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    Virgin Australia – A Business Strategy Report | Free Samples

    Table of contents

                            

    Table of contents. 

    Directory of Illustration.

    Directory of Charts. 

    1.    Executive summary. 

    2. Introduction. 

    3. Strategic Analysis. 

    3.1 Methods.

    3.2 External Analysis. 

    3.2.1 PESTEL Analysis. 

    3.2.2 Porter’s five forces.

    3.2.3 Strategy canvas.

    3.3 Strategic capability.

    3.3.1 VRIO Matrix.

    3.3.2 SWOT Analysis.

    3.4 Strategy and culture.

    3.5 Competitive strategy.

    3.6 Business Strategy Statement

    4. Conclusion.

    References. 

     

    Directory of Illustration

    Figure 1: Layers of the business environment (Johnson, Angwin, Regner, & Scholes, 2014)

    Figure 2: PESTLE Analysis developed from (Johnson, Whittington, Angwin, Regner, & Scholes, 2014)

    Figure 3: Five forces governing competition in the industry developed from (Porter, 1979, p. 141)

    Figure 4: The Strategy Canvas developed from (Kim & Mauborgne, 2005, p. 111)

    Figure 5: VRIO Matrix developed from (Sheehan, 2006, p. 423)

    Figure 6: SWOT Analysis on Virgin Australia.

    Figure 7: Cultural Web applied to Virgin Australia.

    Figure 8: Competitive Advantage developed from (Porter, 1985, p. 12)

     

    Directory of Charts

    Table 1: PESTLE rating on political factors.

    Table 2: PESTLE rating on economic factors.

    Table 3: PESTLE rating on social factors.

    Table 4: PESTLE rating on technological factors.

    Table 5: PESTLE rating on legal factors.

    Table 6: PESTLE rating on environmental factors.

    Table 9: TOWS Analysis of Virgin Australia.

     

    1. Executive summary

    This strategy report emphasizes on the analysis and evaluation of the current strategy, structure and key driving factors of Virgin Australia. Methods of analysis included PESTLE, Porter's five forces, strategy canvas followed by the evaluation of strategic capabilities using VRIO matrix and SWOT. Economy and Technology proved to be the most significant factors through the PESTLE analysis. The influence through customer's participation, reliability, innovative ideas and benefits on the aviation industry are huge. Porter’s five forces resulted in two key forces – the power of customers and the industry competitors are the two most significant forces in the market. The Strategy canvas framework compared the performance of Virgin Australia with its competitors Qantas and Jet Star. The result is:

    • Virgin Australia should be to maintain a high level of customer service,
    • keep on developing their highly skilled employees
    • and ensure a magnificent Wi-Fi & Inflight Entertainment

    The VRIO analysis yielded the following sustained competitive advantages:

    • The most attractive employer in Australia
    • Best Business Class 2017
    • Australian’s most respected Company
    • Positive brand reputation

    An analysis through a cultural web provided following results:

    • Virgin Australia mainly never fails to encourage its employees with various programs like Female Leadership Development Program and employee benefits
    • “Customer Centric” culture approach towards customers
    • Existing Routines, rituals and organisational structures are leading to magnificent achievements
    • The Brand and logo change was successful established and change the perception of their customers by being a more professional business-like airline

    We suggest that Virgin Australia should stick to their differentiation strategy to sustain uniquein a highly competitive market to uphold their competitive advantages.

    2. Introduction

    The Virgin Group is an irresistible brand with its ownership of different companies in various sectors like travel & leisure, health & well-being, telecoms & media, financial service and aerospace. Virgin Australia Airlines was formed in November 1999 formerly named as “Virgin Blue, headquartered in Brisbane. It was rebranded as “Virgin Australia” in 2011. It is the second largest airline after Qantas and is currently employing over 9.500 employees. The revenue for the last year has been around $5 billion, by owning a fleet over 100 airplanes and carrying over 23 million passengers around the globe (virgin.com, 2017). Virgin Australia experienced a profit before tax in 2016 of $41.0 million, an improvement of $90.1 million compared to financial year 2015, and also gained more market share through Tiger Air Australia in the domestic market (virginaustralia.com, 2016). According to the organisation’s macro environment the international capacity to Australia grew nine percent in the last 12 months, from October 2015 till September 2016. Especially China (+37%) and Japan (+21%) are significantly improving the trend. The Australian domestic aviation capacity for passengers only grew marginally up for about two percent for the last 12 months (Australia, 2016).The aim of this business report is to analyse Virgin Australia in its embedded environment. To create a holistic analysis it is crucial to have a look at the immediate industry and competitive environment and the factors which are affecting them shown in Figure 1.

