Virgin Australia Holdings Ltd Situational Analysis

Topics: Virgin Blue, Strategic management, Airline Pages: 6 (1695 words) Published: August 22, 2013
Virgin Australia Holdings Ltd Situational Analysis

Word Count: 1080

Table of Contents
Introduction3
Strategic business units4
Situational analysis5
Internal Environment5
Product5
Price5
Place5
Promotion5
People5
Process6
Physical Environment6
External Environment7
Markets7
Competitive environment7
Economic environment7
Demographic environment7
Social and cultural environment7
Political and legal environment7
Technological environment8
SWOT Analysis9
BCG Matrix10
BCG Paragraph10
References11

Introduction

Virgin Holdings Ltd is an expert in the domestic and international travel industry. Previously known as Virgin Blue, and came to the Australian market in year 2000. Virgin is part of Virgin Group consisting of 400 other companies and founded by Richard Branson. At fiscal year end June 2012, flights operated reached 162,817 and 19,468,929 people were carried to 52 destinations. Revenue is $4,175 million with 5,300 employees. Virgin operates globally but domestic operations are the main income stream. Product line for short haul and long haul international flights as well as domestic include saver lite, saver, flexi, premium saver, premium, business saver, business.

Strategic business units

Virgin holdings limited provide international and domestic flights, as well as tourist package deals. Virgin’s main competitor is Qantas airlines in all strategic business units, SBUs. BCG matrix finds that Qantas is bigger than Virgin in all SBUs in respect to market share by triple the size. Virgin’s growth rate is approximately equal in difference between international, domestic and tourism with domestic being the highest standing at 5.23%. This report will uncover the situational analysis strictly at a management level with links to marketing theories and concepts.

Situational analysis
Internal Environment
Product
* Saver lite, saver, flexi, business saver and business are passenger types of air travel available. * Difference of products is categorized through changes of rights to a consumer. This includes booking changes, booking cancelations, in-flight entertainment, food and beverage, checked baggage, advance seat selection, extra legroom, priority check-in, priority boarding, and lounge entry. * Advance seat selection category is the only option available to all five-passenger types. * Business saver and business are offered all the categories equally. * Saver lite, saver, and flexi are offered lesser categories, however these categories are available for purchase, except priority check-in and priority boarding. Also, saver lite cannot add a bag after or during purchase. Price

* Prices of domestic fares vary upon categories chosen, one-way or round-trip as well as destination. * Changes and cancellation fees fall into two categories. One, change of flight fee, and second is complete cancelation fee. Business saver and business are not charged with a fee for cancelation of flight. Also, flexi is included in fee for flight change to be only the fare difference. * $7.70 is booking fees through credit or debit card for the five passenger types. $35 is also for all passenger types who attempt to change, make or cancel a booking through the Virgin Guest Contact Center or Airport Service. * All cancelation and change fees are per booking, per person. Place

* Bookings are made available through Virgin’s website, local agents or others online such as Expedia and many more websites. * Bookings are also available through the airport services as well as Virgin Guest Contact Center. * In all, booking, changing or canceling flights are available through phone, in person, and online. Promotion

* Agents can offer lesser prices for ticket bookings, and can alert consumers of sales. * Lower prices happen during low travel times to encourage people to fly. However, holiday special offers still exist. * Price...

References: Financial Review. 2012. Qantas Domestic cuts costs to compete with Virgin. [online] Available at: http://www.afr.com/p/business/companies/qantas_domestic_cuts_costs_to_compete_kUtOHoGluRhUlTloNAFvrM [Accessed: 22 Aug 2013].
Insideview.com. 2012. Virgin Australia Holdings Ltd - Company Profile by Insideview. [online] Available at: http://www.insideview.com/directory/virgin-australia-holdings-ltd [Accessed: 23 Aug 2013].
Insideview.com. 2012. Virgin Australia Holdings Ltd - Company Profile by Insideview. [online] Available at: http://www.insideview.com/directory/virgin-australia-holdings-ltd [Accessed: 22 Aug 2013].
Mis.kent.edu. 2001. Competitive Environment of the Airline Industry. [online] Available at: http://mis.kent.edu/Users/weinroth/public/July%208%20Southwest%20Progress%20Report.htm [Accessed: 22Aug 2013].
Reuters.com. 2013. Virgin Australia Holdings Ltd (VAH.AX) Key Developments | Reuters.com. [online] Available at: http://www.reuters.com/finance/stocks/VAH.AX/key-developments/article/2789346 [Accessed: 22 Aug 2013].
Sita.aero. 2013. Technological trends and their impact on the airline industry | SITA.aero. [online] Available at: http://www.sita.aero/content/technological-trends-and-their-impact-airline-industry [Accessed: 22 Aug 2013].
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