Essay on Strategic Management and Virgin Australia

Words: 5935
Pages: 24

Virgin Australia
Written Group Strategic Case Study

24th May 2012


Alixandara Sutherland
Laura Tumbers
Katie Horne
Laura Field
Executive Summary

The purpose of this report was to provide a strategic evaluation of the company Virgin Australia. The report begins by conducting a strategic analysis of Virgin, including an analysis of the external environment and an internal analysis of competitive strengths and weaknesses. The report then identifies the strategic direction and objectives of Virgin Australia, including the vision, mission, strategic objectives and stakeholders of the company. The report moves on to explore strategic choices of Virgin Australia by identifying the key broad business level and
…show more content…
Virgin Australia has significantly increased its employees to around 50,000 in just 12 short years. The reported earnings for the 2011 financial year was a loss of $67.8 million, compared to a great result the year before, in 2010, with a profit of $21.3 million, and 2009 being a large loss of $160.0 million. Virgin Australia’s most recent reported earnings, as of December 2011, is a profit of $51.8 million, leaving them in a very sustained and stable position.

This report will cover the strategic analysis, direction and objectives of Virgin, the key broad business level and international strategies, the strategic implementation and the issues it brings along with it, and finally, the strategic evaluation.

2. Strategic Analysis
2.1 External Analysis

2.1.1 General Environment The PESTEL model refers to factors in the external environment that have an effect on Virgin Australia. The most relevant factors of the model include the political, economic, technological and environmental elements. In terms of political factors that will affect the airline industry, the introduction of the carbon tax in the Australia will impact the firm by increasing expenses as Virgin is taxed on its levels of carbon emissions. In order to cover these expenses, costs will be passed on to the consumer in the form of increased ticket prices. (ABC 2011) Other taxes associated with the airline industry include fuel and landing taxes imposed by foreign