Below is a Sample Paper. You Can Order a Custom Essay Written From Scratch From Our Website. Click Here to Order.
– You are required to undertake and produce a strategic report that addresses the following three (3) questions:
1. To what extent does the
3. What internal stimuli have influenced the
-For a specific delineation of the required elements that will
– Business strategy concepts, theories, models
* Week 7: Extended business strategy – The triple bottom line
* Week 8: Strategic leaders
* Week 9: Talent management
* Week 10: ‘Resources’ or people?
* Week 11: Equal opportunity?
Virgin Australia-Below is a Sample Paper. You Can Order a Custom Essay Written From Scratch From Our Website. Click Here to Order.
Strategic management entails formulation and incorporation of organizational goals and programs taken by the top management of a firm. Usually, initiatives are implemented in consideration of the available resources as well as the internal and external factors affecting a business. Strategic management offers the overall direction to a business and tends to specify the objectives and policies of a company (Bartlett & Ghoshal, 1991). Just like any other company, Virgin Australia embraces strategic management to evaluate its business operations. The primary aim of the report is to generate constructive findings regarding the strategic management of Virgin Australia.
Virgin Australia, formerly referred to as Virgin Blue, is a globally renowned company. It entered for the first time into the Australian airline sector in 2000 (“Virgin Australia Company Overview | Virgin Australia,” n.d.). Its entry brought forth real rivalry in the leisure market but it later on rebranded itself in May 2011 as a serious competitor to its primary rival, Qantas. The firm is run by a talented group of executives and its activities are overseen by the board of directors that is required to present useful judgment to the company. The efforts Virgin Australia has made of the years have often been acknowledged.
There are several reasons behind the undertaking of the report. One of the objectives the report seeks to meet is to determine the corporate social responsibility of Virgin Australia. Another aim for the project is to ensure that the positioning strategy for the company is well identified. Besides, undertaking the report will depict some of the internal stimuli responsible for the company’s action to rebrand itself.
Time was a major limitation in regards to compiling the report. A vast amount of information was required to complete the project yet the time frame provided was minimal. Despite the limitation, reliable and comprehensive information was gathered.
The triple bottom line (TBL) is a business concept that focuses on three aspects of performance which include economic, environmental and social (Lindsay, n.d.). Based on the TBL concept, the responsibility of a company is much wider as it surpasses the traditional role of simply generating merchandizes primarily for profit. The conceptual structure is based on the notion that an organization should measure its productivity through its ecological impact, economic value as well as responsibility towards people. In general, the TBL framework depicts a firm’s role to contribute to the economy, planet and the people significantly.
Figure 1: Triple Bottom Line. (Lindsay, n.d.)
The environmental responsibility is seen through a firm’s undertakings aimed towards protecting the planet’s nature. According to the stakeholder theory, an enterprise should not create value for all its stakeholders and not just its shareholders (Cantrell, Kyriazis & Noble, 2015). The theory addresses the ethical part of the business as it greatly emphasizes the need to safeguard the interests of other parties involved such as the community. The air travel industry is a substantial contributor to the issue of climate change and for this reason, Virgin Australia actively seeks strategies that can help minimize the environmental effects of its business. According to Sheffield (2016), the Virgin Australia Group aspires to reduce its total emission of greenhouse gases (GHGs) by 50% as at the year 2050. The firm has invested in fuel-efficient schemes that identify ways to optimize its flying and its aircrafts to monitor and restrict fuel utility as well as emissions.
Additionally, the company recently eliminated over 250,000 plastic straws and 7 million stirrers from both its lounge and in-flight operations (“Virgin Australia has had the last straw | Virgin Australia,” 2018). Consequently, Virgin Australia replaced the merchandizes with bamboo stirrers as well as paper straws. The change may seem small but it certainly has a positive effect on the environment (“Virgin Australia has had the last straw | Virgin Australia,” 2018). Virgin Australia understands that it is the firm’s responsibility to prioritize implementation of sustainable behavior.
The notion of the social bottom line refers to the enactment of favorable and fair organizational practices towards the workforce, the society, and the region in which a business operates (Żak, 2015). Virgin Australia is a company committed to providing gains to numerous constituencies and does not exploit any of its social components. Lindsay (n.d.) depicts a weak environment as one of the causes of unethical behavior in business. Diversity is of importance to a company as Clark (2014) and Ashley & Empson suggests. Evidence shows Virgin Australia greatly values inclusion (Virgin Australia Airlines, 2013). The group has reinforced its corporate culture to prevent the occurrence of immorality.
It is the policy of the firm to ensure all staffs, prospective workers, clients, vendors, and contractors are treated equally and fairly despite one’s race, gender, sexual orientation, political opinion, religion, nationality, marital status, and disability. The recruitment and selection process at Virgin Australia is transparent and involves procedures that ensure qualified candidates from distinct backgrounds can apply for the available vacancies without unlawful prejudice. The company is dedicated to establishing a workforce that is a reflection of its surrounding societies.
The dimension of profits is an economic advantage which the community also exploits. The economic aspect entails business activities that contribute towards the economic health of an institution and the society at large. As Żak (2015) depicts, the dimension should not be restricted the internal financial earnings of a company. Besides, the current generation seems to prefer companies to focus on not just making profits but also on other aspects including people and the environment. In fact, Lindsay (n.d.) shows that millennials show considerable loyalty to their employers. Therefore, incorporating an economic bottom line in a business would boost levels of employee satisfaction and subsequently decrease employee turnover rate.
