Virgin Australia Airline Overview
Discuss about the Organization Management Goals Involve Developing.
Organization strategic management goals involve developing and implementing strategies that will help in achieving the company short and long-term goals and objectives of the organization. It is a continuous process, and most times it keeps changing as the organization evolves. To develop an effective strategic management plan then the organization has to give critical consideration to the resource capability of the organization as well as improve a critical analysis of its internal and external environments (Utami 2017, p. 17). One of the main challenges facing the management of different organizations in today’s competitive global environments is building a competitive advantage. Most organizations have gained a competitive advantage through increasing their efficiency in service delivery, quality, by being flexible in their operations as well as focusing on customer responsiveness. However, energy in business operations will be determined by the organization’s ability to make the most productive use of its resources (Davis & Simpson 2017, p. 19). Therefore the primary issue of concern in strategic management for most managers has been making prudent and practical use of organization resources and capabilities to achieve their organizational objectives in the prevailing external conditions. This report, therefore, seeks to provide an analysis of Virgin Australia Airlines internal environments and recommend a strategic direction that will help in improving the company competitive advantage in the industry.
The Virgin Australia Airlines is an airline company operating under the Virgin Group and was founded by British Businessman Richard Branson. It is the second largest airlines after their main competitor Qantas airlines. The company worked initially as a small carrier where most of their market concentration was on low-cost services. However, the company has experienced tremendous growth rates and improvement in its operations which has enabled it to become the new world carrier and enjoys a significant market concentration (Gross & Lück 2016, p. 32). The substantial growth in the company was realized in the year 2011 and was attributed to the efforts of the company to introduce new services in the airline such as new catering services onboard, business class carrier, new wide-body aircraft as well as new uniforms for their staffs. The company has been able to develop its market structure as well as their consumer base to cover significant destinations within and outside Australia. Its focus has been to expand its services in the market with the aim of satisfying their customer demands. Such a strategy has enabled the company to increase its customer base with the international airline market by having a share of up to 36 percent.
Internal Factors Giving Virgin Australia a Competitive Advantage
Virgin Australia internal factors have placed the company in a strong market position and therefore providing a competitive advantage to the company over its competitors. The Australian Airline industry has become very competitive with the major players such as Qantas, Jetstar and Tiger airways improving their efficiency to dominate the industry. Therefore the company competitive advantage has been able to be achieved through the development of the company key strengths and capabilities. The ability to utilize the available company resources for maximum benefit is essential in improving a firm’s efficiency in the industry (Wheelen et al. 2017, p. 27). One of the most resourceful departments of the company has been the human resource department. The company has been able to employ very relaxed vibrant young people in the customer service department. The staff working in the industry is the most important assets as they contribute to increased productivity of the company (Srisaeng et al. 2014, p. 208). The company has therefore been able to offer sufficient customer services to their customers. The company has been voted severally as the best airline with good flying and aircraft record attributed to their customer service.
Regarding their financial resources which play a significant role in the development of the airline services, the company has been able to establish itself in a strong financial position. This has been achieved through a cost advantage strategy as well as its membership to the Huge Virgin Group. The cost advantage strategy was initiated by the company to offer low fare prices to the domestic services by providing discounts across various destinations in Australia (Zhang 2015, p. 22). This has enabled the company to experience increased customers in their airlines and therefore improving their profitability and strengthening their financial position in the airline industry. Its membership to the Virgin Group which is one of the world’s largest and successful corporate groups enables the company to enjoy continued support regarding finances, innovations and increased competitive challenges.
The ability to create strong working relations with major partners in the industry is a significant competence of the company. Maintaining strong relationships with company partners is an essential determinant of company strength in the industry. Virgin Australia is therefore committed to developing and maintaining strong working relationships with their partners (Zhang et al. 2017, p. 483). The company membership to the Virgin Group is a high competence in the industry since the group is a recognized a leading global brand that has been established regarding their innovative capabilities, regarding their financial position and attaches more value in competitive challenges in the industry. The group can support the company to develop best services in the industry through innovations and improves services provision and therefore giving the company a competitive advantage (Homsombat & Fu 2014, p. 11). The company also enjoys a cost advantage in the industry over their competitors through the provision of discounts to significant destinations across Australia.