     

    Figure 1: Layers of the business environment (Johnson, Angwin, Regner, & Scholes, 2014, p. 33)

    By being the highest layer, the macro-environment is able to have a high or low impact on all embedded organisations in the industry. The PESTEL framework helps to analyse which factors tend to affect organisations. The result of a PESTLE analysis are key driver which are shaping the future. The industrial environment consists of competitors who are creating the same sorts of products or services. The five forces of Porter are an appropriate analysing tool in this case (Johnson, Angwin, Regner, & Scholes, 2014, p. 33). The strategy canvas compares the competitors on critical success factors and their perceived performance within the market (Johnson, Angwin, Regner, & Scholes, 2014). Through the described strategy analysis tools it is possible to highlight important success factors and significant weaknesses. The rating of the strategy analysis tools are based on the evident information through our research. As a result any assumption is made after a comprehensive analysis.

     

     

    3. Strategic Analysis

    3.1 Methods

    A variety of different sources of qualitative and quantitative data were used. Textbooks built a basic framework and provided us with necessary background information. Journals, articles, various websites, blogs, news provided us with insights, current strategic plans about aviation industry. It helped us to keep track of the current events taking place. Questionnaires and interviews enabled us to analyse the performance of different airlines through collective opinions and further information. Business Documents, Reports and the official website of the competitors gave us brief descriptions of various business events and financial activities of Virgin Australia and competitors in the market compared to their current and previous year’s statistics, annual reports and strategic documents.

    3.2 External Analysis

    Strategy management is an important aspect of managing modern businesses which involves goals and instituting programs that fulfill these goals. Numerous factors determine and have an impact on the organization, which should be identified and analyzed for achieving optimum performance. PESTLE and SWOT are two common management tools which are enabling organizations to analyze their external environment in which they are embedded in and which future implications need to be made.

    3.2.1 PESTEL Analysis

    The PESTLE analysis is a strategic planning tool to identify and analyze the key drivers of change in a business environment. By assessing Political, Economic, Social, Technological, Legal and Environmental factors organizations gain advantages, help in meeting the objectives and minimizing the error in the performance-expectation gap. They provide a deeper understanding of the business, alertness to threats and methods to exploit opportunities(Johnson, Whittington, Angwin, Regner, & Scholes, 2014).

    Table 6: PESTLE rating on environmental factors

    ECONOMY:

    The economic factors are also important affecting the performance of an organisation and major indicators of economic performance are evident. The inflation rate is slightly below the estimates with oil prices being slashed and forcing airlines to cut the fares reflecting "benefits of declining global oil prices" (australianaviation.com.au, 2015). On a positive note, the economy of Australia shows healthy signs which yields to fruitful outcome for the aviation industry.

    TECHNOLOGICAL FACTORS:

    In today’s world technology plays a major role. Virgin airlines have kept themselves ahead by applying recent technological advancements. One of the recent examples is the installation of an inflight Wi-Fi Service and also setting up of self-check-ins which is not only convenient but also time saving (virginaustralia.com, 2017). From the above factors described it can be deduced that Economical and technological factors will prove to play a prominent role in driving the growth and customer demands. As discussed earlier, aviation industry contributes a lot to the growing economy and vice versa. The economy grew by 2.4 per cent in 12 months to December, according to Australian Bureau of statistics (Martin & Bagshaw, 2017)). The transport industry grew up by 1.1 per cent, agriculture being the top. With economy in the right path, markets can breathe with ease and thus businesses operating with no hassle. Apart from this, with great GDP growth rate and lesser inflation rate, Australian consumers can spend moderately on travel and tourism. With up rise in technology era consumers expects innovation and ease of traveling with benefits. Wi-Fi and self-check ins are some of the advancements that have attracted the consumers but in this transforming DNA age consumers expect more. Mobile technology being one of those where travellers can easily book and websites where Virgin Australia have to do better (virginaustralia.com, 2017).

