Impact of Macro Environment on Virgin Atlantic

Strengths

Weakness

The company has very strong recognition and foundation along with efficient services. This carried more than 5 million passenger annually. Virgin Atlantic has state their consumer and preferred company. This is one of the largest British Airlines with more than 35 destination. Excellent innovation and advertisement branding through Richard Branson. High recall brand as emerging premium airlines. Approximate 8000 people hired with the company.

Serve competition that refer to limited growth of market share for Virgin Atlantic. Limited international presence expertise in the leading economies. Limited emerging economies and global presence.

This can emerge their internal environmental strengths with their brand parameters and their marketing standard (Porter, 2011). Hence, the intrinsic environments is significant to consider to manage their business activities and reach to the extreme organisational objectives in significant manner.

M2 Internal environment to assess strengths and weaknesses

Virgin Atlantic is one of the largest airlines company in the British market which provide cost effective and better services to their consumer. The major strengths of company include their carried services and set brand recognition and strong position in North Atlantic network. Company is emerging in the competitive edge as they consist of large revenues and financial advantage assisting to achieve competitive edge. On the other hand, organisation has numerous drawbacks as well which are restraining their growth and development. Ineffective practices include their lack of human resources and different management of activities in more significant manner.

TASK 3

P3 Porter’s Five Forces model evaluate the competitive forces

The framework of Porter's five forces is considered as a tool for evaluating business competition and draws from economies industrial companies to derive 5 major determinants that set the competitive intensity and influence the profitability. This model assist in analyse and identify those components of industry which aid in determining their strengths and weaknesses of Virgin Atlantic (Schaltegger and Wagner, 2011). These five factors consist of :

• Exit and Entry Barrier
• Competitive rivalry
• Bargaining power of suppliers
• Power of Buyers
• Threat of substitution

Virgin Atlantic is considered as the pioneer in the affordable and reasonable cost business model from last few decades but several organisational competitors has incorporated those applied changes in their strategies and operations accordingly (Scholes, 2015). Therefore, there are numerous incurring are going on within the organisation as this has led to distinct modification. Here are discussed some major determinants which are mentioned as below:

• Rivalry among the competitor: It is one of the renown fact that the industry of airlines is saturated deriving various entries of business in the segment for gaining benefits. Though, this is an segregate matter that main airlines does not successfully manage to gain benefits within the industry. Henceforth, this can affirm that rivalry in the airlines industry is quite high as well as influence the Virgin Atlantic business widely. The industry of airlines is contestable market in which numerous exit and entry barrier exits. This is an industry fragment with several firm number each ordering and commanding a provided market share. Many competitor aims over market entry to achieve Virgin Atlantic. Beside of airlines, this can affirm that there is high competition and companies are adopting merging techniques to accomplish their objectives strategically. Company need to focus over their policies and business model in relation of achieving their goals and purpose efficiently.
• Bargaining Power of Buyers: Customer has huge power cause of better framework of distribution. Buyer is the key sources who has the power to influence the services and operations of Virgin Atlantic which is fundamentally a consumer's market due to their intense fare war, plethora of choices etc. who are looming toward low cost threat carrying out market share entry. According to Porter, consumer are fickle and have wide range of brand loyalty along with the exclusive airline cost. Virgin Atlantic is a lathe organisation which mainly aims over carrying out better quality product in less cost which successfully imitated their model of business which mean that they are carried flier away (Slack, 2015). Furthermore, with regulators selecting to lean on buyer's side despite of airlines, company manage their market share. Organisation increase their distribution channels by which customer can access their tickets and intermediary layer along with online booking service which is directed according to the demands and choice of consumer.
• Threat of Substitute: As the people of United Kingdom as better standard of living and more likely tend to choose their convenience, the substitution threat is not higher in the Virgin Atlantic. Considering this, organisation should consider ongoing recession, companies are preferring other options such as telecommunication conferences, virtual meetings avoiding travelling activities. Despite this, individual has begin to suitable leisure travel where they want to choose more cheaper choices as well as trim down their travel dependency through air only (Tavitiyaman, Qu and Zhang, 2011). Long-haul operators whereas are creating competition against the technology like as video conferences etc. which is leading to lack of airlines services. Thus, this can be affirm that there are less substitution threat for Virgin Atlantic as people are more visiting and roaming across the world as well.
• Power of Supplier: Supplier of Virgin Atlantic carried the makers of aircraft such as Airbus, Boeing etc. in addition to the companies of aviation fuel and the basic handling and support of vendors. Furthermore, supplier also consist of those who provide spares part useful for the craft. Understanding the elements, which airlines industry is categorised through the presence of some suppliers and carrier of business, this can be state that supplier are less and airlines have large role in the supplier communication. In such cases, the organisation supply jet fuel as well which is more premium product and is expensive leading to numerous buyer for creating favoured consumer for the fuel aviation consumer. Hence, this can affirm that supplier power is huge which is associated with the 3 key inputs of enterprise i.e. fuel, labour and aircraft. All of them have whole power to bargain with the organisation as they are fundamental and rare to manage.
• New Entrants Threat: In this industrious of airlines and aviation, exits and entry hurdles are comparatively high as more capital to enter into the existing market. Despite in the airline, the industry can not exit once as they are limited through the regulators which are insisted to the complete obligation of firm prepared for the contract. Virgin Atlantic also face various tougher extrinsic environment due to their complex market entrants to make their place. Thus, numerous entrants of market is emerging within the competitive environment which is leading to distinct benefits of organisation as well.

