The Impact of Competition on Air Travel Services of Virgin Atlantic - Case Study Example

 The Impact of Competition on Air Travel Services of Virgin Atlantic 2.0 Terms of Reference 2.1 Purpose: The purpose of this project is articulately analyze the impact of competition on air travel services at the Virgin Atlantic company. Similarly, the document purposes to analyze how entry of new airlines into the international airline alliances affects the operations of Virgin Atlantic Airlines. Aim of the Research Project Therefore, this project will aim at analyzing how Virgin Atlantic Airlines will be affected in a situation where the market operations changes and competition rises significantly. The research further investigates the reactionary policies aimed at cushioning the potential effects of competition on the operations of Virgin Atlantic Airlines. 2.2 Methods: This study will use quantitative methods of research tom collect data on the effects of competition on the operational and organizational structure of Virgin Atlantic Airlines (Utton 2007). The researchers distributed questionnaires to the respondents and the data collected sampled for analysis. Similarly, some respondents who were not in a position to fill in the questionnaires were interviewed to determine the specific impacts the entry of new airlines would have on the general operation of Virgin Atlantic (Utton 2007). The analysis the collected data through questionnaires was done through statistical programs, and specifically SPSS. Correspondingly, the interview data will be analyzed for four major themes that includes a number of crucial factors. The quotations from the interview will be used in the illustration of study findings from this research work. 2.3 Expected Outcomes: This research will ascertain that any form of competition either through entry of new airlines into the market, introduction of similar products of service delivery systems into the market and differences in pricing policies have significant effects on the operation and survival of the Virgin Atlantic Airlines. Any form of competition in any viable firm, though instrumental in defining the operational structures of the firm can be detrimental if not countered by appropriate policies (Malaval & Bénaroya 2002). This research recommends that Virgin Atlantic Airlines be more vigilant and proactive to any changes in the market systems. By checking on the operational strategies of competing firms and establishing better service delivery systems than the competition firms, Virgin Atlantic will be in a better position to attain a fairly high competitive market advantages. The management of Virgin Atlantic should aim at being a leading airline in terms of service delivery and efficiency. 3.0 Background and Context (400 words) 3.1 Academic area and general business context of the problem Like any other service industry, Virgin Atlantic has specified standards and priorities aimed at increasing and improving the excellent customer services care operations (Malaval & Bénaroya 2002). However, like most companies, the Airline is highly susceptible to competitions from rival firms and if not kept under check, may be detrimental to the general operations of the company. Therefore, this research purposes to outline such instances of competitions and recommend appropriate strategies relevant in the mitigation of such competitions. Competition, if not appropriately addressed may result into an economic problem to the Airline which includes total business collapse and loss of loyal customer base (Elenkov 2005). 3.2 Business context of the problem Virgin Atlantic Airways Limited is the 2nd largest international airline based in Britain. The company has in its system a range of special and innovative services making Virgin Atlantic a hallmark in the Airline service delivery industry and transforming into one of the best international Airlines globally (Elenkov 2005). For instance, Virgin Atlantic became the first Airline company to ever offer two separate first class flights in its routes. However, over the time, more Airline companies have been emerging with equally lucrative and desirable service delivery systems making its survival and control threatened (Elenkov 2005). 3.3 Purpose of the proposed study 3.3.1 Research question The researched aimed at answering the following question: What are the impact of competition on air travel services at the Virgin Atlantic company? 3.3.2 Research aim The research aims at studying the impacts of competitions on the operational and organizational structures of the Virgin Atlantic Airlines to help the company come up with relevant strategies to combat any effects competition may cause on the general performances of the Virgin Airlines. 3.3.3 Subsidiary research questions What are the positive effects of competition on the general operations of the Virgin Atlantic Airlines? How does competition for market control affect the long term profitability of Virgin Atlantic? What are the effects of competition on the long term survival of the Virgin Atlantic company? 3.4 Significance of the proposed study This proposed study will be instrumental to the Virgin Airline Company when determining such factors that either way affects the general profitability of the company. The current business operations at the company will benefit significantly from the research findings from this study as the company management will be able to develop relevant strategies to effectively mitigate and manage any ensuing competition. 