Post on 04-Apr-2018
7/31/2019 Final Strategy (2)
1/16
INSTITUTE FOR INTERNATIONAL
MANAGEMENT & TECHNOLOGY
ASSIGNMENT
STRATEGIC MANAGEMENT
VIRGIN ATLANTIC AIRWAYS & XEROX CORPORATION
MODULE LEADER
MR. Vimal Babu
DR. Vinnie Jauhari
Submitted by:
HEENA GUPTA
PGPM 3RD SEM
7/31/2019 Final Strategy (2)
2/16
INTRODUCTION
This coursework discusses about the strategy concepts by different authors and
researchers and how the strategic management has become importance for firms
these days. Further there is a brief discussion about value chain analysis and
resource analysis with context to the two companies XEROX and Virgin Atlantic
Airways thereby introducing the company the key drivers and strategies of the
companies are being talked about so as to analyze the key role of strategies for the
companies in having edge over others lastly the competitor analysis is shown by
perceptual map of virgin atlantics airways and the market positioning of xerox with
shares and in the end lessons derived from the analysis are mentioned.
7/31/2019 Final Strategy (2)
3/16
EVOLUTION OF CONCEPTS AND DEFINITIONS-
In the definition given by Pearce et al (2012), if we look at from the perspective of managers
then the strategy is their future plan on a broader and large scale for attaining the goals of the
company by interacting with the competitive environment. Moreover, a strategy is like a mirror
that reflects awareness of the company of how, where, when, with whom and for what purpose it
should compete. In the English language the word strategy is used most dynamically. Strategy
is derived from the Greek words stratos meaning an encamped army covering ground and
agein i.e. to lead and together it means the general. Strategy therefore means the art of
generalship.Bailey (2007) quoted that strategic management is an approach for managing the
change which constitutes of following: positioning the firm through strategy and capability
planning. It is in the human nature to insist on definition for each and every concept. Strategicmanagement cannot be defined or rely on single definition of strategy. In this article Mintzberg
has presented strategic management in five different definitions of strategy i.e. plan, ploy,
pattern, position and perspective and they all are interrelated. Mintzberg(1987).
According to Dobson et al, 2004 companies are like armies because business is also always
standing on the forfront of war to compete with the competitors as enemies in the case of armies.
Therefore analyzing the weakness of the opponents and the strength within the act should be
performed. To understand the strategy of any firm we must look at the factors that have helpedthe company to gain that position. How does the organization reach its present state ? because
there we come to know what are the strategies and key drivers of the company.
7/31/2019 Final Strategy (2)
4/16
Introduction to Both the companies-
VIRGIN ATLANTIC AIRWAYS-
In an article given by Daas, 2004 in AviaMagazine.com Virgin Atlantic Airways is taken as one
of the first airlines with low budget. It was developed by Richard Brandson as an offshoot of
Virgin Group of Richard Brandson who was known for his legendary Virgin Records. It started
its flights between London and Newark and got its operations started from 22 June, 1984. In the
ending year 1984 it had flown over 1 million passengers and gave great competition to other in
the industry as an first airline to offer their business class passengers with individual Tvs.
(www.aviamagazine.com)
Xerox, is a synonymous name being used for photocopying but it is a global company that was
founded in 1906 in Rochester, NewYork. It started with the name Haloid Company and was
renamed later as Xerox Corporation in 1961. It was having excess revenues in 1996 with $ 17
billion. It produces and sells copiers, printers, scanners, fax machines, document management
software, and related products and services in more than 130 countries around the world. Digital
products contribute to one third of Xerox revenues. There are 86,700 employees worldwide
including 46,000 in U.S (1996). (Tung, 2001)
VALUE CHAIN ANALYSIS-
It defimes the the activities witin and around an organization which together creates a product
or service. It is these value activities and the outcome that they deliver, detrmines the value of
the product and services by the organization is best or not. It plays a key role in having the
competitive advanatge.
http://www.aviamagazine.com/http://www.aviamagazine.com/http://www.aviamagazine.com/http://www.aviamagazine.com/7/31/2019 Final Strategy (2)
5/16
www.management4all.org
Virgin Atlantic airways effectively implemented its value chain and became second largest
long haul airline only in two decades in UK. As we can see in the digram these activities are
being divided into two groups Primary and secondary activities. Primary activities (in context of
virgin atlantic airways) consists of :
Operations- Environmental friendly operations and aviation decision support
Inbound logistics- RFID tagging, Airplane Health management.
