The Virgin Game Plan PDF Free Download

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Table of Contents

EXECUTIVE SUMMARY

The Virgin Game Plan PDF Free Download

1. Introduction

2. Virgin Australia- Company snapshot
2.1 The emergent of a new low cost carrier-Virgin Blue
2.2 The Game Change strategy and a new name- Virgin Australia
2.3 Financial proposition and corporate vision

3. Product overview
3.1 Sydney-Perth business class product overview

4. Strengths and weaknesses in the present marketing mix
4.1 Product
4.2 Promotion
4.3 Price
4.4 Distribution

5. The market situation
5.1 Identified target markets
5.2 Size of Target Markets

6. The product situation
6.1 Product and brand recognition
6.2 Market share
6.3 Product Sales
6.4 Product issues- Costs and pricing

7. The distribution situation

8. The Competitor Situation

9. Macro environment situation

10. The SWOT analysis

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11. Identification of main issues
11.1 The tradeoffs between pricing and profitability
11.2 ‘Choice of airline’: Something not much different
11.3 Effect of communication technology
11.4 First class value at the price of business class
11.5 Loyalty as a long term relationship

12. Conclusion

References

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EXECUTIVE SUMMARY

This report examines an in-depth situation analytical approach on Virgin Australia domestic business class Sydney to Perth product and its ambitious ‘Game Change’ strategic plan. Descriptive research data of the product, distribution, competition, target market and macro environmental situations are exploited and a comprehensive SWOT (Strengths, Weaknesses, Opportunities and Threats) analysis is evaluated. The objectives elicit three main marketing issues- cost control, improvement to competitive advantage without lowering pricing alone and strengthening its position as a full service carrier. Those factors that affect the product’s performance can then generate new insights and strategies about the product sustainability in the dynamic characteristics of demand and the proliferation of the airline market segments.

The essence of the Game Change strategic plan involves activities that are different from the incumbent airline. This differentiation is important in order to knockout its competitive advantage over rivals. The business traveller is a demanding one who looks for those service features being an essential element of the product in meeting air travel needs. Virgin must compete using its valuable tools and unique value based on a tailored mix of activities that differentiate it from rivals but not lowering its pricing alone to attract travellers.

The ethos of Virgin Australia’s vision is the ‘choice of airline’ that must match into the new business model in the marketing process. To support this view, fundamental changes are being embedded and underway according to plan which requires a different business model and interactions. Virgin has opted and entered into the growth strategies of product development and diversification through product/brand extension. The business class product is an example of brand extension which will be discussed.

1. Introduction

This report examines an in-depth situation analysis on Virgin Australia’s domestic flight from Sydney-Perth business class product and its ‘Game Change’ strategic plan. The elements of product, distribution, competition, target market and macro environmental situations are exploited and a comprehensive SWOT analysis is evaluated.

The core purpose for the situation analysis is to gain insight into the significance of what is happening in the marketplace that Virgin competes with, the product and distribution trends. It will then result in the correct product being offered based upon rigorous market assessment. Moreover, rivals’ future intention is well understood and the necessary counter manoeuvre applied because of the ever-changing challenges to participate in the industry’s leading edge. The ethos of Virgin Australia’s vision is the ‘choice of airline’ that matches with travelers needs and the new business model. These are further discussed.

2. Virgin Australia- Company snapshot

2.1 The emergent of a new low cost carrier-Virgin Blue

Plan

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In 2000, the Virgin Group’s founder, Sir Richard Branson ventured into the Australian domestic airline market as one of his many strategic business units [SBUs] (Solomon et al, 2012). Using the Virgin logo as leverage, co-founder and chief executive officer, Brett Godfrey launched Virgin Blue Airlines as a low cost carrier (LCC) to tap into the leisure niche markets (Forsyth, 2003). The Brisbane-based carrier inaugural flight operated from Brisbane-Sydney on 31st August 2000. More domestic services were introduced to meet more leisure passengers’ wants and needs (Moran, 1986).

In 2001, following the demise of Ansett Australia, Virgin Blue’s share market strengthened to further circumvent into the Australian domestic network (Forsyth, 2003). By securing the slack within the market concentration at the right time, Virgin Blue maximized its market position to satisfy more travellers demands and increased its exponential growth.

The LCC strived as a vibrant and innovative business model with a focus on delivering low fare travel to passengers with ‘no frills’ services. Strategies and pricing structure are better designed and managed to penetrate the market (Forsyth, 2003). Further international routes across the Asia Pacific network were operated under Pacific Blue, Polynesian Blue and V Australia. The LCC business Group thus encompasses its optimal offerings and services given its contestable advantage strategy.

2.2 The Game Change strategy and a new name- Virgin Australia

The long term ‘Game Change’ strategic plan follows in retaliation to new LCC entrants like Jetstar, a Qantas affiliated company. As expected, travellers choice switches around within the saturated market while strong pricing competition decreases profit margins (Nuguid, 2011). Having achieved the maturity stage of the LCC product life cycle in this segment (Solomon et al., 2012), the Virgin LCC group opted to consolidation in 2011. Renamed as Virgin Australia (VA), it transforms into a full service carrier to elicit a bigger and more unique picture perspective (Virgin Corporate Communications, 2011).

2.3 Financial proposition and corporate vision

In the bi-annual 2011 financial report, the new chief executive officer (CEO), John Borghetti, announced that there was strong and positive yield growth of 13.7% and earnings before tax of A$71.4 million for their domestic operations, an increased in 29.4% compared to 2010 (Virgin Australia Airlines, 2012). Based on his expertise and experience as ex-Qantas marketing executive and a team of 6,159 dedicated employees (Ibisworld, 2012), he is optimistic that their latest product changes, product innovation, new wide bodied aircrafts, new livery and staff development will further strengthen their presence in the market niche despite current economic uncertainties.

The company’s vision and objectives of the Game Change strategy is to ‘be the airline of choice’ and to improve the cost margins in operating a full service airline. Nevertheless, these distinctive competencies of the program send a clear signal that the perceived value and choice for their products are based on providing superior overall services (Brooksbank, 1994).

3. Product overview

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3.1 Sydney-Perth business class product overview

The product offers a direct route from Sydney-Perth, a journey about 5 hours and 20 minutes flight time over a distance of 3300 kilometres (Virgin Australia, n.d.). Travellers on this city pair choice can choose from any thirty four flights per week. They are given the flexibility to change their reservations without additional costs. The cabin configuration is based on the economic viability of mixed business (27 seats) and economy classes (251 seats) layout for the Airbus 330; while 8 seats are business and 168 seats are economy on the Boeing 737-800.

Virgin offers intangible attractive perks like in-flight entertainment, wider pitch seats and tangible service with a reputable chef special gourmet to reflect a high quality of standard in congruence with other Virgin brands. The aircrafts interior are retrofitted to two classes configuration, thus providing the opportunity to segment business class services targeted at individual, corporate and government travellers. This “market orientation” implies that Virgin focuses on its activities and to augment its product in creating an array of pre-departure benefits and in-flight indulgence (Narver & Slater, 1990, p. 21). Moreover, this creates a sustainable superior value that may exceed the expected value of any substitutable solution for the business travellers

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