     

     

     

     

     

    3.2.2 Porter’s five forces

     

     

    Figure 3: Five forces governing a competition in the industry developed from (Porter, 1979, p. 141)

    “The nature and degree of competition in an industry hinge on five forces: the treat of new entrants, the bargaining power of customers, the bargaining power of suppliers, the threat of substitute products or services (where applicable), and the jockeying among current contestants (Porter, 1979, p. 137).

    The first key force, intensity of rivalry, received a high rating because Virgin Australia and Quantas are meanwhile getting to a similar size when the fleet, numbers of employees, the revenue, market share and seek for dominance in the market are compared. The market is quite mature and growing only slowly 1,8% compared to the last year (bitre.gov.au, 2017). High fixed costs for facilities, the maintenance, fuel and employees are evident(virginaustralia.com, 2016)&(qantas.com.au, 2016). The exit barriers for the main competitors are high because of their huge debts, Quantas $5.6 billion (qantas.com.au, 2016) and Virgin Australia 3.0 billion (virginaustralia.com, 2016). All these implications make it very difficult und unattractive for new business entrants to enter the market.The second key force, power of customers are also very powerful. Although the number of potential customers are not concentrated by being individuals, customers are still benefiting from low switching costs by choosing another airline. The product differentiation also very low by getting an airplane ticket.In the low-budget area customers are very price sensitive and the in the economy and business class area the service plays a major role (airlinequality.com, 2017). This factors are leading into a demand for lower prices, product improvements or additional services that will increase the costs for the competitors in the market(Porter, 1979).

    3.2.3 Strategy canvas

    The strategy canvas serves two main aims: first to diagnose the own business and competitors in the market on specific factors and second an action framework to create a compelling blue ocean strategy. There is distinction between Red Ocean and Blue Ocean markets. Red Oceans markets are defined by a strong competition. In a Blue Ocean Market the competition is minimal to non-existing. A strategy canvas helps the businesses to analyse their own performance and situation in relation to their competitors in the market. Through this analysis critical success factors and new market spaces can be found(Kim & Mauborgne, 2005). For the airplane industry in figure 4 we detected the main rivals named Quantas and Jetstar and pointed out 9 main factors in which the competitors actually compete in. Appendix 16 shows the rating of the factors.

    Based on the research of Clemens et al. (2008, p. 52) the three main factors for customer satisfaction are: price, service quality and assurance.

     

    For the factor price Quantas is 5-15% more expensive that Virgin Australia, also depending on the specific route(Chamberlin, 2016). Jetstaroffers their customers a 10% to 40% cheaper price, depending on the specific flight route. The Airline rankings in Customer Service for Quantas and Virgin Australia are quite the same so that there are no significant differences between them. The Customer Service for Jetstar is significantly lower than the two other competitors (airlinequality.com, 2017). Regarding the safety rankings Quantas is on the 9th place with an index of 0,015; Virgin Australia occupies the 18th place with a safety index of 0,020 and finally Jetstar on 26th place with an index of 0,036 (jacdec.com, 2017). The factors of an inflight Wi-Fi Entertainment connection has the potential of a Blue Ocean market. Virgin Australia, as well as Quantas are just launching their services by offering the service for a few months for free to their customers (Flynn, ausbt.com, 2017)&(virginaustralia.com, 2017). Compared to the both main competitors Jetstar is only offering a streaming service with a determined amount of media and music through an App to the customers. There is no intention evident of developing a Wi-Fi System which can be used on boards (jetstar.com, 2017)&(Flynn, ausbt.com, 2014). Although there are already competitors in the market, a Blue Ocean of Virgin Australia should be to maintain the high level of customer service, keep on developing their high skilled employees and ensure a magnificent Wi-Fi & Inflight Entertainment.

