Implementation of New Strategies Tactical Plans and Actions - Term Paper Example

Business Development Report at virgin Blue On Implementation of New Strategies, Tactical Plans and actions Student’s name: Abdullah AL Hammad Date: 4/24/2011 Table of Contents Cover page................................................................................................................................... 1 Contents....................................................................................................................................... 2 Cover letter.................................................................................................................................. 3 1.0 Abstract...................................................................................................................................4 2.0 Introduction............................................................................................................................4 3.0 Discussion of the current business environment and Marketing...........................................5 4.0 Proposed Strategies.................................................................................................................5 4.1 First Strategy...............................................................................................................5 4.1 Tactical plan and action..............................................................................................6 4.2 Second Strategy..........................................................................................................6 4.3 Tactical plan and action..............................................................................................6 4.4 Third strategy..............................................................................................................7 4.5 Tactical plan and action..............................................................................................7 5.0 Swot analysis...........................................................................................................................7 6.0 Internal and external environment factors................................................................................8 7.0 Conclusion................................................................................................................................9 References.....................................................................................................................................10 Virgin Blue To: Chief Executive Officer Mr. John Borghetti Subject: Virgin Blue Business Development Report. From: Abdullah AL Hammad Date: 4/24/2011 Dear Sir, It's my pleasure to express our sincere gratitude for the company’s performance and increase on the profits. The marketing strategies, innovation and inventions worked tremendously to make virgin blue an adorable airline. The human resources form our deep rival Qantas was an added advantage to several developments and economic growth at virgin blue. We thank you for all these developments but below are useful strategies for further growth. From the analysis, I recommend some new strategies: Expanding business to Africa’s major tourist destinations. Providing business class services to customers doing business in Africa. Forming direct routes to Asia for business class customers. The reasons for their adoption are, To generate more profits through the expansion of new business to Africa and Asia. This would create more jobs through the expansion of the human resource. To improve on our internal and external performance through this expansion. To reduce on the competition with other airline companies like Qantas for holiday maker’s customers or tourists within Australia and Europe. CC: Senior managers Abdullah AL Hammad. Report of Business Development at Virgin Blue 1.0 Abstract This report is divided into several sections. The first section is a cover letter addressed to chief executive officer of Virgin Blue, outlining the recommended strategies and the reasons for their adoption. Other sections include this abstract that gives the road map and summarizes the report where as the introduction introduces the main features of the report. There is a discussion of the current business at virgin blue as well as the proposed strategies together with the plans and actions that forms the core of this business development. Alongside these strategies is the swot analysis of Virgin Blue explaining the strength and weaknesses of the company together with the internal and external factors that influence the business environment? Lastly is the conclusion, summarizing the main findings of the report and reference page which acknowledges the source of this information. 2.0 Introduction Virgin blue is an airline company located in Bowen hill, Brisbane in Australia. It was incorporated in 2000 and began with domestic flights from Brisbane to Sydney daily. The company through research and marketing expanded their services to most cities in Australia and to several holiday destinations. However, the boost of virgin blue business was a result of the collapse of Anset airline in September 2001. This saw a rapid growth in business through the buyer expansion strategy by selling tickets. The upheavals that saw America being attacked by the al-Qaida terrorists together with the war in Iraq and Afghanistan marked a turning point in the business industry of several airlines. Tourism declined on the global market but domestic business expanded. This left a business vacuum which Virgin Blue entrepreneurs utilized to their success in 2000. After its incorporation, a marketing department was set up to purposely fill the domestic market by targeting customers from Sydney to Brisbane and later to several tourist cities within Australia. It’s upon this backdrop that the business grew with