Virgin Australia is aware of the traditional manner of determining profits and losses. Nonetheless, the Group plays a crucial part in supporting the growth of the Australian market through its operations. Virgin Australia provides over 70, 000 jobs in Australia and contributes approximately $3 billion to the Australian economy every year (Virgin Australia, 2017). The enterprise embraces activities that continue to promote the domestic economy.
Under the leadership of John Borghetti, a former chief executive officer (CEO), Virgin Australia transitioned to premium rivalry to its main competitor, Qantas, from a leisure airline to (Freed, 2018). According to Kaplan & Norton (2004), competitive advantage increases significantly when an institution can create for its consumers that which exceeds its cost of production. Superior value revolves around providing a lower price than rivals for the same benefits or offering unique gains for a relatively high cost. In this case, Virgin Australia adopted a premium strategy that would see people pay higher prices, though in exchange for enhanced and unique customer experience, than with Qantas. Ever since the year 2011, the Group has implemented some significant changes including the incorporation of novel first class lounges, menus on both the company’s Boeing 737 as well as A330 (Wilson, 2012). Moreover, the firm structured its fares and introduced an enhanced business class cabins. Virgin Australia has invested in improving its operations to enhance user experience.
Virgin Australia also announced a new structure of ownership for the enterprise, with a distinct holding firm that was established to facilitate foreign investment. As Porter (1985) depicts, competitive advantage within a sector can be significantly improved through establishing interrelationships with other enterprise units rivaling in related sectors. Evidently, with the case of Virgin Australia, the expansion of the organization’s regional network especially in Queensland and New South Wales (NSW) has complimented yielded fares (Wilson, 2012). Besides, their new relation with SkyWest has pushed the company’s services into the western side of the globe. As a result of an expanded company network, the enterprise had accrued an increment of high yield fares by about 121 percent (Wilson, 2012). The codeshare union overseas with airlines such as Delta Etihad, Virgin Atlantic as well as Air New Zealand feeds the traffic into the Australian network.
The premium pricing strategy brings about positive impacts on a company (Ghemawat, 2007). As for Virgin Australia, its passenger bookings, for instance, have increased by about 13.6% (Wilson, 2012). Additionally, international earnings have also risen remarkably. Based on Wilson’s article (2012), Virgin Australia considers its strategy to reposition the enterprise to have a material effect on the financial status of the business. The Group has attained around 5% domestic growth which aligns with its 4-6% goal. Virgin Australia is highly committed to sustaining its leading position in the airline industry over the long-term.
|Premium Pricing.||Enhance crew presentation.Introduce aircraft livery.Establish relationships across the world.Incorporate first class lounges||Brand awareness.Increased market share.Customer loyalty.|
Figure 2: Positioning Strategy for Virginia Australia
4.0 The Internal Stimuli have influenced Virgin Australia to adopt this Positioning
One of the factors that resulted in Virgin Australia adopting its current position is its financial status. Just as Porter (1985) claims, a company in a competitive industry does not necessarily translate into attractive profits and this is vivid in the case of Virgin Australia.At the time the Group was rebranding, it had suffered significant losses. O’Sullivan (2011) shows that the loss had been attributed to the high fuel costs as well as low rates of customer spending. Moreover, the stock was still quite down compared to the performance depicted in the overall market. As a result of making loses constantly, the company found it essential to strengthen its airline brand even if it meant utilizing substantial revenue.
Another internal stimulus that led the changes of the Group’s brand was competition. During the same period when Virgin Australia was making losses due to the occurrence of natural disasters, on the other hand, Qantas was making profits. As a result of natural disasters, the financial impact on the company translated into approximately $224 million (Qantas Airways Limited, 2011). Despite being in a challenging environment, Qantas depicted a strong performance as its revenue rose across all business segments. Based on Qantas’ annual report, the firm’s strategy to restore the enterprise to competition and profitability facilitated the remarkable financial performance.
According to Hanson, Hitt, Ireland & Hostisson (2014), competition rivalry can be a source for success or even a failure to enterprises. Rivalry tends to determine the appropriateness of an organization’s practices that can bring about overall productivity such as integrating a cohesive culture and embracing technology. As for Qantas, it utilized the approach of remaining the best for international travelers, opening opportunities to the planet and establishing a strong business. Qantas had set the standards and Virgin Australia had to better their goods and services compared to Qantas. There was a great possibility that lowering the prices might have led to the continued poor performance for Virgin Australia. Thus, increasing the prices in exchange for remarkable value seemed reasonable to outdo Qantas.
Following Qantas’ footstep of opening gateways to the outside world, Virgin Australia found it important to establish relations with other airlines. Additionally, Virgin Australia focuses on a gap that its rivals including Qantas had neglected. As Wilson (2012) shows, the company enhanced its crew presentation and introduced aircraft livery. The entire enhancement process resulted in the accumulation of a revenue of around $2 billion but this meant increasing the prices for customers. Virgin Australia had to uniquely position itself to address consumer needs at a premium price.
In brief, the main purpose of the report is to establish reliable findings in regards to the strategic management of Virgin Australia. Other than generating profits, Virgin Australia concentrates on ensuring that other stakeholders including benefit. The Group focuses on practices that are likely to benefit people and the planet at large. Currently, the company has positioned itself a great competitor in the airline industry. The firm has incorporated a premium strategy that translates to exchange of unique services and products at a higher cost than its rivals. Implementation of the approach was however influenced by internal factors which included the financial status of the company and competition. The Group embraces corporate social responsibility as it observes the economic, environmental and social aspects of the triple bottom line.
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