Virgin Atlantic Airways: Ten Years After SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Sales & Marketing
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Virgin Atlantic Airways: Ten Years After
The Virgin Atlantic Airways (VAA) case was written on the occasion of the company's 10th anniversary. In 10 years, VAA has brought many innovations to the airline industry and won many awards for its service. It has fought against giants on an international scale and has survived the airline industry's most difficult years. The case describes the history of the firm, its achievements, and its practices especially in terms of operations, human resources and marketing.
Swot Analysis of "Virgin Atlantic Airways: Ten Years After" written by Jean-Claude Larreche, Pantea Denoyelle includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Vaa Virgin facing as an external strategic factors. Some of the topics covered in Virgin Atlantic Airways: Ten Years After case study are - Strategic Management Strategies, International business, Leadership, Marketing, Organizational culture, Pricing, Public relations, Supply chain and Sales & Marketing.
Some of the macro environment factors that can be used to understand the Virgin Atlantic Airways: Ten Years After casestudy better are - – competitive advantages are harder to sustain because of technology dispersion, central banks are concerned over increasing inflation, increasing energy prices, increasing inequality as vast percentage of new income is going to the top 1%, geopolitical disruptions, talent flight as more people leaving formal jobs, supply chains are disrupted by pandemic ,
wage bills are increasing, increasing household debt because of falling income levels, etc
Introduction to SWOT Analysis of Virgin Atlantic Airways: Ten Years After
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Virgin Atlantic Airways: Ten Years After case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Vaa Virgin, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Vaa Virgin operates in.
According to Harvard Business Review, 75% of the managers use SWOT analysis for various purposes such as – evaluating current scenario, strategic planning, new venture feasibility, personal growth goals, new market entry, Go To market strategies, portfolio management and strategic trade-off assessment, organizational restructuring, etc.
SWOT Objectives / Importance of SWOT Analysis and SWOT Matrix
SWOT analysis of Virgin Atlantic Airways: Ten Years After can be done for the following purposes –
1. Strategic planning using facts provided in Virgin Atlantic Airways: Ten Years After case study
2. Improving business portfolio management of Vaa Virgin
3. Assessing feasibility of the new initiative in Sales & Marketing field.
4. Making a Sales & Marketing topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Vaa Virgin
Strengths Virgin Atlantic Airways: Ten Years After | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Vaa Virgin in Virgin Atlantic Airways: Ten Years After Harvard Business Review case study are -
Cross disciplinary teams
– Horizontal connected teams at the Vaa Virgin are driving operational speed, building greater agility, and keeping the organization nimble to compete with new competitors. It helps are organization to ideate new ideas, and execute them swiftly in the marketplace.
Learning organization
- Vaa Virgin is a learning organization. It has inculcated three key characters of learning organization in its processes and operations – exploration, creativity, and expansiveness. The work place at Vaa Virgin is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Virgin Atlantic Airways: Ten Years After Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Diverse revenue streams
– Vaa Virgin is present in almost all the verticals within the industry. This has provided firm in Virgin Atlantic Airways: Ten Years After case study a diverse revenue stream that has helped it to survive disruptions such as global pandemic in Covid-19, financial disruption of 2008, and supply chain disruption of 2021.
Successful track record of launching new products
– Vaa Virgin has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Vaa Virgin has effective processes in place that helps in exploring new product needs, doing quick pilot testing, and then launching the products quickly using its extensive distribution network.
High brand equity
– Vaa Virgin has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Vaa Virgin to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Highly skilled collaborators
– Vaa Virgin has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive segment. Secondly the value chain collaborators of the firm in Virgin Atlantic Airways: Ten Years After HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Training and development
– Vaa Virgin has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Virgin Atlantic Airways: Ten Years After Harvard Business Review case study by analyzing – employees retention, in-house promotion, loyalty, new venture initiation, lack of conflict, and high level of both employees and customer engagement.
Strong track record of project management
– Vaa Virgin is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Low bargaining power of suppliers
– Suppliers of Vaa Virgin in the sector have low bargaining power. Virgin Atlantic Airways: Ten Years After has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Vaa Virgin to manage not only supply disruptions but also source products at highly competitive prices.
Digital Transformation in Sales & Marketing segment
- digital transformation varies from industry to industry. For Vaa Virgin digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Vaa Virgin has successfully integrated the four key components of digital transformation – digital integration in processes, digital integration in marketing and customer relationship management, digital integration into the value chain, and using technology to explore new products and market opportunities.
Analytics focus
– Vaa Virgin is putting a lot of focus on utilizing the power of analytics in business decision making. This has put it among the leading players in the industry. The technology infrastructure suggested by Jean-Claude Larreche, Pantea Denoyelle can also help it to harness the power of analytics for – marketing optimization, demand forecasting, customer relationship management, inventory management, information sharing across the value chain etc.