Outbound logistics- Fatest Check-in, Secure website.
sales and marketing- Marketing campaign, direct booking.
and services- Excellent customer service by virgin atlantic airways.
Support activities are the activities that add value to product and service by themselves or by the
support of primary activities. They basically constitute of human resource management,
technology development and general administration.
http://www.management4all.org/http://www.management4all.org/http://www.management4all.org/7/31/2019 Final Strategy (2)
6/16
7/31/2019 Final Strategy (2)
7/16
XEROX also had their resouces as it had its brand name, its global approach, customer
satisfaction and innovation and technology with high quality focus strategy.
KEY STRATEGY VALUE DRIVERS OF THE FIRMS-
VIRGIN ATATLANTIC AIRWAYSs KEY STRATEGIES
Aviation industry is highly competitive and in the industry where everyone gives same service,
same aircraft, in such a volatile industry Virgin Atlantic airways has used Differentiation strategy
to have a competitive edge over its competitors. Differentiation strategy means unique and
valuable distinction indentified by customer to be different from other competitors. It used
customer innovation and has long series of success, it gave individual tvs to its business class
customers, it came up with no smoking flights, innovative check-in, it was the first one to have
at-seat podcasting, the first airline to fly using biofuels and at present it is the first one to
introduce Limousines service for the upper class customers, their current theme was highly
effective i.e. your airlineseither got it or it hasnt. due to these sustained innovation it has
been a leader with thefirst mover advantage in the industry. Virgin Atlantic Airways have then
usedfocus strategy for having competitive edge. This means that focusing on a particular target
group by narrowing down the market. If we observe differentiation strategy then it has mainly
target upper class passengers and its marketing strategy to campaign and invest 10 million pound
is just to focus upon upper class people. It provided upper class experience to its passengers on
business class price. It came up with Upper Class Suite in 2003. To give their customers great
comfort they have used flip over chair that provides a flat bed and a wider seat to their passenger
that no other airline ever thought of. Moreover it had in-flight cocktail bar, massage, personal
limo services and its state of art clubhouse especially for the passengers of upper class.
There are basically three competencies which Virgin Atlantic Airways follow to have
competitive advantage are:
Creativity and innovation Excellent service in scheduling Transatlantic long haul service.
STRATEGY CREATION IN VIRGIN ATLANTIC AIRWAY:
7/31/2019 Final Strategy (2)
8/16
DISCARDED STRATEGIES
IMPLEMENTATION
ORGANIZATIONAL AND ADAPTIVE
STRATEGIC CHANGE
Intended strategies are result of planning and visionary leadership and on implementation someof them get discarded due to changing environment and then it adapted strategies when new
opportunities come up. Virgin Atlantic started recruiting expertise people in the industry and
concentrated on visionary strategy the airline then got success and awards for the quality and its
service over 12 years. There was limitation in its growth, then it learned from its experience in
changing environment and gave threat to British airways and the whole industry got affected by
the gulf war and the recession worldwide in 1990s but virgin came as a transatlantic market with
new innovation in their services and brought a drastic change gave high competition.
(Thompson, 1997)
FORMALLY
PLANNED
STRATEGIES
VISIONARY
LEADERSHIP
ENVIRONMENTAL
CHANGES
INTENDED
STRATEGIESACTUAL
STRATEGIES
PURSUED
7/31/2019 Final Strategy (2)
9/16
XEROX CORPORATION-
During 1970s Xerox market share started declining and therefore in 1980s it came up with new
strategies and ambitious programme so that it can take back its market leader position in the
market. It mainly emphasized on quality, leadership and management process, culture with
market orientation, employee empowerment and a learning organization, innovation process,
continual innovation. From 1992 to 1994,Xerox reorganizaed the company and came up with
new strategies that would strengthen its profitability and growth.
