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 of 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 Solutions ● ● Air travel becoming a commodity Strong company culture ● ● little differentiation between Use of entertainment airlines background ● ● Low barriers for switching Combination of low cost and innovation

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 o Build Custom Playlists o Food & Drink on Demand o Live Television o Power Outlets o USB and RJ-45 Ethernet cord o

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 offers first class experience for low cost, plus more I → to imitate the technological features per seat would be costly for others o → 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 OPPORTUNITIES ● ● customer 2014 IPO ● satisfaction current gas prices weaknessES THREATS ● ● small market share with limited routes growing market for low cost airlines with ● poor reviews of first class 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 o

Recommendations ● Increase domestic flight routes Codesharing - Delta ● SHARE airport space in SouthEast hubs Atlanta o Miami o New Orleans o

Recommendations INVESTMENTS RETURNS ● ● Marketing team & CRM increased market share ● ● Employee acquisition & training increased profits ● expanded fleets ● general operating costs

Thank you