Category: Virgin Group

Introduction

In their operation, firms are affected by environmental changes which may either emanate from internal or external sources. Despite the changes, firms management teams have an obligation to develop their organizations internal strengths and at the same time exploit opportunities available. This purpose of this paper is to evaluate Virgin Australias internal and external environments.

Analysis of the general environment

Virgin Australia is likely to be affected by two main environmental forces which include demographic and social-cultural changes. According to Farabi (2012), demographic forces have significant influence on the airline industry. Currently, Australia is experiencing significant demographic changes which are evidenced by changes in the countrys population.

For example, Generation Y which accounts for approximately 4.5 million of the countrys total population has a significant influence on the countrys spending patterns. Second, the country is also characterized by a large number of retiring baby-boomers who have large debt. Considering these changes, the country is likely to experience an increment in the rate of consumption in the future. The large size of Generation Y population presents a unique market opportunity for Virgin Australia to increase its sales by targeting this generation.

With regard to social-cultural changes, consumers have over the past few decades become very conscious of the environment in their consumption process. Consequently, they are leaning towards environmental friendly products and services. This is likely to affect Virgin Australias operational strategy. For example, the firm will be required to invest in fuel efficient technologies in order to attract and retain customers.

Degree of rivalry

The degree of rivalry is one of the most important forces in the aviation industry (Gandellini, Pezzi & Venazi, 2012). This arises from the fact that the industry is very competitive. Virgin Australia operates in an industry that is characterized by intense competition which translates into a high degree of rivalry.

In the course of its operation, Virgin Australia is focused towards development of a high competitive advantage. However, the degree of rivalry in the industry has over the past few years limited the firms quest to attain the desired level of competitiveness.

To deal with the high degree of rivalry, the airlines management team has invested in product differentiation. Virgin Australia has achieved this by enhancing the level of customer experience. The airline has invested in technological innovations that are aimed at improving both on-the-ground and in-flight services.

Moreover, the firm has invested in new service initiatives. Another strategy that the firm has invested in an effort to develop customer satisfaction is employee development program. The objective of the program is to develop a workforce so that is customer focused (Virgin Australia, 2012).

High buyer bargaining power

The Australian airline industry has undergone significant growth over the past two decades. Some of the factors that have contributed to the industrys growth include greater industry efficiency, growth in the countrys tourism sector, high rate of economic integration and intense regulatory reform.

As a result, a large number of domestic and foreign airline companies have entered the industry. Some of the major industry players include Jetstar, Qantas Airlines and Tiger Airways. The large number of industry players has increment in buyer bargaining power. This arises from the fact that customers incur minimal or no switching cost.

Despite the high buyer bargaining power, Virgin Australia has managed to attain an optimal market position. The airline has achieved this by developing a strong brand image. Additionally, the firm has invested in innovative ideas that are aimed at enhancing the level of customer loyalty. For example, the airline provides business executive customers with chauffeured limousine services. This serves in enriching their experience by travelling with the company.

What the firm might do to address the degree of rivalry and high buyer power in the future

The future competitiveness of Virgin Australia is dependent on the effectiveness with which the firm will deal with the high degree of rivalry and buyer bargaining power. To deal with these two forces, there are a number of options that the firm should consider. First, the firm should consider investing in Customer Relationship Management (CRM).

By investing in CRM, Virgin Australia will nurture a high level of customer loyalty thus driving revenue generation. Additionally, investing in CRM will enable the airline to effectively interact with its customers hence developing a comprehensive understanding of its customers needs.

As a result, Virgin Australia will be able to undertake effective market segmentation thus differentiating itself from competitors. However, to gain the benefits associated with CRM, Virgin Australia should invest in modern CRM technology. This will improve the effectiveness with which it manages its customers experience.

Second, the firm should also consider enhancing the quality of services that it offers to customers. Currently, customers are increasingly demanding high quality airline services. The airline should ensure that customers receive value for money by investing in provision of superior services.

One of the ways through which the firm can achieve this is by ensuring that it has a strong workforce that is customer focused. Additionally, the firm should improve its on-the-ground and in-flight customer services. Investing in CRM and improving the quality of service offered to customers will increase the probability of the firm developing a high level of customer loyalty hence promoting its competitive advantage.

External threats affecting the firm and the opportunities available

Economic recession

Firms in different economic sectors are affected by economic recession either positively or negatively. The recent 2008/2009 global economic recession adversely affected the firms financial stability. The firms management team projected a substantial reduction in the level of its profitability during the recession. During its 2008/2009 financial year, the firm projected that it would incur a net loss of $165 million.

Despite the Australian government investing in stimulus package to enhance economic recovery, the country has not fully recovered. As a result, the level of consumer confidence is relatively low. This has adversely affected the consumers consumption patterns. Considering the high rate of globalization, occurrence of another economic recession can adversely affect the firm.

High fuel prices

The global aviation industry is currently being affected by high fuel price which started in the mid-2000s. Most firms in the industry including Virgin Australia base their pricing on the prevailing fuel price. Fuel cost accounts for approximately 30% of the total cost incurred by airline companies. Consequently, any fluctuation in oil price requires firms in the industry to adjust their pricing and operational strategies.

One of the ways through which firms achieve this is by minimizing their flight schedule in order to conserve fuel. Another strategy that is integrated by airline companies in an effort to cope with rising fuel prices is increasing their ticket prices. In 2011, Virgin Australia was forced to raise its airfares by a margin of 10% as a result of increment in global jet fuel prices. Such moves adversely affect the firms level of profitability.

To deal with high oil prices, Virgin Australia should consider utilizing alternative forms of energy. This will enable the firm to cease from depending on petroleum-based fuels that are greatly affected by global price fluctuation. One form of energy that the firm should consider is bio-fuel which is not only efficient but also environmental friendly. As a result, the firm will safeguard itself from high fuel prices. Furthermore, the firm should consider enhancing its business level strategy by establishing a low-cost carrier under a different brand. The firm should also consider discounting its fares in order to attract customers from low-cost competitors such as Tiger Australia.

Opportunities

Improving customer service  Investing in human capital is one of the main sources of competitive advantage especially for firms in the service sector. Despite the harsh economic environment, the firm can improve its competitiveness by investing in customer service. For example, the firm can develop its workforce so as to ensure that its employees are customer focused.

The effectiveness with which the firm will handle its customers will determine the competitiveness of the Virgin Australia brand. In 2012, the firm invested in a recruitment drive that was aimed at ensuring that it has a sufficient workforce that is passionate towards development of the firms brand in addition to delivering unique customer experience.

To survive into the long term, the firm should continuously improve its workforce. One of the ways through which the firm can achieve this is by investing in a comprehensive employee training program. The program should be effectively designed so as to equip the workforce with skills and knowledge necessary to handle customers.

Forming alliances  The firm can also improve its competitiveness by entering into strategic alliances with other firms in the airline industry. This will contribute towards the firm attaining economies of scale. Additionally, forming alliances will enable the firm to effectively coordinate its domestic and international flights.

Collaborating with other firms in the service sector  The firm should consider collaborating with other firms in the hospitality industry such as travel agents, hotels and restaurants. This will not only enable the firm to increase its customer base but also develop a high level of customer loyalty. By collaborating with other firms in the hospitality industry, customers develop a positive perception regarding the firms services.

Strengths and weaknesses

Effective branding and development of strong brand recognition  Since its inception; Virgin Australia has been committed in developing a strong brand. To achieve this, the firm has invested in development of a strong brand identity. Some of the dimensions that the airlines management team have over the years focused on include offering high quality services, innovation, provision of quality in-flight entertainment and ensuring that customers receive value for their money.

Operating in an environmental sustainable manner  Virgin Australia is cognizant of the adverse effects of climate change arising from global warming. Consequently, the firm has invested in carbon foot-printing in order to reduce the amount of carbon dioxide that its aircrafts emit into the atmosphere.

Optimal customer service  Effective and efficient customer service are some of the main pillars that drive the firms operations. By offering its customers quality services, the airline has been able to nurture a high level of customer satisfaction.

To further improve its strengths, Virgin Australia should invest in product development. Some of the ways through which the firm can achieve this is by undertaking new product development and continuous development. This will enable the firm to sustain its competitiveness.

Weaknesses

One of the airlines major weaknesses relates to the fact that it is not a member of major global alliances such as the One World Alliance. This limits the effectiveness of the firm in exploiting opportunities presented in the global market. For example, the firm is not able to create awareness regarding its services to a large number of customers.

Secondly, the firm is not able to undertake code-sharing which is an important aspect in firms quest to develop competitveness. To deal with this weakness, the firm should consider improving the scope of its strategic alliances for example by joining major global alliances.

Virgin Australia resources, capabilities, and core competencies

Resources  Over the years it has been in operation, Virgin Australia has managed to develop a strong human and financial resource base. The firms financial strength has enabled Virgin Australia to develop an effective global network by joining a number of strategic alliances. The alliances have enabled the firm to share codes which is one of the cornerstones in the airline industry.

Capabilities Virgin Australia is focused towards ensuring that its customers attain a high level of customer satisfaction. Consequently, the firm has invested heavily in areas that contribute to delivery of high quality services such as employee training and aircraft maintenance. Moreover, the firm is also committed towards installation of high quality entertainment facilities such as internet.

Core competencies One of the main sources of the firms core competencies is its brand. In an effort to nurture a high level of customer satisfaction, Virgin Australia has heavily invested in developing its brand. The firm undertakes continuous product innovation in order to meet the customers tastes and preferences. By improving its brand, the firm develops a positive attitude amongst customers.

The firm can utilize its financial strength and a strong human capital base in determining market changes. One of the ways through which the firm can achieve this is by investing in continuous competitor and consumer market research. The research will enable the firm to effectively assess changes in customer tastes and preferences. As result, the firm will be in a position to develop products or services that satisfy customers.

On the other hand, competitor market research will enable the firm to identify gaps amongst it competitors that it can exploit. Moreover, the firm can also utilize it strong workforce to develop a strong customer relationship which is key in promoting customer loyalty. By improving its value, the firms competitive advantage will be enhanced significantly.

Conclusion

The external and internal environment analysis conducted reveals that there is a high likelihood of Virgin Australia succeeding in the future. However, to exploit the opportunities presented by the external environment, the firm will be required to adopt effective business level strategies. Moreover, Virgin Australia will be required to develop an effective value chain. This can be achieved by utilizing its core competences, capabilities and resources.

Reference List

Farabi, Y. (2012). Analysis of marketing environment of Virgin Australia. New Jersey: GRIN Verlag.

Gandellini, G., Pezzi, A. & Venanzi, D. (2012). Strategy for action-I: the logic and context of strategic management. Milan: Springer.

Virgin Australia: Virgin Australia Holding Limited reports financial results for full year ending 30 June 2012. (2012). Web.

Introduction

Managing the marketing process is an issue that companies have to contend with in the new dynamic and competitive environment. Performance of most businesses in contemporary environment is gradually shifting to the need of superior marketing strategies that are able to respond to the market needs in the most appropriate way.

Therefore, this research intends to look at how management of marketing process can be enhanced in the increasing competitive business environment. The research will be a case study on Virgin Blue Company, which is an airline company based in Australia.

Manage the Marketing Process

Virgin Blue Company sees itself as possessing a humble background and beginning especially for being the first type of company to initiate the first and unique sustainable low far airline in Australian skies (Virgin Blue Company n.d). The company, through steady progress, has evolved and grown to become a recognized company in the world as innovator and leader in the global aviation industry.

Blue Virgin Company started its operations in on 31 August 2000, with initial two aircrafts to start with (Virgin Blue Company n.d). It operated one route and had 200 team members who collectively shared a clear and concise goal of changing in the most drastic way the air travel in Australia (Virgin Blue Company n.d).

As a way of revolutionalizing aviation industry with regard to way of doing business, the company reduced the airfares by almost 50 per cent while at the same time introducing genuine Guest service to the flying public, coupled with a strong commitment to being the best in the business (Virgin Blue Company n.d).

Company mission indicates what the company is trying to achieve, what is the purpose of the company, and why it exists, hence, mission statement constitutes a short statement that says what a company stand for and it outlines a companys strategy that becomes a key referential tool by companys members in making key decisions (Griffins and Goffar n.d). Virgin Blue Companys culture has been created based on the companys core values.

For instance, the company expresses that the big secret to Virgin culture is simple  there is no secret, where creation and maintenance of an enviable culture has been the top secret of the company and this has been done by infusing the companys core values into everything the company does where we get that right and the Virgin culture just follow (Virgin Blue Company n.d, par.3).

The companys values have been infused with everything that the company takes part in. For instance, the company works hard and participates in everything necessary to provide work environment characterized by the right policies, processes, systems, communications, facilities, benefits, interesting work, fair pay, and reward and recognition to support our people and our business operations (Virgin Blue Company n.d).

Virgin Blue Company has code of conduct and practice that it has established and acts as guide to business conduct in the organization (Virgin Blue 2010).

One of the director in the company summarizes all personnel are required to support the quality of Virgin Blue and to take an active role in identifying and facilitating opportunities for improvement where the ultimate commercial success of the company is intrinsically linked to both perception and reality that the company operate safely, surpassing both the competitors and the required regulation and legislation (Virgin Blue 2010, p.1).

Code of ethics at Virgin Blue outlines key responsibilities members have to demonstrate and these responsibilities have been categorized into groups of: underlying values for the company, business integrity, which stress virtues of honesty, integrity, and fairness with regard to reporting, political involvement, and competition (Virgin Blue 2010).

Brett Godfrey, CEO of Virgin Blue Company observes that the company has greatly moved away from organizational structures, instead the company work more brilliantly to establish a lesser organizational hierarchical in the workplace (Brett n.d). Instead of an organizational structure and hierarchical, Virgin has instead embraced structure that is kind of pie chart and not the traditional and usual triangle structure.