The preceding statements has highlighted over the influence of each and every determinant of Porter's framework in Virgin Atlantic. The coherent execution which one can manage from it is that the company cope up with several challenging and competitive extrinsic environment which directly affect their activities as this has to creative and be mean and lean in their capabilities and capabilities. Numerous challenges are emerging in the market environment and also they are facing huge competition in their industry. To refrain its vitality, this is essential that company focus over the further industry and can gain their position.

M3 Appropriate strategies to improve competitive edge and market position according outcomes

As the company is facing numerous challenges as per the analysis of the market, this is fundamental for Virgin Atlantic to improve and develop effective methods and strategies that can assist them in meeting new outcome and push them to bright path of future. Here are discussed some of essential and effective strategies:

• Distribution Extension: It is one of significant and better technique to manage their competitive edge and sustain in the market along with making benefits as possible.
• New Business-Model Evolution: Through changing development model of business, Virgin Atlantic can manage their growth and evolve in the competitive business environment (Tavitiyaman, Qu and Zhang, 2011).
• Market Expansion: This is one of the significant methods according which through deploying the market, company can manage their growth. Virgin Atlantic should focus over destination expansion to get more audience and consumer base.

TASK 4

P4 Range of theories, concepts and models, interpret and devise strategic planning

Strategic planning can be termed as the organisation activity of management which is optimised to determine their focus energy, priorities resources, strength activities and ascertain that worker are performing in regard of common objectives, forming agreement around the intended outcome, evaluating and adjusting organisational dignity within the marketplace. A systematic procedure of envision a determine future and managing their vision into more widely determined objectives and goals that assist company in attaining their objectives. Virgin Atlantic focus over long-term planning to perform effectively and desired end to the present status. An overview of process of strategic planing procedure, the organisation has applied the Bowman's strategic clock model which has assisted them in achieving business aims efficiently. Here is presented the bowman's strategy model in elaborated manner in regard of managing their strategy and company's growth in more efficient manner.

Bowman's Strategy Model: Strategy of business direct to the grants and numerous benefits in the business organisation. Strategy clock of Bowman can be termed as the model optimised in marketing to evaluate competitive company's position relativity to the competitors offering. This was improved through David Faulkner and Cliff Bowman as the three generic strategies of Porter. This consider the competitive edge in comparison to the cost edge or differentiation edge (Tavitiyaman, Qu and Zhang, 2011). The whole strategic model represents 8 possible determinants of strategic in four quadrants determined through cost axes and perceived value. Virgin Atlantic can categorised their activities and their operations according to the distinct circumstances which is mentioned here:

