Strategic Analysis of Virgin America-A Study of Success Factors and Competitive Edge

Strategic Analysis of Virgin America – A Study of Success Factors and Competitive Edge

Virgin America’s Segmentation Strategy

Companies use segmentation to create a competitive advantage by targeting customers with specific demand characteristics, desires, and needs. Virgin America used the psychographic segmentation strategy to attract and retain customers. According to Sainjargal et al. (2022), psychographic segmentation includes dividing customers based on their social status, lifestyle, beliefs, values, opinions, activities, and interests. Virgin America’s psychographic segmentation strategy served young travelers and individuals traveling for work and seeking access to the internet and a port to charge their devices onboard.

What Virgin America Offered its Customers

Virgin America focused on offering its customers comfort by offering onboard Wi-Fi, leather seats, in-seat power outlets for electronic devices, cocktail-lounge-style lighting, full-service meals, and spacious legroom (Hill et al., 2020). Virgin America also wanted to offer its customers a unique experience they could not get from any other airline to create a competitive advantage. The company also focused on ensuring that customers were satisfied, which led to a few customer complaints.

The Generic Business-Level Strategy Virgin America was Pursuing

Virgin America was pursuing the focus differentiation strategy. According to Hill et al. (2020), the focus differentiation strategy includes targeting a specific niche or segment and customizing products and services to the segment’s needs by adding functions and features. Virgin America added features in its aircraft to meet young and business travelers’ needs and maintain a competitive advantage.

Actions that Enabled Virgin America to Implement its Strategy

According to Agwu & Onwuegbuzie (2017), functional-level strategies are developed to support corporate and business-level strategies by exemplifying decisions in various functional parts of an organization. Functional-level strategies also focus on the procedures, methods, and activities used to manage key activities or specific functions within a business (Stephen, 2018). The main actions taken at the functional level that enabled Virgin America to implement its strategy included designing a product offering with high perceived quality in terms of features and embracing technology to improve customer experience and meet customers’ needs.

 References

Agwu, M. E., & Onwuegbuzie, H. (2017). Strategic Importance of Functional Level Strategies as Effective Tools for the Achievement of Organizational Goals. Archives of Business Research, 5(12). https://doi.org/10.14738/abr.512.4012

Hill, C., Schilling, M. A., & Jones, G. (2020). Strategic management: Theory & cases: An integrated approach (13th ed.). Cengage Learning Asia Pte Ltd.

Sainjargal, B., Davaasuren, B., & Otgonsuren, Ya. (2022). Psychographic segmentation of the Saving Market. The International Journal of Business & Management, 10(2). https://doi.org/10.24940/theijbm/2022/v10/i2/bm2202-042

Stephen, H. (2018). Strategies at the functional level. Changing Planes: A Strategic Management Perspective on an Industry in Transition, 89–107. https://doi.org/10.4324/9780429462801-3

ORDER A PLAGIARISM-FREE PAPER HERE

We’ll write everything from scratch

---

Unit 4 DB: Virgin AmericaUnit 4 DB: Virgin America
For this question, review the Virgin America short case study at the end of Chapter 5. Prior to 2016, Virgin America was consistently rated as one of the top U.S. airlines. It served 20 destinations out of its main hub in San Francisco. Known for its leather seats, cocktail-lounge-style lighting, onboard Wi-Fi, in-seat power outlets for electronics devices, full-service meals, and spacious legroom, the key competitive issue the company has been facing is that it is a niche player in a much larger industry where low-cost carriers such as Southwest Airlines and Jet Blue are putting constant pressure on prices and crowding out routes with multiple flights a day. After reviewing the full case, please answer the following questions.

What was Virgin America’s segmentation strategy? Whom did it serve?
Regarding its core segment, what did Virgin America offer its customers?
Using the Porter model, which generic business-level strategy was Virgin America pursuing?
What actions, taken at the functional level, enabled Virgin America to implement its strategy?