corporate, middle and upper middle classes. With the its latest expansion efforts, Qatar
Jetstar also now gives customers with more expensive tickets priority boarding, although it plans to retain unallocated seating for reasons of efficiency. The airline buys the points from its parent but strategically recovers costs by prompting people to buy more expensive tickets and attracting back customers (Creedy, 2005). The carrier's frequent-flyer scheme has produced a revenue gain that offset its cost, such as big business routes, an immense amount
Another contributing factor is the industry's high fixed costs. These costs increase the exit costs, which is another factor that increases the intensity of rivalry. The third major factor is the degree of consolidation within the industry. Aside from the minor carriers, there are essentially only three major discount airlines operating in the Australian market. Prior to the entrance of Tiger, the two players operated as a duopoly. Tiger
" (Knorr and Eisenkopf, 2004) the fifth and final strength identified for Emirates Airline in the work of Knorr and Eisenkopf (2004) is stated to be the Emirates "...award-winning service in all classes, which is matched or exceeded only by very few other carriers such as Singapore Airlines. Sixth, clever marketing - for example, Emirates, not Lufthansa - was named official carrier of the 2006 FIFA World Cup hosted by
political scenario illustrated that governments all over the globe are making their immigration rules more stringent because of the rise in terrorism; the implication of this phenomenon is a decrease in international traveling, which endangers continuance of a number of airlines, including Nigeria's Arik Air (Eze, 2010). Hofstede's power distance dimension denotes the degree to which unequal distribution of power is anticipated and accepted by the lower ranking members
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