    3.3 Strategic capability

    3.3.1 VRIO Matrix

    The VRIO Matrix is an appropriate tool to identify a sustained competitive advantage. Four essential party are necessary: (1) Valuable Resources, (2) Rare Resources, (3) Imperfectly Imitable Resources and (4) Unique historical conditions (Barney, 1991, p. 107). A resource is valuable when it enables the company to conceive or implement strategies which are improving its efficency and effectiveness. Firms need to have or create rare resources (Barney, 1991, p. 106). Resources which are not rare, can be copied and also achieved or established from competitors in the market, so that a competitve parity is only achieved (Barney, 1991). Valuable and rare resources within an organization are able to create a competitive advantage when they are one of the first-mover in the market. To become a sustained competitve advantage it is crucial that other competitors are hardly able to obtain them (Barney, 1991, p. 107). For the last requierement it is important that organisations are supporting the use of the resources. In addition already gained organisational knowledge, thorugh experinces, systems and documents can also be very helpful. Personal and indirect, subconsious experinces tend to be the most important one, because these arise from direct experience and aren’t always documented (Johnson, Whittington, Angwin, Regner, & Scholes, 2014).

    Within our analysis in table eight, we detected four sustained competitive advantages: Most attractive employer (AUS), Best Business Class 2017, Australian’s most respected Company, Positive brand reputation. According to Barney (1991), all the four frameworks should be possessed by the organisation. These resources must be maintained over time to be able to sustain in a competitive market. These resources change over time and hence must be reviewed constantly. With time resources which were rare will be not anymore if organisations come up with alternate solutions. The framework helps in identifying factors which can be protected and developed to make an organisation unique.

    3.3.2 SWOT Analysis

    The SWOT analysis is an appropriate framework to analyse internal strengths and weaknesses, as well as its external opportunities and threats.

     

     

     

     

    3.4 Strategy and culture

    The cultural web depicting the relationship between the culture and strategy of Virgin Australia is briefly described below

     

    The core beliefs and assumptions of Virgin Australia can be reflected in the numerous awards the organization accomplished. The success stories are an inspiring force for the newcomers and portray the progress of the airlines. The culture that has been followed through the organisation since its establishment leads Virgin Australia to achieve its successful strategy. They follow the motto “Customer Centric” and thrive to achieve it by providing an excellent travel experience which can be witnessed through various awards honoured. They follow an inclusive culture and provide a supporting environment, which is the foundation for their “Diversity and Inclusion” strategy(Hsin-Hsuan, 2015). It is a multinational company which adapts an organic approach to handle its organizational structure. The reason behind adapting an organic approach is to be flexible to deal with the frequently changing organization’s environment (virginaustralia.com, 2017). It follows a horizontally integrated reporting structure as they aim to reduce organizational bureaucracy. It uses staff authority and decentralization where in every staff member has the authority to make decisions and can communicate without vertical structure. The skills and dedication of the team members is a driving force for the organization and this can be perceived through the external awards achieved in the year 2016. Through additional general developmental programs the airline is able to sustain the spirit and establish the values and beliefs within their company and at their employees (virginaustralia.com, 2016). The new brand and logo had the aim to reposition the airline away from a low cost carrier more to a modern, professional and business-like airline. The new launch was influenced by the Virgin Group guidelines (Duncan, 2011). The flight attendants at Virgin Australia are famous for their impeccable appearance with their wardrobe designed by the famous Australian fashion designer Juli Grbic to add a more professional edge to the vibrant and fun personality (flightcentre.com.au, 2016). Based on the analysis, Virgin Australia can be seen a non-traditional business. Through various measures Virgin is always looking for new opportunities and try to expand constantly. It can be termed as Customer Centric Airlines from the above analysis.