Innovation driven organization
– Vaa Virgin is one of the most innovative firm in sector. Manager in Virgin Atlantic Airways: Ten Years After Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Weaknesses Virgin Atlantic Airways: Ten Years After | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Virgin Atlantic Airways: Ten Years After are -
Low market penetration in new markets
– Outside its home market of Vaa Virgin, firm in the HBR case study Virgin Atlantic Airways: Ten Years After needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Capital Spending Reduction
– Even during the low interest decade, Vaa Virgin has not been able to do capital spending to the tune of the competition. This has resulted into fewer innovations and company facing stiff competition from both existing competitors and new entrants who are disrupting the industry using digital technology.
Increasing silos among functional specialists
– The organizational structure of Vaa Virgin is dominated by functional specialists. It is not different from other players in the Sales & Marketing segment. Vaa Virgin needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Vaa Virgin to focus more on services rather than just following the product oriented approach.
High operating costs
– Compare to the competitors, firm in the HBR case study Virgin Atlantic Airways: Ten Years After has high operating costs in the. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Vaa Virgin 's lucrative customers.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Virgin Atlantic Airways: Ten Years After, is just above the industry average. Vaa Virgin needs to redesign the compensation structure and incentives to increase the revenue per employees. Some of the steps that it can take are – hiring more specialists on project basis, etc.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Vaa Virgin is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Virgin Atlantic Airways: Ten Years After can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
No frontier risks strategy
– After analyzing the HBR case study Virgin Atlantic Airways: Ten Years After, it seems that company is thinking about the frontier risks that can impact Sales & Marketing strategy. But it has very little resources allocation to manage the risks emerging from events such as natural disasters, climate change, melting of permafrost, tacking the rise of artificial intelligence, opportunities and threats emerging from commercialization of space etc.
Interest costs
– Compare to the competition, Vaa Virgin has borrowed money from the capital market at higher rates. It needs to restructure the interest payment and costs so that it can compete better and improve profitability.
High cash cycle compare to competitors
Vaa Virgin has a high cash cycle compare to other players in the industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
High dependence on existing supply chain
– The disruption in the global supply chains because of the Covid-19 pandemic and blockage of the Suez Canal illustrated the fragile nature of Vaa Virgin supply chain. Even after few cautionary changes mentioned in the HBR case study - Virgin Atlantic Airways: Ten Years After, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Vaa Virgin vulnerable to further global disruptions in South East Asia.
Lack of clear differentiation of Vaa Virgin products
– To increase the profitability and margins on the products, Vaa Virgin needs to provide more differentiated products than what it is currently offering in the marketplace.
Opportunities Virgin Atlantic Airways: Ten Years After | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities highlighted in the Harvard Business Review case study Virgin Atlantic Airways: Ten Years After are -
Manufacturing automation
– Vaa Virgin can use the latest technology developments to improve its manufacturing and designing process in Sales & Marketing segment. It can use CAD and 3D printing to build a quick prototype and pilot testing products. It can leverage automation using machine learning and artificial intelligence to do faster production at lowers costs, and it can leverage the growth in satellite and tracking technologies to improve inventory management, transportation, and shipping.
Developing new processes and practices
– Vaa Virgin can develop new processes and procedures in Sales & Marketing industry using technology such as automation using artificial intelligence, real time transportation and products tracking, 3D modeling for concept development and new products pilot testing etc.
Learning at scale
– Online learning technologies has now opened space for Vaa Virgin to conduct training and development for its employees across the world. This will result in not only reducing the cost of training but also help employees in different part of the world to integrate with the headquarter work culture, ethos, and standards.
Building a culture of innovation
– managers at Vaa Virgin can make experimentation a productive activity and build a culture of innovation using approaches such as – mining transaction data, A/B testing of websites and selling platforms, engaging potential customers over various needs, and building on small ideas in the Sales & Marketing segment.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Vaa Virgin is facing challenges because of the dominance of functional experts in the organization. Virgin Atlantic Airways: Ten Years After case study suggests that firm can utilize new technology to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Leveraging digital technologies
– Vaa Virgin can leverage digital technologies such as artificial intelligence and machine learning to automate the production process, customer analytics to get better insights into consumer behavior, realtime digital dashboards to get better sales tracking, logistics and transportation, product tracking, etc.
Low interest rates
– Even though inflation is raising its head in most developed economies, Vaa Virgin can still utilize the low interest rates to borrow money for capital investment. Secondly it can also use the increase of government spending in infrastructure projects to get new business.
Creating value in data economy
– The success of analytics program of Vaa Virgin has opened avenues for new revenue streams for the organization in the industry. This can help Vaa Virgin to build a more holistic ecosystem as suggested in the Virgin Atlantic Airways: Ten Years After case study. Vaa Virgin can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Identify volunteer opportunities
– Covid-19 has impacted working population in two ways – it has led to people soul searching about their professional choices, resulting in mass resignation. Secondly it has encouraged people to do things that they are passionate about. This has opened opportunities for businesses to build volunteer oriented socially driven projects. Vaa Virgin can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Vaa Virgin can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Use of Bitcoin and other crypto currencies for transactions
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Vaa Virgin in the consumer business. Now Vaa Virgin can target international markets with far fewer capital restrictions requirements than the existing system.
