Virgin Blue
AJNRR Consulting
Virgin Blue Holdings
A Strategic Analysis
Prepared by:
Andy Ley
Joachim Brastein
Nathan Westgarth
Rishi Dave
Ron Stanley * * Contents 1. Executive Summary 2 2. Virgin Blue Now 3 2.1 Introduction 3 2.2 Virgin Blue Overview 3 2.3 Virgin Blue’s Current Strategy 3 3. Outside Virgin Blue 4 3.1 Macroenvironment 4 3.2 Industry Analysis 4 4. Inside Virgin Blue 6 4.1 Resources 6 4.1 Capabilities, Distinct Competencies and Competitive Advantage 6 5. The Virgin ‘Blues’ (Strategic Issues) 7 5.1 Positioning in the Market 7 5.2 Challenging Economic Conditions 8 6. What to Do with Virgin Blue? (Strategic Options) 9 6.1 Cost Leadership Strategy 9 6.2 Focus Strategy 9 6.3 Differentiation Strategy 9 6.4 Strategy Analysis and Choice 10 7. Virgin Blue Flying Ahead (Strategic Implementation) 11 7.1 Business Level Strategy 11 7.2 Corporate Level Strategy 12 7.3 Functional Level Strategy 13 7.4 Global Strategy 13 8. Virgin Blue Summary and Future Outlook 15 9. References 16 Appendix 1. Virgin Blue Detailed Overview and Shareholding 18 Appendix 2. Virgin Blue’s ‘New World Carrier’ Strategy 19 Appendix 3. Detailed Macroenvironment Analysis 20 Appendix 4. Detailed Industry Analysis 23 Appendix 5. Limitations of the PESTALG and Porter’s Five Forces Models 26 Appendix 6. Virgin Brand Creation and Rebranding 27 Appendix 7. Implementation for Varying Levels of Collaboration 28 Appendix 8. Organisational Structure and Integration Difficulties 29
Executive Summary
This report analysed the strategic position of Virgin Blue Holdings. The analysis highlights the current challenging economic environment and the strategic predicament in which Australia’s second largest airline finds itself.
It was identified that Virgin Blue currently lacks a sustainable competitive advantage and is facing two
Virgin Blue Holdings
A Strategic Analysis
Prepared by:
Andy Ley
Joachim Brastein
Nathan Westgarth
Rishi Dave
Ron Stanley * * Contents 1. Executive Summary 2 2. Virgin Blue Now 3 2.1 Introduction 3 2.2 Virgin Blue Overview 3 2.3 Virgin Blue’s Current Strategy 3 3. Outside Virgin Blue 4 3.1 Macroenvironment 4 3.2 Industry Analysis 4 4. Inside Virgin Blue 6 4.1 Resources 6 4.1 Capabilities, Distinct Competencies and Competitive Advantage 6 5. The Virgin ‘Blues’ (Strategic Issues) 7 5.1 Positioning in the Market 7 5.2 Challenging Economic Conditions 8 6. What to Do with Virgin Blue? (Strategic Options) 9 6.1 Cost Leadership Strategy 9 6.2 Focus Strategy 9 6.3 Differentiation Strategy 9 6.4 Strategy Analysis and Choice 10 7. Virgin Blue Flying Ahead (Strategic Implementation) 11 7.1 Business Level Strategy 11 7.2 Corporate Level Strategy 12 7.3 Functional Level Strategy 13 7.4 Global Strategy 13 8. Virgin Blue Summary and Future Outlook 15 9. References 16 Appendix 1. Virgin Blue Detailed Overview and Shareholding 18 Appendix 2. Virgin Blue’s ‘New World Carrier’ Strategy 19 Appendix 3. Detailed Macroenvironment Analysis 20 Appendix 4. Detailed Industry Analysis 23 Appendix 5. Limitations of the PESTALG and Porter’s Five Forces Models 26 Appendix 6. Virgin Brand Creation and Rebranding 27 Appendix 7. Implementation for Varying Levels of Collaboration 28 Appendix 8. Organisational Structure and Integration Difficulties 29
Executive Summary
This report analysed the strategic position of Virgin Blue Holdings. The analysis highlights the current challenging economic environment and the strategic predicament in which Australia’s second largest airline finds itself.
It was identified that Virgin Blue currently lacks a sustainable competitive advantage and is facing two
References: Aaker, D. & Mills, M. 2005. Strategic Market Management – Pacific Rim Edition. Queensland: John Wiley & Sons. Conrady, R. and Martin, B. 2008, Trends and Issues in Global Tourism 2008, Springer, New York. Hill et al. 2007, Strategic management, An Integrated Approach, John Wiley & Sons, Milton. Virgin Blue’s ‘New World Carrier’ Strategy The following is an extract from Virgin Blue Airlines’ Annual Report (2007), detailing the New World Carrier strategy currently being adopted by the Virgin Blue Group of airlines. According to the Porter’s Five Forces framework, the attractiveness of an industry as measured by the long term return on investment of the average firm depends largely on five factors that influence profitability (Aaker & Mills, 2005).