Virgin Atlantic Competitor Analysis
Threat of substitutes
“The threat of substitutes for Virgin Atlantic is low in the developed countries where people mainly use airlines for both short and long distance travel”. “Virgin has a high group of substitutes. Leading substitutes include innovative products such as IPhones, Blackberries, Times Warner Productions, and Google products. Some of these substitutes products prices are lower, creating buyers to face few high switching costs”. On the other hand, in the developing world, there are threats of different modes of transport for example train. Even though trains do not have the same speed as Virgin Atlantic which they are two different modes of transport it is still less expensive when compared to Virgin and thus, “the preferred
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and their capacity to threaten other airlines. When Virgin Atlantic competitors are large as well as the number of identical products and services that they offer, the power of their rivals are less. Additionally, both buyers and suppliers seek out competition of other airlines if they cannot get an appropriate deal. When competitive rivalry is low, Virgin has more power in doing what they want in order to attain higher sales and profits. “Rivalry for the Virgin Group is high. Virgin faces an array of different smart phones, tablets, laptops, online video services, airline industries, and home computers”.
https://www.slideshare.net/mayurkhatri5/porters-five-forces-26443199
Conclusion
The framework of porters five forces helps to analyse the competition of Virgin Atlantic. It, also determines the intensity of competitive as well as the attractiveness as it relates to profitability. The five forces of Porters framework are important for Virgin Atlantic to monitor in order for them to assess the attractiveness of the
Porters five model is necessary to monitor this factor to continue in assessing the attractiveness of the industry and also to determine how to use the forces to gain competitive
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But in choosing one out of the two, the differentiated strategy is preferable. Virgin can use the differentiated strategy to increase growth by product differentiation to better develop their brand which allows them to stand out from their competitors such as Qatar, British Airways. “Virgin’s minimum level of quality for differentiation also creates threshold pricing”. However, Virgin using the differentiated strategy can create value for Virgin Atlantic because when Virgin uses this strategy that concentrates on the cost value of the product or services as opposed to similar products in the industry of their rivals, it builds a perceived value between potential customers and
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