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Market Situation of Australia Based Airline Company Virgin Australia Assessment Answer

Case Study Analysis (30%) - INSTRUCTIONS 


This assessment should deliver an in-depth case study analysis – from a business strategy perspective. Students may examine a business or an organisation of their choice, by selecting one of the following business enterprises:  

Virgin Australia Scentre Group (Westfield) A2 TikTok Smiggle 


The purpose of this report is to allow students to analyse a company by using the theoretical knowledge, business concepts and models that are delivered in class in weeks 1-5. The company must be selected from the list above. Students should analyse organisation’s business strategy or aspects of it. Here is the list of theoretical themes that may assist in completing the analysis:  

  1. Business Strategy (Concepts and Techniques) 
  2. Company’s Direction and Capabilities (Vision, Mission, Objectives and Strategy; SWOT) 
  3. External Environment (PESTLE, Five Competitive Forces, Industry Dynamics, Competitor Analysis, 

Success Factors, Industry Outlook for Profitability) 

  1. Resources and Competitiveness (Competitive Advantage, Value Chain, Value Proposition) 
  2. Five Generic Competitive Strategies (Low Cost Provider, Broad Differentiation Strategy, Focused Strategy, Focused Differentiation Strategy, Best-Cost Provider)  

The students will have to describe it as a business case study - that reflects a company’s business strategy decisions (e.g. layoffs, diminishing profits, takeovers, retail closures, change of industry, entry to new markets, new product development, international expansion, sales and acquisitions, disruptive or obsolete technologies, industry leadership, or any other similar issues).  

Format and referencing: 

Written report 

The word limit for this assignment is 1500 words, excluding executive summary, references, figures, tables, and charts. It should be submitted via Turnitin as a Word or PDF file. The cover page should include student’s name, student number, study program (MBA, MBI, MM), unit name and code, and company’s or organisation’s name.  

Each student will individually analyse a selected case (from 5 listed companies) and submit a written report (via Turnitin) . 

When conducting research for this assignment, students need to correctly reference or cite the original sources (Harvard referencing style). The assignment must have a proper reference list, any omissions will be penalised. For a pass mark - students need to have at least 5 references. For a higher mark a bare minimum is 10, but it is expected that a HD assignment would have 15 or more good quality and discipline relevant references. If students are using any additional readings that are not necessarily cited or referenced in the body of the assignment – a bibliography list can be added. This paper may include up to three appendices, each appendix should not exceed a full A4 page.  


Written report and presentation 

The students need to select a case study (company) from the list above. This organisation should be briefly introduced, analysed, issues identified, and linked to the theory. The identified issues should be clearly outlined and justified (with supporting arguments from academic or industry sources) within the context of the company’s business strategy and business environment in which the selected company operates.  

This report should explain the company’s business strategy case, what were the outcomes of the introduced strategic changes, what were the consequences for the organisation or perhaps for the industry in which the company operates. This paper should provide a set of clearly outlined business strategy issues that should be justified by using the academic literature, industry reports or research findings.  

Structure and content: 

Written report  

This paper should have the following structure:  

  • Cover page – student name, ID, unit code and name, type of assessment (Case Study Analysis); 
  • Table of content; 
  • Executive summary – a detailed overview of the full paper;  
  • Introduction – a brief outline of issues that will be discussed in this paper;  
  • Analysis – about a company, analysis of a company’s background (industry, size, history, organisation’s structure, available resources, product portfolio, market share, etc.);  
  • A detailed description of two (2) business issues - highlighting reasons why the company decided to implement changes, or completely change its strategy;  
  • Outcomes – what consequences may arise from this strategic change, for the organisation or industry in which the company operates; 
  • Recommendations – a set of commendations how to encourage positive outcomes and boost growth, or how to diminish negative consequences and prevent reoccurrence of similar issues in the future; 
  • Conclusion – a brief overview of the key points presented in the paper; 
  • References and bibliography;  
  • Appendices - up to three, but not longer than 3 pages.    