later expansions between 2004- 2010. The report gives analyzes new strategies, reason for their adoption and plan to be taken for further economic growth. If adopted and applied, Virgin Blue would become the world’s biggest Airline in the world and would make more profits than it has accumulated now. 3.0 Discussion of the Current Business Environment at Virgin Blue and marketing Major share holders of this company include Virgin group holdings, Toll holdings and Air New Zealand. Their major competitor is Qantas Airline although there are others. However, through marketing, business innovation and invention, they have steadily had a good competitive advantage over the Qantas and continue to flourish in the business by doing business with several airlines in the world such as American airlines, Vietnam, Garuda of Indonesia, Emirates, Hawaiian airline, Malaysia among others. The target marketing strategies employed in the last six months have seen the company grow by 12% accounting to $1.69 billion (Kelly, 2011). The application of the macro and micro economic factors appropriately worked in a similar way to raise the company’s profits both in domestic and in international markets. The supplier and buyer power, product substitution through partnerships and brand name has seen virgin blue flourish in Business. This has given the company a good competitive strategy (Porter, 1998). 4.0 Proposed Strategies 4.1 First Strategy There is a need to expand business to several Africa destinations. In recent years, there has been an increase in the number of tourists and business men visiting Africa. According to the World Bank, It is estimated that the number of tourists would increase if the continent continues to enjoy relative peace (World bank, 2010). Africa is becoming an investment herb for many investors from outside and within the continent. As a result there are several customers across Australia and beyond who travels to Africa but they connect with other airline. Currently, Virgin blue does not have such a strong business linkages with Australian customers traveling to Africa, although we have done it on a small scale. This business needs to be developed further. The fact that we are now looking forward to a new brand name (Flynn, 2011), it will make the company a world airline capable of doing business in all world destinations. 4.2 Tactical Plan and action Firstly, it could be done by partnering with other airline as we have done in the past. These are airlines that often do business in Africa like KLM of Netherlands, British Airways, Kenya airways, Ethiopian air ways and Egypt air. I have chosen these air lines because of their reputation on the continent and their business partnership with other airline companies. Secondly, Virgin blue can invent a direct airline from Australia to major African destinations where tourism business has in recent years grown. These areas include South Africa, Uganda, Egypt, Kenya, Ghana and Rwanda. Virgin blue direct air would connect from Australia to Egypt and then to several of these countries. Egypt would steadily have good business with Virgin blue and all other tourist destinations in Africa. 4.3 Second Strategy Another strategy is developing a plan to tap the business class who import a wide variety of fruits from Africa that have gained market among tourists who tour the continent. Although these tourists loves these fruits, they cannot bring them to West due to food control system and regulations enacted by each western countries like the food and Drug authority in America. From Research conducted by Alan Legge, (2006) indicate that most of the African nations have natural fruits which are rich in food nutrients, mineral salts and other valuable purposes and have been tested in UK. In the tropics of this continent especially in countries like Egypt, Uganda, Ethiopia, South Africa, Ghana and Namibia, there are a variety of fruits that could easily penetrate the European, American and Australian Markets. Through their strategic marketing and the geographical indication there is market for fruits like the natural sweet pineapples, mangoes, and Jack fruit from several of these countries. Besides, there are business men who have expressed the desire to expand this business and are willing to invest in it but they do not have a reliable airline. Therefore, Virgin blue could tap the business class customers willing to invest in this business. 4.4 Tactical Plan and Action With this business opportunity at hand, the plan would be for Virgin blue to convince these business men about the availability of the airline transport direct air flights at affordable costs. Like in the way we filled the gap when Ansett collapsed, we could do the same with this available opportunity. We need to contact all these customers who have expressed the desire import fruits to their respective countries and sell our idea to them using supplier and buyer supply strategy. Already there is a business a business in the making and we just need to tap the resources and earn profits. 4.5 Third Strategy Another business development would be creating business class and direct flights to Asia especially to China, Singapore, Taiwan, Malaysia and India. Asia has remained a major business investment destination for many investors in the world due to her market availability. Many people travel to several Asian countries to do business in and out of Asia. However, Virgin Blue does not have direct flights that could capture this business opportunity but instead depends upon partner airlines like the Malaysian air which to a certain extent reduces on the profits gained from the business. However, having direct flights would increase our sales because the company would be earning more money with frequent daily or weekly direct flights to Asia. This would supplement on the competitive tourist travel or holiday destinations with other companies and keep the Virgin blue in a better competitive advantage, as observed by Kelly, (2011). 