The CEO of Virgin goes on to state that, as a leader he lacks confidence and is non-believer in organizational charts and instead advises that all leaders in the company should view themselves to be equal to each other. The company has an established marketing department headed by marketing manager and a dedicated team that is responsible to all aspects with regard to brand, product, and retail media advertising in television, radio, and related online campaigns (Virgin Blue Company n.d).

Marketing objectives at Virgin Blue are built on the principles of SMART, which stands for: specific, measurable, attainable, relevant, and timely objectives. First, Virgin Blue has pursued its marketing objectives through strategic alliances with other companies (OSullivan 2011). Strategic alliances have been favored by the company mainly to create extensive marketing channels and networks in region the company cannot afford to go it alone (OSullivan 2011).

At the same time, Virgin Blue, upon its establishment, rested on the philosophy of endeavoring to be low cost, but offer reasonable services. In addition, the initial marketing strategy of the company based on these objectives was motivated by prevalence of market domination by airlines like Qantas; hence, Virgin Blue adopted an aggressive marketing expansion based on low costs which in actual were about 30 to 40 per cent less that that of Qantas (Bamber 2006).

As part of implementing market plan, there is need to carry out monitoring, controls and adjusts process, which can be undertaken using different tools such as developing a financial forecast of revenue using statistical models, past sales data, executive judgment and surveys of consumer trends (Cooper and Argyris 1998). After this has been done, there is need to carry out estimation of costs such as market research costs, promotion costs, product development costs and distribution costs (Cooper and Argyris 1998).

At Virgin Blue Company, the management and overall organizational culture encourages working together of departments hence sharing of information is key to the success of the company. The company further encourages cross pollination of ideas and communication, which in turn leads to working and implementation of strategies at the company more easy (Brett n.d). On large scale silo mentality has been discouraged, which has opened up communication channels to be more easy and frequent.

Evaluate International Marketing Opportunities

Virgin Blue currently controls about 33 per cent of the airlines market in Australia where the company global marketing strategy has been simple perceived to largely involve offering of easy-to-understand, low priced carrier and at same time use of low-cost business model that generate high profit margins (Virgin Blue Company n.d).

Virgin Blue brand stand exceptionally in a situation that has numerous opportunities only when appropriate environmental scanning had taken place. Situation analysis according to Michael E. Allen in the book titled How to promote and advertise observes that it involves describing what is happening in the markets in which the company operates and competes and also the companys products and distribution trends (Allen 2006).

Situation analysis for Virgin Blue Company can be grouped into macro-environment situation; market situation; competitive situation; target buyer or end user situation; product/service situation; and lastly, distribution situation (Allen 2006). In order to carry out this situation analysis more effectively Virgin Blue may employ two critical situation analysis tools: SWOT analysis and PEST analysis.

SWOT Analysis

Virgin Blue can be assessed with regard to Strength, Weakness, Opportunities, and Threats (SWOT) as follows. The strengths of the company include: the company has relatively low cost structure; the company has out-won its competitors given its low fare offering policy; further the company as compared to the competitors boost of having a management team that possess significant and beneficial airline experience that continue to be utilized in the company (Asian Travel Tips, 2003).

Moreover, other related strengths of the company include presence and possession of strong brand in the market as compared to some of its competitors; presence of unique culture and the overall enthusiasm of the organization that has endeavored it to customers; and lastly commitment and general productivity of its workforce (Asian Travel Tips 2003).

With regard to weakness, first Virgin Blue Company is not an Australian owned company an aspect that sometimes has affected the companys operations especially with regard to legal and political policies in the country. Second, the overall Virgin Group financial structure has continued to change and remain fluid translating into impacts in other Groups units like Virgin Blue Company (Grant 2004).

For instance the companys structure of stand-alone financing of each company has executed a lot of pressure on individual companies resulting into accumulation huge debts (Grant 2004). This situation has left Virgin Group vulnerable to bad debts in one part of the group that in turn swiftly infect the rest of the companies (Grant 2004). Being part of the Virgin Group, Virgin Blue has not been immune to these debts.

With regard to opportunities, Virgin Blue Company has some opportunities in its way. For instance, the fact that international security has become an issue especially after the 2001 terrorist attack in USA, international tourism declined and this particular situation translated into the number of domestic travels increasing (Isik-Vanelli 2003). At the same time, the collapse of Ansett Company has provided unexploited opportunities which with adequate and appropriate strategies Virgin Blue can create a contingency for success.

Moreover, all indications point to the possibilities that the route network and service frequencies are destined to expand, an opportunity Virgin Blue can exploit to expand in the Australian market (Isik-Vanelli 2003). Lastly, the increasing market orientation towards leisure travelers still has few players who can adequately exploit hence Virgin Blue Company is presented with an opportunity to venture in the area.

At the same time, threats that face Virgin Blue Company largely originate from the increasing competition in the airlines market. The main fierce competitor for Virgin Blue Company in the Australian Market is the Qantas which has eclipsed Virgin Blue Company (Virgin Blue Holdings Limited n.d).

Qantas airlines given its expansive network and huge financial base has continued to offer much lower fares as compared to Virgin a situation that has immensely executed pressure on Virgin Blue (Virgin Blue Holdings Limited n.d). Other threats facing Virgin Blue company has to do with the government initiatives to liberalize airlines in Australia, a situation that is going to see increased entrance of low-fare companies thus increasing the competition environment.

PEST Analysis

PEST is an acronym for Political, Economic, Social and Technological factors which are used to assess the market for a business or any organizational unit (Chapman 2006). Assessing the Virgin Blue Company with regard to PEST, the following information is generated. With regard to Political-Legal effects affecting the company, it can be deduced that Australian overall liberal policy has created an environment that favor and motivate new entrants to enter the Australian market (Slide Share In. 2009).

At the same time, Australian international aviation policy is seen to be multiple designations where at the same time the deregulation that has been taking place since 1990 has led to more controlled form of competition between the two rival competitors Qantas and Virgin Blue (Slide Share In. 2009).

With regard to economic factors, it can be deduced that since the events of September 11 2001 in USA, international tourism has continued to suffer as more customers hold back due to security concerns. Further, other economic issues such as increasing fuel costs has continued to pose challenge to Virgins policy of low-cost fare whereby the increased fuel costs has in turn affected the basic costs of flights which in turn affects the likeability of customers to book a flight (Slide Share In. 2009).

Socio-Cultural factors on the other hand that impact Virgin Blue has to do with the current situation of tightening of labor market specifically with regard to skilled fields that forces the company to increase its employee motivation. At the same time it is predicted that the demand for personnel in other and distant countries will lead to the need to initiate foreign-language training (Slide Share In. 2009).

Lastly, the technological impact in the increasing information world requires Virgin Blue to institute appropriate technologies for its services. For instance, online booking is a technological aspect the company will need to explore. On overall, the growth of information industries is creating knowledge-dependent global society and information is gradually becoming the primary commodity for the success of industries (Slide Share In. 2009).

Manage International Marketing Programs

SWOT Analysis and PEST Analysis forms the two critical assessment and evaluation tools Virgin Blue Company can use to identify opportunities and threats which in turn can lead to formulation of appropriate marketing objectives especially with regard to international markets. SWOT Analysis in nature concentrate on international assessment of the company, in other words, it largely dwells on micro-environment analysis of the company.

On the other hand, PEST Analysis makes assessment of the external environment of business where the emphasis shifts from micro-environment to macro-environment evaluation. Therefore, the results generated from the two assessments become critical in postulating the companys marketing and overall strategies especially with regard to corporate strategy of the company.

Virgin Blue after successful assessment of SWOT and PEST, the following international marketing objectives of the company can be pursued.

According to Richard Branson, the Virgin Group founder asserts that Virgin Blue has already proven its ability to operate successfully in a competitive market and the directors are confident that this will continue in the future (Asian Travel Tips, 2003, p.1).

Given this observation it can be deduced that Virgin Blue company need to create and develop business travel market that has focus on fulfilling the needs of leisure travel market (Asian Travel Tips, 2003). At the same time, with increasing entrance of new competitors Virgin Blue can create new and unique ultraslow cost carriers so that it can be in position to challenge its competitors offering low fare services such as Qantas and JetStar (Asian Travel Tips 2003).

Another marketing objective that can be formulated in the future involves instituting a new carrier such as Virgin Light Blue that has potential and capability of serving regional airports that in the current state are not served and this should also include secondary metropolitan airports.

Furthermore, Virgin Blue need to formulate marketing objectives that reflect desire to provide domestic air services in all parts of Australia and also international services to countries like New Zealand, Vanuatu, any many more (Asian Travel Tips, 2003).

Lastly, the marketing objective Virgin Blue should concentrate on involve online marketing and this should involve implementing a better IT system that enables customers to book ticket and holiday much easier through the web (Asian Travel Tips, 2003).

In order to manage risks which in large part are presentable in threats the company face. Managing risks will need the company to increase the quality of its services and products in order to out-perform the competitors. At the same time, offering low fares should be within the economies of financial position of the company.

The Asian market appear promising and prospective with forecasting indicating that any venture in the market has the potential to realize about 20 per cent increase. But how well can Virgin Blue exploit these opportunities given its current position? One possible and viable international marketing operation structure the company can adopt involve joint venture with an Asian countries airline.

Virgin Blue needs to bring on board new airline partners to penetrate and exploit the Asian market. This aspect is necessary given that all indications point to the fact that international cooperation that in turn will results into growth of the market size (Asian Travel Tips, 2003). In order to successful succeed in international market; Virgin Blue

Company needs to develop an international marketing communication strategy that will be critical in the promotion of the company and its products and services. The main aspects that the communication strategy should have include: assessment of marketing communication opportunities, analysis of marketing communication resources, setting marketing communication objectives, developing and evaluating alternative strategies, and lastly, assigning specific marketing communications tasks (Czinkota and Ronkainen, 2007).

Conclusion

Increasing competition in the Australian airline market has resulted into companies adopting various marketing strategies that are intended to position their businesses at an advantageous level in winning customers.

Virgin Blue Company has adopted cost leadership strategy, which in turn has been rewarding for the company. In summary what the company need to know is that, airline market is becoming more competitive, dynamic and price elastic while at the same time not compromising quality of the products and services offered.

Therefore the company needs to device other marketing strategies based on the market situation, customer needs, company objectives, consumer needs, and overall business environmental situation. International marketing is challenging but again the company needs to create and implement an international marketing communication strategy that is able to incorporate the corporate strategy of the company together with external environment the company face.

Reference List

Allen, M. E., 2006. How to Promote and Advertise. Lotus Press. Web.

Asian Travel Tips. 2003. Virgin Blue lodges prospectus for IPO. Web.

Bamber, G. J., 2006. Marketing Strategies and Labor-Market Behavior of Full-Service and Low-Cost Airlines: An Australian Study. Sydney: Griffith University. Web.

Brett, G., Culture and Measurement: Passion and Performance. CEO Forum Group, Sydney. Web.

Chapman, R. J., 2006. Simple tools and techniques of enterprise risk management. MA: John Wiley and Sons. Web.

Cooper, C. L. and Argyris, C., 1998. The concise Blackwell encyclopedia of management. MA: Wiley-Blackwell. Web.

Czinkota, M. R. and Ronkainen, I. A., 2007. International marketing. OH: Cengage Learning. Web.

Grant, R. M., 2004. Richard Branson and Virgin Group of Companies. Web.

Griffins, G. and Goffar, A., Commercial Organizations. Association of Chartered Certified Accountants. Web.

Isik-Vanelli, H., 2003. Marketing Plan for Virgin Blue. MBA Paper, Bond University, Australia. Web.

OSullivan, M., 2011. Virgin Blue hooks up with regional Skywest. Sydney Morning Herald. Web.

Slide Share In. 2009. A Comparative Analysis and Strategic Response to: The Australian Airline Industry. Web.

Virgin Blue. 2010. Guide to Business Conduct. Web.

Virgin Blue Company. The Virgin Blue History. Web.

Virgin Blue Company. Culture and Values. Web.

Virgin Blue Holdings Limited. Top Competitors of Virgin Blue. Web.

Introduction

Virgin Blue which is currently known as Virgin Australia is an airline company situated in Australia (Ranson, 2006). Analysis of literature has shown that this is the second largest airline in the country. The company is also based in Queensland, Brisbane and Bowen Hills (Raggatt, 2009).

These are the numerous brands which were founded by Virgin Blues Chief Executive Officer Sir Godfrey Brett. The airline was established in 2000 and was later expanded in 2001(Ranson, 2006). Since then, the airline has developed numerous brands located in some of the cities in Australia.

Having operated for several years, the company has established a corporate plan for marketing its services at low cost. Consequently, this has made the airline to become a new world carrier, a factor that has equally improved its competitiveness with other companies of its status within the airline industry (Ranson, 2007).

It is against this backdrop that this paper discusses and evaluates the companys background, marketing plan and numerous changes that have taken place in its operations.

Background of the company and its marketing plan

After the company was launched officially in 2000, it began its operations with only two single types of Boeing 737aircrafts (Ranson, 2006). This made it possible to make approximately seven flights daily from Brisbane city to Sydney. After a short while, the company expanded the flights by covering all the major cities in Australia.

Ranson (2006) observes that the expansion was triggered by stiff competition that existed among sister airlines in Australia. The entry of the brand to the market was a significant development within the Australian market since it replaced the gap left by Ansett Australia which collapsed in 2001.

Having replaced the Ansett Australia airline, it effectively dominated the market taking over the already established players, a factor that made it to rank second among the distinguished airlines in Australia. The airline grew rapidly to a point that it was able to access the entire terminus in Australia (Francis, 2006).

In order to increase its marketability, the airline initially acquired new equipment that enabled it to phase-out its old aircrafts. In this case, it replaced the Boeing 737-400 series with 7000 and 8000 series (Ranson, 2007). Moreover, the aircrafts were equipped with winglets, modern glass cockpits and had greater fuel efficiency.

