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Critical Success Factor Analysis on Virgin Atlantic Airways

This part makes use of critical success factor (CSF) to analyze Virgin Atlantic Airways (Virgin) from four aspects.

Industry

Macroeconomic volatility will have a great impact on the air transport industry, especially economic recession, rising oil prices, exchange rate fluctuations will have a huge impact on cost and profitability (Loudon, 2004). For airlines, how to implement scientific cost control is very important.

Travelers are increasingly concerned about travel experience, airlines need to meet the requirements of travelers from sales, services, supporting facilities, security and other aspects (Prince and Simon, 2009), so as to allow the airline to get a place in the fierce market competition.  http://www.51due.net/writing/essay/sample1249.html

Competitive strategy and industry position

Virgin Atlantic Airways is the UK's second largest airline, it is one of the low cost carriers. The business model that Virgin adopts is the low-cost carriers-but with the addition of Virgin’s distinctive approach to differentiating its in-flight experience (Grant, 2012), to attract consumers by offering low prices but high quality services. For example, the majority of Virgin’s ticketing is completed through the call center or the Internet, 99% of the tickets are electronic tickets, which is an important cause of cost savings. Virgin's IT system often outsources its IT services and call center, allowing enterprises in India and South Africa to do the business. Thus they can acquire satisfied services, simplify its procedures and save a lot of costs.

Virgin also uses synergy strategy, using its strengths in other areas to work together to provide personalized services to consumers, thereby enhancing its competitiveness (Goold and Luchs, 1993). For example, Virgin also invests in aviation, hotel and resort industry, which allows it to provide travelers with more comprehensive and personalized services in tourism (Grant, 2012  Virgin also has a special focus on the use of innovative strategies, through innovative services to meet the individual needs of consumers, so as to better enhance consumer loyalty (Grant, 2012).

Environmental factors

Protecting the environment, reducing carbon dioxide emissions, reducing noise pollution and improving fuel efficiency have become the consensus of the aviation industry, governments of each country have formulated relevant laws and tax policies to standardize business practices of airlines. Virgin has also taken measures to deal with the issues, including cooperation with Boeing to develop bio-fuels, the use of aircraft bringing least pollution, these measures help Virgin to establish a good image in assuming corporate social responsibility, which helps to improve brand recognition.

Temporal factors

World economic recession reduces demand in the world's aviation industry, Virgin tries to expand its market share through the merger with British Midland International (BMI) to reduce costs (Osborne, 2010). Virgin can significantly reduce unit cost through the merger, thereby allowing the airline to offer cheaper tickets. As Virgin and BMI share existing resources, it will provide passengers with more diverse services, which is more likely to provide a good travel experience for passengers. Lower prices and increased quality of service will help Virgin to expand its market share.

 

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