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Strategy Analysis - Virgin

Essay by   •  December 11, 2011  •  Case Study  •  2,916 Words (12 Pages)  •  2,347 Views

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In this portfolio, a brief analysis and the discussion would be made on the generic strategies, means and methods, global factors and strategic objective of the organisation. Different organisations are taken into account to develop this portfolio. The different organisations are chosen for different factors to clearly understand the impact strategically on the development of the organisation.

Core competencies of Virgin

SWOT is one of the effective tools in analysing the internal potential of the organisation. SWOT is simple but provides the information for the organisation that enables to develop and utilise the factors for the growth of the organisation. Through this method strength, weakness, opportunity and the threats for the organisation could be understood. This is used to understand the strength, weakness, opportunity and threats of virgin group of industries.


* High brand value

* Products are well recognised

* Wide range of network all around the world in different industries

* Ability to create high value products and services

* Innovative in driving business understanding the business market

* Business in wide range of industries as reduced the risk


* Brand value has been affected by diversification

* Group solely relies on the Branson

* Depends much on the brand name

* Group could be affected by the loss and failure of the business


* Entry of the group in the new markets

* Opportunity to expand in the developed and developing market


Connection of the brand with the subsidiaries is strong. The impact on the subsidiaries would bring negative impact on the brand image of the organisation.

Virgin's focused strategies

The organisation's corporate statement clearly indicates the focus of the organisation in developing the value to the customer. The strategy is devised in such a way to develop the value for the customers which in turns develops the value for the band. The gap in the customer expectation in the market is analysed and appropriate actions are taken to fulfil the expectation gap of the customers.

A basic set of global strategy is adopted in the wide range of industries in the Virgin group. According to Porter (1985), the organisation develops its competitive advantage in the business market by choosing the type of competitive advantage it has to develop. Once the type of competitive advantage is develop it could be achieved by different means and methods that supports the development of the organisation.

Virgin adapts strategy of differentiation in the global market. This is by providing unique features in the products and services that are offered by the organisation which is significant for the customers. The organisation makes it difficult for the rivalries to imitate their products and services (Johnson & Scholes 1997, p. 255). The organisation has developed the brand image for being different from the competitors with high value (Johnson & Scholes 1997, p. 255). It has been stated that the development and the success of Virgin group highly depends on four different core competencies all round the world that are:

* Quality of service

* Quality of employee

* High level of innovation and technology

* And being close to the customers

World airlines

Airline industry has been severely hit by continuous problems in the recent years. The industry has been impacted by regulation, liberalisation and deregulation all over hte world. Some of the most important issues in the airline industry are fuel price, pollution control, personnel cutback, global economic woes and recurring safety lapses. Apart from these issues for the industry there were several other problems that have been rising in the recent years. The cost of travelling has been increased by fuel price, labour and maintenance of the aircraft. The increase in the price has been increased by the operating cost for the aircrafts.

Industry in the year 2008

According to survey by IATA, the airline industry is to lose $5.8 billion in 2008. This has been mainly due to increasing oil price and decrease in the demand. It has been identified that travelling demand among hte customers is shrinking. This is noted from the fact that 500k flights were less in 2008 comparing to the year 2007. 200 and more airports has stopped from providing service. The financial problems also increased that has caused nearly 25 airlines to fail in the 2008. The rate of growth has also decreased drastically in the consumer airlines and cargo traffic.

To understand the airline industry, it has been divided into six regions. This would help in knowing the issues and trends along with the challenges for hte airline industry all over the world. The six regions in the airline industry are North America, Europe, Asia-Pacific, Middle East, Latin America and Africa. The regulations for airlines that are adapted in these regions are completely different. In North and Latin America regulations has been deregulated and privatised, in Europe it is liberalised and privatised. In Asia-Pacific it is liberalised, deregulated and privatised wherein Middle East it is limited privatisation and liberalisation and in Africa it is privatised cautious and liberalised.


With all these differences airline organisations with the challenges and issues left to be sorted out, organisation are trying to develop strategies to consolidate. Some of the challenges that the industry is facing currently are bankruptcy, shutdown of operations, new operating environment, increasing price of hte fuel, restructuring and alliances among hte organisation in the airline industry. It is also having tough time in maintaining the relationship with hte staff members, excessive capacity of the flights with all this competition is also very high within hte organisations in the industry.

Areas to be



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