The paper should use only valid (academic journals, industry reports, financial reports, government publications, etc.) sources of information that are based on primary research or experts’ analysis, as arguments. Recommendations should be well structured and should correspond to the analysis, and the identified issue(s). The writing style should be clear and precise. It is a prerogative to link the identified issues to the theory, and to provide suitable strategic solutions / recommendations to the identified issues.  

Students will need to show their understanding of the business strategy theoretical models, and use the business concepts that are relevant and appropriate for this type of analysis. The accurate business terminology should be used throughout the paper.


Executive summary

The report presents a discussion on the market situation of Australia based airline company Virgin Australia. Virgin Australia has been one of the leading entities in the domestic market. However, the company has been facing financial debt issues and lack of proper strategy ideas. The internal analysis has stated that Virgin Australia has a stable position due to its brand reputation in the market. External environment states that the forces of the market have been in favour of the entity. Therefore, the application of the right form of strategies might help Virgin Australia to make instant growth in the market. 

1. Introduction 

The marketing tools, techniques and tactics are used to understand and analyze the present status of a business origination in the market. It helps to define the current issues of the entity and strategic applications might require applying for mitigation of such issues. The report presents a discussion on the present market performance of Virgin Australia; it also explores the business issues of split ownership and increasing financial debt of the entity.  

2. Analysis

2.1 Company overview 

Virgin Australia is the largest airline company operating in the country under the name of the Virgin brand.  The company is currently known for its highest domestic travels and journey carried out within Australia and New Zealand. It has been operating around 33 cities of Australia the Melbourne, Sydney and Brisbane are the central hubs for Virgin Australia (Virgin Australia 2020).  According to the mission and vision of the company, Virgin Australia has been focused on positioning itself as leading and favourable airlines for their customers for the long term. It is focused on presenting and promoting quality, comfort, secured and safe travelling experience to the customers.

2.2 SWOT analysis 

  • Updated technologies and advances bight automation which has improved the brand performance  (Virgin Australia. 2020) 
  • It covers a huge market due to its domestic presence and low carrier service 
  • High level of customer satisfaction due to proper management of customer comfit and security

  • Increasing in the financial debts
  • Short term  ideas and long term solutions  

  • Online websites and mobile application booking bring new customers 
  • Low inflation rate introduce stable market 
  • Favourable new taxation policies reduce financial pressure.

  • Increasing competition
  • Climatic changes 
  • Economical conditions of Australian is questionable from some years  

2.3 Pestle analysis 

Pestle analysis  
Analysis of Virgin Airlines   
Political factor 
There is a political stably found in Australia, as the governing bodies make favourable support to the airline industry about infrastructure (Westmore 2020). However, the possible risks of the economical downfall of the country might create hurdles like lack of demand, this might generate revenue for the airline industry  
Economical factors  
The GDP of Australia has made also growth in the present yea of 2019. it has estimated that GDP of e country has been increased by 1.8% in 2018, which is low in comparison to 2.7% in 2018 (Zhang et al. 2017). Thus, there is low demand in investments by the customers over the airline travel restrictions. The airline industry might face slowly in the demands of airline travels during the period.  
Social factors 
The customers in the company have become much couscous about their safety and security while travelling through airlines due to increasing risks of accidents. Due to domestic travelling services, the airline industry has been making additional demands over ticket bookings. The customers look for low-cost airline travels, which is one of the prime points of making purchase decisions.  
Technological factors  
Increasing usage of internet and mobile applications for booking of the flights explains that there has been an increase in demands for advanced technologies to reach customer satisfaction (Brown 2020). The proposed AI system and advanced technologies have been estimated to increase expiate of the passenger during the flight
Environmental factors  
The airline industry has been increasing concerns about the usage of fossil fuels and petroleum ad its impact over the environment The industry has been making millions of investments for bringing control over the CO2 emissions. However, these investments were increasing financial pressures.
Legal factors 
The labour laws and regulations have been imposed and applied by the airline industry in the market. However, the consecutive demands of the labours sometimes increase risks of strikes which limit operational functions of the airline industry.

