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Purpose Develop long-term strategies and progressive options
for Virgin America to increase its market share and competitive advantage in the airline industry.
Methodology
Porter’s 5 Forces Current Industry VRIO SWOT Analysis Perceptual Mapping Recommendations
Porter’s 5 Forces Model
Threat of New Entrants
● LOW ○ Large amount of money required
Buyer Power
● MODERATE ○ Fluctuating price schedule ○ Experienced vs. Novice customers
Threat of Substitutes
● MODERATE ○ Cars ○ Trains ○ Buses
Supplier Power
● LOW ○ Process of sales ○ Market of of the buyers
Competitive Rivalry
● HIGH ○ Price wars ○ High level of acquisition
Current Problems
● Air travel becoming a commodity ● little differentiation between
airlines ● Low barriers for switching
● Strong company culture ● Use of entertainment
background ● Combination of low cost and
innovation
Solutions
Who? •Domestic Flyers
•Young
•“Self-Managed” Businesspeople
•Start-up to small business employees
•People who are always plugged into their technologies
What needs to be satisfied? Technology + Low Cost
HOW? “FLY LOW-COST LUXURY”
● Features per Seat:
o Seat-to-Seat Chat
o Build Custom Playlists
o Food & Drink on Demand
o Live Television
o Power Outlets
o USB and RJ-45 Ethernet cord
How? Creating Value
•“Give guests what they have on the ground and bring it to the sky”
•Upbeat, Modern Advertising – Addressing “boring” airlines
• Social Media: YouTube Channel
VRIO V → Unique focus on experience R → other airlines do not focus on experience for economy class. Virgin offers first class experience for low cost, plus more I → to imitate the technological features per seat would be costly for others o → casual culture, strong values to ensure consistent flight experiences, excellent marketing strategy contributing to brand recognition
Competitive Advantage ● Core competencies: Low Prices, Sleek design, Sustainability
● Capabilities: Corporate management and marketing
Resources
Tangible: Financial assets; aircrafts
Intangible: Organizational culture; brand recognition
SWOT strengths
● customer satisfaction
weaknessES ● small market share with limited routes ● poor reviews of first class
OPPORTUNITIES ● 2014 IPO ● current gas
prices
THREATS ● growing market for low cost airlines with
special accommodations
Business Level Strategy •Low Cost Airline Model –Single Aircraft type –Point-to-Point routes
•Differentiation –“A Breath of Fresh Airline” –Focus on Customer Experience
Perceptual Mapping
Recommendations ● Long-term marketing efforts
● Improve email marketing
● Improve First Class customer
service
Recommendations
● Increase domestic flight routes: East Coast o North to South
Recommendations ● Increase domestic flight routes
Codesharing - Delta ● SHARE airport space in
SouthEast hubs o Atlanta o Miami o New Orleans
Recommendations
INVESTMENTS ● Marketing team & CRM
● Employee acquisition & training
● expanded fleets
● general operating costs
RETURNS ● increased market share
● increased profits
Thank you