• Position 1 (Less cost and Adverse Provided Quality): Numerous position will not be outlines as the competitive environment of business face in which numerous services are differentiated along with perceived consumer value which is adverse beside of less cost. It can state that bargaining and negotiation basement techniques can be suggested to refrain their product cost which are cheaper in regard of compete their competitors.
• Position 2 (Adverse Cost):This can often interrelate with the economies of scale concept which is required for the strategy of minimisation of price for achieving success. Delivered cost of service is lower and the outcome value is higher which enable company more benefits and high revenues. This is often utilise while direct or leading in the price wars developed among the rivals of organisation in whole industry.
• Position 3 (Hybrid): As per the position name, situation shows the more cost as well as the products and service differentiation by the respected organisation (Auzair, 2011). It can aim over the consumer persuasion through delivering more effective product values and affordable product price i.e. numerous effective techniques to create efficient positioning of market.
• Position 4 (Differentiation):Aiming over the different services and products, it can render more better level of value to the services and products provided to consumer. Quality and branding of service play major role in the whole organisation which is essential. Virgin Atlantic prefer to create and disseminate efficient awareness of brand among the market in regard of create more dedication among consumer and service user through delivering comparatively more better value and quality of manufactured commodities according to the requirement of consumer and demands of market.
• Position 5 (Focused Differentiation):This concentrate over cost retaining for a long time for value added service is having a high demand by their customers for using perceived value as well as quality. It is termed as strategy positioning is used by luxury organisation which having pressure over the premium cost by higher concentrating on market segment, distribution and promotion. It directs the goods threat that aid in sustaining within global trade which lead in higher quality as well as unique selling which lead to high business margin (Auzair, 2011).
• Position 6 (Dangerous High Margin): It isdefined as the higher risk strategy of positioning in which higher price is analysed without providing any perceived service value. If the customers as well as buyers are frequently purchasing their service, it will create higher benefits because of buyers gradually seek a properly products as well as services with the cheap cost and perceived value. It is an non competitive strategy as well as short term.
• Position 7 (Monopoly Costing): In the situation of monopoly of enterprise, firms cannot stress over the values of giving service as well as goods as the consumer are often bound to purchase the goods because of lack of alternative. In various counties, the monopolies is strictly run in regard of preventing them from setting cost as per company.
• Position 8 (Market Share Damage): The activities are defined as a competitive trade of disaster. In this, the standard of cost is being analysed with middle range of goods and low quality of service that lead to buyers downfall and loss in share of market in any business.

Through opting proper strategy, business environment of the Virgin Atlantic in comparison to their issues in 2004. the drastic and rapid changes within Virgin Atlantic is cause of executive management of strategic planning. These drastic changes in the organisation should be consider to compare with competitors. One of those alternation was the profitability rise within the short of time span (Annabi and McGann, 2013). The efficient execution of low-fares methods, punctuality and no-frills in the service of flight brought a fundamental value on the Virgin Atlantic growth and challenged their rivals. According to the above discussed elements of whole Bowman's model, position 6, 7, 8 which are various uncompetitive as per which the value or quality is defined as the key concentration despite the service cost. In regard of using the numerous position 1, 2, 3, 4 for rendering service in relation of their service support.

M4 Strategic management plan that has tangible and tactical strategic priorities and objectives

This can be state that strategic planning is very fundamental as the organisation need to manage their operations and distinct departments of company efficiently. Virgin Atlantic, through adopting Bowman's strategy clock model, company can understand their numerous resources and tactics that can help them in expanding their business, managing their objectives and achieving their set targets accordingly.

Related sample:

Positive and Negative Impact of Macro-environmental Factors

D1 Critique and interpret information and data

The above mentioned report explains numerous business and environmental aspects and evaluation of Virgin Atlantic that explains distinct concept of business (Ackermann and Audretsch, 2013). In regard of achieving determined objectives and carry out the standard outcome, this is significant for an organisation to execute various models, theories, approaches and techniques to outline extrinsic and intrinsic environment of business. Virgin Atlantic need to conduct proper SWOT analysis, PESTLE evaluation, Ansoff Matrix, Porter's five forces to manage and understand their internal and external environments of business. Bowman's strategy can assist in achieving business objectives and help in developing effective method of business in more significant manner. Thus, the report has collected authentic data and relevant evidence to employ proper market condition and competitive advantages of Virgin Atlantic considering as one of the emerging company entirely.

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CONCLUSION

It can summarised from the above discussed report that business strategy is the specifying procedure the company's vision, mission and objective, improving plans and policies, often in the program and project term that are managed to meet set objectives. External environment refer to condition that exists within the economy and compare with particular industry or region. Strategic positioning means which is intended overall methods and purpose of situations. An intrinsic environment of Virgin Atlantic consist of numerous components including existing members of staff, corporate management and culture that discuss the attitudes and behaviour of various members of staff at working environment. The framework of Porter's five forces is considered as a tool for evaluating business competition and draws from economies industrial companies to derive 5 major determinants that set the competitive intensity and influence the profitability. A systematic procedure of envision a determine future and managing their vision into more widely determined objectives and goals that assist company in attaining their objectives. An overview of process of strategic planing procedure, the organisation has applied the Bowman's strategic clock model which has assisted them in achieving business aims efficiently.

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