Assesment of Virgin Group Corporate Strategy

Virgin Atlantic is clearly the cash cow of the Virgin Empire but we have undertaken a

Virgin is a U.K-based company led by Sir Richard Branson and is one of the three most recognized brands in Britain. The company has a vast history of brand extensions – one of which is their launch of a wireless phone service in the USA. Dan Schulman has been appointed CEO of the Virgin

Additionally, the competition is likely to lead to erosion of margins and market share. Therefore, Virgin has to be sure that they can cope with the competition and take over some of the market share from the established banks.

| WEAKNESSES * Smaller company than other brands * Customers may not be aware of Company G’s products or brand *

The corporate strategy of the business diversification is to create a synergy to achieve more performance under a single umbrella rather than diverse business units (SNU, 2016). A business diversification is to build the company shareholder value when the independent business units can perform under a single corporation as an umbrella organization instead of independent parents or a corporation. A diversified organization has many business units and each business units have its own business level strategy irrespective of whether they are related or not. A successful business diversification not only spreads the business risk across the diverse units but also adds a long term economic value to the company. The strategy for starting a new business is based on industry attractiveness test, the cost of entry and the better off test (Thompson, Peteraf, Gamble, and Strickland, 2016).

This provides Virgin Australia with a positive outlook of the future. The international sector of Virgin Australia during financial year 2015 was not so forgiving with a loss of $68.9 million. This was $22.8 million worse than the previous year. The domestic sector has improved greatly however the international sector has fallen into a loss larger than the previous year. Virgin Australia international improved by $2.4 million after making some minor changes to international business class. The operating cash flow of $218 million has improved by $226 million from previous year. Moreover, domestic unit revenue has improved by 3.5%, cost savings target for financial year 2017 has increased by $0.2 billion from financial year 2014. The closing cash balance of $1.03 billion signifies the improvement from financial year 2014. Yield has grown by 5.2% over the past financial year. The outlook statement, as quoted directly from the ASX Virgin Australia Financial year 2015 Results Presentation, states that “based on current market conditions, all fundamental business metrics are on track for the Group to return to profitability and report a Return on Invested Capital in line with its cost of capital for the 2016 financial year.” Virgin Australia is planning to improve their fleet and meet customer’s needs by improving their international network.

The company tends to use pull strategy by creating a fresh and refurbished brand image so that the customer is coaxed to seek out the services offered by the brand(Appendix A). The company has an active social media presence which helps it to stay in touch with current customers and offer a window of experience to its new customers.(Appendix B) The company is actively present on facebook with the name of Virgin Australia, twitter, Instagram, YouTube, LinkedIn and the like(Appendix D). The customers can lodge complaints, find feedback forms; share their views through these websites. The idea behind the whole thing is to create positive social communities.

The purpose of this report was to provide a strategic evaluation of the company Virgin Australia. The report begins by conducting a strategic analysis of Virgin, including an analysis of the external environment and an internal analysis of competitive strengths and weaknesses. The report then identifies the strategic direction and objectives of Virgin Australia, including the vision, mission, strategic objectives and stakeholders of the company. The report moves on to explore strategic choices of Virgin Australia by identifying the key broad business level and

The first part of this report provides a broad introduction into the business of Virgin Australian by examining its principal sources of revenue, its nature of operating, its competitors, the market share and the regulations affecting its operations. From this, it can be seen that Virgin Australia operates in a very competitive environment and generates revenue by the core business of passenger and cargo transport.

Being in the service sector it is important for Virgin Atlantic to study its marketing mix as it works as an efficient tool, while building up marketing plans. It comprises of the seven P’s which are as follows.

The purpose of this report is to examine Virgin Blue’s external environment followed by its impacts to the organization as well as how management functions could help overcome the external environment for the organization to compete properly in the domestic airline market.

The most important inputs are craft and technology, aviation fuel, and skilled labour. Due to the reasons of political and economic, the fuel price is subjected to fluctuate. Also, the technology suppliers and craft suppliers are very limited and Virgin brands solely relies upon the supplier for them to supply very fast and aircraft that is well designed and fast. Boeing and Airbus are the two leading manufacturing aircraft that supply Virgin. The Virgin Group is constantly being technologically developed by suppliers with its touchscreen seat back entertainment, Wi-Fi accessibility, health club maintenance, cutting edge smart phones, and new space

In this term of our discussion we’re talking about business environment. It’s like an overview of the whole business environment. Simply environment of a business means the external forces including the business decisions. They can be forces of economic, social, political and technological factors.

Considering about the strategy of the Virgin group, their founder has mainly pointed out that the key to success as to being up to date with the things going on with the environment. When considering about analyzing an organization, one of the main concepts is that the corporate rational. This means that the way in which corporate parent will add value for its strategic business units.

We had launched four products, comparably less than other groups which was five. Our products aimed for a niche luxury market with high technologies and expensive price. Rather than selling many products with different models, we planned to increase market shares of each specific models.