     

     

    3.5 Competitive strategy

    Apart from Five forces, Michael Porter introduced generic strategies widely used by the organizations for their market approach. Porter asserts that there are two gripping ways to ensure competitive advantage: either be a cost leader or a differentiator, as shown below:

     

    Figure 8: Competitive Advantage developed from (Porter, 1985, p. 12)

    Virgin Australia has lost the cost leadership position battle against JetStar. Hence it should completely rely on Differentiation which shows “Uniqueness as perceived by the customer”. Virgin Australia has a very convincing and attractive product to offer their customers as seen in the comparative table in appendix. They must create a new segment which includes both – Leisure travellers and business class travellers. A “fun and cheeky” approach could be appreciated by the business travellers. Granted business travellers are stereotypically bland but there are sufficient of not that mindset. This approach along with exemplary services would align with the corporate culture, making an attractive airline on offering to business and leisure travellers. In fact, Virgin Australia has won numerous number of awards along with the best Business class which are some of its strengths. Virgin airlines capability to deliver on-time and cancellations figures are excellent. Instead of passing two different messages to the customers for two different classes, a single segment covering both business and leisure travellers can be introduced. The strategy of focusing on mid – high end and business class, its superior work culture and strong brand personality can break the barrier of pricing and can relate to the Aussie culture of being laid back. As stated earlier” fun and cheeky” approach from the airlines can be well received because of virgin’s strength in best customer services and training and hiring new employees which is evident from their numerous programs and have been rated as preferred employers.

    “To get it right and have people come back again and again, our staff members have got to be absolute perfectionists in terms of their customer service ability.” - Brett Highfield – former Virgin Blue CEO 2003.

    3.6 Business Strategy Statement

    Mission:

    The current mission of Virgin Australia is to “Become Australia’s best customer led organization”(Burke, 2016).

    Vision:

    Virgin Australia’s vision is to “Become Australia’s favourite Airline Group”. John Borghetti states that “Over the next three years, the Virgin Australia Group will focus on capitalising on growth business opportunities, implementing a low cos program, driving yield enhancement, optimising the balance sheet, setting a new standard in customer experience, and developing our people to their full potential” (Burke, 2016).

    Objectives:

    The current key objectives of Virgin Australia are:

    • Create an outstanding travel experience to the customers
    • Maintain excellent relationship with shareholders to entrust commitment throughout the business to influence commercial benefit of partnership
    • Continue to put safety as the first priority and make use of technology to improve services
    • To exceed the cumulative cost savings target of $1.2 billion by the end of 2017 and to achieve a lower cost base
    • To increase net free cash flow savings $300 million per annum by the end of 2019 (virginaustralia.com, 2016).

     

     

     

     

     

    Scope:

    Virgin Australia is strongly committed to become a more sustainable business in the aviation market.

    • Sustainable aviation fuels provides an opportunity to decouple emissions growth from flying operations and with Virgin Australia’s membership with Sustainable Aviation Fuels Users Group, it aims to source 5% of fuels from renewable resources by 2020(virginaustralia.com, 2016).

    Advantages:

    • The numerous awards achieved by Virgin reflects its impeccable service: Best Frequent Flyer Scheme, Best Cabin Crew, Best Domestic Airline and Most Attractive Employer in Australia (report 2016)
    • Its association with the “Virgin” group adds to its brand advantage.
    • The airline’s On Time Performance is a major advantage: It achieved 86.7 %, followed by Qantas 86.4% on arrivals and 88.4%, followed by Quantas 88% on departures (bitre.gov.au, 2017).
    • It has gained more market share through its alliance with HNA, the largest private airline operator in China (bitre.gov.au, 2017).

    From the above mentioned existing mission, vision, scope and advantages of Virgin Australia, it can be stated that the company is the leading airlines in the aviation industry after Qantas. It is striving to sustain in the market by improvising its operations and is able to achieve strategic goals through the support of stakeholders.

    Proposed Strategy Statement:

    Virgin Australia strives to achieve and sustain “Uniqueness” through magnificent services, perceived by the customers which will outstand it from the other airlines.

