Strategic Management: Virgin Airlines

Australia
Table of Contents
Introduction .................................................................................................................................................. 1
Strategic Frame Work: .................................................................................................................................. 1
Vision ......................................................................................................................................................... 1
Mission: ..................................................................................................................................................... 2
Goals: ........................................................................................................................................................ 2
Rationale behind these goals: ............................................................................................................... 3
Objectives: ................................................................................................................................................ 3
Strategic Implementation Management Plan:.............................................................................................. 4
Justification: .................................................................................................................................................. 6
Conclusion: .................................................................................................................................................... 6
References .................................................................................................................................................... 7

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Introduction
Strategic management has been the integral part of any organization around the world. Strategy
refers to those plans of actions that are built to achieve organizational goals in short. It is
formulated by the top management of any company. Fundamentally strategic management is
quite different from strategic management. Strategy refers to either plans made or the actions
taken, in any effort to help an organization fulfill its intended purpose. (Miller, 1996) As it this
assignment asks to deal as a strategist of a firm I chose Virgin Airlines Australia. I have chosen
this firm as it has quite distinguishing success history in Australia and now I will discuss
throughout the article how it can thrive more in near future and becoming the most value added
contributor in this industry of Australia.
Strategic Frame Work:
To be a key strategist first I have to set forth some goals supported by precise objectives to give
the employee of the organization and other relevant stake holders of the business where do I
want to see my business in next five years. This is very important for any organization to set
some valid goals and objectives for organization. The valid in terms of these should not be too
short to provide accurate direction to the people involved in achieving certain standards and also
it must not be too broad that might give an ambiguous idea to the people who have the largest
duty to meet these goals. (Viljoen, 1994)
Vision
Well articulated vision for the next five years is very necessary in order to get people inspired
who have the role to accomplish this vision. Most of times visions in any company is too
intrinsic to articulated in words mostly it is reflected by the behavior of the top management of
the firm. But it is indeed necessary to express an explicit vision for the company for getting
people involved in the organization. For this Ive set number of visions for Virgin. They are
We will offer air transport services of the highest quality and value with keeping in
minds the needs of the customers. We will be very responsive with regard to quickness,
respect and integrity.
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We will be dedicated to give employees with best working environment, our most
essential resource. We will focus on continuous improvement, group work and total
quality management all around the organization.
We will ensure a sustainable growth of our company and through appropriate leadership
and creativity we will meet all the challenges to deliver greater value to our customers
compared to our competitors.
These goals must be inconsistent with the mission, objectives and goals of the company. As we
are going to discuss about it later we could see these visions have been set. With these well
portrayed visions we will be the largest contributor in the Australian airline market. (Forsyth,
2002)
Mission:
Mission takes vision to a more tangible level. It discusses about basic purpose or why being like
that or discuss about what is so distinctive about my organization. Ive set logical mission for
next five years of Virgins operation in Australia.
We will be the market leader in Australian aviation industry and related information services.
This leadership will accomplished by
Setting an industry standard in aeronautical management
Providing best customer services based on international standard
Setting an open and collaborative culture which welcomes constructive changes in the
organization by focusing on innovation based reward system, balanced growth, safety
and equal opportunity for all employees by managing work force diversity appropriately
Goals:
1. Becoming the no. 1 airline company in Australia in terms of both profitability and market
share.
2. Creating more value for the customer by becoming more responsive to the needs of the
customer and providing customized services.
3. Building a positive working force by providing them adequate training, providing
adequate remuneration and rewards to make satisfied employees and also ensuring
working place safety.
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Rationale behind these goals:
The goals stated here are very consistent with one another otherwise it cannot be met properly.
Because in order to get no. 1 position in the market one must have to obtain more market share
this is in turn only possible by providing more value to customers. This can be done through by
pursuing various marketing tactics. This can be done through mass customization. That means
providing tailored facility specific to the needs of the individual customers. Employee is key to
the development of any company by managing them properly one can achieve the desired level
of target.(Hess, 1987) Because all of this set goals will be ended in smoke if it is not supported
by efficient personnel. Proper work force needed to be built up in order to remain competitive.
Because dissatisfied employee cannot get the desired outcome. Right kind of people must be
employed to the right place that means HR planning must also have to be consistent with the
overall goal of the company. To achieve these goals each and every resources within the
organization must be utilized fully supported by a good strategy. (Virgin, 2000)
Objectives:
Generally goals are broader terms that cannot be measured. So I have to set some specific
supporting these goals. How these goals could be achieved by quantitive measurement. Firstly, to
obtain the maximum market share of the Australian market first and foremost duty of any
business is to create customers. So in short term our focus will not be profit or revenue
maximization. We firstly look forward to capture the market as much as possible. By setting an
