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1. Critically examine the relationship and the need for compatibility between corporate strategic and functional management policies.

2. Analyse the internal and external influences on corporate objectives and strategy.

3. Demonstrate the need for flexibility in strategic management and the practical limits of quantifying corporate strategy.

Advantages of Strategic Planning

This report focuses on Virgin Airways to conduct the overall analysis.  It is a British airline with the head office in Crawley, United Kingdom. There are more than 8,875 employees in the organization who are conducting their routine activities. The report will consider the advantages of strategic planning in British Airways.

It is evaluated that strategic planning plays a great role in operating the overall activities of the company.  If planning is done in the company then it can be simple for the company to complete the routine activities in a proper way. There are many advantages that can help the company to complete the assigned task in a proper manner. The advantages that can be attained by the company through strategic planning are creating goals. The process of planning assists the company to enhance the performance of the employees (Lohmann and Spasojevic, 2018).

It is analyzed that by having proper planning in the organization the company can easily reduce duplication of work. Planning can help the employees to conduct the activities in a right direction. It is analyzed that by having strategic planning the company can easily analyze the strength and weakness which are related to the competitors (Taneja, 2016).

Competitive advantage can be created by having proper strategic planning and it helps to analyze the competitive advantage prevailing in the market. It is evaluated that reduce the risks and also assist the employees to adopt the changes that are made by the company (O'Connell and Williams, 2016 ).Strategic planning also helps in proper utilization of resources and minimizes the wastage of the resources. In the process of planning the information is given to the top management so that so that the changes and correct decisions can be taken so that growth can be achieved by the company. Virgin airways can easily achieve large market share with proper planning (Porter and Kramer, 2019).

Strategic planning helps to forecast the overall activities of the organization and it is seen that if activities are forecast than it can easy to accomplish overall target of the organization. At the time when the employees of the organization are conducting the activities, it is seen that proper evaluation is done so that hindrances can be minimized and productivity can be enhanced. In the context of airline industry, it is seen that if strategic planning is done properly then it can be easy to conduct the overall activities in a smooth manner (Veth et al., 2017).

Internal Analysis using VRIO Model

Internal analysis of the company is related to the overall competencies of the company. To conduct the overall internal analysis of Virgin Airways the emphasis will be given on the VRIO Model in which analysis of the company resources and competitive advantage is discussed. It is analyzed that internal analysis assists to analyze the strength and competency of the organization.  Internal analysis helps to achieve the goals and objectives. Goodwill can be maintained if proper planning is there in the company. It is seen that internal analysis helps to increase the strength of the company.  Internal analysis is done when the company wants to enter the market (Pearson et al., 2015).

In the process of planning analysis related to external plays a great role. It is considered so that the strategies can be reviewed easily. It is seen that analysis can also help to compete in the overall competitive scenario in the market. Also, external analysis helps to analyze the competitors in the market. In external environment Porter, five force models will be explained of the company.

VRIO MODEL is one of the parts of the internal environment and it is used so that proper analysis of environment can be done properly. It is analyzed that the company has many resources that can assist to sustain in the competitive environment. One of the strongest resources of the company is goodwill (Analoui, 2017).But in the recent scenario, the customer service and human resources are a competitive advantage for the company. 

RESOURCE

VIRGIN BRAND

FINANCE

REPUTATION

CUSTOMER

GEOGRAPHIC LOCATION

TECHNOLOGY

HUMAN RESOURCES

Value

Y

Y

Y

Y

Y

Y

Y

Rarity

Y

Y

Y

Y

Y

Y

Y

Inimitability

Y

Y

N

N

N

N

N

Organized

Y

Y

Y

Y

Y

Y

Y

The VRIO framework of the company states that the competitive advantage is achieved from the resources that are valuable, rare, inimitable and organized.  It is seen that the brand name is virgin and the capability of the company is to rise so that the reputation of the company can be enhanced and also a competitive advantage can be attained.  The competitive advantage of the company can be created with the technology and the location of the flights (Jackson, Schuler and Jiang, 2014).  But it is seen that there is a possibility of being imitated by the competitors.  The value of the company is related to the cabin crew and it is known because of the good degree of customer orientation. The rarity of the company offers a competitive advantage. The company uses engine technology which is very rare in the market. Imitability has a good reputation and also it is seen that the company support a valuable rare (Armstrong and Taylor, 2014).   