     

     

     

     

     

    4. Conclusion                                                                                         

    This report is an analysis of the performance of Virgin Australia and the findings are advantageous as well as critical for the organization. It has been identified that Virgin Australia aims to provide best customer service and gratifies its shareholders in every aspect of business. This analysis was undertaken by applying relevant concepts and tools of business strategy to conditions of the business. The analysis of the macro environmental condition (PESTEL) recognized that economic and technological factors play a significant role in the growth of the business. The power of customers and the competitor rivalry are rated high due to high competition from Qantas and growing customer demands. Its commitment to maintain the value is reflected in its constant improvisation of airline services. Though the airlines is honoured with numerous achievements for its service, there were also few critical factors which led to the downfall of the organisation – poor cash flow performance, weak stock price and unsecured loan from major shareholders. Despite all the drawbacks, Virgin always maintains its culture and its relationship with the staff, being self-controlled. Overall, the performance of Virgin Australia can be rated as good but still requires few operational improvements to sustain in the aviation industry.

    Key recommendations for growth:

    There are few recommendation for Virgin Australia to help improve its operations to attain sustainable growth.

    • It is currently neither a low-cost carrier nor full cost carrier like its strongest competitor Qantas. It is recommended that Virgin emerges as a low-cost carrier so that it is affordable by everyone in the society
    • Make good use of the profits occurred in 2016 to improve its safety ratings and increase the operation capital by increasing the number of shareholders
    • Take initiative to improve the organisational structure and supply chain programs

     

     

     

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    Appendix 1Virgin Australia rating

     

    Appendix 2: Quantas ratinng

     

    Appendix 3: Jet Star rating

     

    Appendix 4: Domestic RPT passenger traffic

     

    Appendix 5: Summary of annual RPT activity

     

    https://bitre.gov.au/statistics/aviation/domestic.aspx

     

     

    Appendix 6: Strategy Canvas rating

     

    Virgin Australia

    Quantas

    Jetstar

    Price

    High

    High

    Low

    Seat comfort

    High

    High

    Middle

    Food & beverages

    High

    High

    Low

    Staff service

    High

    High

    Middle

    Safety Ranking

    High

    High

    High

    Frequent Flyer Program

    High

    High

    Low

    Inflight Entertainment

    Middle

    Low

    Low

    Skilled employees

    High

    Middle

    Middle

    Brand identification

    High

    High

    Middle

    OTP (On-Time-Performance)

    High

    High

    High

     

     

     

     

     

     

    5 Forces of Porter

    Force

    Description

    Threatthrough force

    Threat of  new           entrants:

    • Brand establishment and identification are huge barriers

     

     

     

     

     

    Weak

     

    • Huge efforts in customer service and advertising needed

     

     

    • Huge capital requirements to enter the aviation market for facilities

     

     

    • Many governmental and safety policy requirements

     

     

    • Huge fixed costs (fuel, fleet, maintenance, employees)

     

    Appendix 11: 5 Forces of Porter

    5 Forces of Porter

    Force

    Description

    Threat through force

    Bargaining power of suppliers:

    • Long term maintaining, repairing contract with Delta TechOps over 13 years

     

     

     

     

     

     

     

    Middle

     

    • Main suppliers are Boeing and Airbus

     

     

    • Boeing and Airbus have a duopoly supplying airplanes

     

     

    • No serious interests of suppliers to migrate forward

     

     

    • Only a few specialized providers for fleet maintenance

     

     

    Appendix 12: 5 Forces of Porter

    5 Forces of Porter

    Force

    Description

    Threat through force

    Threat of substitutes:

    • Domestic flight markets: Bus and trains aren’t better options because of the higher price and time investment

     

     

     

     

    Very weak

     

    • International flights: Ships are also too expensive and time consuming

     

     

    • No real threat of an substitution for middle long and long    distances

     

     

     

     

     

     

     

     

     

     

     

     

    Appendix 13: 5 Forces of Porter

    5 Forces of Porter

    Force

    Description

    Threat through force

    Bargaining power of customers:

    • Customers have less alternative provider (Quantas, Jetstar & others)

     

     

     

     

     

     

     

    Strong

     

    • Low switching costs to another brand/     provider

     

     

    • Very price sensitive for the low-budget-area

     

     

    • Less price but more service sensitive in the economy and business class area

     

     

    • No alternative to substitute a flight

     

     

    • Large number of individual buyers (millions)

     

     

     

    Appendix 14: 5 Forces of Porter

    5 Forces of Porter

    Force

    Description

    Threat through force

    Intensity of rivalry:

