Political analysis; inspects the guidance of government, it is Polices, rules and regulation on the industry or association with reference to virgin Atlantic airline it can be debated that several political factors such as taxation policies, labour low, customer policies and trade restrictions forced by the government have had great impact to airline industry. According to Verging airline management they are expression with various political challengers when business spread in to foreign countries compare to UK,( ex; USA & Australia) .this most of the political challengers are embrace licensing, bureaucracies set by the UK and foreign governments also increased parameter and control of business operation by government.
Economic analysis; Virgin Atlantic airline has been challenged with hard competition from other firms in the industry, for example, the organization was required to lower its flight rates following an analysis of prices for air travels by its major opponents in the air transport industry such as American Airlines and UK Airways. because of this competition in 1990 “Atlantic airline offered first class ticket at business class prices, inventions included limousine pick up for first class passengers and seat back video entrainment systems for economy class passengers ” .This new decision creates an opportunity to win the economic competition and get more profit & customers
Social factors, British Airways, Atlantic airways and other airlines such as EasyJet have already requested the EU and the French government to advance an action plan to minimize the effect of ATC attacks on passengers (The Guardian 2017). A number of ATC union strikes hit France in 2016 due to social unrest over a series of disputed labour reforms from the Socialist government, causing Virgin Atlantic to cancel many flights to and over France The peak summer season in 2016 was operationally difficult for many airlines including Virgin Atlantic, largely due to social factors outside of the airline’s control particularly, air traffic controller (ATC) strikes in France
Technologic analysis: Further as Jones (2009) has argued, the Internet makes industry competition perfect because it allows passengers to compare airfares of different airline companies with just a few clicks, which in effect affects pricing ability, according to Gal-Or (2011).Nevertheless, the internet also offerings a cost-cutting chance for Virgin which is why it recently launched AIR4, Virgin Atlantic’s major technological revolution in company history, which saw Virgin invest in IT based passenger service systems such as a new mobile app, self-service booking technology and improved kiosk functionality (Annual report 2016).
Legal environment: During the December 2016, Virgin Atlantic pilots decided to take industrial action in a row over union recognition after the pilots union, Professional Pilots’ Union (PPU) which represents over 70% of Virgins 900 plus pilots, demanded to be the only exclusively recognized union for Virgin’s pilots and for British Airline Pilots Association to be derecognized (The Guardian 2016).
Environmental Factors People are much attentive of the effects of climate change since people of all nations have knowledgeable some form of negative disaster; from floods, drought extreme record breaking hot temperatures, record breaking sub-zero temperature etc, that have been credited by scientists to global warming. Virgin Atlantic like many other airlines faced sustained working disruption in June last year (2016) as well as January 2017 due to adverse weather conditions, in particular thunderstorms in South East England, which led to a cancellation of flights to and from London Heathrow and Gatwick and a delay in many other flights (Swinnerton 2017).
Total words 572
2. Conduct a Five Forces analysis of one of the Virgin companies, Among the forces are new entrants, substitutes, buyers, suppliers and competitors. (around 600 words)
The threat of entry
The entry and the exit barriers for the airline industry rather high compare to other industry.one of the fact is lot of capital to enter the sector .earlier days Atlantic airline faced major problem is buying new aircraft for enter the industry because that time cost of aircraft very high and maintains difficult also. Airlines cannot leaving the industry when they choose as the officials often insist that they achieve their promised responsibilities towards their stakeholders in situation they need to exit the industry. Ones Atlantic airline enter they faced external environment problem of regulation and maintains. Atlantic Airlie is a company with strong back ground and reputation in the industry also shareholder with Singapore airline giving extra advantage in this industry
For ever product, companies or service have a similar substitutes. The main substitutes for the airline industry are the buses, train and ships. But most of the time long destination travel passengers are choosing airline industry but some of the passengers using other substituting depend on their budgets and etc. The main substitution is for the Atlantic airline not bus or ship its British airways routs and united routes. Because Atlantic airways have short and long flight facilities for the same destination as well as united airways also providing same route and facilities for their passengers. This is the main substitutes challenge for Atlantic airline
Power of suppliers
Virgin Atlantic is one of the leading airline company because of this reputation they always picking quality and solid supplier’s. Aircraft manufacture is the prime supplier’s in the airline industry in this case Atlantic airline main aircraft manufacture are BOEING & AIRBUS. Fuel suppler also mainly impact because fuel is basic required for operating the aircraft. Technology also key factor, so in this case last over the year IBM and NCR make the support for IT solution for Atlantic airline. Engineering and other maintains service provide by airport.
