CompanyM1 Analysis of macro environment to determine strategic management decision
The macro environment of an organization provides various opportunities and also creates threats in the market that affect the ability to perform business (Islam and Mamun, 2017). For Virgin Atlantic, all the opportunities and threats that are related to the macro environment are described below:
Political: Political factors in a country affect the business operations and also provide opportunities to run the business smoothly.
- Opportunity: If political parties of the UK introduce a new policy like tax reduction for the airline industry, then this will be an opportunity for the company to operate business effectively.
- Threat: Security factors are affecting the business of the airline industry. If the governments of different countries implement any new policy in which strict rules are mentioned, then it may affect it negatively in the future, which is a threat.
Economical: Different types of trade policies and economy-related decisions are the types of such factors.
- Opportunity: As the governments of the UK and other countries are providing opportunities to different sectors in order to enhance their national income, hence it is a good chance for Virgin Atlantic to operate business more efficiently.
- Threat: If the inflation rate in the future gets decreased, then 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 the business of organizations like Virgin Atlantic.
- Opportunity: If Virgin Atlantic can launch a new and effective travel plan according to the needs of customers, then it may help to increase profitability in the upcoming period.
- Threat: Changed perception and needs of customers in the future may affect business operations of Virgin Atlantic directly (PANDEY, 2017).
Technological: Market trends and the introduction of new technologies in the market are related to such types 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 the future, as most of the customers get attracted toward technology (Sarsby, 2016).
- Threat: As the ticket booking system of the company is not fast and handheld device check systems have also not been implemented by Virgin Atlantic, this may result in decreased customers and profits of the company.
Environmental: All the CSR policies and environmental laws are related to such types 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 the market as all the laws are followed appropriately.
- Threat: Changes in environmental laws are made frequently by the governments of the US and UK that are not easy to implement, and this can become a problem for Virgin Atlantic in the 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 customs duties and taxation rates may affect the business activities in the future.
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M2 Strength and weakness of Virgin Atlantic
The strengths and weaknesses of Virgin Atlantic are as follows:
VRIO analysis: It is a technique that is used by most of the observers to evaluate resources that are used to get a competitive advantage. The organization has an aircraft that is not useful and a good engine that helps to save 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 types of engines (SWOT analysis of Virgin Atlantic, 2018).
Organized: This resource is organized and used by Virgin Atlantic effectively. As it is used by the organization, it helps to save funds that may help to operate the business effectively in the future and also help to overcome financial crises that may occur in the future and result negatively for Virgin Atlantic.
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REFERENCES
- 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.
- Online
- SWOT analysis of Virgin Atlantic. 2018. [Online]. Available through:
<https://www.marketing91.com/swot-analysis-of-virgin-atlantic/>
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