4.6 Tactical Plan and Action The plan would be to open up business centers at all relevant airports in China, Singapore, Malaysia, Indonesia and India among others. Increase on the human resource on the plane with a good customer care. Make a research study in the environmental factors of social, political, economic and technological for the respective business Asian markets and determine how to fit within in the global environment. With already existing businesses in Asia, It is possible that Virgin blue would flourish in this business with the company’s brand new name and the reputation gained on the international plane through partnerships. 5.0 Swot Analysis of Virgin Blue This section deals with the strength and weaknesses of Virgin Blue. Like any other corporation, Virgin blue’s strength and weakness is analyzed in light of Michael Porters analytical business forces and this include, the supplier power, degree of competition, threats from new companies into the business, the degree of diversifying or substituting their services and the customer power to book Virgin blue airline (Porter, M 2008). Through the forces of supply and product power, Virgin blue has partnered with several airlines by expanding the fleet and consolidating business travels from Sydney to Brisbane. Partnerships with other airlines like Emirates, Indonesian airline, Delta airline, Malaysian airline among other has too strengthened the company’s marketing ability to several destinations. The strong financial growth of the company last year is an indication of possible business expansion in the above strategies if adopted. The company increased on her profits dramatically by 12%, accounting to $1.69billions. Although there was a decrease in the net profits from $62.5 million to $23.8millions, due to the bad weather and poor booking system, it did not affect strongly the company’s financial strength (Kelly, 2011). There major weakness is competition from other major airlines in the world and the expansion of the human resource. This would require a lot more money to fit within the competitive rivalry (Michael Porter, 1998). To deal with the threats from new companies and the degree of rivalry, Virgin blue is inventing a strong brand that will put the company on the world map and that could still make the company stronger with a better competitive advantage. However, it can be seen from the above that the company has a better economic strength than weaknesses which is evidence of possible investment in Africa and Asia. 6.0 Internal and External environment at Virgin Blue According to Mital, A ( 2008), he concludes that organization of the external and internal business environment is influenced by the political–legal, social, economic and technological environment factors. In the political-legal environment, Virgin blue complied with international laws governing air transport and all the Australian legal laws. In all partnerships, virgin blue performed all their contractural agreements with partnering companies which has stimulated business both internally and externally. This is an indication that the company would equally conform to the existing laws in Asia and Africa. Socially, the company had to break the cultural cycle of several customers by having universal respect to all cultures without discrimination. All passengers from several countries do use virgin blue. Culture and behavioral change is a fundamental principle in any business. Economically the business strategies explained above have strengthened the internal and external business plans there by bringing into the company more sales. All these factors were assisted by the advanced technology that easily facilitates the booking and electronic data transfer within and outside the company. All these views expressed above are also a characteristic of the writings of Bridwell, (2007). 7.0 Conclusion In conclusion therefore, developing and expanding business to Africa and Asia would appropriate more sales into the company and lead to economic growth. The tourist destinations in Africa, business class in both areas are the cardinal baselines of this development plan. If implemented, the company would grow dramatically in the next five years. The implementation of the plans and action have been applied by Virgin blue domestically and also applied by several airlines internationally. This means that these plans would equally be adoptable in these new strategies. The strength of the company coupled with her aggregation of the internal and external environmental factors indicates that Virgin blue would grow if the company continues to enjoy such a steady economic growth. References A, M. (2008). Cases in strategic Management. Delhi: McGraw Hill Publishing company. Alan Legge, J. O. (2006). The production of fresh produce in Africa for export to the United Kingdom: mapping Different value chains. London: Natural resources institute. Bridwell, J. C. (2007). Australian Companies Using Globalization to disrupt the Ancient Wine Industry. Emerald Journal, 17(4) , 209-221. Flynn, D. (2011, March 8). Virgin Blue’s new brand: Virgin Australia or V Australia? Retrieved April 24, 2011, from Australian Business Traveller: http://www.ausbt.com.au/virgin-blue-s-new-brand-virgin-australia-or-v-australia Kelly, R. (2011, February 13). Virgin blue to add business Class, 1H profit Slumps. Retrieved April 27, 2011, from Dow Jones newswires: http://online.wsj.com/article/BT-CO-20110223-700270.html M, P. (1998). Competive Advantage: Creating and Sustaining Superior Performance. New York: Free Press. Porter, M. E. (2008, Janauary). The five Competitive Forces taht shape the strategey. Havard Business Review , pp. 78-97. World bank. (2010). Africa Region Tourism Strategy. New York: UNWTO. Read More