2.4 Porter five force analysis 

Porter five forces 
Bargaining power of the buyer
The bargaining power of the buyers in the Australian airline industry has been higher duet its stiff and rigid competition (Alexander and Merkert 2017). Virgin Australia faces risks of rapid brand shifts of the customers while operating in the industry.  
Bargaining power of suppliers 
The availability of suppliers in the airline industry is less compared to the number of airlines firms availed in the market. This means supplies have options to gain profit from any of the airline entity. So, the bargain proper of the suppliers in the market is relatively higher.  
Threat to substitutions  
The threat to substitute products is the medium for Virgin Australia. The customers do have options for water, railway, roadway transportation or vehicle travelling which is considered a substitute (Buckeridge and Newman 2017). However, these substitutes might take a longer time to react to desalination than flights, which again increase the value of airline services.  
The threat to nee entrances
The airline industry includes huge investments for purchasing flights, create infrastructure, a section of Airlie travels. Thus, the threat to the new entrances is relatively low in the Australian market due to the high cost of capital investments.    
Competitive rivalry 
Virgin Australia has been operating in a highly competitive environment.  Qantas Airlines has been one of the closed bidders in the airline industry, which has a huge customer base (McGrath et al. 2017). The other airline's entities like FIJI Airways, Singapore Airlines, JetBlue, and Delta are some of the competitor firs in Australia airline industry.    

3. Business issues identification

3.1 Issue 1: Short term ideas, and long term solutions 

Virgin Australia creates strategic applications which might be beneficial for the entity for a short term period such as keeping the cost related services for long flight journeys. Usually, in the airline industry, the long term journey reduces unnecessary service to reduce its expenditures (Cummins 2020). The strategy benefits Virgin Airline for a short run although has increased risk of loss-making. On the other hand, Virgin Airlines has been looking for profitability from short distance journeys. The company has been operating in loss-making routes, which might be profitability at some point but the percentage will be lower than the loss-making might be done by the entity by the time.   

3.2 Issue 2: Financial debt: 

One of the primary ad current risks faced by Virgin Australia is increasing risks of financial debt, which might also trigger the possible situation of bankruptcy. The company has stated that it is looking for options to get financial protection to get itself out from the financial debt crisis, which has been enhanced due to rising pandemic of coronavirus (The Economic Times. 2020). The company might require to make changes on the entire functions and strategic applications regard o control the downfall of the company or its business. The company has been looking for proposing bare-bone services to bring back the buyers for sustaining the pandemic crisis and save the company from being financial breakdown. 

4.0 Outcomes  

The current situation of Virgin Australia has been been in downfall direction, the application of the barebones strategy and services might help the company to boost its journeys and demand of the ticket bookings might ban boosted through the engagement of marketing strategies and promotional campaign. The changes in the operational functions of the business such as cost-cutting for unnecessary activities might help to rescue expenditures for the firm (Zhang et al. 2017). Thus, the financial debt might be relaxed to some extent for the entity. The application of low-cost for the tickets might also help the company to enhance its customer base and certainly its income.  Virgin Airlines has been trying o make rapid changes in the functional and operational activities since the year of 2011(McGrath et al. 2017). The changes have been bought into existence about rephrase its service and increase benefits to the customers. The strategic applications of including digital marketing strategies have resulted in an increase in customer base and customer attention towards the offerings of the entity.

5.0 Recommendations

There are different issues and risks which have been found in the way of growth for Virgin Australia, some of the recommended strategies might help the entity to reduce these issues.

  • Joint venture or collaboration with other airlines companies might help the company to increase its source of income within the market. The company rising debts might be covered with the engagement and introduction of new services under a brand originated from a joint venture or collaborations.
  • Diversification might b another strategic option for Virgin Australia, in which the company might invest in tourism business, hospitality business, and travel and tourism services for presenting additional products for the customs. The increase of different product portfolio might help the company to generate income from different sources. 

6.0 Conclusion

The environmental analysis presents the internal and external situation and positioning of the business. Virgin Australia has been going through a poor phase, although the analysis suggests he market has an ample of scopes which might help the entity to bounce back to growth. The company has been facing issues of bad financial debt, which might impact on the financial breakdown of the entity. Thus, diversification and joint venture might be possible options to help the entity to generate income again

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