External Analysis using Porter's 5 Forces Model

It is seen that in the airline industry is bound and restricted by taking into consideration buyer side instead of the supplier side. This is one of the reasons the cost is low of the services offered to the customers.  There are many competitors who have entered the market (Gross and Lück, 2016).  So, it is seen that competition level is high. It is seen that airline industry is saturated with more and more carriers who are entering the sector so that profits can be earned. It is also seen that in the airline sector the rivalry is enhancing day by day with the main motive to earn profits so that growth can be achieved in the market (Holloway, 2017).

The suppliers of the company are the aircraft makers like Airbus and Boeing and also the vendors who support the aviation fuel companies. The suppliers are also the people who make spare parts for the company (De Neufville, 2016). The power of the supplier is low. It is seen that jet fuel is used as a premium product whose buyers are not many and is considered as a favorable product for the organization. Also, it is considered that airline sector is related to the few carriers and many suppliers of the business. The sector has an upper hand with the interaction with the suppliers of the company.

Customers have a power just because of the great distribution systems. Also, there are many channels through which booking of the tickets can be done easily. The buying power of the customers has given impact on the company because there are many choices that are related to the fare (Eaton, 2017). It is seen that charges are low if a business model is considered by the companies. There are many options that are given to the customers like booking tickets. It is seen that company should focus on the customers so that growth can be achieved in a proper manner and also it is seen that satisfaction level can be enhanced effectively. The process of booking tickets has been done in a simple way so that growth can be achieved in the market (Bratton and Gold, 2017).

The substitution rate is high in the company as there are many options available to the customers to travel. It is seen that just because of recession companies are taking into consideration many other options like virtual meetings and Telecommunication so that continuity in the work can take place (Wensveen, 2018). Also, there are many people who have started to enhance the leisure travel so that cheaper choices can be considered. There are many people like in west who give more preference to travel by air, so it is seen that the rate of substitution is not so high as compared to other factors (Hill, Jones, and Schilling, 2014). 

Strengths, Weaknesses, Opportunities, and Threats

In the airline industry, there is a high level of threat of new entrants. In this industry, it is seen that the airlines are not able to exist once they are suppressed by the regulators and they have many obligations to complete the task. They are also related to safety, financial safety, and trustworthiness (Parise, 2017). The company has to face tough competition due to the new entrants that take place. Also, there are tight regulations that should be taken into consideration by the company so that activities can be conducted smoothly (Hollenbeck and Jamieson, 2015).

From the analysis done in Section 1, it is depicted that there are many strength, weakness, opportunities, and threats that are analyzed in the context of Virgin Airways.  It is seen that one of the major strength of the company is that the company has a good image in the market.  For the company, it can be easy to enhance the market share on the international platform so that profitability can be enhanced effectively. As the company has a good image in the market it is seen that the satisfaction level of the customers can be enhanced.  The suppliers of the company are sufficient which help to conduct the activities in a smooth manner. It is seen that if suppliers of the company are sufficient then it can be easy to conduct the routine activities in an effective manner.

 The services that are offered by the company are good and customers also feel good at the timing of availing the services. It is evaluated that company offers good services to its customers and try to enhance the satisfaction level of the customers. Also, the major strength of the company is related to the employees. There are more than 8000 people who are employed in the organization and conduct the activities on the routine basis.

 The threats possessed by the company are related to the rise in the fuel cost and also change in the regulations of the aviation.  It is also seen that competition level is enhancing day by day in the airline industry which has given negative impact on the overall activities of the company.

If the focus is given to the opportunities then it is analyzed that the company has its leverage for its strong brand presence so that penetration can be done on a global basis. The company can also enhance its international routes and destinations. It is analyzed that Heathrow terminal is one of the largest hubs globally and the activities are conducted through it only in an effective manner. The weakness that is seen in context to the company is that there are many competitors who are prevailing in the market and it has affected the market growth rate of the company (Pisano, 2017).  It is seen that the global presence is limited in the emerging economies. It is also seen due to high competition level the company is not able to achieve large market share. Latest technologies should also be considered by the company so that growth can be achieved easily and in a proper manner (Truong et al., 2017).