objective measurement of gaining 20% more market share of total market share each year by
running more extensive customer retention and customer acquisition program. (Wensveen, 2009)
Secondly, we will provide more value to the customers. Value is actually an abstract term very
difficult to measure in terms of numerical measurement. But economists suggest a way to
measure the value placed by customers that is consumer surplus. That is the difference maximum
amount a customer willing to pay and actual price of the product. This is also difficult to measure
objectively for individual customers because it is hard to define on which factors customers are
placing more value. But this could be easily observed by observing the customer retention and
acquisition rate. Minimum 98% retention rate and 20% acquisition rate for the company. Taking
initiatives, like mass-customization and after marketing. To ensure this Virgin needs to provide
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greater consumer surplus by optimum marketing mix compared to their competitor. (Forsyth,
1998)
Thirdly, Virgin has to assure an appropriate HR plan to meet all these goals make possible. For
that first we need to ensure a fair recruitment and selection procedure. So that everyone gets
assured that none in the organization got differential treatment for nepotism or any kind of
partiality. Everyone in the organization must be judged under the same criterion under the
specific departments personnel needs. Performance of the employee must be judged under
objective measurement standard. Company must give value to individual needs as all personnel
are not motivated to the same incentives. To measure these effects objectively HR manage
should observe some key variables as to measure HR performance as a whole. These variables
are absenteeism rate, employee turnover, remuneration and hiring & firing practices compared to
the industry set standard or average practices. Employee turnover must kept virtually is zero
given a year at least for the mid-level and line- managers. Top managers are likely to switch
from one company to another it is very difficult to resist. But this trend is also quite visible in
others part of the organization then it is very worrying for the organization. Absenteeism rate
must be kept minimum and check it why this is happening taking necessary measures to stop it.
(Borenstein, 1989).
Strategic Implementation Management Plan:
Strategic implementation plan must be align with the goals of Virgin. Ive decided to take several
steps to ensure that Virgin will reach its goals and objectives very efficiently and effectively.
Firstly we will look forward to making this company with the greatest reach in Australia. For
that we need to take into consideration of marketing activities on larger basis. Marketing
activities to the target market will ensure that people is aware of that brand and must design the
marketing activity such that we will be able to create strong brand awareness among the
customer that is,brand recognition & brand recall.(Keller, 2013) Though in airline business
customer posses least amount of brand loyalty, they value brand at least at the long hauls which
we served as FSC. While creating marketing activities we have to keep one thing mind is that
Virgin is now currently operating as a full service carrier which was a low cost carrier previously
but still has its operations as Virgin Blue at LCC market. This is our distinctive advantage as we
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can resist the incumbent actions of LCC market by Virgin Blue. Initially we will not be
concerned about economic concept of profit maximization as achieving greater market share is
our primary concern and once it is achieved it will be quite easier for us to make profit. (Stahl,
2001)
Secondly, we have to ensure that by being a FSC we have to ensure cost minimization as much
as possible. For that we need to ensure the capacity utilization properly. Very highly skilled
expert must be deployed in order to make proper fleet management. As we are a FSC we have to
follow hub & poke method to manage fleet if one delay occurs during peak period where there is
lots of congestion, it will have cumulative impact on overall performance of the whole flight
management. We will outsource cheap employee wherever possible to better utilize available
resources. (Schnell, 2003)
Thirdly, we have to create more value for the consumer compared to the other incumbents in the
market. For that we have to create services tailored to individual needs and capturing more
consumer surplus for those who value the service more than the others. This can be possible my
applying widely known term in airline pricing is the yield management. (Kons, 2007) This is one
kind of group pricing by which business travelers are separated from tourists and other general
customers. (Besanko, 2010) By this we will give discounts to our more price sensitive customers
by providing some purchase restriction requirement like, advance purchasing discounts (APD),
minimum stay period, and off-peak travel. These requirements cannot be fulfilled by the business
travelers. But to remain on the competitive edge with the other FSC we will also provide after
marketing programs, though we have some but we will diversify more in this regard to capture
more business class customers, for example frequent flyer program, providing various discounts
offers on hotels and others services if they travel with Virgin Airlines. (Knorr, 2004)
Finally, we have to implement an efficient HR plan in order to execute them all. This is very
vital for the overall success of the company. Because HR is the key to success for all
organizations. If plans are not supported by appropriate personnel whole strategic framework
will be vein. We will value equality in recruitment, selection, promotion, rewarding employees,
nepotism will be made punishable act. We have to manage work force diversity properly every
employee will be judged on same criterion irrespective of their race gender, race, religion, color
etc. Regarding this HR policy we should keep one thing in mind very carefully is that human
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being is not machine to optimize the effort of current employees we should also consider the
emotional part of the people. Because employee demand things which cannot be explained in
economic framework rather their very intangible in nature but can give immense amount of boost
up in the work. (Williams, 1994)
Justification:
This plan is justified as Virgin is supported by strong business conglomerate as it will not face
any kind of funding problem even if it needs to engage in war of attrition with others airline.
Innovation is well articulated in all part of strategic frame work that will help them to remain
competitive. Worker performance will also be judged in terms of same objective criterion so that
any kind of partiality will not be arised. Most importantly it has converted into a FSC from LCC
so it is well efficient in dealing with these LCCs.
Conclusion:
With this clear Vision, Mission, Goals, Objective and Operational plan I think virgin will Virgin
Airlines Australia will go on top in this market. As three is consistency in overall plan of the
company both in business level and in corporate level.








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References
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