    • Moderate number of competitors: Quantas (39,1% market share) and Virgin Australia (30,3% market share) are of a similar size and both are dominant

     

     

     

     

     

    Very strong

     

    • Mature market 1,8% growth in the last year, -0,5% available seat kilometres

     

     

    • High fixed costs (fuel, fleet, maintenance, employees)

     

     

    • Product differentiation is low

     

     

    • Huge exit barriers (bankrupt would be a consequence)

     

     

     

     

     

     

    Appendix 15: Overall description of PESTLE factors

    POLITICAL FACTORS:

    The Airline industry in any economy is highly affected by the political factors. One of the most notable factor would be terrorism which has adversely affected the tourism industry which have resulted a steep decline in aviation as well. It is essential to maintain a favourable trade relation with other nations and Virgin airlines has been successful in doing so. Evidence evokes from the vast network of operation it has. A governmental support through policies such as “Open skies” enabled and helped the company to sustain in a competitive environment (virginaustralia.com, 2009). Through the policy, Virgin Australia has achieved attained strategic relations with the HNS group. The example shows the potential positive impact of political decisions.

    ECONOMY:

    The economic factors are also important affecting the performance of an organisation and major indicators of economic performance are evident. The inflation rate is slightly below the estimates with oil prices being slashed and forcing airlines to cut the fares reflecting "benefits of declining global oil prices" (australianaviation.com.au, 2015).        On a positive note, the economy of Australia shows healthy signs which yields to fruitful outcome for the aviation industry.

    SOCIAL:

    With a strong and style brand image, Virgin Australia have showcased its presence in different social media channels. They even conduct numerous events and programs. Through their sponsorship in AFL or the Sports car championship they have tried to nurture Australian talent and culture through promoting their values and financial support (virginaustralia.com, 2016).

    TECHNOLOGICAL FACTORS:

    In today’s world technology plays a major role. Virgin airlines have kept themselves ahead by applying recent technological advancements. One of the recent examples is the installation of an inflight Wi-Fi Service and also setting up of self-check-ins which is not only convenient but also time saving (virginaustralia.com, 2017).

    LEGAL:

    Just like any other airlines Virgin Australia should stick to legal obligations. Competitive regulations to be a single operator on a regional route can be changed to two major airlines. By giving customers more options and allowing international airlines to carry domestic passengers the level of competition and service will be enhanced (competitionpolicyreview.gov.au, 2015).

     

     

     

    ENVIRONMENTAL:

    To curb the emission,Virgin Australia started using Bio fuel by specific percentage shares. In addition the airline tries to reduce the excess of food and is also donating it, which is a great indicator of sustainability (virginaustralia.com, 2017).

     

     

    Appendix 16: Overall Rating for the strategy Canvas of Critical Success Factors

    Factor

    Description

    Rating

     

     

    Virgin       Australia

    Quantas Airways

    Jet Star

    Price

    The price for an airline ticket

    High

    High

    Low

    Seat comfort

    The seat comfort the airlines provide passengers

    High

    High

    Middle-low

    Customer   service

    Food and beverages offered during the flights; the staff service through the cabin crew during the flight

     

     

    High- middle

    High-     middle

    Middle-low

    Assurance

    Having a high safety ranking through meeting safety requirements, policies and laws

     

    High

    High

    High

    Frequent Flyer          Program

    A frequent flyer program to establish customer loyalty and offer them more advantages and features

     

    High

    High

    Low

    Wi-Fi & Inflight Entertainment

    The inflight entertainment including: Wi-Fi, Movies, Music

     

    High- middle

    High-     middle

    Middle

    Skilled         employees

    Skilled Employees which experience many appropriate developmental programs from their companies like female leadership, emerging leaders program, indigenous employment skills workshops, diversity trainings

     

    High

    High-     middle

    Middle-low

    Brand identification

    A well-established brand name which is recognized by customers and creates more customers

     

    High

    High

    Middle-low

    OTP On-Time-Performance

    An OTP (On-Time-Performance) over 85% to ensure for the majority of customers scheduled departures and arrivals

    High

    High

    High-    middle

     

     

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