Virgin Atlantic Case Study

After the collapse of the Laker Airways in the year of 1982, with the end of the Falkland war, Fields and Hellary came up with the idea of starting a new Airways company with the name of British Atlantic Airways, that would once again start the commercial journey between London and Falkland Islands. On 22^nd of June in the year 1984, the first inaugural flight for the company flew between Gatwick and Newark. Since then, the company had expanded at a pace that is commendable. The service that is provided by the company is that of three separate class cabins according to the needs of the customers.

Internal Environmental Analysis

The image that the company virgin Atlantic has is one of the most important strengths of the company. Due to the cool image that is associated with the company, there are many young generation travellers who are attracted to it.

Trendsetter in Industry

Virgin Atlantic is considered to be a trendsetter in the airline industry. The standard of the service that they provide to their customers are considered to be extremely innovative in nature and therefore, has often set a trend in the industry.

Diverse Customer categories

The categories that are available for service are various. Through primarily the services that are provided to the customers range to the economy segment, the premium segment and the luxurious segment; the company actually has the benefit of attracting a vast number of customers towards them.

Positioning of the Company

The positioning of the company is one of the reasons for the strength. Virgin Atlantic is considered to be a company that is value for money. Though the prices of the tickets are expensive in comparison to the competitors, people are still attracted because of the personalized service that is provided.

Lack of Differentiation

The company lacks differentiation. Though it is one of the first companies and is responsible for setting various trends in the industry, there are certain disadvantages. There are many airline companies that have taken ideas from Virgin Atlantic and done better.

Perception about the Cost

Since the company is known for the personalized and the premium services that are provided there is a general perception among the different people that the flights are indeed expensive. As a result, the people who are travellers in the economy class, generally tend to avoid the services.

Economic Challenges

Brexit is a very big challenge or weakness for the company. Since the company usually spends in dollars and earns in pounds, therefore, there is a chance that the drop in the valuation of the pounds is a big loss for the company.

Opportunities

Changing Customer preferences

The biggest opportunity for the company, Virgin Atlantic is the recent changes that are noticed in the attitude and the preferences of the customers. There is an increase of the professionals in the corporate world. This has also increased the travel for the purpose of business. Therefore, it is seen that the customers are referring to spend on the airplanes if they are guaranteed comfort. This is a great opportunity for Virgin Atlantic that looks after the comfort.

Threats

Competition

The competition that is faced by Virgin Atlantic is a real threat to the business. It is seen that there are many new airline companies that have developed over the years that pose real competition to the brand that includes Emirates, British Airways and others.

Brexit

Brexit is a very big threat for the company. The number of passengers has steadily declined after the situation. This has caused a huge economic loss that can lead to shattering the business.

External Environmental Analysis

PESTLE analysis

Political

• Instability in the political scenario in the country of operation can be a very big impact on the business of the company.
• Since Virgin Atlantic is a British company that has the headquarters in Britain, therefore the political stability of Britain is extremely important for the business. The recent event of the Brexit can have a very adverse impact on the business of the company.

Economic

• The economic factors are extremely important in the external analysis of the business. Due to the Covid-19 pandemic that has been prevalent throughout the world, there is a huge economic loss that is noticed in the company.
• Travelling was completely prohibited due to the spread of Coronavirus disease. As a result, it is seen that there is a severe cash crunch that is faced by all the companies including Virgin Atlantic.
• There were less travellers therefore, the revenue that is collected by the company was also meagre resulting in a severe cringe in the economic factor.
• Also, the decrease in the valuation of pounds can have an adverse economic effect on the business for Virgin Atlantic as the company usually spends in dollars and earns in pounds.

Social

• The company, Virgin Atlantic is based in United Kingdom; however, the company operates in multiple countries. Therefore, there is a difference of social conditions that are prevalent in every country that has a very serious impact on the business of the company.
• There culture that is seen in various countries can be different from the culture that is prevalent in the United Kingdom that is the home country. This can have a major impact on the business of the company.
• The factors of culture like the habit of spending on travel, the gender ratio in the different places, the demographic age is all important for the business of the company, Virgin Atlantic.

Technological

• The various technological factors are very important in the aviation industry. These factors have a very strong influence on the business.
• Continuous improvement in the technological aspect in the aviation industry is important because it helps to upgrade the safety standards of the flights. This in turn allows a greater number of customers who want to take the service from the airline company.
• Virgin Atlantic should also make an effort to increase the amount of digitalization that is used and also upgrade the innovation and the technology of the company to the so that a proper satisfaction is provided to the customers.

Legal

• Various legal factors are responsible for the smooth running of the business. The various trade laws are different from one nation to another. This can easily affect the business of the company.
• There are also certain laws and regulations that are extremely strict and are implemented on the various airline companies that are mandatory for the company to follow including Virgin Atlantic. Therefore, these laws have a very serious impact on the companies.
• In the context of the Covid-19 pandemic, it is seen that the various governments in the different countries have implemented certain specific laws that can be used to stop the spread of the disease like maintaining a distance between the passengers and their seats. These are the laws that needs to be maintained by the airline’s companies including Virgin Atlantic.

Environmental

• Nowadays there is a change of attitude that is noticed among the consumers towards the environment. They have become more protective towards the environment.
• This can impact the business of the airline company like Virgin Atlantic. This is because these airline companies are often criticized by the passengers for the emission of the large amount of carbon gases.
• The people also keep a close watch to see what these companies are doing to address or lessen the various issues in the environment that can be caused due to them. The decisions that are taken by the companies on the basis of the protection of the environment can be the reason behind people selecting a particular company over the other. Therefore, this can have a massive impact on the business of Virgin Atlantic. 

Conclusion

Therefore, to conclude, it may be said that the airlines company Virgin Atlantic is a very famous Airline company in the United Kingdom. Through the case study there is a clear picture of the origin of the company and then the further developments of the company. The SWOT analysis helps to understand the internal environment of the business of Virgin Atlantic with all its strengths, weaknesses, opportunities and threats. Also, the PESTLE analysis helps to analyse the various external factors that can affect the business of the Airline company Virgin Atlantic.

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