Reference List Executive Summary The purpose of this report is to analyse the current market environment of Australian airline industry in which Virgin Australia operates. Virgin Australia, which was commenced as a low-cost carrier gradually transformed into a four-star airline competing vigorously with Qantas and its subsidiary Jetstar. The demographics of Australia is bringing positive vibe within the industry with the rise of Generation Y and retiring Baby boomers. However, with the raise of environmental concern, people are looking for environment friendly transportation system.
The main areas that will be analysed in this report includes an analysis of the main products that are offered by Virgin Australia, its business conditions as faced by it across Australia, important aspects related to the business operations of the airline including its factors of production and their cost, the macro environment conditions as faced by the organisation, and the sustainability practices that are considered by it.
An analysis of all these aspects in relation to Virgin Australia is performed as follows: Introduction of Business and General Business Environment A critical analysis of the business activities of Virgin Australia with a brief assessment of the competitors and customers profile of the airline is performed as follows: Name and Location of Business: Products or Services of Business: In terms of the nature of products and services as offered by Virgin Australia, its core product is air travelling services to its customers and this is mainly aimed at facilitating them with the opportunity to travel from one particular destination to another Virgin Australia, Main Customers of Virgin Australia: The customer profile of the company is also an important area of analysis because it is mainly the customers that define the overall effectiveness of an organisation.
In respect to Virgin Australia, an analysis indicates that the main customer group of Virgin Australia includes business and corporate customers, customers from abroad especially the US and general Australian people at large.
The core aspect to Virgin Australia that has contributed towards higher level of growth is the focus of the airline towards providing cheaper air travelling services, as it operates in the low cost model. This contributes positively towards the improved performance level of the airline and in attaining significant position within the Australian airline industry Virgin Australia, Main Competitors of Virgin Australia: Apart from customer analysis, it is also essential to evaluate the profile of competitors because an organisation is directly affected by its competitors.
In respect to the Australian market, the main competitor of Virgin Australia is mainly Qantas Airline which has been the provider of premium class air travelling services and also low cost services through its subsidiary Jetstar.
Since Virgin Australia operates on the low cost business model, the airlines that are operating on this model across the globe also competes with it and these mainly include Southwest Airline, Ryanair etc Qantas v Virgin Australia: The entire analysis as carried out especially in respect to the competitive environment conditions across the airline industry in Australia, the market condition can be defined as the one similar to that of perfect competition.
There has been higher level of competition between the two major airlines especially Virgin Australia and Qantas Airline as they are competing against each other with a view to acquire higher market share.
Virgin Australia in particular has recently performed modifications to its business model by adding extra services in its low cost model and there are changes with respect to uniform and other physical evidences being carried out.
These are mainly to compete with Qantas and achieve higher market share. In addition to this, the analysis with respect to the substitute in airline industry indicates that there is no close substitute. However, the road transportation and waterways are posing certain major challenges to the efficient performance of the airline industry Virgin Australia, Production Costs and Scale The services that are provided by Virgin Australia are now aimed at analysis with regard to their production costs and scale.
There are certain major production processes that have to be carried out for the purpose of delivering the products and services to customers. Fixed Factor of Production: The services as offered by Virgin Australia to its customers imply that it is mainly the transportation services whereby people select the airline in order to travel from one destination to another.
The delivery of such services is being ensured by Virgin Australia by following through certain major fixed and variable factors of production. The major fixed factor of production that has been noted in respect to the successful delivery of services to customers include the cost borne by the company in purchasing aircraft since it is a one time cost.
Another major fixed factor of production that is identified in respect to the efficient service delivery by Virgin Australia to its customers is the airport operating charges that the airline has to face.
In efficiently performing the airline services, the airline operators are required to pay the airport charges to the authorities.
This cost is also fixed in nature and airline have to incur this cost even if it does not fly is aircraft. In running the aircrafts, the taxes to government on the services as offered to customers is also fixed in nature that have to be paid by the airline by way of collecting them from their customers.
Variable Factor of Production: In addition to the fixed factors of production, the airline operation is also supposed to incur variable costs in ensuring its successful performance.
Variable costs are the one that varies with the quantity of products or services delivered to customers. An analysis with respect to Virgin Australia indicates that the airline also incurs significant variable cost in the process of successfully delivering services to its customers.
The variable factor in the process of delivering service is mainly the oil charges, as this charge is mainly decided by the distance as selected for travelling purposes. The longer distance would mean higher fuel charges, and vice versa.
Thus, in case, if a flight does not operate on a particular day, there would not be any fuel cost and this suggests that the cost of fuel is variable and it occurs with the delivery of services as performed by airline.
This is also a major variable cost in the delivery of services to customers because the cost of such products and services has to be borne when the customer avails such services Virgin Australia, Thus, the analysis above indicated about the fixed and variable factors of production that Virgin Airline has to incur in providing its low cost air travelling services.
The factors of production as assessed in respect to Virgin Australia has indicated that the cost structure of the firm is partly fixed and partly variable in nature. As for instance, there are certain major fixed costs as well as variable costs that have to be borne by the airline in the process of delivering cost efficient services to its customers.
However, the fixed cost occupies the larger share of the entire total cost in delivering services and this is mainly because the airline operating charges including the cost of airline itself is massive and this leads to higher fixed cost share in the total cost of the firm.
As a result, the focus of analysis in this section is mainly towards the external environment conditions that is affecting the performance of Virgin Australia.Do Men Even Notice Women Anymore?
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Management Theory and Practice Name Course College Tutor August 16, Management Theory and Practice Introduction Organizational external environment consist of all the entities existing outside its operational periphery but garners significant influence on its growth and continued existence.
Free swot analysis papers, essays, and research papers. The purpose of this report is to investigate and analyse the current market environment in which Virgin Australia operates.
With a view to achieving this objective, the report provides an overview of Australian domestic airline industry and its competitors with a keen focus on Virgin Australia’s operation. These factors monitor the legal macro environment in which the company operates.
The factors are closely related to all the other factors included in PESTLE framework and tend to change with changes in other factors. For example, improved economic factors lead to relaxed legal forces and are in turn supportive for organisations.
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