Xerox benchmarking - Xerox implemented a quality through leadership program which
employed cost of $ 125 million bt it was positive. In addition to it xerox observed american
express, LL. Beam so as to learn and increase their efficiency. This was known as competitve
benchmarking which is the process of continuously measuring product and services against the
toughest competiors in the industry. It helps xerox to adopt to changes in the environment.
Team players and Innovators- with the implementation of its strong strategies, the process was
continouous improvement and innovation to maintain the leader position. Its strategies
emphasisied on group development: people in Xerox are team players. Teams that achieve black
belts earn the title of X team i.e. a group of innovative people who se best practices are shared
across organizational lines. It is the highest level of team recognition in Xerox given in Annual
report of 1997. (Lynch, 2000)
Customer business units - till mid 1990s the operations of customer was based on national
boundaries. However xerox recognized that it is the small countries like Austria, Portugal,
Swtzerland, Belgium etc. that perform better in dynamic economic environment. Corresponding
to the size of smaller countries the company size for customers was discovered to be 400
employs. So by the year 1992-93 all the large companies split into small units. Customer
Business Unit managers were given roles to handle.
Developed powerpower was given to individual CBUs, including the responsibility of profit
and loss. Managers were empowered to take decisions so as to how unit operated. The effect of it
was beneficial for profitability. For example in Italy there were three CBUs and was going in
losses consistently, their revenues increased by 25% with insight of profitability.
7/31/2019 Final Strategy (2)
10/16
7/31/2019 Final Strategy (2)
11/16
JetBlue Air France
AirTran Delta Air
British Airways
Continental
Japan Airlines
Low-Cost Air Travel High -Cost Air
Ryan Air Zoom Air
Thai Sky Airlines Air Asia
Sky Airlines US Airways
United
Air Canada
Low Quality Air Travel
7/31/2019 Final Strategy (2)
12/16
Airline industry has lot of competition and consumer also have wide options with them to select
airline of their status and lifestyle. The perceptual mapping given above shows the consumer
mindset that where virgin atlantic falls when compared with competitors. The rating of air travel
is done on two basis the cost of travel and the comfort level. The map shows that the passesngers
who prefer low cost air travel without taking into consideration comfort go for airlines such as
sky airlines and ryan air, while there are other travellers who are willing to pay more. If we take
the case of Virgin atlantic airways consumer is willing to pay a higher cost so as to travel with
comfort and luxury. (Cordiner, 2011)
In 1960s when the japanese countries try to enter photocopying markets at international level ,
but they had to face Xerox which was dominating the market. Xerox had a policy of leasing out
its machines and then giving to the engineers to maiantain them this always attracted large firms
those have large printing demands but small companies accepted japanese offering. Therefore
after 1990s, Xerox started loosing its market share of the overall market but despite of it
mainatined its leadership position in the high segments because it had the ability to provide high
level of service to its customers and even the japanese companies never tried to match because of
the high cost in setting up and difficulty faced in obtaining minimum levels of business to make
profits. Xerox faceed tough competition, in 2009 the company had $ 485 million on sales of $
15.2 billion. In next third quarter its profit doubled to 250 million. The firm had aquired global
imaging systems in 2007 that contibuted to its growth. (Leckey, 2011). Xerox as a leader among
competitors always had key factors its success strategy was always employees oriented.
Increasing the involvment of employees will definitely give great results to customers.
Empowering the employees help in giving customer satisfaction.
7/31/2019 Final Strategy (2)
13/16
LESSONS LEARNED FROM VIRGIN ATLANTIC AIRWAYS AND
XEROX-
Innovation was common in both the companies. Therefore, both the companies shouldfocus on adoting to new technology etc.
