Virgin Atlantic Airways External Environment - Case Study Example

CLIENT REPORT Name; Institution affiliation; Date; Introduction The following report is based on a request by Virgin Atlantic Airways to prepare a report on how technology and innovation could be used in line with the organizations internal and external environment, mission and values to advance its expansion plan. The report includes information such as the company's current position, its mission and goals and its ambitions regarding profit making and expansion plans. The main objective of the report is to provide an accurate picture of the company's situation and how technology and innovation can help in realizing its goals and objectives[Joh09]. Virgin Atlantic Airways Company Overview Virgin Atlantic Airways founded in 1984 went ahead to become the second largest carrier in Britain. The carrier serves most of the world's major cities and is located at London's Gatwick and Heathrow airports and also Manchester airport. The carrier operates a large pool of destinations that reach as far as Las Vegas and Shanghai in China. The company's profile and fame have grown considerably enabling it to win top business, consumer and trade awards from all over the globe. The airline has been regarded as a pioneer in the Industry because it has started some major innovations, helping set the standards which also help its competitors. The amazing that about Virgin Atlantic is that despite its growth, it has remained true to its goal of being consumer driven while also emphasizing on value for money, quality, fun and innovation. Since its inception, the airline estimates that it has ferried close to 58 million passengers while at the same time employing more than 9000 people (Balmforth, 2009). Ownership Of the overall stake of Virgin Atlantic, 51% is said to be owned by the Virgin Group and 49% controlled by Singapore Airlines. On 20 December 1999, Richard Branson approved an alliance to sell a 49% stake of Virgin Atlantic to Singapore Airlines to form a bizarre global partnership. The cost of the trade to Singapore Airlines was £600.25 million, which included a capital injection of £49 million and valued Virgin Atlantic at a minimum of £1.225billion. The contract was finalized in early 2000. Product Virgin Atlantic gives three classes of travel - Upper Class, Premium Economy and Economy all with award-winning inflight entertainment (David, 2003). Virgin Atlantic organizational environment An organizational environment is composed of forces or institutions surrounding an organization that affects performance, operations, and resources. Internal environment Virgin Atlantic Airways internal environment comprises of the airline industry, competitors, suppliers and customers. The airline industry in which Virgin Atlantic operates consists of much other bigger and smaller carriers that are always looking for ways of getting a piece of the market share. When a new entrant a market share, it means Virgin Atlantic's market share is decreasing. Despite facing a lot of competition in the industry, Virgin Atlantic has managed to keep its market share and has been more successful as compared to its competitors (Evans N., Strategic management for tourism, hospitality and events, 2015). The industry also has competitors such as British Airways, Air France, AMP Corp and Delta. The competitors offer around 150 destinations as compared to Virgin Atlantic's 35. The company has been successful over its competitors because it changed how people traveled over long distances, enabling them to have fun while on the air[Hen96]. Suppliers also make up the company's internal environment, and they include Boeing and Airbus. The two suppliers are some of the largest manufacturers of aircraft in the world. The relation between Virgin Atlantic and Boeing and Airbus can be seen by the company's new acquiring Boeing 747 and Airbus 340 (Evans, Campbell, & Stone house, 2003). Customers also make up the company's internal environment, and they are considered to be the most relevant stakeholders in the business. Customers in Virgin Atlantic are grouped into three classes; upper class, premium economy and economy class. External environment The outer environment of business includes the factors that are outside the company and hence affect the company's ability to function properly. Some factors can be manipulated by the marketing department of the company while others will require that the company makes adjustments on how it operates. The external SWOT analysis of Virgin Atlantic Airways showed a few external factors that affect its operations. Political factors such as taxes and laws or regulations affected the company's operations. Taxes are charged differently in different countries. Hence, the company has to adapt to these interruptions. Laws and regulations also affect or interrupt the functioning of the company in many ways because of the fact that it operates in many different countries[Zon13]. Economic factors also comprise a company’s external environment and include sub-factors such as interest rates and prices of other commodities. Virgin Atlantic may be affected by a rise in interest's rates because it will affect their long-term debt. Oil prices are also impacting on the company positively because of reduced fuel costs. An increase in prices of fuel means that the firm will spend more on operational costs hence fewer profits. Social factors such as the safety measures employed by the company have