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

● Air travel becoming a commodity ● little differentiation between

airlines ● Low barriers for switching

● Strong company culture ● Use of entertainment

background ● Combination of low cost and

innovation

Solutions

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:

o 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

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

● customer satisfaction

weaknessES ● small market share with limited routes ● poor reviews of first class

OPPORTUNITIES ● 2014 IPO ● current gas

prices

THREATS ● growing market for low cost airlines with

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 o North to South

Recommendations ● Increase domestic flight routes

Codesharing - Delta ● SHARE airport space in

SouthEast hubs o Atlanta o Miami o New Orleans

Recommendations

INVESTMENTS ● Marketing team & CRM

● Employee acquisition & training

● expanded fleets

● general operating costs

RETURNS ● increased market share

● increased profits

Thank you