Virgin Blue

10460 Words Feb 7th, 2013 42 Pages
AJNRR Consulting

Virgin Blue Holdings
A Strategic Analysis

Prepared by:
Andy Ley
Joachim Brastein
Nathan Westgarth
Rishi Dave
Ron Stanley * * Contents 1. Executive Summary 2 2. Virgin Blue Now 3 2.1 Introduction 3 2.2 Virgin Blue Overview 3 2.3 Virgin Blue’s Current Strategy 3 3. Outside Virgin Blue 4 3.1 Macroenvironment 4 3.2 Industry Analysis 4 4. Inside Virgin Blue 6 4.1 Resources 6 4.1 Capabilities, Distinct Competencies and Competitive Advantage 6 5. The Virgin ‘Blues’ (Strategic Issues) 7 5.1 Positioning in the Market 7 5.2 Challenging Economic Conditions 8 6. What to Do with Virgin Blue? (Strategic Options) 9 6.1 Cost Leadership
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Several strategic models are drawn upon in order to analyse the competitive forces in the industry environment, the macroenvironment, as well as Virgin Blue’s internal environment. Finally, justified strategic responses to the given strategic issues facing Virgin Blue are proposed, including a detailed strategic implementation.
Virgin Blue Overview
Virgin Blue began operations in Australia on 31st August, 2000. Virgin Blue launched itself as the first sustainable low fare airline in Australia against a strong duopoly in place at the time, Qantas and Ansett (Virgin Blue Airlines, 2008a).
The airline took strong influences from the well known Virgin brand in innovation and customer enjoyment and fun, but has also now established a reputation for brilliant customer service, value for money and excellent on-time performance. Virgin Blue has launched subsidiary joint-venture international airlines, Pacific Blue (Aust and NZ) and Polynesian Blue, and is starting a third this year, V Australia. Virgin is now Australia’s second largest airline, holding more than 31% of the domestic market (IBISWorld, 2008; Peanuts! Online, 2008).
Further details of Virgin Blue and its shareholding can be found in [ Appendix 1 ]. [ Virgin Blue Detailed Overview and Shareholding ].
Virgin Blue’s Current Strategy
Virgin Blue’s current strategy is very different today than when the airline was first launched. The collapse of Ansett Airlines provided Virgin with a unique opportunity to

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