Conclusion

By analyzing all the factors it is seen that company should focus on offering effective services to the customers so that demand for the services can be enhanced. It is also important for the company to focus on marketing so that growth can be achieved in a proper manner.  Marketing can be done by the company by giving discounts to the customers so that they can be aware of the services that are offered.  It is seen that if a company takes into consideration this strategy than it can be easy to minimize the competition level prevailing in the market.  It will also assist in achieving the competitive advantage and a large market share. Also, the company should maintain proper resources so that the profits and growth can be achieved in next 3 to 5 years.

It is also seen that company should focus on increasing the quality of the services so that image of the company can be maintained in the market. Virgin airways should also focus on partnering with the other airlines so that large market share can be achieved in an effective manner. Virgin airlines can penetrate into the profitable markets that can help the company to expand in each and every area.

Conclusion 

It is analyzed in the report, that company can enhance the market share with the help of proper marketing and also it will help to enhance the demand for the services offered by the company. Virgin airways should try to minimize the competition level by considering effective services like offering services at low prices so that customers can be attracted towards the product. The company should try to offer services in every area so that demand can be enhanced effectively.  

References 

Analoui, F. ed., 2017. The changing patterns of human resource management. Routledge.

Armstrong, M. and Taylor, S., 2014. Armstrong's handbook of human resource management practice. Kogan Page Publishers.

Bratton, J. and Gold, J., 2017. Human resource management: theory and practice. Palgrave.

De Neufville, R., 2016. Airport systems planning and design. Air Transport Management: An International Perspective, p.61.

Eaton, J., 2017. Globalization and human resource management in the airline industry. Routledge.

Gross, S. and Lück, M. eds., 2016. The low cost carrier worldwide. Routledge.

Hill, C.W., Jones, G.R. and Schilling, M.A., 2014. Strategic management: theory: an integrated approach. Cengage Learning.

Hollenbeck, J.R. and Jamieson, B.B., 2015. Human capital, social capital, and social network analysis: Implications for strategic human resource management. The Academy of Management Perspectives, 29(3), pp.370-385.

Holloway, S., 2017. Straight and Level: Practical Airline Economics: Practical Airline Economics. Routledge.

Jackson, S.E., Schuler, R.S. and Jiang, K., 2014. An aspirational framework for strategic human resource management. The Academy of Management Annals, 8(1), pp.1-56.

Lohmann, G. and Spasojevic, B., 2018. Airline business strategy. The Routledge Companion to Air Transport Management, p.139.

O'Connell, J.F. and Williams, G., 2016. Airline Strategy: Keeping the Legacy Carrier Competitive. How Can Mature Airlines Stay Ahead in the Low-fare Airline Era?. In Air Transport in the 21st Century (pp. 179-194). Routledge.

Parise, G., 2017. Threat of entry and debt maturity: Evidence from airlines. Journal of Financial Economics.

Pearson, J., O’Connell, J.F., Pitfield, D.E. and Ryley, T., 2015. Competition Between Asian Network Airlines and Low-Cost Carriers: Strategic Analysis. Transportation Research Record: Journal of the Transportation Research Board, (2501), pp.56-65.

Pisano, G.P., 2017. Toward a prescriptive theory of dynamic capabilities: connecting strategic choice, learning, and competition. Industrial and Corporate Change, 26(5), pp.747-762.

Porter, M.E. and Kramer, M.R., 2019. Creating shared value. In Managing Sustainable Business (pp. 327-350). Springer, Dordrecht.

Taneja, N.K., 2016. Designing future-oriented airline businesses. Routledge.

Truong, Y., Klink, R.R., Simmons, G., Grinstein, A. and Palmer, M., 2017. Branding strategies for high-technology products: The effects of consumer and product innovativeness. Journal of Business Research, 70, pp.85-91.

Veth, K.N., Korzilius, H.P., Van der Heijden, B.I., Emans, B.J. and De Lange, A.H., 2017. Which HRM practices enhance employee outcomes at work across the life-span?. The International Journal of Human Resource Management, pp.1-32.

Wensveen, J., 2018. Air transportation: A management perspective. Routledge.

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