Purpose Develop long-term strategies and progressive options for - - PowerPoint PPT Presentation

Purpose

Develop long-term strategies and progressive options for Virgin America to increase its market share and competitive advantage in the airline industry.

Methodology

Porter’s 5 Forces Current Industry VRIO SWOT Analysis Perceptual Mapping Recommendations

Porter’s 5 Forces Model

Threat of New Entrants

• LOW

○ Large amount

• f money required

Buyer Power

• MODERATE

○ Fluctuating price schedule ○ Experienced vs. Novice customers

Threat of Substitutes

• MODERATE

○ Cars ○ Trains ○ Buses

Supplier Power

• LOW

○ Process of sales ○ Market of of the buyers

Competitive Rivalry

• HIGH

○ Price wars ○ High level of acquisition

Current Problems

• Air travel becoming a commodity
• little differentiation between

airlines

• Low barriers for switching
• Strong company culture
• Use of entertainment

background

• Combination of low cost and

innovation

Solutions

Who?

• Domestic Flyers
• Young
• “Self-Managed” Businesspeople
• Start-up to small business employees
• People who are always plugged into their

technologies

What needs to be satisfied? Technology + Low Cost

HOW? “FLY LOW-COST LUXURY”

• Features per Seat:
• Seat-to-Seat Chat
• Build Custom Playlists
• Food & Drink on Demand
• Live Television
• Power Outlets
• USB and RJ-45 Ethernet cord

How? Creating Value

• “Give guests what they have on the ground

and bring it to the sky”

• Upbeat, Modern Advertising

– Addressing “boring” airlines

• Social Media: YouTube Channel

VRIO

V → Unique focus on experience R → other airlines do not focus on experience for economy class. Virgin

• ffers first class experience for low cost, plus more

I → to imitate the technological features per seat would be costly for others

• → casual culture, strong values to ensure consistent flight experiences,

excellent marketing strategy contributing to brand recognition

Competitive Advantage

• Core competencies: Low Prices, Sleek design, Sustainability
• Capabilities: Corporate management and marketing

Resources

Tangible: Financial assets; aircrafts Intangible: Organizational culture; brand recognition

SWOT

strengths

• customer

satisfaction

weaknessES

• small market share with limited routes
• poor reviews of first class

OPPORTUNITIES

• 2014 IPO
• current gas

prices

THREATS

• growing market for low cost airlines with

special accommodations

Business Level Strategy

• Low Cost Airline Model

–Single Aircraft type –Point-to-Point routes

• Differentiation

–“A Breath of Fresh Airline” –Focus on Customer Experience

Perceptual Mapping

Recommendations

• Long-term marketing efforts
• Improve email marketing
• Improve First Class customer

service

Recommendations

• Increase domestic flight routes:

East Coast

• North to South

Recommendations

• Increase domestic flight routes

Codesharing - Delta

• SHARE airport space in

SouthEast hubs

• Atlanta
• Miami
• New Orleans

Recommendations

INVESTMENTS

• Marketing team & CRM
• Employee acquisition & training
• expanded fleets
• general operating costs

RETURNS

• increased market share
• increased profits

Thank you