M1 Analysis of macro environment to determine strategic management decision
Macro environment of an organisation provides various opportunities and also create threats in the market that affects the ability to perform business (Islam and Mamun, 2017). For Virgin Atlantic all the opportunities and threats that are related to macro environment are described below:
Political: political factor in a country affect the business operations and also provide opportunity to run the business smoothly.
- Opportunity:If political parties of UK introduce a new policy like tax reduction for airlines industry than this will be an opportunity for the company company to operate business effectively.
- Threat:Security factors are affecting business of airlines industry if the government of different countries implement any new policy in which strict rules mentioned than it may affect negatively in future which is a threat.
Economical: Different type of trade policies and economy related decisions are the type of such factors.
- Opportunity:As government of UK and other countries are providing opportunities to different sectors in order to enhance their nation income hence it is a good chance for Virgin Atlantic to operate business more efficiently.
- Threat:If inflation rate in future get decreased than it will affect the business of Virgin Atlantic because purchasing power will also be reduced.
Social: All the preferences, needs, age, taste, educational level etc. that are related to customers directly impact business of organisations like Virgin Atlantic.
- Opportunity:If Virgin Atlantic can launch a new and effective travel plan according to needs of customers than it may help to increase profitability in up coming period.
- Threat:Changed perception and needs of customers in future may affect business operations of Virgin Atlantic directly (PANDEY, 2017).
Technological: market trends and introduction of new technologies in market are related to such type of factors that may help to enhance profits.
- Opportunity:Use of new and innovative technology in flights will be a good opportunity for Virgin Atlantic in future as most of the customers get attracted toward technology (Sarsby, 2016).
- Threat:as ticket booking system of the company is not fast and hand held device check system have also not been implemented by Virgin Atlantic, this may result in decreased customers and profits of the company.
Environmental: all the CSR policies, environmental laws are related to such type of factors and these may result positively or negatively for the company.
- Opportunity:A good contribution in CSR may help Virgin Atlantic to be more competitive in market as all the laws are followed appropriately.
- Threat:Changes in environmental laws are made frequently Government of US and UK that are not easy to be implemented and this can become a problem for Virgin Atlantic in future.
Legal: Governmental rules, regulations and policies are the part of such type of factors that are implemented by legal authorities of the country and can impact business operations of business entities like Virgin Atlantic.
- Opportunity:Managers of Virgin Atlantic have implemented all the policies at their workplace according to the law which is a good opportunity for it as this may help to operate business freely.
- Threat:Continuous changes in custom duty and taxation rates may affect the business activities in future.
M2 Strength and weakness of Virgin Atlantic
Strengths and weaknesses of Virgin Atlantic are as follows:
VRIO analysis: It is a technique which is used by most of the observers to evaluate resources that are used to get competitive advantage. The organisation have an aircraft which is not useful and good engine that helps to save the fuel on every flight. For Virgin Atlantic a detailed VRIO analysis is as follows:
Valuable: the old aircraft is not valuable for the company because it is not worthy for Virgin Atlantic. The engine of the planes is very good and valuable as it helps to save fuel on every flight.
Rare: The engine is rare as the cost for that engine is very high and it is not possible for all the airlines to use type engines in aircraft.
Inimitable: The engine is not inimitable as it is very expensive and copyrighted by the official manufacturer of such type of engines (SWOT analysis of Virgin Atlantic, 2018).
Organised: This resource is organised and used by Virgin Atlantic effectively. As it is used by the organisation and helps to save funds that may help to operate business effectively in future and also help to overcome financial crisis that may occur in future and result negatively for Virgin Atlantic.
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- Islam, F. R. and Mamun, K. A., 2017. Possibilities and Challenges of Implementing Renewable Energy in the Light of PESTLE & SWOT Analyses for Island Countries. In Smart Energy Grid Design for Island Countries (pp. 1-19). Springer, Cham.
- PANDEY, B. C., 2017. Nike Inc-Complete Analysis: SWOT, PESTLE and Marketing strategy. BookRix.
- Sarsby, A., 2016. SWOT Analysis. Lulu. Com.
- SWOT analysis of Virgin Atlantic. 2018. [Online]. Available through: