The Global Environment and Global Activities - Essay Example

Globally the airline's capacity increased to 5.2 percent buoyed by an increase of 10.3 percent in the number of passengers and yield improvement by 6.1 percent annually (IATA, 2011, p.8). The competitive global environment and key market drivers The airline industry is highly competitive with a large number of market players both in domestic as well as international routes.

The advent of Low-cost carriers has also compounded the competition with a predatory pricing mechanism (Wensveen, 2010). The key market drivers for the growth of the industry include a robust economic growth that would mean an increase in business class passengers as well as growth in the tourism industry both of which can act as good drivers for the industry (AAPA, n.d.). Background of Chosen Brand and the Role of Branding In Chosen Industry Virgin Atlantic was established in the year 1984 under the leadership of Richard Branson under a joint venture with Singapore Airlines that has a 49 percent stake (Virgin Atlantic-a, 2011).

The company headquartered in the UK is one of the most favored and established brands in the industry (Virgin Atlantic, 2011). Because there are a large number of market players with heightened levels of competition the role of branding assumes considerable importance in this industry to help create a distinction from the other brands in the market. Brands Global Competitors and Competitive Advantage Virgin Atlantic is a global brand and faces stiff competition from some of the well-reputed brands including British Airways, Emirates and Delta Air, Continental, and American Airlines in the international markets.

On the domestic front, it faces competition from legacy carriers as well as low-cost carriers like Ryan Air, Easy Jet, etc. The competitive advantage of Virgin Airlines comes from its excellence in service delivery and formidable brand image. Focus of Project The project would try to analyze the global airline industry in the context of the chosen organization and would also try to formulate a suitable strategy for the expansion and growth of the airline in the US (Los Angeles) market. Section 2: Global ActivitiesGlobal Participation In addition to the UK market the company has international operations in India, Africa, USA, and the Caribbean Islands (Virgin Atlantic-b, 2011).

Foreign Markets Served Virgin Atlantic in addition to the above markets is also trying to enter markets in Asia as well as consolidate its presence in the USA, particularly in the Los Angeles region. Segments Served-Current and Potential Customers Virgin Airlines is a legacy carrier and caters mostly to UK-based residents who constitute 60 percent of all the passengers flown by the airline. The company caters to multiple segments with business class meant for the upper-income group and business class travelers while economy class is for passengers traveling for leisure at lower rates.

Its potential customers include tourists, business class as well as institutional customers for its cargo segment (Virgin Atlantic-b, 2011). Role, Impact, and Importance of Cultural Issues and EthicsA successful international market expansion call for paying considerable attention to ethics and culture. In the case of Virgin Airline’s expansion plans into the American region, it must adopt a ‘glocalization’ strategy of thinking globally and acting locally to include local feelings and sentiments to make a better connection with the customers (Culpan, 2002, p.60). This can be done by selecting local personalities as brand ambassadors which would help it to generate a sustainable edge in the market.