The power of Buyers
Buyers are the most power full force in airline industry. Because there are the market and they directly impact for the company profit. Modern days Airline market is competitive also buyers have several choices. Because of that competition Atlantic airways continuously try to provide quality and attractive service for passenger’s .Atlantic airways always think about ability to provide cheapest air fare with extra unique service. Buyers Used to porches there are ticket directly from the Airline Company, but Atlantic airline increase in the distribution Channels Company everywhere to retain the competition for the selling air tickets. This empower the airline to cover the market but on other hand grant bargaining power to the buyers. But Atlantic airline give n other option to buyers to porches there are ticket by online its save cost and time for all-round verging buyers
The competition is very stiff at this days. Virgin Atlantic airline has several different competitor and they offer equal product and service for passengers. But virgin airlines always try to give deferent style of deal and unforgettable travel expires for they are passengers.one of the reputations instance is “because of this competition Atlantic airline offered first class ticket at business class prices, inventions included limousine pick up for first class passengers and seat back video entrainment systems for economy class passengers ” .This new decision creates an opportunity to win the economic competition .The fundamental competence of the Atlantic airways is their high technology, cheap ticket and good schedules
Total words 573
3. Conduct a SWOT analysis. Among the issues to be addressed are the business response to the threats and opportunities; was the business reactive or proactive? how the business activities are organised? What are their strengths and weaknesses? Judgement on the business ability to respond. (Around 600 words)
SWOT is a valuable device to study economic accounts and developing healthy work environment of any corporation. It is a key step towards any strategic design in a business. It is measured to be very significant source of info for judging and understanding any kind of conditions in the organization. Below SWOT analysis aimed at Virgin Atlantic.
Virgin Brand standard by 98% of British Public. Brand reputation is important for any company, Atlantic airline got strong foundation and airline was ranked 6th in world best , the only British carrier to make the world top 10.Becourse of punctuality, Quality and the speed of dealing with reward claims.
Averagely Carried over 5 million passengers in year. Passenger’s always expect good customer service in each travel business /economy and verging able to fulfil their customer satisfaction
Virgin Atlantic airline is one of the biggest British airline with over 35 destinations, because Atlantic has a customer base and preferred airline off comfortable customers
Atlantic airline has outstanding advertising and marketing management team
Virgin Atlantic Using high technology: including in flight music, video, games, and movies.
Offering loyalty card for regular customers and also providing quality food and comfort service for them.
More than 8000 people are employed with airline and they are quality and well trained staff
Reasonable pricing for business class offers more services.
Partnership with Singapore airlines (49% shareholder)
Flight Delays and need to improve flight competence. Virgin Atlantic Airways is known as one of the believed airlines, take care of passengers and their needs but sometimes their flights do get delayed due to reasons which could have been foreseen.
Lack of travel routes and limited, increasing destination and extra flight
Heavy reliance in celebrity personality of Richard Branson for promotion of brand. because one man owner and director of multiple companies it can give negative impact and risk for company
Main competition from cash rich gulf airline.
Disproportionate growth skewed towards USA flight compared to other high growth regions especially china, India and midlist
Atlantic airline decide Cut routes to Chicago, Toronto, and Cape in relation to the September 11 tragedy.
Cost of keeping two five star chefs, lounge, and limo service impact negatively for profit
US government approved third runway at Heathrow
This is great opportunity for Virgin Atlantic. The planned development will create new and affordable extra capacity at Heathrow. It will also reduce the cost of operating to or from Heathrow which is currently the world’s most expensive hub airport (Johnson 2016). Further, expansion of Heathrow post-Brexit will allow carriers like Virgin Atlantic to offer more direct flights to not only UK destinations but also up to 40 new cities abroad such as Wuhan, Osaka and Quito
Continued low fuel price in 2017 will translate into low fuel coste
Technology is key factor for airline, flight internet connection and Web site needs to be improved
may be an unexpected opportunity for investment and make it more strong brand name
Main threats for Atlantic airline is fuel price are fluctuation, because 15% of total airline expenses going under fuel price.
modern days traveling for leisure and business is greatly impacted by the global economy and terrorism attacks .because of this issues less people are likely to travel .this leads to low income to the virgin airline and during this period possible losses due to the its operating cost exceeding income
Atlantic airline has competition for routes British and USA