It is imperative to note that in terms of flight cost, Virgin Australia faced stiff competition from other airlines (Knibb, 2005). As a matter of fact, it developed new cost models in order to elevate its marketability. For instance, the company adopted the best cost strategy that enabled it to offer differentiated services for relatively low costs than other brands (Anila, 2007). Therefore, the airline marketing strategies experienced a change since it focused on its crews to advertise new operations.

From a careful review of history, it is definite that the brand has faced numerous marketing challenges. For instance, as an international and domestic company, it has to devise ways of changing its marketing strategies to make them convenient and compatible with the prevailing market competition (Ranson, 2006).

Moreover, the adopted changes had to be attractive to travelers and the market at large bearing in mind that the company could lose its customers share. Studies have shown that the marketing changes made in the last five years have not sufficiently hit the target due to the increase in costs and new entrants in the market (Anila, 2007).

Notably, the flights conducted by the airline are leisure-based and hence are largely affected by economic crises. Therefore, irrespective of the marketing strategies, there comes a time when consumption declines. At this juncture, the company relies on government agencies, departments and business travelers who rely on travelling as a basic necessity (Raggatt, 2009). For this reason, Virgin Blue airline has ensured that effective marketing is one of its core activities.

Describe and evaluate the most recent changes to Virgin Blue which included dropping the Blue part of the Virgin brand and responses by competitors within the Australian market

The most recent development noted in the company is the change of its name from Virgin Blue to Virgin Australia. This change occurred in 2011 when its executive officers opted for the new brand name in order to redefine the airlines position in the local market. In addition to rebranding the companys name, the management also opted to modify the staff uniforms and business-class seat (Ranson, 2007).

After effecting these changes, it is anticipated that it will help to make the new brand peculiar from other extensions such as Pacific Blue and Polynesian Blue (Francis, 2006). It is important to note that before the changes were implanted, the brand name had been fragmented to the extent that it could not be distinguished from other brands. In this case, it is definite that the change was also meant to transform the brand into a business class category which is largely perceived as a benchmark for success of the airline (Anila, 2007).

Research has shown that this change is stage managed to ease the company from stiff competition. Furthermore, most of its competitors have branded their airlines with similar names. Some of these changes have been executed deliberately in order to attract more travelers who are often undecided on the choice of flight to use.

It goes without saying that the competition posed by other brands such as Qatar airlines led to stiff market rivalry (Anila, 2007). Additionally, even the unveiling of a new brand name, logo, staff uniforms and business-class seats led to more rivalry. Notably, the company could not accomplish the intended changes at once and therefore, it had to be implemented in stages. The other companies responded by improving certain features in their brands in order to keep the pace set by the Virgin Blue airline.

Evaluate Virgin-Blues changes to strategy using Ansoffs matrix sand their best cost strategy and whether the strategy is being maintained within the present competitive environment, if not how best would you describe any changes?

According to Raggatt (2009), Ansoffs Matrix is a tool that is used to develop marketing strategies in a business. These strategies include improving existing products, pricing and market environment. Therefore, the tool recognizes four major strategies such as market penetration, product development, market development and diversification. It is apparent that Virgin Blue airline has heavily applied the strategy of market penetration to increase its sales (Moynihan, 2003).

This has been made possible by product promotion and reduction of prices. It is arguable that the company understands the risks and products required in the market. For example, it has established business-class equipment such as new craft designs and staff uniforms. This has significantly improved the image of the company to become the second best world carrier in Australia (Ranson, 2007).

Besides, Virgin Blue has developed its products and services to meet the consumer need in the existing markets. Knibb (2005) notes that product development is one of the medium risks since every business employing this strategy understands or is familiar with marketing new services and goods. In this case, the airline was quite aware that the existing market required new models and efficiently designed aircrafts.

This made it easier to replace the Boeing 737-400 series with those of 700 and 800 series (Ranson, 2007). Besides, the company has employed market development strategy in order to maintain its position in the excising market. In this case, it employed the best cost strategy in order to attract more passengers. The company has used this strategy to enhance differentiation of services hence offering quality services at low costs.

Nevertheless, the airline has tried to create a balance between differentiation, quality and cost in order to evade price war that might occur due to competition (Raggatt, 2009). This strategy has continued to be maintained even in the current market situation since it has enabled the company to maintain a top position amid its competitors. Therefore, a best-cost strategy is recommended since it guarantees future success of the company.

For a business traveler who may traditionally select a legacy/full-service carrier such as Qantas, evaluate how Virgin Australia may present a value proportion that could attract a customer to this airline

There are numerous ways through which Virgin Blue airline can present its value proportion to attract customers. For instance, in order to boost its legacy, the airline expresses its value proportion by creating a strong marketing and sales team who are able to market the companys services directly to the clients.

According to Ranson (2007), this will enable the company to acquire corporate clients who will be extremely important in contributing towards its success. In the process of marketing its products, Virgin Blue should offer discount for given volume of travels and can also partner with other agencies that offer additional services to travelers (Moynihan, 2003).

Moreover, the company can also lower costs of operation which is an added advantage for overhead expansion in numerous regions. This will help it to capture corporate clients in diverse destinations. The latter strategy will boost flexibility of travelers in spite of geographical barriers.

That notwithstanding, Virgin Blue company can employ or develop superior services and products that will attract large masses of travelers who will prefer the airline to traditional ones (Raggatt, 2009). For instance, if the company can reduce the overall time taken for travelling by disembarking on the use of modern aircrafts, it will not merely attract new clients.

It will also ensure that there is a good flow of return customers. A particular attention should be paid on improvement of cabin designs, travel processes, technology and product quality. This will help the company to stand out among other competitors and traditional airlines such as Qantas.

Conclusion

To recap it all, Virgin Blue has registered considerable success in the past 10 years since it was established in 2000. Moreover, its one-time performance has increased significantly by developing new brands in different cities both in Australia and abroad. Effective marketing strategies have enabled the airline to rank second in Australia. Despite stiff competition facing the airline, it has employed numerous strategies such as development of new products, rebranding and market development.

References

Anila, A. (2007). Virgin dumps budget image. B & T Weekly, 1(1), 1-5.

Francis, L. (2006). Virgin blue issues request for first long-haul aircraft. Flight International, 170(2), 25-32.

Knibb, D. (2005). Virgin blue at centre of power struggle. Airline Business, 21(10), 26- 28.

Moynihan, S. (2003). Low-cost blueprint lets Virgin soar. Retrieved from https://www.theage.com.au/national/low-cost-blueprint-lets-virgin-soar-20031116-gdwqzz.html

Raggatt, T. (2009). Virgin plans new flights for city bold move a huge tourism and business win. Townsville Bulletin, 1(1), 3-9.

Ranson, L. (2006). Virgin blue continues to cast net beyond leisure travelers. Aviation Daily, 366(18), 4-9.

Ranson, L. (2007). Virgin blue eyes higher yields from corporate travelers. Aviation Daily, 363(25), 3-8.

Introduction

In their operation, firms are affected by environmental changes which may either emanate from internal or external sources. Despite the changes, firms’ management teams have an obligation to develop their organizations’ internal strengths and at the same time exploit opportunities available. This purpose of this paper is to evaluate Virgin Australia’s internal and external environments.

Analysis of the general environment

Virgin Australia is likely to be affected by two main environmental forces which include demographic and social-cultural changes. According to Farabi (2012), demographic forces have significant influence on the airline industry. Currently, Australia is experiencing significant demographic changes which are evidenced by changes in the country’s population.

For example, Generation Y which accounts for approximately 4.5 million of the country’s total population has a significant influence on the country’s spending patterns. Second, the country is also characterized by a large number of retiring baby-boomers who have large debt. Considering these changes, the country is likely to experience an increment in the rate of consumption in the future. The large size of Generation Y population presents a unique market opportunity for Virgin Australia to increase its sales by targeting this generation.

With regard to social-cultural changes, consumers have over the past few decades become very conscious of the environment in their consumption process. Consequently, they are leaning towards environmental friendly products and services. This is likely to affect Virgin Australia’s operational strategy. For example, the firm will be required to invest in fuel efficient technologies in order to attract and retain customers.

Degree of rivalry

The degree of rivalry is one of the most important forces in the aviation industry (Gandellini, Pezzi & Venazi, 2012). This arises from the fact that the industry is very competitive. Virgin Australia operates in an industry that is characterized by intense competition which translates into a high degree of rivalry.

In the course of its operation, Virgin Australia is focused towards development of a high competitive advantage. However, the degree of rivalry in the industry has over the past few years limited the firm’s quest to attain the desired level of competitiveness.

To deal with the high degree of rivalry, the airline’s management team has invested in product differentiation. Virgin Australia has achieved this by enhancing the level of customer experience. The airline has invested in technological innovations that are aimed at improving both on-the-ground and in-flight services.

Moreover, the firm has invested in new service initiatives. Another strategy that the firm has invested in an effort to develop customer satisfaction is employee development program. The objective of the program is to develop a workforce so that is customer focused (Virgin Australia, 2012).

High buyer bargaining power

The Australian airline industry has undergone significant growth over the past two decades. Some of the factors that have contributed to the industry’s growth include greater industry efficiency, growth in the country’s tourism sector, high rate of economic integration and intense regulatory reform.

As a result, a large number of domestic and foreign airline companies have entered the industry. Some of the major industry players include Jetstar, Qantas Airlines and Tiger Airways. The large number of industry players has increment in buyer bargaining power. This arises from the fact that customers incur minimal or no switching cost.

Despite the high buyer bargaining power, Virgin Australia has managed to attain an optimal market position. The airline has achieved this by developing a strong brand image. Additionally, the firm has invested in innovative ideas that are aimed at enhancing the level of customer loyalty. For example, the airline provides business executive customers with chauffeured limousine services. This serves in enriching their experience by travelling with the company.

What the firm might do to address the degree of rivalry and high buyer power in the future

The future competitiveness of Virgin Australia is dependent on the effectiveness with which the firm will deal with the high degree of rivalry and buyer bargaining power. To deal with these two forces, there are a number of options that the firm should consider. First, the firm should consider investing in Customer Relationship Management (CRM).

By investing in CRM, Virgin Australia will nurture a high level of customer loyalty thus driving revenue generation. Additionally, investing in CRM will enable the airline to effectively interact with its customers hence developing a comprehensive understanding of its customers’ needs.

As a result, Virgin Australia will be able to undertake effective market segmentation thus differentiating itself from competitors. However, to gain the benefits associated with CRM, Virgin Australia should invest in modern CRM technology. This will improve the effectiveness with which it manages its customers’ experience.

Second, the firm should also consider enhancing the quality of services that it offers to customers. Currently, customers are increasingly demanding high quality airline services. The airline should ensure that customers receive value for money by investing in provision of superior services.

One of the ways through which the firm can achieve this is by ensuring that it has a strong workforce that is customer focused. Additionally, the firm should improve its on-the-ground and in-flight customer services. Investing in CRM and improving the quality of service offered to customers will increase the probability of the firm developing a high level of customer loyalty hence promoting its competitive advantage.

External threats affecting the firm and the opportunities available

Economic recession

Firms in different economic sectors are affected by economic recession either positively or negatively. The recent 2008/2009 global economic recession adversely affected the firm’s financial stability. The firm’s management team projected a substantial reduction in the level of its profitability during the recession. During its 2008/2009 financial year, the firm projected that it would incur a net loss of $165 million.

Despite the Australian government investing in stimulus package to enhance economic recovery, the country has not fully recovered. As a result, the level of consumer confidence is relatively low. This has adversely affected the consumers’ consumption patterns. Considering the high rate of globalization, occurrence of another economic recession can adversely affect the firm.

High fuel prices

The global aviation industry is currently being affected by high fuel price which started in the mid-2000s. Most firms in the industry including Virgin Australia base their pricing on the prevailing fuel price. Fuel cost accounts for approximately 30% of the total cost incurred by airline companies’. Consequently, any fluctuation in oil price requires firms in the industry to adjust their pricing and operational strategies.

One of the ways through which firms achieve this is by minimizing their flight schedule in order to conserve fuel. Another strategy that is integrated by airline companies in an effort to cope with rising fuel prices is increasing their ticket prices. In 2011, Virgin Australia was forced to raise its airfares by a margin of 10% as a result of increment in global jet fuel prices. Such moves adversely affect the firms’ level of profitability.

To deal with high oil prices, Virgin Australia should consider utilizing alternative forms of energy. This will enable the firm to cease from depending on petroleum-based fuels that are greatly affected by global price fluctuation. One form of energy that the firm should consider is bio-fuel which is not only efficient but also environmental friendly. As a result, the firm will safeguard itself from high fuel prices. Furthermore, the firm should consider enhancing its business level strategy by establishing a low-cost carrier under a different brand. The firm should also consider discounting its fares in order to attract customers from low-cost competitors such as Tiger Australia.

Opportunities

Improving customer service – Investing in human capital is one of the main sources of competitive advantage especially for firms in the service sector. Despite the harsh economic environment, the firm can improve its competitiveness by investing in customer service. For example, the firm can develop its workforce so as to ensure that its employees are customer focused.

The effectiveness with which the firm will handle its customers will determine the competitiveness of the Virgin Australia brand. In 2012, the firm invested in a recruitment drive that was aimed at ensuring that it has a sufficient workforce that is passionate towards development of the firm’s brand in addition to delivering unique customer experience.

To survive into the long term, the firm should continuously improve its workforce. One of the ways through which the firm can achieve this is by investing in a comprehensive employee training program. The program should be effectively designed so as to equip the workforce with skills and knowledge necessary to handle customers.

Forming alliances – The firm can also improve its competitiveness by entering into strategic alliances with other firms in the airline industry. This will contribute towards the firm attaining economies of scale. Additionally, forming alliances will enable the firm to effectively coordinate its domestic and international flights.

Collaborating with other firms in the service sector – The firm should consider collaborating with other firms in the hospitality industry such as travel agents, hotels and restaurants. This will not only enable the firm to increase its customer base but also develop a high level of customer loyalty. By collaborating with other firms in the hospitality industry, customers develop a positive perception regarding the firm’s services.