4.0 Summary of Relevant Theory (Literature Review)(385) 4.1 Introduction The question of potential impacts of competition in the capital intensive airline industry such as the Virgin Atlantic has necessitated the need to regulate the operations of the market which is currently facing immense competition and increased demands (Malaval & Bénaroya 2002). The demand in the airline industry in most cases is highly elastic and stiff competition if not well prepared for may adversely affect the operations of the company (Malaval & Bénaroya 2002). The airline industries, just like the Virgin Atlantic are characterized by constant entry of new firms and production of homogenous products and services. As a result, competition in the aviation industry is extremely fierce and any decision made by the company in terms of output is instrumental in ensuring the company remains operational (Stoller 2010). 4.2 Literature Related to First Objective/ Subsidiary-Question All companies and organizations’ main objectives are to maximize their profit making and business sustainability (Stoller 2010). According to a previous study, economic theories responsible for the regulation competition based of pricing and quantity of products and services are crucial in the airline operational designs. For instance, the number of seats (quantity) in airplanes are fixed based on demand and competition for prices in the market (Stoller 2010). The models explaining competition in the aviation industry are explicit and concentrate on the number of factors ranging from products competition to the set prices of the company products (Gillen & Morrison 2005). The Virgin Atlantic company should aim at enforcing product homogeneity, purpose at establishing low-cost carrier services and but still maintain the quality of travel and services offered. When the Virgin Airline decides to operate on a domestic route, the emphasis should be on efficiency and convenience of the company’s clients to make economic sense of such domestic flights (Gillen & Morrison 2005). According to Bertrand model on communication, the emphasis is placed primarily on customer preferences and satisfaction with the ultimate aim of maximizing output. Modernizing the services offered at the company should be top priority to ensure that they remain above other companies in terms of quality service delivery. A previous study on airline operations ascertained that by setting considerably lower prices, the Virgin Atlantic will be in a position to remain competitive in an industry so much maligned with competitions (Gillen & Morrison 2005). 4.6. Significance of the proposed study The proposed study is significant in the determination of appropriate policies Virgin Airline can apply in their operations to ensure that all forms of competitions are met with the minimum economic shock and to ensure the company stays relevant in the Aviation industry (Barrett 2004). Similarly, the study will be crucial to the company top management when making decisions on how to improve the quality of services. 4.5 Conclusion/ Summary of Literature Review Section Competition in the service industry revolves around service quality, price of flights and the efficiency of travel in a particular airline (Barrett 2004). Therefore, Virgin Airline must at all times embrace competition from rival companies and use it as a challenge to increase their service delivery systems. In conclusion, in a company full of homogenous products and services, Virgin Airline Company, in the face of competitions, must strive for relevance in such a market and ensure customer preferences are articulately met (Barrett 2004). 5.0 Methodology (400 words) 5.1Introduction The data collection methods to be used in this research include conducting interviews and issuing questionnaires. Interviewing is convenient in terms of price and time taken to carry out the same (Barrett 2004). While issuing of questionnaires to respondents is instrumental in the gathering of relevant information on the impacts competitions has on Virgin Atlantic operations (Barrett 2004). 5.2 Research Design The proposed research will apply both qualitative and quantitative research methods to meet the meet the research objectives (Elenkov 2005). Qualitative approach will aim at determining the relationship of the research variables with the social settings to ascertain the relevance of the study. Qualitative research on the other hand is isolated and based on the research objectives (Elenkov 2005). 5.3 Data collection, analysis and presentation of results 5.3.1Objective 1 The objective of the research will be ascertain the impacts competition had on Virgin Airline Company and the relevant strategies the company’s management may apply in mitigating the effect competition has on profitability of the airline company. 5.3.1.1 Secondary data The research will make use of some secondary data collected from the company management on past experiences the company had when a new airline entered the market. 5.3.1.1.1SecondaryDataSearch Strategy The researchers will access secondary from the company’s databases or from online search engines to gather relevant information on the impacts of competition on the operations of Virgin Atlantic company. 