SWOT FINAL PAPER

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SWOT SUMMARY

SWOT Summary

Summary

Virgin Atlantic is a British airline company that has its headquarters in Crawly, England. The airline offers its services to over one million passengers to more than thirty different destinations worldwide. Like all organizations globally, Virgin Atlantic has to carry out a swot analysis to identify its strengths, weaknesses, opportunities, and threats to help it devise a successful strategy to gain a competitive advantage. The purpose of this essay is to provide a summary of the SWOT analysis and describe recommendations for improvement.

Strengths

There are two main strengths of Virgin Atlantic. These are technological innovation and brand recognition. Virgin Atlantic's strength of technological innovation is evident in its fully automated operations. It coordinates all its activities such as booking, payment, and communication through technology that enables the online delivery of these services (Baxter, 2019). Full automation has made it possible for the organization to develop a competitive advantage over its rivals. The second strength is brand recognition, where the airline brand is recognized in more than fifty countries, which has helped the organization attain customer loyalty. Its brand recognition has resulted in it having the lowest turnover rate and it to attract talented employees.

Weaknesses

There are two major weaknesses of Virgin Atlantic; they are financial challenges and poor differentiation. The financial challenges started with Brexit, and since then, the company has been facing many issues. The airlines have to pay the amount in dollars, but the exchange currency is in pounds. The covid-19 pandemic has also resulted in a loss of revenue where the financial statements that have been released are three times lower than the previous years (Arnott, 2020). The theory that can be used to address this weakness is the issue and management theory. The company's differentiation strategy has been a complete failure since the new entrants in the market to beat up its strategies. The communication theory should be implemented in the company because employees and managers maintain differentiation.

Opportunities

There are several opportunities that Virgin Atlantic can take advantage of to gain competitive advantages. The first opportunity is a change in customer preferences where people are willing to spend extra money for comfort in airplane seats. The airplane company can take advantage of this opportunity to differentiate from other aviation companies to increase its competitive advantage both in the long and the short term. The organization can seize this opportunity by ensuring that they provide comfort to the customers (Tran, 2014). The other opportunity is to expand into new routes with more than fifty thousand routes globally, and it only operates on 200 routes. It can seize this opportunity by taking advantage of the merger with Delta airlines, penetrating new markets. The leadership theory that can be used to implement these opportunities is the situational leadership theory. This leadership theory can be utilized by using a democratic leadership approach to choosing the new routes for Virgin Atlantic expansion.

Threats

The biggest threat to Virgin Atlantic that comes under the socio-environmental domain is the increased competition in the European Market. VA faces competition from several brands, including Emirates, Lufthansa, Cathay Pacific, Air France, and British Airways. The second threat to Virgin Atlantic in the legal dimension is the investigation by the EU of Delta's Ownership on non-European investments in the European airline industry (Baxter, 2019). In April 2014, the EU began investigating that these investments should contravene restrictions imposed on non-European control and ownership.

Recommendations

The recommendation for improvement is for the organization to expand into different routes, increase flight frequency, and introduce value-added services. By implementing these recommendations, the organization can gain a competitive advantage and increase its revenue. These recommendations will ensure that Virgin Atlantic becomes a leader in the aviation industry.

Virgin Atlantic is a British airline company that offers one million passengers to more than thirty different destinations worldwide. The strengths that Virgin Atlantic has are technological innovation and brand recognition, and its weakness includes financial challenges and poor differentiation. There are several opportunities that Virgin Atlantic can take advantage of to gain competitive advantages; these are changes in customer preferences and expansion to new routes. The threats which it faces include increased competition and legal dimensions.

References

Arnott. (2020). VIRGIN STRATEGIC MANAGEMENT ANALYSIS INTERNATIONAL BUSINESS. Retrieved from https://www.globalsocialmediamarketing.com/virgin-strategic-management/?cn-reloaded=1

Baxter, G. (2019). Capturing and Delivering Value in the Trans-Atlantic Air Travel Market: The Case of the Air France-KLM, Delta Air Lines, and Virgin Atlantic Airways Strategic Joint Venture. MAD - Magazine Of Aviation Development, 7(1), 17-37. https://doi.org/10.14311/mad.2019.01.03

Tran Viet, T. (2014). Public Relations in enhancing brand values: case study Virgin Atlantic and Vietnam Airlines.