Strengths and weaknesses

Effective branding and development of strong brand recognition – Since its inception; Virgin Australia has been committed in developing a strong brand. To achieve this, the firm has invested in development of a strong brand identity. Some of the dimensions that the airline’s management team have over the years focused on include offering high quality services, innovation, provision of quality in-flight entertainment and ensuring that customers receive value for their money.

Operating in an environmental sustainable manner – Virgin Australia is cognizant of the adverse effects of climate change arising from global warming. Consequently, the firm has invested in carbon foot-printing in order to reduce the amount of carbon dioxide that its aircrafts emit into the atmosphere.

Optimal customer service – Effective and efficient customer service are some of the main pillars that drive the firm’s operations. By offering its customers quality services, the airline has been able to nurture a high level of customer satisfaction.

To further improve its strengths, Virgin Australia should invest in product development. Some of the ways through which the firm can achieve this is by undertaking new product development and continuous development. This will enable the firm to sustain its competitiveness.

Weaknesses

One of the airline’s major weaknesses relates to the fact that it is not a member of major global alliances such as the One World Alliance. This limits the effectiveness of the firm in exploiting opportunities presented in the global market. For example, the firm is not able to create awareness regarding its services to a large number of customers.

Secondly, the firm is not able to undertake code-sharing which is an important aspect in firms’ quest to develop competitveness. To deal with this weakness, the firm should consider improving the scope of its strategic alliances for example by joining major global alliances.

Virgin Australia resources, capabilities, and core competencies

Resources – Over the years it has been in operation, Virgin Australia has managed to develop a strong human and financial resource base. The firm’s financial strength has enabled Virgin Australia to develop an effective global network by joining a number of strategic alliances. The alliances have enabled the firm to share codes which is one of the cornerstones in the airline industry.

Capabilities –Virgin Australia is focused towards ensuring that its customers attain a high level of customer satisfaction. Consequently, the firm has invested heavily in areas that contribute to delivery of high quality services such as employee training and aircraft maintenance. Moreover, the firm is also committed towards installation of high quality entertainment facilities such as internet.

Core competencies– One of the main sources of the firm’s core competencies is its brand. In an effort to nurture a high level of customer satisfaction, Virgin Australia has heavily invested in developing its brand. The firm undertakes continuous product innovation in order to meet the customers’ tastes and preferences. By improving its brand, the firm develops a positive attitude amongst customers.

The firm can utilize its financial strength and a strong human capital base in determining market changes. One of the ways through which the firm can achieve this is by investing in continuous competitor and consumer market research. The research will enable the firm to effectively assess changes in customer tastes and preferences. As result, the firm will be in a position to develop products or services that satisfy customers.

On the other hand, competitor market research will enable the firm to identify gaps amongst it competitors that it can exploit. Moreover, the firm can also utilize it strong workforce to develop a strong customer relationship which is key in promoting customer loyalty. By improving its value, the firm’s competitive advantage will be enhanced significantly.

Conclusion

The external and internal environment analysis conducted reveals that there is a high likelihood of Virgin Australia succeeding in the future. However, to exploit the opportunities presented by the external environment, the firm will be required to adopt effective business level strategies. Moreover, Virgin Australia will be required to develop an effective value chain. This can be achieved by utilizing its core competences, capabilities and resources.

Reference List

Farabi, Y. (2012). Analysis of marketing environment of Virgin Australia. New Jersey: GRIN Verlag.

Gandellini, G., Pezzi, A. & Venanzi, D. (2012). Strategy for action-I: the logic and context of strategic management. Milan: Springer.

Virgin Australia: Virgin Australia Holding Limited reports financial results for full year ending 30 June 2012. (2012). Web.

Introduction

Investment practices are generally defined by the market situation and the financial abilities of the company. The brand, which may be invested into, requires a thorough analysis of the funds, which will be invested, the fund management principles of the organization or brand, which requires investment. This paper aims to explain the necessity to invest in a selected brand, ground the possible benefits of investment, and give recommendations on capitalizing on the selected brand. The selection of the investment strategy, in general, will be defined based on the principles of portfolio and fund management.

Trend Importance

The trend, which is recommended for further investment is Virgin Blue Airlines. The key reason, why this company should be invested in the managed investment fund principle, which is applied for all investment resources. The general characteristic of this investment portfolio is closely associated with the importance of lower financial risks, and the necessity to improve the financial and marketing performance, which the company faces at the moment.

Virgin Blue Airlines is a steadily developing company, which acts on the market of low-cost airline transportation. The investment fund of the company is fully managed, which makes the invested resources controllable. The fund manager will be helpful for risk minimization, and the investment funds may be spread across several asset classes (Hopkins, Kontnik, and Turnage 2009). On the other hand, if the returns should be increased, a more volatile investment strategy may be selected. The managed fund principle presupposes the investment strategy changing, however, this change depends on the generally accepted management principle, which fund manager should match with the general investment policy of the company. As for Virgin Blue, the fund management strategy presupposes low risks. The key features of the fund management strategy, which will help to benefit are as follows:

• Professional fund management of the debt-based capital structure is aimed at minimizing the risks for the stakeholders
• A regular savings plan is issued for better control of the invested funds
• Investment choice is available to any stakeholder. Virgin Blue operates several sub-brands, and each may be invested separately
• The investment management principles of Virgin Blue presuppose access to international shares and property developments of the entire Virgin Corporation
• The applied management strategy ensures fund diversification across a range of asset classes (Murphy, 2008)

To measure the invested resources and the performance of the managed fund, the stakeholder will only need to measure the return and consider the growth of the assets.

Market Realization

The importance of investment in the selected brand has numerous benefits, nevertheless, few stakeholders agreed to invest in it. It may be explained by the fact that some experts (Baker, 2009) consider the applied strategy non-beneficial, as the minimization of risk following the strategy, applied by Virgin Blue Company minimizes the benefits, thus, the returns of the investment fund are low, and do not grant access to direct shares, while per Tollington (2002, p. 54): “Direct shares generate higher returns than all other asset classes. Over time, international shares have performed better than Australian shares, but Australian shares generally provide steadier income and may offer tax benefits.” In the light of this statement, it should be emphasized that Virgin Corporation, in general, does not fit the Australian economy, where Virgin Blue operates, consequently, the company may experience risks and difficulties even in the circumstances of a stable economic position. On the other hand, access to direct shares is regarded as the non-grounded risk for withdrawing returns from investment funds.

Additionally, the company is subjected to valuation risks, and it should be stated that the actual benefits of the managed fund are seriously violated, while valuation risks are not minimized (Yen, Coats, and Dalton, 2006), consequently, the actual necessity of investment becomes less significant.

Capitalizing the Trend

The capitalization process will be closely associated with the aspects of fund management, and minimization and avoiding of the potential risks. The capitalization process will require a thorough analysis of the potential return rates, depending on the currency which will be invested, and the valuation rates, associated with the marketing position of the company. Thus, the sum, which is intended for investment should be properly allocated within several sub-spheres of the company, to minimize the valuation risks, and the management strategy, which should be applied for this fund requires a depth analysis of the return rates maximization in the circumstances of the unstable low-cost airline transportation market.

Conclusion

Virgin Blue Airlines may be regarded as a reliable brand for investing. The benefits of the managed investment funds are obvious, however, considering the opinion of some investment researchers, the investment in low-cost airline transportation, in general, can not be regarded as a reliable and low-risk affair. However, the talented management of the company is aimed at minimizing the possible risks, and brand capitalization may be reliable enough even in the circumstances of an unstable market.

Reference List

Baker, J. C. 2009. Foreign Direct Investment in Less Developed Countries: The Role of ICSID and MIGA. Westport, CT: Quorum Books.

Hopkins, D. M., Kontnik, L. T., & Turnage, M. T. 2009. Counterfeiting Exposed: Protecting Your Brand and Customers. Hoboken, NJ: Wiley.

Murphy, A. 2008. Scientific Investment Analysis (2nd ed.). Westport, CT: Quorum Books.

Tollington, T. 2002. Brand Assets. New York: John Wiley & Sons.

Yen, S. T., Coats, R. M., & Dalton, T. R. 2006. Brand-Name Investment of Candidates and District Homogeneity: An Ordinal Response Model. Southern Economic Journal, 58(4), 988

In a study by Beulen, et al (2006), Virgin Mobile is an upcoming first growing company that runs mobile telephone services within the telecommunication industry. It was founded in 1999 and is presently a fully Virgin Group’s subsidiary.

The company prides in having its customers being able to both shop in about 6000 retail outlets in the UK and purchase the company’s services through the internet and cell phones. The company has already penetrated the Australian and American markets and plans are underway to get into Canada. In addition, its aim is to provide full fledged services at affordable prices.

Virgin Mobile allows its customers to only pay for the actual use of their services and does not provide them with subscription services. It does not only focus on wider markets, but is also customer oriented.

Rather than introducing new services in the market, the company aims at improving on what is already being provided. With such strategies in place, the company has managed to reach millions of subscribers in the UK apart from being the fastest growing mobile provider globally.

A strategy that is keep the company in the changing and ever growing market is outsourcing business processes that can well handled by partners and outside suppliers. Presence of numerous contractors enables the company to respond accordingly to changes in market and hence enabling it to locate and hire required employees.

It is headquartered at Trowbridge and has its marketing departments in London. Between 2003 and 2006, the company was ranked the best provider of both prepaid and customer care services. Orange, Vodafone, 02 and T- Mobile are Virgin Mobile Australia’s key rivals (Virgin Mobile Australia, 2010).

Virgin Mobile Australia’s Marketing Strategies

In a study by Jaray (2006), Virgin Mobile Australia has devised the following marketing tactics for its products:

Product Collateral (Brochures)

Through this strategy, the company is able to put a list of its available services on brochures. Explanations of how those services operate are made in an elaborate and simple manner. This enables customers to read them on their own at their own time. Through this, they can be reminded of the products, make choices and change where necessary.

Advertising

Virgin Mobile Australia engages in different forms of advertising such as through both print and electronic media to either remind customers of the existing services or to introduce a new service.

The website

Given that most of its customers are up keeping with the advancement in technology, the company uses the website to reach out to both potential and existing clients to keep them informed about the features of its services and any changes.

In a study by Informa Healthcare (2005), Virgin Mobile has launched the following additional strategies to increase marketability of its services:

Simplicity

Virgin Mobile’s success in the US has been attributed to its simplistic approach. The company begins by taking note of areas of customer strain as outlined by the operator. The company then realizes that simplicity is the only marketing strategy that can make it distinctive. Simplicity has been implemented through the prepaid service where an easy non-contract one-rate charging option has been adopted together with a narrow choice of handsets.

Customer Relationship Management (CRM) strategy

Its elaborate customer experience is one of the aspects that have placed the company above its rivals. This is one of the approaches that have been very successful with studies showing that a bigger percentage of the United States customers will tell a friend about Virgin Mobile due to provision of its high quality customer related services.

3 G strategy

This is a high investment plan required in provision of services such as content and operator partnerships, and network infrastructure. Through 3 G, the company provides a mobile television service that has a provision for program recording that can then be watched later on, making it an effective marketing aspect.

Content strategy

To penetrate most of its markets, Virgin Mobile’s services have based on texts, wallpapers and ringtons. After an agreement with T-Mobiles, the company introduced another content service under its brand virgin extras. Through this, the company’s brand strength was boosted through enabling its clients download digital music.

Use of Incentives

In a study by Beulen et al (2006), Virgin Mobile has employed the use of incentives in an effort to retain its customers. First there is the use of 3p texts between virgin to virgin. Secondly, the company has introduced lowest denomination airtime vouchers (£ 5). Thirdly, there is the glue incentive where customers are rewarded with some airtime for every person they connect. Additionally, there is the flash it incentive where clients are awarded some airtime for the much they spent at the Virgin Megastores.

Impacts of marketing strategies on customer and business base

In a study by Manning, Salter and Tuinzing (2005), the marketing mix is used to ascertain the blend of product, price, place and promotion to be used together with the marketing strategy.

Levels of customer services provided by Virgin Mobile Australia

In a book by Grant and Neupert (2003), first, the company offers flat call rates to its customers. Unlike other mobile providers, it has no peak rate calls. Secondly, the company offers its customers a simple call tariff that enables them to pay less after the first five minutes of each day. Additionally, the company has daily discounting rates and provides phones with integrated mp3 tones.

As listed in virgin mobile, at the time, the following are products and their respective prices:

Pre – paid and post – paid plans

Iphone plans

Ways of promoting and distributing products.

As stated in Loop Mobile limited (2007), Virgin Mobile Australia distributes and distributes most of its products on a website through that can be accessed on the phone. Secondly, products are promoted through mobile advertising and Public Relations campaign. The company also promotes music through news, fan communication and gig information that are available on both mobile and Personal Computer devices. Artists’ music is also being distributed via live chat message services.

In a study by Wooton (2009), Virgin Mobile provides services such as call centre, phone service and other technical services. Apart from the internet and iphones, the company also provides its customers with handsets, ringtons, phone accessories and insurance. Additionally, credit customers are given discounts on the company’s phone services. This is normally done through mail.

New marketing strategies that should be implemented for the new products

Short message services.

As stated in Sms News Articles (2010), given the increased use of this service, Virgin Mobile Australia can capitalize on its usability to target both potential and existing customers as it seeks to market its products and penetrate deeper into the market. To make this strategy successful, a powerful and marketing message should be composed and read first.

The impact of this marketing plan reaches more people at diverse levels compared to audio visual. Also the cost of this plan is cheaper compared to other marketing strategies. What are likely to attract the attention of the clients are the simplicity, captivity and friendliness of the message. Intentions of making the product being marketed appear as if it is the best should be avoided.

A message should describing for instance the new ringtons or phone accessories should be send to the customers and then they be left to decide on what to do after reading it.