5.3.1.1.2 Research Ethics The information gathered in this research is according to the discretion of individual respondents and are not coerced or influenced to do so. The privacy of the respondents is assured and maintained by the researcher. 5.3.1.1.2 Data Analysis Data analysis in this proposed project work will be done using statistical programs such as SPSS for accuracy and efficiency. 5.3.1.1.3 Presentation of Results The results from this research will be presented using tables and graphs explicitly explaining the impacts of competition on the operation of the Virgin Airline. 5.3.1.2 Primary data The research will also use primary data collected through questionnaires and interviews and analyzed using SPSS. 5.3.1.2.1Data Collection Data used in the analysis in this study will be collected from the employees of Virgin Atlantic who have first experience on the impacts of competition on their firm. 5.3.1.2.1.1Data Collection Tools and Techniques The possibility of biasness in respondents’ response is higher and researchers in this study will aim minimizing such bias responses by encouraging honest opinions and offering incentives to responds (Elenkov 2005). Questionnaires as a tool used in data collection is efficient and relatively accurate making it a relevant technique in this study. Interviews administered to top managers at Virgin Atlantic is time conserving and convenient. The data collected through the two techniques are easily retrieved for future from the company databases (Elenkov 2005). 5.3.1.2.1.2Population The research proposes to gather its data from the employees of the company who are considered to be having first hand experiences on the impacts competition has on the operational structure of the company. 5.3.1.2.1.3Sampling The research will employ probability sampling techniques in the analysis and presentation of the collected data. 5.3.1.2.1.4Research Participant Protection (Ethics) The project researchers will reassure the respondent of the privacy of their responses and security of their utterances. 5.3.1.2.2Data Analysis (may be quantitative or qualitative or both) Data analysis in this document will be carried out using SPSS. 5.3.1.2.3 Presentation of Results and/or Findings Data presentation will carried out using graphs, charts and tables. Electronic presentation through projectors is also a possibility. 5.4 Conclusion/ Summary of the Methodology Section In conclusion, the data analysis techniques used in this proposed research project should emphasize on efficiency and relevance to ascertain the authenticity of the data collected. 6.0 Project Management (75 words) 6.1Introduction This chapter aims at providing a brief overview of a number of contingency issues related to the study. 6.2Timing of Project Events and Processes The project will be carried out on a strict schedule to avoid any possible time wastages. 6.3Costing of Project Events and Processes The cost of the project will be footed by the Virgin Atlantic company management and other interested airlines as the recommendations from the study will be instrumental across the aviation industry. 6.4 Contingency Plan In case of any mishap such as threat on personal privacy during data collection processes, the scale researcher may withdraw the response from the respondents (Elenkov 2005). Similarly, in case of wide-scale non-response, the researchers may opt for secondary data instead. The researchers may experience hostility from the field during data collection processes and are advised to retreat to more welcoming respondents (Elenkov 2005). 6.5Conclusion of the Project Management Section In conclusion, the whole process should concentrate on efficiency in terms of time management and strict adherence to the research schedules. References Barrett, S. D. 2000. Airport competition in the deregulated European aviation market. Journal of Air Transport Management, 6(1), 13-27. Barrett, S. D. 2000. Airport competition in the deregulated European aviation market. Journal of Air Transport Management, 6(1), 13-27. Barrett, S. D. 2004. How do the demands for airport services differ between full-service carriers and low-cost carriers?. Journal of Air Transport Management, 10(1), 33-39. Elenkov, D. S. 2005. Russian aerospace MNCs in global competition: their origin, competitive strengths and forms of multinational expansion. The Columbia Journal of World Business, 30(2), 66-78. Gillen, D., & Morrison, W. G. 2005. Regulation, competition and network evolution in aviation. Journal of Air Transport Management, 11(3), 161-174. Global, T., Waters, G. L. S. I. T., Strategy, M., & Puro, C. C. 2000. Virgin Strategic Management Analysis. Malaval, P., & Bénaroya, C. 2002. Aerospace marketing management: Manufacturers, OEM, airlines, airports, satellites, launchers. Boston: Kluwer Academic Publishers. Stoller, G. 2010. “Virgin America, Southwest airlines praised in Zagat survey. USA Today, 30. United States. 2006. S. 415, Aviation Competition Restoration Act: Hearing before the Committee on Commerce, Science, and Transportation, United States Senate, One Hundred Seventh Congress, first session, March 13, 2001. Washington: U.S. G.P.O. Utton, M. A., 2007, Economists Advisory Group., & Commission of the European Communities. The Likely impact of deregulation on industrial structures and competition in the Community: Final report. Luxembourg: Office for Official Publications of the European Communities. Read More