Strengths and Competencies
The company has been able to lower the costs through partnering with international airlines in their move to gain expand their operations outside Australia for instance from the partnership is created with the Etihad Airways. The company has been able to increase their domestic customer base efficiently over the past years through lowering of prices for various destinations in the country compared to their competitors. Such a strategy has enhanced their local services in the nation and increased their financial resources through increased profits (Srisaeng et al. 2015, p. 95). However, the company has not been able to diversify their services as it has focused on developing a one-line strategy on the leisure market compared to what their competitors are doing in the industry by developing a dual brand strategy, primarily by Qantas and Jetstar airlines. The company has not able to build its management team and has been characterized by constant changes in its management. Such changes and failure to diversify their operations have become the primary company weakness which needs to be addressed to improve their competitiveness in the industry.
The high strengths and capabilities have given the company a competitive advantage in the industry and hence becoming the second most significant airline in Australia after Qantas Airways. The competitiveness of the company can be attributed to its ability to offer lower prices in the market by giving discounts to domestic operations over their competitors in the industry (Ringham & Miles 2018, p. 15). The cost advantages have enabled them to increase their profitability as a result of increased customer concentration in their airlines. Secondly, the company drives its competitive advantage through its financial capabilities over the main competitors such as Tiger Airways and the Jetstar Airways. The company strong financial position can not only be attributed to the cost advantage but also to the financial support it enjoys from the Virgin Group. Its ability to maintain healthy working relations with its partners has also given the company a competitive edge in the market and especially in venturing into international airline industry compared to the competitors operating domestically likely to experience economic shutdowns.
Virgin Australia Airlines current strategies can be said to be practical and prudent as they have contributed positively to the growth of the business in the current competitive business environment. Its cost leadership strategy has been very useful in enhancing company productivity regarding their profitability and also helping the company increases their customer base in the domestic market. It has also helped the company in improving their service provision through innovation and enhances customer service onboard operations.
Current Strategies
The company, human resource strategy of recruiting vibrant young staff in the customer care service, has also been prudent and has played an essential role in improving service provision. The industry pays much importance in service provision and many customers using their airlines are focused on the services and not only on the cost of traveling. Investing in improving service provision is, therefore, a principal strategy in increasing or gaining a competitive edge in the market.
Business partnerships play an essential role in enhancing business development locally and internationally (Merkert & Ploix 2014, p. 80). The company strategy to develop and maintain strong working relationships with their partner’s both local and international partners is therefore very efficient in achieving the company goals and objectives. It provides the company with an opportunity to venture into new markets as well as diversifying their services into the existing domestic markets. It has been one of the contributing factors to the company growth since the year 2011.
The company has to be able to differentiate their services from those of the competitors in the industry through offering innovative solutions such the development of a new wide-body aircraft and the introduction of the business class carrier which most domestic companies do not provide in the market. However, their focus on leisure’s services has deprived the company of enjoying the benefits of services diversification. Its membership strategy with the Virgin Group has been very prudent in enhancing growth opportunities for the company through continued support regarding fiancés, innovations and competitive challenges.
However not every strategy has been effective in helping them achieve their objectives, the company has a high potential to diversify their services and operations to different sectors and mainly in the corporate area. Its strategy to focus on the development of one line strategy has reduced their competitiveness with their rival companies such as the Qantas and Jetstar having developed a dual brand line strategy (Adler et al. 2017, p. 63). The company management and leadership strategy has not been sufficient due to the constant changes in management and has negatively affected the growth of the company. Constant changes in administration provide an opportunity for mismanagemeort and servnt of company resources and lack of accountability in the company. The airline has a challenge in attaining their maximum efficiency in Australia since the company is not an Australian based company but belongs to the Virgin Group. There is a need therefore to consolidate the efforts of having shares in the Australian Airline industry since this may become a future business barrier.
Recommendations for Virgin Australia Airways Strategic Direction
Despite the prudence of the existing strategy which has given the company a competitive edge in the industry, the company has an opportunity of becoming the largest airline in Australia and also increasing their international consumer base. The company also seeks to improve their service provision in the industry which is very essential for the development of transp
ice industry. To achieve this, I recommend the company to develop and implement a combination of cost leadership and service differentiation strategies (Lasserre 2017, p. 6). Implementing these strategies will help the company improve its service provision and grant them an increased competitive advantage in the industry. Cost leadership will ensure that the company offers the best discounts and favorable fare charges for not only specific destinations across Australia but seek to extend the cuts to majority destinations locally and internationally. Differentiating their services will give the company a unique business sense and therefore provide it with an opportunity to develop its brand domestically and globally in the industry. There is, however, a need to change its management strategy that has weakened the management team of the company. To achieve adequate strategic management in the company operations, there is need to provide security to the management team to increase their commitment and dedication to delivering the organizational goals and objectives.
References
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