Social Network Advertising

To increase the marketability of its new products especially ringtons and insurance, Virgin Mobile Australia should consider using social networks such as Facebook, Twitter, and Myspace among others. This will enable users of these Social Networking Sites to be conversant with the product features, quality and even price. Additionally, the users’ responses and interest in the product can very easily be obtained giving the company an opportunity to make necessary changes so as to suit the demands of the customers.

Employing this strategy will also enable the company to penetrate a wider market because there is a high likelihood of users sharing the information with their friends who may in turn make a choice to purchase the product. Additionally, links to the page containing ringtons can be included in the advert giving the users a chance to decide not only to buy but also to download it.

Use of customer database

In a book by Kutty (2008), Customer data base provide helpful information about the customer such as their attributes, previous transactions, their preferences and replies to various questions. Therefore, Virgin Mobile Company should use its database and that of other players like banks. The advantage of databases is that they provide information at reduced costs. Such information can then be used to tailor make the right insurance product for the customers.

The success of the short message service strategy can be effectively monitored by the number of responses from targeted customers. Increased response should trigger a repeat of the strategy. Low responses could call for modifications in the strategy such as changing the message content.

On the other hand, the success of social network advertising can be gauged by for instance the number of users who have not only liked the product, but also made up their orders on Facebook. Moreover, the success of customer database can be monitored by collecting specific information from customers that matches insurance products and using it appropriately.

Return on Investment and Cost benefit Analysis of the strategies

In a book by Shelly and Rosenblatt (2009), Return on Investment is a technique that compares a project’s total returns with its total costs. Cost Benefit Analysis on the other hand is a technique that measures the actual social benefits of a project in monetary terms in comparison to its costs.

To begin with, the short message service approach is not only less costly but it can also target many people. Its total returns are likely to be higher than the total costs. Secondly, although advertising via social networks may target masses, its return may not be necessarily as many. It may also be costly given the many companies that are competing to advertise through it. Use of the customer database is less expensive and the insurance product to be marketed through it is likely to be more beneficial to the company.

Ranked in ascending order, the most preferred strategy should be customer database, followed by short message service and then use of social network advertising.

Resource Management and effect on current operations

To implement the three advertising strategies, Virgin Mobile Australia should first invest in Research and Development to come up with the most competitive ways of implementing the strategies so as to be above its rivals.

A market research on how their rivals are implementing their strategies is also necessarily to enable Virgin Mobile Australia know their weaknesses and thus come up with something effective. Secondly, the company may need to reduce its internet charges to allow most of the customers access some of its products from social networks easily.

Thirdly, given that these strategies require financial back up in their implementation, the company ought to allocate an equivalent amount of funds to accomplish this. Fourthly, the company may be required to empower its marketing department. This may be done by training them more on marketing strategies, hiring more competent marketing executives or raising the remuneration for the current marketing staff.

Successful implementation of these strategies will definitely affect the current operations of the company. For example as discussed earlier, implementing each of these strategies require additional budgeting.

This is to cover social network advertising costs, sending short text message services, doing research on these strategies, covering wages, among other expenses. Creating a customer database requires the company to put mechanisms in place like hiring more customer care staff and increasing its public relations.

The company may also need to lower the cost of some its products as a way of penetrating the market and flooring its rivals. Additionally, if the strategies work that will then mean that the company will have more customers and hence there may be need for more staff to handle the clients.

Reference List

Beulen, E. Ribbers, P. and Roos, J., 2006. Managing IT outsourcing: governance in global partnerships. New York: Routledge. Web.

Informal Health Care. 2005. Mvno Strategies Business Opportunities and Trends in the Global Mobile Market. Informal Health Care. Web.

Jaray, S., 2006. Marketing (Australia wide). Jones Street: Career FAQs Pty Ltd.

Kutty, S. K., 2008. Managing Life Insurance. New Delhi: Prentice Hall of India.

Loop Mobile Limited. 2007. AGM presentation. Web.

Manning, D., Salter, J. E. and Tuinzing, A., 2005. Virgin Atlantic Marketing Case Study. Web.

Shelly, G. and Rosenblatt, H., 2009. Systems Analysis and Design. Boston: Cengage Learning.

Sms News Articles. 2010. Sms my business blog. Baulkham Hills: Ail sms my business. Web.

Virgin Mobile Australia. Mobile Plans and Pricing. Web.

Wooton, C. 2009. Carpe Diem: The Australian Journal of Business Maximizing Brand Contact Points. Web.

Introduction

Strategy in airline industry is based on two merits: one, the escalating worldwide concern for safety; and two, the increasing consumer demand for a variety of services. In such an environment, the HRM strategies are needed to drive promotional plans of airlines in order to be attractive in the aviation market.

Thus, HRM can be defined as an array of steps that converts strategies into action (Appelbaum & Fewster, 2005, p.70). This implies the process of how a firm recruits, interrelate, with, appraise and compensate workers to be more productive at workplace (Appelbaum & Fewster, 2005, p.70).

Richard Branson started the Virgin Blue brand in 1973. Since then, the airline has attained global status. In 1994, the airline acquired Euro Belgian Airlines and re-branded it as Virgin Express (Bamber, 2006, p.3).

Five years later, it was renamed Virgin Blue, an airline based on a low fare, low cost business model and flying in Australia. More than $7.4 million was spend as initial outlay to set up the Virgin Blue. The airline at first utilized reconditioned planes to implement its low fare, low cost (LCC) model (O’Sullivan, 2010, p.1).

There are several factors that contributed to the emergence of Virgin Blue. First, the market was controlled by Ansett and Qantas airlines. Second the demise of Ansett airline in 2001increased demand in the market and prompted Virgin Blue airline to increase its operations in Australia.

Third, Virgin Atlantic adopted a business model based on low costs. Based on this, the airline was able to capture over 30 percent of the market in three years time (Bamber, 2006, p.4).

Step1: Screening HR oriented factors

The Virgin Blue airline, in collaboration with other Virgin Blue Airlines Group offer domestic and international air travels to over 12 countries such as New Zealand, Australia, and South Africa. As the parent company, Virgin Blue Airline Group has a workforce of over 5900 workers.

The Virgin Blue Airline started a strategic plan set up a project portfolio management (PPM) to oversee its operations. This would be adopted to match a recently created project management methodology that the airline devised internally. After thorough studies were done, Bluenova was chosen among a list of optional providers to execute Daptive PPM.

The system has proved to be effective after one year of its use. The system was first applied to several Virgin Blue pilots in the organization to ascertain which components of the plan would be effective within the organization and the necessary modification needed.

The new system enabled the airline to modify its methodology and it captured employees’ opinion on what is needed before implementation phase of the program was done (Mason, 2009, p.1).

Environmental pollution is one among external problems the airline face. For instance, Virgin Blue Airlines produced over 1.5 million tonnes of carbon dioxide in 2006 (Godfrey, 2007, p.2). However, Virgin Blue is committed to reduce its carbon print.

For instance, it invested over $70 billion in low-carbon technologies and bio-fuels in a span of two years (Godfrey, 2007, p.4). Some of its other environmental strategies include: fuel management plans; carbon-offset program started in Australia; fuel and flight path efficiency; and Australian Greenhouse Challenge Plus program (Godfrey, 2007, p.6).

The airline is an apt example of an organization that has identified the need to adjust and be alert in a tricky economic environment and the firm is reaping benefits of Daptiv PPM. The firm has been able to create a bond with its workers to assist them develop their PPM potentials and achieve new heights of efficiency (Mason, 2009, p.2).

Virgin Blue is conscious of its environmental liabilities. The airline minimises food wastage on board collaborates with suppliers to evaluate apt packaging that reduces wastages. The airline frequently computes and submits data about its green house emission.

It has also launched Embrae E-jets that reduces emissions per passenger and facilitates course tailoring. Virgin Blue has also minimized on the use of secondary power units by utilizing proficient ground power units.

Moreover, Virgin Blue was the first airline to attain an all-inclusive and certified carbon offset program, which is an element of its assimilated strategy to deal with environmental issues such as carbon emissions (Green Credential, n.d., p.1).

Step2: Detecting potential HR opportunities and problems

The key element of an effective HR strategy lies with the supportive traditions and ideals that sustain it (Wooldridge, 2007, p.2). Virgin Blue’s case study demonstrates the importance of mitigating potential HR problems. The computer glitch at Virgin Blue’s check-in counters in Australia exposed several HR issues that most airlines encounter.

It has been noted that airlines are facades for a host of private firms that do carry out the low-key tasks such as cleaning toilets, loading bags and boarding tasks. A few airlines even rent aircrafts together with their own crew and pilot.

These airlines do not reveal incidences of outsourcing to their customers. However, most airlines, including Virgin Blue regard outsourcing as a cost cutting strategy.

For instance, Virgin Blue airline has outsourced some of its operations to Aero-Care, a firm that specializes in ground operations in Australia aviation. Virgin Blue has thus benefited from efficient ground services and lower cost arising from Aero-Care’s economies of scale.

The airline has also outsourced its IT services to Navitaire which manages computerized air ticketing, check-in and other vital Blue chip operations making it a low-cost carrier (Heasly, 2010, p.7).

Labour issues are of the factors that affect operations of Virgin Blue Airlines. Labour cannot be managed in a similar manner to other goods since dexterity and effort cannot be detached from the need of the holder.

For employers, production process can be arranged in several ways: hiring more workers; replacing labour with capital; increasing work rate; and restructuring division of labour.

The choice made is determined by strategies of the company, conditions in the industry and competition from rival firms (Boudreau, 2002, p.8).

Rather than perceiving labour selection as a convergence of the choices of independent agents in the framework of a required technological skill, it becomes a complex instance in a progressive association between firm-specific labour markets, internal and the external market where companies are entrenched and from which they converge their labour requirements (Weller, 2007, p.419).

Matters of control and power define the precise form of this coupling. Recruitment hurdles related with age, for instance, interact in a complex way with other stratifying features such as gender.

Given that age relations at workplace are instilled with matters of personal power that determine the relationship between employees and employers, they have the ability to upset hierarchical regimes of control (Walker, 2001, p.362).

Thus, companies have a prominent motivation to match age and authority in the pecking order. For example, the demise of Ansett airline left Virgin Blue and Qantas to service the Australian market.

Virgin Blue joined the business following the deregulation of the Australian market and commenced operations using an aggressive employment plan. Cost saving were attained through the stiffening rosters, annihilating work hierarchies and eliminating penalty wage rate.

Thus, the Virgin Blue’s workplace customs required that employees be granted more duties at an earlier phase. The function of senior manger is to aid junior workers rather than give instruction on what to do (Weller, 2007, p.419).

Step 3: Verify/reject potential HR problems or opportunities

Terrorism is a potential security threat to all airlines and Virgin Blue is not an exception. The airline has recorded several security mishaps involving on-board passengers. For example, in 2001 there were only two incidences. Passengers’ incidences later rose to over 100 the following year and increased to 130 in 2003.

One area that requires adequate security check involves screening of passenger cargo. The matter of check bag screening is very costly to many airlines. For example, the Virgin Blue airline projects that it will cost over $90 million dollars to conduct a comprehensive check bag screening procedure at Sydney airport.

Also, there is minimal collaboration between airlines and government agencies such as Department of Transport and Services. Ever since the terrorist 9/11 terrorist attacks in the United States, Virgin Blue has been under enormous pressure to elevate its security strategies, usually at high cost because there is always perceived risks when passenger enters the plane (David, 2003, p.28).

Moreover, industrial actions by labour unions threaten operations of Virgin Blue leading to massive cancellations of flights. Such an event is likely to generated substantial losses in terms of revenues and manpower. Gender and cultural diversity in the Australian aviation industry is another issue that Virgin Blue must address effectively (McArthur, 2010, p.13).

Step 4: Devise plan and success criteria

Virgin Blue is devoted to attaining workforce diversity by creating an environment that foster equal employment to prospective workers from all cultures. The airline is doing this via its Indigenous Employment Strategy that aims to deal with under representation of Torres Straits Islander and Aboriginal employee within its labour force.

The main goal is to ensure that the airline draws; build ups and preserve flexible, skilled and inspired indigenous workers. Virgin Blue has also collaborated with key organizations such as Australian Indigenous Mentoring center (AIME) and Australian Indigenous Leadership Center (AILC) to develop skills of young native Australians and eventually offer them employment opportunities.

To illustrate its commitment to this noble course, Virgin Blue Group of Airlines recently incorporated some native members in an array of roles including guest services and cabin crew (McArthur, 2010, p.13).

Virgin Blue airline has adopted other strategies to drive its success in the domestic and international operations. With regard to personnel management, the airline manages its labour expenses by constantly enhancing the efficiency of its labour force.

The reward scheme adopted by the airline is based on output and includes payments for on-board sales of goods for flight assistants and remuneration on the basis of sectors and amount of hours spent in air by pilots and the cabin team according to set standards.

In addition, the airline is collaborating with other stakeholders in several airports for aircraft and passenger management to reduce operating costs and provide efficient services.

Given the unpredictability in fuel prices and economic cycles, Virgin Blue tries to secure lucrative rates for these services by agreeing to multi-years deals at prices that are appended only to sporadic increases related to inflation. The establishment of Virgin Blue’s e-ticketing facilities and reservation centers has enabled the airline to get rid of travel agent costs (Virgin Blue, 2008, p.9).

The airline has also made safety regulation its primary focus area. This dedication is reflected by the firm’s recruitment policy with respect to training pilots, cabin crews and maintenance staff. Priority is also given to aircraft maintenance according to the utmost international aviation standards.

To demonstrate its commitment to safety, the airline has never recorded any event related to injury to cabin crew or passenger since its inception. Although the airline has adopted a low cost, low fare model to run its operation, the firm does not extend the strategy to areas such as quality assurance, training of pilots and fleet management (Virgin Blue, 2008, p.12).

Step 5: Implementing the plan

Virgin Blue airline recognizes environmental pollution as a vital problem that must be addressed appropriately. The airline supports the International Air Transport Association’s 2010 goal of reducing carbon emission by over 49%.

