Service is an amorphous concept, “ it can cover anything from the quality of food to the cheerfulness of flight attendants from the ease of check-in to the care taken in baggage handling, from the frequency of flights” . This means quality service and plane fare together with the number of direct flights are what consumers want most in an airline. The holiday package tour market is similar to the airlines industry in one respect, it is also a service industry and there is a need to manage customer expectations well.
Strategy Formulation (the Aha moment) – paranoia and creativityVirgin Holidays thrived on its piggybacking strategy on the destination network of its sister-company Virgin Atlantic Airways. It has no real distinctive feature that distinguishes it from other travel agencies in the same business of offering exotic tours to far-away places. It has relied mainly on the advertising antics of its maverick president Sir Branson to generate much-needed publicity. The actions of Sir Branson attract the media due to his penchant for publicity stunts such as inviting famous people to product launchings and a cameo role in the James Bond movie “ Casino Royale” but this company needs a strategy to stand on its own. Before it can craft a strategy that will differentiate it from other operators, it needs to examine first the travel industry as it is today, buffeted by numerous threats such as the swine flu epidemic, terrorist attacks, cheap on-line travel agencies that offer similar holiday tours, the rising cost of jet fuel and possible tie-ups between another airline and tour operator.
The playing field had changed markedly since its launch 24 years ago and the current economic recession discouraged many people from taking holiday trips and save their money instead.
For Virgin Holidays to stay competitive, it must craft its strategy based on two crucial points: paranoia and creativity. It must prepare for its nightmare moment that will change all rules of the industry and also look at its vulnerabilities. Paranoia is indeed very useful in business as what Andy Grove cited in his book (Grove 9) that only the paranoid survive. Mr. Jack Welch at GE had two aspects of his corporate strategy: the hardware part and a software part which he called the “ Software Initiatives” known as the Work-Out program and the Best Practices program (Bartlett & Wozny 4).
What he emphasized in these programs is creativity and an adaptive change attitude.
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