a large impact on its operations. Other external factors that might affect the functioning of the company include population growth and how many people in the population have disposable income. Population growth may influence the operations of the company because an aging population means that they will travel less hence affecting the profits of the business. When the population has a larger amount of disposable income, it means that they will travel more hence bringing more business to the airline. Virgin Atlantic Organizational Culture Over a period of many years, experts have surged to research the key elements of organizational culture. The term organizational culture has become a crucial part of any business. This is because it forms the foundation towards how a business operates, displays itself in the public eye and ultimately the type culture the business wants to sow in their employees Virgin Atlantic Airways products and services The company's customer-focused approach made it one of the most respected international cargo organizations in the world. The company's products are designed around the customer to give them the best experience when traveling with them. The products are made to offer simplistic and reliable services with an added flexibility when the need arises. The products include; General cargo This product is ideal for non-specialist cargo, and the customers are assured their cargo will get to any destination thanks to the wide network that the company has. Must ride This product takes care of urgent cargo and offers to transport the cargo as booked. The company also promises that the cargo will be made available for the next flight. Vex This is the company's express courier product and is meant for all urgent airport to airport shipments that customers may want to have. What makes this product different from others is the speed and efficiency it is associated with. Service level agreements A service level agreement (SLA) is said to be a contract between a service provider (either internal or external) and the end user that normally defines the level of service g that a client expects from the service provider. Service Level Agreements are output-based in that their purpose is specifically to define what the customer will receive. The client, virgin Atlantic airways, provides a strong service level agreement and pro-active network monitoring. Virgin Atlantic airways new business opportunities Airlines have introduced significant innovations over the years, which don't just make flying a better experience for the customer but inspire other business sectors across the globe. After going through the company information, the I.T department profiled some technological innovations that can help the company achieve its goals. Some of these innovations are discussed below; Boarding passes Boarding passes are the new in thing with the introduction of iPhones passbook bringing in a new idea when it comes to eradicating paper passes. New innovators each day are coming up with ways in which they hope to lessen the time clients take to get on a plane. Virgin Atlantic Airways are looking to tap into this new business idea and profit from it by selling the iPhone passbooks to other airlines. Shop with class while you fly in style Virgin Atlantic has introduced various innovations that are meant to give consumers a new and unforgettable experience when they are shopping. Shopping while flying is not a new thing in the air transport industry as most consumers especially ladies pride themselves in doing this. In 2013, Virgin Atlantic opened the Gallery in the Air, an innovation which allows Upper-Class passengers to purchase original artworks by Ben Eine. This innovation is meant to bring in more customers especially art lovers[Naw10]. The airline also made sure that passengers on the New York to London route were not left out since they will be able to view a virtual gallery tour of 10 one-off pieces during their fight to and from their destination. Virgin Atlanta seeks to expand its client base by giving its customers an unforgettable flying experience. The company makes sure the passengers know that they can purchase the artworks, which are normally priced at £2,500 to £15,000. For a passenger to purchase an art from the gallery, they would have to place a deposit with a member of the cabin crew. Wearable technology to improve passenger experience This is another area that the business can major in and expand its business while creating an unforgettable experience for its customers. By introducing the Google Glass, the company sought to revolutionize air travel and in a way fuel the future of air travel. Virgin Atlantic passengers boasted to be the first air passengers to experience the benefits of Google Glass, which is produced by Google, one of the leaders in wearable technology innovation. With customer experience a top priority, Virgin Atlantic Airways has always been keen to show how committed they are in making sure that customers have a better experience when traveling. Introducing Wi-Fi in the plane, clubhouses and lounges Virgin Atlantic has introduced Wi-Fi hotspots all over to ensure that customers enjoy their travel while surfing the internet. Clients had challenges especially those on business trips because they could not receive or reply to their emails on time due to poor connection. References Joh09: , (Balmforth, 2009), Hen96: , (Lucas, 1996), Zon13: , (Luo, 2013), Naw10: , (Taneja, 2010), Read More