Over 97% of the airline’s carbon emissions are due to aircraft’s consumption. The firm’s Fuel and Emissions Management Team is focused on reducing carbon emissions through adoption of new technologies. Virgin Blue was the first airline to be certified by the government on airline carbon offset program in the world in 2007.

The airline’s-Fly Carbon Neutral- offset program has been operational in the last three years. The airline was able to offset over 3.9% of its carbon emission in 2008 (McArthur, 2010, p.11).

Virgin Blue is dedicated to developing a workforce that reflects diverse cultures within its employees. For example, the airline has an Indigenous Employment Strategy that aim to recruit Torres Straight Islanders and Aboriginal employees within its labour force.

To this end, Virgin Blue signed the Australian Employment Covenant (AEC), a nationwide strategy that intends to alleviate poverty and unemployment amongst native Australians.

The airline is also collaborating with Australian Indigenous Mentoring Experience (AIME) and Australian Indigenous Leadership Center (AILC) to help build working skills amongst young natives and then offer them employment opportunities within the airline.

For example, AIME, in collaboration with Virgin Atlantic, is currently training over 980 native high school students, spread over the East Coast of Australia (McArthur, 2010, p.13).

On security issue, Virgin Blue has taken measures to provide utmost level of security for its crew and passenger. The airline has collaborated with CASA and other government agencies to enhance safety of cockpit door.

Virgin Blue has introduced a shared responsibility program where passengers are encouraged to report incidences that may pose security threats to its business.

Given the high costs associated with screening passengers’ bags, it is crucial that government agencies and other stakeholders collaborate with Virgin Blue airline to meet these costs and augment security in all critical areas.

Thus, consultation among all stakeholders is the key to mitigating security threats facing Virgin Blue airline and aviation industry in general (David, 2003, p.28).

Step 6: Evaluation phase

An evaluation of the Virgin Blue’s CHRM model shows that it has successfully implemented its HR strategies. For example, the airline has managed its labour expenses by constantly enhancing the efficiency of its labour force (Malloy, 1996, p.32).

The reward scheme adopted by the airline is based on output and includes payments for on-board sales of goods for flight assistants and remuneration on the basis of sectors and amount of hours spent in air by pilots and the cabin team according to set standards (Virgin Blue, 2008, p.9).

The airline has also out-sourced some of its auxiliary services to enhance service delivery at reduced cost. The employment strategies of the airline reflect has also been able to embrace diversity within its workforce by creating equal employment opportunities for its employees (McArthur, 2010, p.13).

Virgin Blue airline has also partnered with several government agencies and other stakeholders in efforts to enhance security of its operations (Virgin Blue, 2008, p.12).

Conclusion

Virgin Blue airlines Group has been able to successfully implement its HRM strategy to drive its operations and increase employee output. It selection, recruitment, training, evaluation and incentive programs have enabled the airline boast of a diverse workforce that is multi-talented.

Its decision to create job opportunities among the Australian natives through its partnership with AIME and AILC is a clear demonstration of its culture of diversity at workplace. The airline has also collaborated with government agencies and trained its staff to enhance security levels for its cabin crew and on-board passengers.

Recommendations

There are several strategies that Virgin Blue airline can adopt to enhance its HR management strategies and improve its business operations in the aviation industry. One, the airline should foster effective communication among its staff to facilitate efficient flow of information.

Second, the customs of the highest-performing airlines enhance internal marketing strategies, empower workers, and improve collaboration among workers. Third, senior managers should mingle freely with their junior staff and acknowledge their excellence performance.

Fourth, Virgin Blue should encourage its workforce to submit their recommendations on how to enhance service delivery. Fifth, the airline should offer refresher courses to its employees on a regular basis to keep them abreast with changing customer needs (Appelbaum & Fewster, 2005, p.75).

References

Appelbaum, SH & Fewster, BM. (2005). Human Resource Management Strategy in the Global Airline Industry. Concordia: Concordia University.

Bamber, G. (2009). Marketing Strategies and Labour-Market Behaviour of Full-Service and Low-Cost Airlines: An Australian Study. Brisbane: Griffith University.

Boudreau, JW. (2002). Strategic HRM Measurement in the 21st Century. Web.

David, P. (2003). Review of Aviation Industry in Australia. Web.

Godfrey, B. (2007). Climate Change Summit. Web.

Green Credential. (n.d). Virgin Blue. Web.

Heasly, A. (2010). The secret life of airlines. Web.

Malloy, A. (1996). Counting the intangible. Computerworld, 9, 32-33.

Mason, A. (2009). Virgin Blue Airlines enjoy unprecedented Visibility into its Project Portfolio through Daptiv PPM. Web.

McArthur, M. (2010). Virgin Blue Holdings Annual Report. Web.

O’Sullivan, P. (2010). Virgin’s New Look. Web.

Virgin Blue. (2008). The strategy of Low-Cost Carrier-Virgin Blue. Web.

Walker, G. (2001). Designing and implementing a HR Scorecard. Human Resource Management, 40, 365-377.

Weller, SA. (2007). The labour market prospect of older workers: What can legal case teach us? Work Employment and society, 21(3), 413-437.

Wooldridge, E. (2007). Breaking down the Barrier. Web.

Executive Summary

In the recent past, organisations have embraced change management as a way of increasing productivity when faced with economic, social, technological, or environmental challenges.

To assess the effectiveness of change management, this report delves into an analysis of drivers of organizational change at the Virgin Blue Holdings, as well as the barriers it may face in the change management process, including the management barrier, vision barrier, and the resource barrier.

More so, through a review of literature, the report underscores diverse models used in change management, including procedural model, Kotter’s model, and EFQM Excellence model, with a view of finding out the most viable change management theory that should be adopted by the Virgin Blue Holdings.

As such, this report recommends the procedural model over other change management models by demonstrating its effectiveness through analysing the stages involved in the process.

This indicates that an effective change management strategy should address each phase separately, as this helps to highlight the barriers to organisational change, as well as to provide recommendation for improving the change management process. This report brings to light the rationale behind adopting change management as a viable managerial practice.

Introduction

Change management is a critical tool to human resource managers, as it persuades and enables workers to accept new ideas, values, technologies, processes and administration.

Change in the workplace is inevitable as changes in environmental, technological, economic, social, as well as the legal factors make businesses constantly apply new technologies, upgrade systems, and change their management practices in an effort to improve productivity.

This change is normally faced with many challenges, and key among them include realignment of human resources and redeployment of capital resources (Kanter 2003, p.237).

Thus, change management is an indispensable process that facilitates acceptance of new ideas, values, technologies, processes, and administration, and its participation should include all the staff members as well as the stakeholders (Saka 2003).

It is from this perspective that the field of change management has been evolving over the years to ensure that all employees embrace change within the organisational settings.

This paper will provide a report on the case study of the “Virgin Blue Holdings” to give an informed review of change management models and theories and their effectiveness. It will begin with analysing the drivers of organisational changes and proceed to evaluate the models and theories necessary for an effective change process.

Analysis Of Drivers Of Organisational Change At The Virgin Blue Holdings

Despite the fact that many organisations resist changes during the initial stages and find it expensive to implement, a number of aspects force them to make operational changes.

Thus, an organisation can be forced to adopt relevant changes when its alters its mission statement; when its products / services become obsolete due to technological factors, among other factors; or when it is faced with a stiff competition that can only be conquered through a merger (Gebauer, Fischer, & Fleisch 2010).

One of the most important drivers of organisational change is when companies fail to achieve financial targets. This makes them evaluate their business objectives and processes in a bid to avert the crisis. The Virgin Blue Holdings reports a 62% decline in the net profits, a profit margin that is below the target level.

This portrays that the company is experiencing an inadequate financial performance, thus necessitating change in its business operations. The decline can be attributed to strong competitive forces, making it attain only 10% of the market share.

And since the Virgin Blue Holdings wants to attain a competitive advantage, it has been forced to adopt a move that cannot be overemphasized: restructuring its business operations to match the dynamic trends.

Thus, extreme competition is a driver to organisational change as it forces some organisations to change their objectives and strategies. In this regard, the Virgin Blue Holdings has made an endeavor to change its objectives and strategies by making sure that it takes the necessary steps that aim at including the corporate travelers, besides the leisure travelers, as part of its market share.

Its change management approach stems from the fact that companies that understand and address the ever-increasing demands of their customers are major competitors than the companies that neglect the rising trends, as this reduces their chances of facing a diminishing market share (Gebauer, Fischer, & Fleisch 2010).

Moreover, it is imperative to note that businesses should not only adapt to organisational changes due to technological innovations but also due to peoples’ attitudes and social behavior affecting them (Penger et al. 2007).

In this regard, the Virgin Blue Holdings is required to acquire a profound understanding of the social factors that may affect productivity of the company by trying to understand the current demand of the employees.

More so, companies should create social relations and collaborate with other companies’ practices that are in line with its change strategy. And it is for this reason that the Virgin Blue Holdings has taken the initiative of benchmarking its uniform with a popular fashion industry, which is commonly known as the Project Runway.

Additionally, when a product reaches the end of its product life cycle, companies are forced either to cut the operating costs of the product in question or to introduce another product in the market.

This is evident in the Virgin Blue Holdings as it seeks to introduce Airbus A330 aircraft to operate between Sydney and Perth. This aircraft is expected to present a new product in the market by introducing a new business class cabin and a “superior economy class.”

Companies can also be forced to change their management system as they seek to cut costs that prove to be detrimental to the company’s profit. This is normally achieved by collaborating with other companies in the field.

At this stage, some companies take the approach of partnering with existing competitors, and this, in turn, facilitates structural changes to company’s business processes through teams that help to sustain performance.

To cut excessive costs, the Virgin Blue Holdings has taken the initiative of collaborating with the Skywest, and this provides it with an opportunity of flying the Turboprop aircraft to regional routes.

However, such kind of a partnership is characterised by redundancy or threats to organizational culture, and this elicits organisational changes due to differences emanating from divergent views of management practices and cultural values of two different companies as they seek common ground (Kanter 2003, p.253).

Thus, an effective change management process is required to bring this to fruition. In a bid to adopt an effective change management process, it is paramount to analyse a number of challenges that the Virgin Blue Holdings may face in the process.

Barriers To The Organisational Change

While managing organisational changes, it is paramount to establish whether the new paradigm is acceptable to all members of the team because this facilitates implementation of a viable framework to counter the organisational change barriers, which include the management barrier, vision barrier, and the resource barrier.

These barriers emanate from inadequate requirement planning, failure to consult the affected members, and inadequate training (Coram & Burnes 2011).

Because of this, sufficient justification and education should be put in place to realign individuals with the new company’s direction, since the move of coming up with new strategic changes may not be fully embraced by the employees as well as other stakeholder.

Nevertheless, change agents, which involve managing employees’ attitudes, can assist with the changing process despite the fact that not all agents are acknowledged in change management.

For case in point, while the Virgin Blue Holdings has taken the initiative of collaborating with Skywest, some staff members of the Virgin Blue Holdings may not appreciate the move since it may raise discomfort, which normally emanates from working with an organisation that has been considered as a rival over the years.

Organisational changes present an organisation with a new mission and vision statement, making the employees attain new job specifications.

The employees may tend to resist these changes after realising that the move will necessitate additional skills, which they may lack at the time of the change implementation (Coram & Burnes 2011). In such a case, the organisational barrier emanates from failure to plan adequately and ignoring the affected employees, who, in turn, affect the rest of the employees within the organisation.

Additionally, inadequate training serves as a barrier to organisational changes. For case in point, many employees are offered basic skills in computer software operation with a view of increasing their proficiency in computer operations.

However, this does not always provide them with an opportunity to handle logistics involved with the new line of business operation. Thus, the Virgin Blue Holdings should ensure that it provides formal training required to handle the new line of business, namely, the new airport lounges and the business class products.

Techniques, Theories, And Models Of Change Management

A vast majority of organisations are faced with a dilemma when it comes to managing change. This has necessitated an analysis of change management models to underscore the prime factors that should be considered in order to achieve the change process successfully.

Some models are designed in such a way that they are in a position of addressing a number of barriers, including decision phase barriers, preparation phase barriers, design phase barriers, and implementation phase barriers. It is from this perspective that a number of change management models have emerged in order to counter the challenges faced with the overall change management process.

Diefenbach (2007) affirms that an effective change management technique should entail analysing the change process using a number of dimensions, with the first dimension emphasizing on the essence and the extent of change. The changes are then arranged in sequence in an effort to differentiate the reactive from the anticipated change.

The procedural model, according to Cameron and Green (2009, p.124), defines organisational change as evolutionary, meaning that changes continuously evolve from one department to the next, while the EFQM Excellence model puts more emphasis on evaluating as well as aligning a company in an effort to meet the expected quality after the change process takes effect.

And while the procedural model compares with the Kotter’s model in the sense that both operate under the platform of sequential procedure, the procedural model is flexible in that it is able to react positively to unexpected changes emanating from environmental factors affecting an organisation (Cameron & Green 2009, p.127).

With this in mind, the Virgin Blue Holdings can adopt the procedural model to achieve the desired change effectively.

Developing And Implementing A Change Management Strategy

Given that business strategies are built around innovation, flexibility, speed, customer service, affordable quality, and competitive advantage, developing and implementing an organisational change strategy for Virgin Blue Holdings requires the key decisions to be guided by a set of organisational values and culture.

Although the role of top executives is important in sustaining transformation in the firm, the overall participation of all shareholders occupies a central place in this model. Such shareholders include the government, union managers, employees, line managers and top executives.

The principles guiding the change process using the procedural model are divided into five phases, namely, the decision, preparation, design, implementation, and, finally, reinforcing changes phase. These phases are discussed below in turn.

The Decision Phase

Effective development of strategic change can only be achieved when a company defines the factors that affect its productivity (Self & Schraeder 2009).

In this regard, the clients, society, government policies, competitors, as well as the environment affect the Virgin Blue Holdings’ productivity as it seeks to come up with new airport lounges, new uniforms, as well as a new business class.