Both the companies should evaluate their current strengths and competencies. Focus on aquire, outsource, build-in house. Should develop a plan that can dominate the markets of both the company. Continuous improvement should be focused upon. Virgin Atlantic mainly focuses on upper class but it should check its competencies in
other target group also.
Xerox is doing great through Lean six sigma it should see which are the other areas it canleverage into.
Linking technology and market is the major challenge that should be looked after. Xerox must make advancement in digital technologies, cost reduction, and should
broaden its product and service distribution network worldwide.
There are other companies also which are pioneers in innovation and are continuouslythriving upon something new that others have not thought of so it is important for both
the companies xerox and virgin atlantic airways to keep a pace to dynamic changes andkeep coming up with new innovations.
Customer sattisfaction is the key for both the companies so evry day they should work oncustomer needs and wants and should be prepared for future challenges.
7/31/2019 Final Strategy (2)
14/16
References
Duke, Charles B. (2004), creating economic value from research knowledge (online)(cited on 25 October, 2012). Available from
Management4all (2012) value chain framework (online) (cited on 25 October 2012)Available from
Fao (2012) The value chain (online) (cited on 25 October 2012) Available from
Virgin Atlantic (2012) History (online) (cited on 25 October 2012) Available from
Mintzberg, Hnery (1987), The strategy concept I: five ps for strategy, California MangementReview, 30:1, pp: 11.
Dobson, Paul et al (2004), strategic management, second edition, UK, Blackwell PublishingLtd.
Lynch, Richard (2000), Corporate strategy, England, Person Education Limited. Avia magazine (2012) Airline profile (online) (cited on 25 October 2012) Available
from
Xerox (2012) Our company our capabilities our commitment (online) (cited on 25October 2012) Available from
Klm (2012) The 7 service standards (online) (cited on 25 October 2012) Available from Tung, Rosalie L. (2001), Company Profile 18 Xerox Corporation, Learn ing from World
Class Companies, Derby, Thomson Learning 2001.
http://www.aip.org/tip/INPHFA/vol-10/iss-4/p29.pdfhttp://www.aip.org/tip/INPHFA/vol-10/iss-4/p29.pdfhttp://www.management4all.org/2012/05/value-chain-framework.htmlhttp://www.fao.org/fileadmin/user_upload/fisheries/docs/ValueChain.pdfhttp://www.fao.org/fileadmin/user_upload/fisheries/docs/ValueChain.pdfhttp://www.virgin-atlantic.com/en/us/allaboutus/ourstory/history.jsphttp://www.virgin-atlantic.com/en/us/allaboutus/ourstory/history.jsphttp://www.aviamagazine.com/factsheets/airlineprofile/virgin/index.aspxhttp://www.xerox.com/downloads/usa/en/x/Xerox_Fact_Sheet_Who_We_Are_Today.pdfhttps://www.klm.com/csr/en/images/7SS_KL_crew_eng_17_06_tcm696-317994.pdfhttps://www.klm.com/csr/en/images/7SS_KL_crew_eng_17_06_tcm696-317994.pdfhttps://www.klm.com/csr/en/images/7SS_KL_crew_eng_17_06_tcm696-317994.pdfhttps://www.klm.com/csr/en/images/7SS_KL_crew_eng_17_06_tcm696-317994.pdfhttp://www.xerox.com/downloads/usa/en/x/Xerox_Fact_Sheet_Who_We_Are_Today.pdfhttp://www.aviamagazine.com/factsheets/airlineprofile/virgin/index.aspxhttp://www.virgin-atlantic.com/en/us/allaboutus/ourstory/history.jsphttp://www.fao.org/fileadmin/user_upload/fisheries/docs/ValueChain.pdfhttp://www.management4all.org/2012/05/value-chain-framework.htmlhttp://www.aip.org/tip/INPHFA/vol-10/iss-4/p29.pdfhttp://www.aip.org/tip/INPHFA/vol-10/iss-4/p29.pdf7/31/2019 Final Strategy (2)
15/16
7/31/2019 Final Strategy (2)
16/16