Virgin Atlantic

Topics: Strategic management, Management, Business Pages: 6 (1985 words) Published: April 26, 2013
Virgin Atlantic Airways (VAA) was set up in 1984 to provide a competitive alternative for business and leisure passengers on long-haul routes between the UK and major destinations. It was founded by Virgin group management and in few decades time it became prominent figure in UK airline business. It has grown steadily over past 25 years and now serves 30 destinations in US, Africa, Asia from Heathrow, Gatwick, Manchester and Glasgow (Palmer, 2012). Currently Virgin Atlantic is managed by Singapore Airlines and Virgin group. In 2004, VAA introduced revolutionary upper class suite which was longest and most cosy fleet bed and seat in business class which was totally innovative and new idea for airline business. VAA also was first to come up with service like salon, cocktail bar, spa through its club house based on airport. Task 1:

Collaborative networks or strategic alliances are arrangements between businesses to co-operate with the express purpose of gaining competitive advantage. Collaborative businesses have become increasingly important means of acquiring competitive advantage for the business who are members of the collaborative network (Stonehouse, Campbell, Hamill, & Purdie, 2004). Recent experience of Virgin Atlantic highlights the need of collaboration to achieve competitive advantage. Virgin Atlantic leased access to a computerized booking system, which had been developed for its own use but then marketed to other airlines by British Airways. This made it particularly simple for British Airways representatives to enter Virgin’s. Collaboration between business firms takes place in order to absorb the skills and capacity of each other. The major benefits of co-operation to business firms is access to external/additional resources and how the external resources in combination with internal resources impact on the focal actor’s strategic identity in a business network. The extent of collaboration and co-operation depends upon the fulfilment of responsibilities of each parties involved in it. For collaboration to succeed, each partner must contribute something distinctive which benefits the other partner. Each partner must follow the following sets of principles to create a win-win situation for both parties: a) Collaboration doesn’t affect the company competition policy and it should be taken as another form of competition. So, company should always concerned about their partner and do not let them dominate in the competition. Company need to keep eye on their partner’s objective and understand how it will affect them. Company should enter with clear strategic objective in any kind of alliance b) The measure of success to each party is not concerned with the smooth relationship. Each partner entering in collaboration should strive for their own success despite of any occasional conflict. Few alliances remain win-win undertakings forever (Wit & Meyer, 2010). c) Parties involving in strategic alliance must know their boundaries because co-operation has its own limits. Companies should not compromise their competitive advantage. In many circumstances, company have to bargain on different grounds which go beyond the legal agreement or the aims of the top management. However, partners must monitor the request and actions of each other and remain in the limit of co-operation and collaboration. d) Co-operation and Collaboration is all about leading company towards better future by building their resources. But every strategic alliance provides company a realistic picture of their board capabilities and they should use these alliances to learn lesson for the future. Company should use the alliance to build skills in areas outside the formal agreement and systematically diffuse new knowledge throughout their organisations (Wit & Meyer, 2010). Strategic alliances provide company an edge to achieve competitive advantage but alliance have its own merits and demerits. Company stepping into alliance should be...
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