Thus, this phase entails taking a decision that would enable it cope with dynamic changes of business process in order to be in a position of coordinating its business operations for the next strategic period.

Developing strategic changes starts with making decision on the intended nature of change. The challenge with decision-making, however, may create an assumption that the managers are in a position of predicting the future. The employees, in contrast, may express doubts towards the success of the new strategic change.

However, a detailed description of how this model works and what it encompasses can be made possible by carrying out a critical analysis of its strong and weak points and the opportunities and threats that it presents in the management of change in the workplace.

In doing so, the Virgin Blue Holdings acquires sufficient knowledge that would help to prioritise alternatives as well attract change through creating a positive attitude to the employees as they handle the new line of business (Proctor & Doukakis 2003).

The Preparation Phase

Managers involved in the strategic change are increasingly required to demonstrate the ability to contribute to the overall welfare of their organisations. As such, they should strive to participate in the accomplishments of the organisation’s objectives and visions.

Thus, they should not only focus on their departments but should engage in an increased cooperation with the in-line managers. More so, they should display a wide range of knowledge on how to effectively design work systems that encourage organisations’ success.

In addition to this, a good preparation phase calls for effective communication skills. This stems from the fact that effective communication facilitates reaching a point of consensus with the employees while planning and designing the organisational changes.

More so, communication explicitly analyses the barriers to organisational changes in the event where the employees share their opinions regarding the proposed changes. This, in turn, helps to reduce employees’ resistance to organisational changes (Lewis 2011, p. 56).

However, in order for communication to achieve its objectives in the organisation change process, it must be done face-to-face and through the company’s website. In the face-to-face interviews, the managers should ensure validity in the communication process in order to avoid biased opinions from the employees.

And while using the company’s website, the managers should use an ordinary computer since a new computer model may end up scaring some workers who are not accustomed to it.

The preparation phase should also include the affected members who may be displaced due to adoption of new line of business operations. Effective communication with the affected members should be carried out in a manner that does not affect the other employees’ attitude towards change.

This stems from the fact that employee dissatisfaction and resistance to change could only be countered if the strategic changes of the organisation are well understood and accepted by all, including the affected members (Proctor & Doukakis 2003).

The Design Phase

This is the stage where the organisational managers meet with the employees for discussion on the planning of the change process. The managers define the behaviours and competencies expected of the employees and the target on what the employees are expected to achieve over a given period of time.

Thus, this phase entails motivating and empowering the employees towards achieving the set target, and it can be achieved by introduction new technologies and products in a timely manner.

The Virgin Blue Holdings has designed its strategic change by defining ways in which it is expecting to achieve its objects, such as penetrating pricing and new marketing campaigns, in a manner that takes into account the time intervals and deadlines under which the strategy is expected to achieve its purpose.

In doing so, the Virgin Blue Holdings is in a position of identifying change constrains before implementing the subsequent strategic changes, as well as managing the change process effectively due to timely distribution of cost of the change process (Cameron & Green 2009).

The Implementation Phase

In this phase, the organisation defines the changes and the time the company would take to adopt the changes effectively. Thus, the implementation phase monitors the deadlines and the expected target adopted in the design phase.

This target definition is vital since it helps the management to assess whether the intended changes have been achieved. More so, the implementation phase should address all the disciplines within an organisational setting, with each head of department taking the role of controlling, monitoring, and ensuring that the changes are in line with the set boundaries (Cameron & Green 2009).

This is paramount because, even with high sense of vision and direction, it is very risky for one individual to take the lead in large-scale organisational changes.

The Reinforcing Changes Phase

It is imperative to mention that change management process should be designed in such a way that it is able to assess whether the changes adopted are valid and congruent with the company’s culture (Coram & Burnes 2001).

Additionally, this phase should be used to establish other environmental or social factors that may further lead to a subsequent development of mission and vision statements.

This phase is paramount because it manages information regarding the change process in the implementation phase, including the employee’s attitude towards change, and forms a good background for implementing an effective change process in future.

Conclusion

This report has clearly analysed and developed change strategies that could be considered by the Virgin Blue Holdings in order for it to survive and prosper. With the tensions and uncertainty faced by organisation while adapting to innovations, it is advisable that the Virgin Blue Holdings adopts an appropriate change model and strategy that would allow it deal with such threats.

This report has underscored the barriers to organisational changes, including management barrier, vision barrier, and resource barrier, and has recommended the procedural model for the Virgin Blue Holdings change management process since it seeks to manage the change by monitoring closely the five phases of the change process in a sequential order.

List of References

Cameron, E & Green, M 2009, Making sense of change management: A complete guide to the models, tools & techniques of organizational change, Kogan Page, London.

Coram, R & Burnes, B 2001, ‘Managing organizational change in the public sector: Lessons from the privatisation of the Property Service Agency’, The International Journal of Public Sector Management, Vol.14 no.2, pp. 94-110.

Diefenbach, T 2007, ‘The managerialistic ideology of organisational change management’, Journal of Organizational Change Management, Vol. 20 no.1, pp.126–144.

Gebauer, H, Fischer, T, & Fleisch, E 2010, ‘Exploring the interrelationship among patterns of service strategy changes and organizational design elements’, Journal of Service Management, Vol. 21 no.1, pp.103 – 129.

Kanter, R 2003, The Challenge of organizational change: How companies experience it and leaders guide it, Free Press, New York.

Lewis, L 2011, Organizational change: Creating change through strategic communication, Wiley-Blackwell, Chichester, West Sussex.

Penger, S, Črnak-Meglič, A, Tekavčič, M, Hrovatin, N, & Skornšek, P. 2007. ‘Strategic change management in the public sector: The Slovenian case’, Reflecting on Issues and Controversies in Current Management Trends, pp.189-206.

Proctor, T & Doukakis, I 2003, ‘Change management: the role of internal communication and employee development’, Corporate Communications: An International Journal, Vol. 8 no.4, pp. 268-277.

Saka, A 2003, ‘Internal change agents’ view of the management of change problem’, Journal of Organizational Change Management, Vol. 16 no.5, pp. 480-496.

Self, D & Schraeder, M 2009, ‘Enhancing the success of organizational change: Matching readiness strategies with sources of resistance’, Leadership & Organization Development Journal, Vol. 30 no. 2, pp.167-182.

Introduction

Since entering the Australian market in 2000, Virgin blues has expanded its routes as time goes by (Gregory 2000, p. 21). In this case, it has employed a wide range of cost cutting measures and established itself as a low cost carrier airline. Apart from this and other competitive aspects that it has employed, the company has strong brand recognition. In this case, it has a link to the general group brand.

All along, the company has used innovative tactics to remain competitive. This has been done by thinking out of the box. Although the company has been a big player in the market, it has also faced turbulent times in recent years (Virgin Blue 2011, p. 12). Therefore, this paper will evaluate various aspects as far as strategic competitiveness is concerned.

Strategic management and strategic competitiveness

Strategic management revolves around coming up with good decisions that can enable an organization to achieve its objectives. This is aimed at achieving its long term objectives as far as strategy formulation is concerned. Strategic competitiveness can be termed as a type of strategy and course of action that an organization will use to achieve its goals and objectives (Gladwell 2000, p. 21).

Strategic competitiveness is based on the idea that there are many competitors around and that is why an organization needs to come up with special ideas that will enable the company to create wealth without any problem. There are new radical changes that have continued to take place in the current competitive landscape.

In this case, the characteristics of the 21^st century have caused a lot of core competencies. As a matter of fact, their choices have been influenced in a great way and this is as far as competition is concerned. It should be known that the 21^st competitive landscape has increased opportunities for various companies because they have to think out of the box.

These characteristics of the 21^st competitive landscape have had a lot of effects on Virgin Blue. For instance, the company has been forced to strengthen its marketing and code of alliances to remain competitive and strategic (Marx 2010, p. 18). It should be known that competition has forced Virgin Blue to think out of the box by being innovative.

External Environment

The external environment that a firm operates in is rarely stable and this means that various factors can change quickly as time goes by. As a matter of fact, all businesses operate in a changing world and this is a fact that we need to evaluate. This means that firms are subject to forces that are very powerful beyond their control.

In this case, they can not come up with a good projection of what will likely transpire as time goes by and this is as far as their business external environment is concerned (Berry 1995, p. 21). The external environment has made businesses to known that they can not survive without interacting with the environment.

The external environment has forced these businesses to be creative in doing business. Because a firm does not have control over the external environment, it has always affected performance depending on various aspects.

In a broad perspective, firms have been forced to take into account this forces with an aim of coming up with a strategy. There are various external environment factors that have had an impact on Virgin blue. The economic downturn of 2008 was crucial for Virgin blue because it affected its performance in a broad way (Canning 2011, p. 25).

As a matter of fact, the company recorded a loss but it has bounced back to profitability by coming up with good measures. Global security concerns have also affected the company’s performance and that is why this is a challenge. As far as global security is concerned, the company has been forced to comply with various security requirements that have been enforced by governments (Kitney 2010, p. 15).

Virgin blue has been forced to match its internal strengths to various opportunities that have emerged as time goes by. All in all, the global airline industry has been exposed to various regulations from different governments and this has had an impact on the company’s performance.

Internal Environment

The internal environment is used to asses a company’s strengths and weaknesses. In this case, more attention and focus is laid on the factors that are internal to the firm. Most of these internal factors can be controlled by the firm as time goes by. This is because they are within the company’s means.

As a matter of fact, these internal factors can be changed or acted upon by the company for long term sustainability (Pelly 2006, p. 27). Internal business environment has forced companies to change their operations to suit in the market. The internal business environment has forced firms to look at various elements that define their business. It should be known that a company’s internal environment revolves around competencies, capabilities and resources.

There are various internal environment factors that have been crucial for Virgin blues. As far as costs are concerned, the company has been able to establish itself as a low cost airline (Creedy 2010, p. 11). Aspects like the rising operation costs have mostly been internal and this has forced the company to re-evaluate itself to remain afloat.

Terminal and operating costs have also been going up and this has affected the company’s operations in a broad way. In a broad perspective, these internal factors have influenced the company positively in a big way. This is based on various strategies that it has occasionally come up with to remain competitive (Wardell 2008, p. 18). An example is the strengthening of marketing and different alliances.

Business level Strategies

Business level strategy can be explained and termed as a coordinated set of actions that will enable a company to gain competitive advantage in the market.

This is done through the exploitation of various competencies by focusing on specific product markets (Gladwell 2009, p. 32). Therefore, it does occur that firms can use business level strategy to achieve competitiveness in the market. Businesses level strategy can enable a firm to evaluate its weaknesses and come up with good strategies that will enhance its competitiveness in the market.

As a matter of fact, a company can come up with good mechanisms that it can later on use to compete in the market. Virgin blue has used a lot of business strategies to remain competitive in the market. In this case, the company has always been innovative by thinking out of the box to give customers unique services and products.

The firm’s low cost culture has also been a good strategy to attract customers and this will likely be replicated in the future for sustainability (Osborne 2009, p. 26). In the long run, the company has initiated various competitive moves that will make it a big player in the market as time goes by.

Conclusion

Virgin blue will continue being a large market player because of various initiatives and strategies that it has initiated in the market. The company has been the preferred airline because of the fact that it is a low cost airline. All along, the company has established itself as Australia’s strongest domestic airline.

The firm has good prospects because it was able to bounce back to profitability after the economic downturn and this means that it can always be profitable (Osborne 2009, p. 31). With the right strategies in place, the company will continue being a big market player and this is a fact. The company has a strong brand name and this is something that it can use to its own advantage for sustainability.

Reference List

Berry, L., 1995. On Great Service. New York: Free Press.

Canning, S., 2011. Virgin Blue to drop blue to attract more business. Sydney: The Australian.

Creedy, S., 2010. Virgin chief starts at $3.5m. New York: The Wall Street Journal.

Gladwell, M., 2000. The Tipping Point. New York: Little Brown.

Gregory, M., 2000. Dirty Tricks: British Airways’ Secret War against Virgin Atlantic. New York: Virgin Books.

Kitney, D., 2010. Virgin Blue steals AFL official airline contract from Qantas. Sydney: The Australian.

Marx, A., 2010. Virgin check-in has checked out before. London: Herald Sun.

Osborne, A., 2009. Virgin boss caught up in BA price fixing case. London: The Telegraph.

Pelly, M., 2006. Virgin backs down in disability row. Sydney: The Sydney Morning.

Virgin Blue., 2011. Services.

Wardell, J., 2008. Virgin attempts to block BA-American-Iberia deal. New York: Forbes.

Introduction

Managing the marketing process is an issue that companies have to contend with in the new dynamic and competitive environment. Performance of most businesses in contemporary environment is gradually shifting to the need of superior marketing strategies that are able to respond to the market needs in the most appropriate way.

Therefore, this research intends to look at how management of marketing process can be enhanced in the increasing competitive business environment. The research will be a case study on Virgin Blue Company, which is an airline company based in Australia.

Manage the Marketing Process

Virgin Blue Company sees itself as possessing a humble background and beginning especially for being the first type of company to initiate the first and unique sustainable low far airline in Australian skies (Virgin Blue Company n.d). The company, through steady progress, has evolved and grown to become a recognized company in the world as innovator and leader in the global aviation industry.

Blue Virgin Company started its operations in on 31 August 2000, with initial two aircrafts to start with (Virgin Blue Company n.d). It operated one route and had 200 team members who collectively shared a clear and concise goal of changing in the most drastic way the air travel in Australia (Virgin Blue Company n.d).

As a way of revolutionalizing aviation industry with regard to way of doing business, the company reduced the airfares by almost 50 per cent while at the same time introducing genuine Guest service to the flying public, coupled with a strong commitment to being the best in the business (Virgin Blue Company n.d).