Buying journey improvements
– Vaa Virgin can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Virgin Atlantic Airways: Ten Years After suggest that firm can provide automated chats to help consumers solve their own problems, provide online suggestions to get maximum out of the products and services, and help consumers to build a community where they can interact with each other to develop new features and uses.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Vaa Virgin can use these opportunities to build new business models that can help the communities that Vaa Virgin operates in. Secondly it can use opportunities from government spending in Sales & Marketing sector.
Threats Virgin Atlantic Airways: Ten Years After External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Virgin Atlantic Airways: Ten Years After are -
Backlash against dominant players
– US Congress and other legislative arms of the government are getting tough on big business especially technology companies. The digital arm of Vaa Virgin business can come under increasing regulations regarding data privacy, data security, etc.
Environmental challenges
– Vaa Virgin needs to have a robust strategy against the disruptions arising from climate change and energy requirements. EU has identified it as key priority area and spending 30% of its 880 billion Euros European post Covid-19 recovery funds on green technology. Vaa Virgin can take advantage of this fund but it will also bring new competitors in the Sales & Marketing industry.
Aging population
– As the populations of most advanced economies are aging, it will lead to high social security costs, higher savings among population, and lower demand for goods and services in the economy. The household savings in US, France, UK, Germany, and Japan are growing faster than predicted because of uncertainty caused by pandemic.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Vaa Virgin can face downward pressure on margins from increasing competition from international players. The international players have stable revenue in their home market and can use those resources to penetrate prominent markets illustrated in HBR case study Virgin Atlantic Airways: Ten Years After .
Instability in the European markets
– European Union markets are facing three big challenges post Covid – expanded balance sheets, Brexit related business disruption, and aggressive Russia looking to distract the existing security mechanism. Vaa Virgin will face different problems in different parts of Europe. For example it will face inflationary pressures in UK, France, and Germany, balance sheet expansion and demand challenges in Southern European countries, and geopolitical instability in the Eastern Europe.
Shortening product life cycle
– it is one of the major threat that Vaa Virgin is facing in Sales & Marketing sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Technology acceleration in Forth Industrial Revolution
– Vaa Virgin has witnessed rapid integration of technology during Covid-19 in the Sales & Marketing industry. As one of the leading players in the industry, Vaa Virgin needs to keep up with the evolution of technology in the Sales & Marketing sector. According to Mckinsey study top managers believe that the adoption of technology in operations, communications is 20-25 times faster than what they planned in the beginning of 2019.
Capital market disruption
– During the Covid-19, Dow Jones has touched record high. The valuations of a number of companies are way beyond their existing business model potential. This can lead to capital market correction which can put a number of suppliers, collaborators, value chain partners in great financial difficulty. It will directly impact the business of Vaa Virgin.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Virgin Atlantic Airways: Ten Years After, Vaa Virgin may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Sales & Marketing .
New competition
– After the dotcom bust of 2001, financial crisis of 2008-09, the business formation in US economy had declined. But in 2020 alone, there are more than 1.5 million new business applications in United States. This can lead to greater competition for Vaa Virgin in the Sales & Marketing sector and impact the bottomline of the organization.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Vaa Virgin with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Technology disruption because of hacks, piracy etc
– The colonial pipeline illustrated, how vulnerable modern organization are to international hackers, miscreants, and disruptors. The cyber security interruption, data leaks, etc can seriously jeopardize the future growth of the organization.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Vaa Virgin in the Sales & Marketing industry. The Sales & Marketing industry is already at various protected from local competition in China, with the rise of trade war the protection levels may go up. This presents a clear threat of current business model in Chinese market.
Weighted SWOT Analysis of Virgin Atlantic Airways: Ten Years After Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers in the HBR case study Virgin Atlantic Airways: Ten Years After needs to zero down on the relative importance of each factor mentioned in the Strengths, Weakness, Opportunities, and Threats quadrants.
We can provide the relative importance to each factor by assigning relative weights. Weighted SWOT analysis process is a three stage process –
First stage for doing weighted SWOT analysis of the case study Virgin Atlantic Airways: Ten Years After is to rank the strengths and weaknesses of the organization. This will help you to assess the most important strengths and weaknesses of the firm and which one of the strengths and weaknesses mentioned in the initial lists are marginal and can be left out.
Second stage for conducting weighted SWOT analysis of the Harvard case study Virgin Atlantic Airways: Ten Years After is to give probabilities to the external strategic factors thus better understanding the opportunities and threats arising out of macro environment changes and developments.
Third stage of constructing weighted SWOT analysis of Virgin Atlantic Airways: Ten Years After is to provide strategic recommendations includes – joining likelihood of external strategic factors such as opportunities and threats to the internal strategic factors – strengths and weaknesses. You should start with external factors as they will provide the direction of the overall industry. Secondly by joining probabilities with internal strategic factors can help the company not only strategic fit but also the most probably strategic trade-off that Vaa Virgin needs to make to build a sustainable competitive advantage.