Company’ mission indicates what the company is trying to achieve, what is the purpose of the company, and why it exists, hence, mission statement constitutes a short statement that says what a company stand for and it outlines a company’s strategy that becomes a key referential tool by company’s members in making key decisions (Griffins and Goffar n.d). Virgin Blue Company’s culture has been created based on the company’s core values.

For instance, the company expresses that “the big secret to Virgin culture is simple – there is no secret, where creation and maintenance of an enviable culture has been the top secret of the company and this has been done by infusing the company’s core values into everything the company does where we get that right and the Virgin culture just follow” (Virgin Blue Company n.d, par.3).

The company’s values have been infused with everything that the company takes part in. For instance, the company works hard and participates in everything necessary to provide work environment characterized by the “right policies, processes, systems, communications, facilities, benefits, interesting work, fair pay, and reward and recognition to support our people and our business operations” (Virgin Blue Company n.d).

Virgin Blue Company has code of conduct and practice that it has established and acts as guide to business conduct in the organization (Virgin Blue 2010).

One of the director in the company summarizes “all personnel are required to support the quality of Virgin Blue and to take an active role in identifying and facilitating opportunities for improvement where the ultimate commercial success of the company is intrinsically linked to both perception and reality that the company operate safely, surpassing both the competitors and the required regulation and legislation” (Virgin Blue 2010, p.1).

Code of ethics at Virgin Blue outlines key responsibilities members have to demonstrate and these responsibilities have been categorized into groups of: underlying values for the company, business integrity, which stress virtues of honesty, integrity, and fairness with regard to reporting, political involvement, and competition (Virgin Blue 2010).

Brett Godfrey, CEO of Virgin Blue Company observes that the company has greatly moved away from organizational structures, instead the company work more brilliantly to establish a lesser organizational hierarchical in the workplace (Brett n.d). Instead of an organizational structure and hierarchical, Virgin has instead embraced structure that is kind of pie chart and not the traditional and usual triangle structure.

The CEO of Virgin goes on to state that, as a leader he lacks confidence and is non-believer in organizational charts and instead advises that all leaders in the company should view themselves to be equal to each other. The company has an established marketing department headed by marketing manager and a dedicated team that is responsible to all aspects with regard to brand, product, and retail media advertising in television, radio, and related online campaigns (Virgin Blue Company n.d).

Marketing objectives at Virgin Blue are built on the principles of SMART, which stands for: specific, measurable, attainable, relevant, and timely objectives. First, Virgin Blue has pursued its marketing objectives through strategic alliances with other companies (O’Sullivan 2011). Strategic alliances have been favored by the company mainly to create extensive marketing channels and networks in region the company cannot afford to go it alone (O’Sullivan 2011).

At the same time, Virgin Blue, upon its establishment, rested on the philosophy of endeavoring to be low cost, but offer reasonable services. In addition, the initial marketing strategy of the company based on these objectives was motivated by prevalence of market domination by airlines like Qantas; hence, Virgin Blue adopted an aggressive marketing expansion based on low costs which in actual were about 30 to 40 per cent less that that of Qantas (Bamber 2006).

As part of implementing market plan, there is need to carry out monitoring, controls and adjusts process, which can be undertaken using different tools such as “developing a financial forecast of revenue using statistical models, past sales data, executive judgment and surveys of consumer trends” (Cooper and Argyris 1998). After this has been done, there is need to carry out estimation of “costs such as market research costs, promotion costs, product development costs and distribution costs” (Cooper and Argyris 1998).

At Virgin Blue Company, the management and overall organizational culture encourages working together of departments hence sharing of information is key to the success of the company. The company further encourages ‘cross pollination’ of ideas and communication, which in turn leads to working and implementation of strategies at the company more easy (Brett n.d). On large scale ‘silo mentality’ has been discouraged, which has opened up communication channels to be more easy and frequent.

Evaluate International Marketing Opportunities

Virgin Blue currently controls about 33 per cent of the airlines market in Australia where the company global marketing strategy has been simple perceived to largely involve offering of easy-to-understand, low priced carrier and at same time use of low-cost business model that generate high profit margins (Virgin Blue Company n.d).

Virgin Blue brand stand exceptionally in a situation that has numerous opportunities only when appropriate environmental scanning had taken place. Situation analysis according to Michael E. Allen in the book titled ‘How to promote and advertise’ observes that it involves describing what is happening in the markets in which the company operates and competes and also the company’s products and distribution trends (Allen 2006).

Situation analysis for Virgin Blue Company can be grouped into macro-environment situation; market situation; competitive situation; target buyer or end user situation; product/service situation; and lastly, distribution situation (Allen 2006). In order to carry out this situation analysis more effectively Virgin Blue may employ two critical situation analysis tools: SWOT analysis and PEST analysis.

SWOT Analysis

Virgin Blue can be assessed with regard to Strength, Weakness, Opportunities, and Threats (SWOT) as follows. The strengths of the company include: the company has relatively low cost structure; the company has out-won its competitors given its low fare offering policy; further the company as compared to the competitors boost of having a management team that possess significant and beneficial airline experience that continue to be utilized in the company (Asian Travel Tips, 2003).

Moreover, other related strengths of the company include presence and possession of strong brand in the market as compared to some of its competitors; presence of unique culture and the overall enthusiasm of the organization that has endeavored it to customers; and lastly commitment and general productivity of its workforce (Asian Travel Tips 2003).

With regard to weakness, first Virgin Blue Company is not an Australian owned company an aspect that sometimes has affected the company’s operations especially with regard to legal and political policies in the country. Second, the overall Virgin Group financial structure has continued to change and remain fluid translating into impacts in other Group’s units like Virgin Blue Company (Grant 2004).

For instance the company’s structure of ‘stand-alone’ financing of each company has executed a lot of pressure on individual companies resulting into accumulation huge debts (Grant 2004). This situation has left Virgin Group vulnerable to bad debts in one part of the group that in turn swiftly infect the rest of the companies (Grant 2004). Being part of the Virgin Group, Virgin Blue has not been immune to these debts.

With regard to opportunities, Virgin Blue Company has some opportunities in its way. For instance, the fact that international security has become an issue especially after the 2001 terrorist attack in USA, international tourism declined and this particular situation translated into the number of domestic travels increasing (Isik-Vanelli 2003). At the same time, the collapse of Ansett Company has provided unexploited opportunities which with adequate and appropriate strategies Virgin Blue can create a contingency for success.

Moreover, all indications point to the possibilities that the route network and service frequencies are destined to expand, an opportunity Virgin Blue can exploit to expand in the Australian market (Isik-Vanelli 2003). Lastly, the increasing market orientation towards leisure travelers still has few players who can adequately exploit hence Virgin Blue Company is presented with an opportunity to venture in the area.

At the same time, threats that face Virgin Blue Company largely originate from the increasing competition in the airlines market. The main fierce competitor for Virgin Blue Company in the Australian Market is the Qantas which has eclipsed Virgin Blue Company (Virgin Blue Holdings Limited n.d).

Qantas airlines given its expansive network and huge financial base has continued to offer much lower fares as compared to Virgin a situation that has immensely executed pressure on Virgin Blue (Virgin Blue Holdings Limited n.d). Other threats facing Virgin Blue company has to do with the government initiatives to liberalize airlines in Australia, a situation that is going to see increased entrance of low-fare companies thus increasing the competition environment.

PEST Analysis

PEST is an acronym for Political, Economic, Social and Technological factors which are used to assess the market for a business or any organizational unit (Chapman 2006). Assessing the Virgin Blue Company with regard to PEST, the following information is generated. With regard to Political-Legal effects affecting the company, it can be deduced that Australian overall liberal policy has created an environment that favor and motivate new entrants to enter the Australian market (Slide Share In. 2009).

At the same time, Australian international aviation policy is seen to be ‘multiple designations’ where at the same time the deregulation that has been taking place since 1990 has led to more controlled form of competition between the two rival competitors Qantas and Virgin Blue (Slide Share In. 2009).

With regard to economic factors, it can be deduced that since the events of September 11 2001 in USA, international tourism has continued to suffer as more customers hold back due to security concerns. Further, other economic issues such as increasing fuel costs has continued to pose challenge to Virgin’s policy of low-cost fare whereby the increased fuel costs has in turn affected the basic costs of flights which in turn affects the likeability of customers to book a flight (Slide Share In. 2009).

Socio-Cultural factors on the other hand that impact Virgin Blue has to do with the current situation of tightening of labor market specifically with regard to skilled fields that forces the company to increase its employee motivation. At the same time it is predicted that the demand for personnel in other and distant countries will lead to the need to initiate foreign-language training (Slide Share In. 2009).

Lastly, the technological impact in the increasing information world requires Virgin Blue to institute appropriate technologies for its services. For instance, online booking is a technological aspect the company will need to explore. On overall, the growth of information industries is creating knowledge-dependent global society and information is gradually becoming the primary commodity for the success of industries (Slide Share In. 2009).

Manage International Marketing Programs

SWOT Analysis and PEST Analysis forms the two critical assessment and evaluation tools Virgin Blue Company can use to identify opportunities and threats which in turn can lead to formulation of appropriate marketing objectives especially with regard to international markets. SWOT Analysis in nature concentrate on international assessment of the company, in other words, it largely dwells on micro-environment analysis of the company.

On the other hand, PEST Analysis makes assessment of the external environment of business where the emphasis shifts from micro-environment to macro-environment evaluation. Therefore, the results generated from the two assessments become critical in postulating the company’s marketing and overall strategies especially with regard to corporate strategy of the company.

Virgin Blue after successful assessment of SWOT and PEST, the following international marketing objectives of the company can be pursued.

According to Richard Branson, the Virgin Group founder asserts that “Virgin Blue has already proven its ability to operate successfully in a competitive market and the directors are confident that this will continue in the future” (Asian Travel Tips, 2003, p.1).

Given this observation it can be deduced that Virgin Blue company need to create and develop business travel market that has focus on fulfilling the needs of leisure travel market (Asian Travel Tips, 2003). At the same time, with increasing entrance of new competitors Virgin Blue can create new and unique ultraslow cost carriers so that it can be in position to challenge its competitors offering low fare services such as Qantas and JetStar (Asian Travel Tips 2003).

Another marketing objective that can be formulated in the future involves instituting a new carrier such as Virgin Light Blue that has potential and capability of serving regional airports that in the current state are not served and this should also include secondary metropolitan airports.

Furthermore, Virgin Blue need to formulate marketing objectives that reflect desire to provide domestic air services in all parts of Australia and also international services to countries like New Zealand, Vanuatu, any many more (Asian Travel Tips, 2003).

Lastly, the marketing objective Virgin Blue should concentrate on involve online marketing and this should involve implementing a better IT system that enables customers to book ticket and holiday much easier through the web (Asian Travel Tips, 2003).

In order to manage risks which in large part are presentable in threats the company face. Managing risks will need the company to increase the quality of its services and products in order to out-perform the competitors. At the same time, offering low fares should be within the economies of financial position of the company.

The Asian market appear promising and prospective with forecasting indicating that any venture in the market has the potential to realize about 20 per cent increase. But how well can Virgin Blue exploit these opportunities given its current position? One possible and viable international marketing operation structure the company can adopt involve joint venture with an Asian countries airline.

Virgin Blue needs to bring on board new airline partners to penetrate and exploit the Asian market. This aspect is necessary given that all indications point to the fact that international cooperation that in turn will results into growth of the market size (Asian Travel Tips, 2003). In order to successful succeed in international market; Virgin Blue

Company needs to develop an international marketing communication strategy that will be critical in the promotion of the company and its products and services. The main aspects that the communication strategy should have include: assessment of marketing communication opportunities, analysis of marketing communication resources, setting marketing communication objectives, developing and evaluating alternative strategies, and lastly, assigning specific marketing communications tasks (Czinkota and Ronkainen, 2007).

Conclusion

Increasing competition in the Australian airline market has resulted into companies adopting various marketing strategies that are intended to position their businesses at an advantageous level in winning customers.

Virgin Blue Company has adopted cost leadership strategy, which in turn has been rewarding for the company. In summary what the company need to know is that, airline market is becoming more competitive, dynamic and price elastic while at the same time not compromising quality of the products and services offered.

Therefore the company needs to device other marketing strategies based on the market situation, customer needs, company objectives, consumer needs, and overall business environmental situation. International marketing is challenging but again the company needs to create and implement an international marketing communication strategy that is able to incorporate the corporate strategy of the company together with external environment the company face.

Reference List

Allen, M. E., 2006. How to Promote and Advertise. Lotus Press. Web.

Asian Travel Tips. 2003. Virgin Blue lodges prospectus for IPO. Web.

Bamber, G. J., 2006. Marketing Strategies and Labor-Market Behavior of Full-Service and Low-Cost Airlines: An Australian Study. Sydney: Griffith University. Web.

Brett, G., Culture and Measurement: Passion and Performance. CEO Forum Group, Sydney. Web.

Chapman, R. J., 2006. Simple tools and techniques of enterprise risk management. MA: John Wiley and Sons. Web.

Cooper, C. L. and Argyris, C., 1998. The concise Blackwell encyclopedia of management. MA: Wiley-Blackwell. Web.

Czinkota, M. R. and Ronkainen, I. A., 2007. International marketing. OH: Cengage Learning. Web.

Grant, R. M., 2004. Richard Branson and Virgin Group of Companies. Web.

Griffins, G. and Goffar, A., Commercial Organizations. Association of Chartered Certified Accountants. Web.

Isik-Vanelli, H., 2003. Marketing Plan for Virgin Blue. MBA Paper, Bond University, Australia. Web.

O’Sullivan, M., 2011. Virgin Blue hooks up with regional Skywest. Sydney Morning Herald. Web.

Slide Share In. 2009. A Comparative Analysis and Strategic Response to: The Australian Airline Industry. Web.

Virgin Blue. 2010. Guide to Business Conduct. Web.

Virgin Blue Company. The Virgin Blue History. Web.

Virgin Blue Company. Culture and Values. Web.

Virgin Blue Holdings Limited. Top Competitors of Virgin Blue. Web.