Business policy presentation for ismo kuhanen
Download
1 / 73

BUSINESS POLICY PRESENTATION FOR ISMO KUHANEN - PowerPoint PPT Presentation


  • 256 Views
  • Uploaded on

BUSINESS POLICY PRESENTATION FOR ISMO KUHANEN. Mark Bentman Boyd Hargreaves Dave Horton Richard Kirk Scott Morris Matt Whiting. History of Virgin What is TOWS? TOWS 1 Profile TOWS 2 External Environment TOWS 3 Forecasting & Planning TOWS 4 Internal Environment

loader
I am the owner, or an agent authorized to act on behalf of the owner, of the copyrighted work described.
capcha
Download Presentation

PowerPoint Slideshow about ' BUSINESS POLICY PRESENTATION FOR ISMO KUHANEN' - ivy


An Image/Link below is provided (as is) to download presentation

Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author.While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server.


- - - - - - - - - - - - - - - - - - - - - - - - - - E N D - - - - - - - - - - - - - - - - - - - - - - - - - -
Presentation Transcript
Business policy presentation for ismo kuhanen
BUSINESS POLICYPRESENTATION FOR ISMO KUHANEN


Mark bentman boyd hargreaves dave horton richard kirk scott morris matt whiting
Mark BentmanBoyd HargreavesDave HortonRichard KirkScott MorrisMatt Whiting


Presentation structure

History of Virgin

What is TOWS?

TOWS 1 Profile

TOWS 2 External Environment

TOWS 3 Forecasting & Planning

TOWS 4 Internal Environment

-Management & Organisation

-Business Operations

-Finance

-Marketing

M. Bentman

R. Kirk

M. Bentman

S. Morris

S. Morris

M. Whiting

M. Whiting

M. Whiting

D. Horton

R. Kirk

PRESENTATION STRUCTURE


Presentation structure1

TOWS 5

TOWS 6 Strategic Choices

TOWS 7 Consistency testing &

Contingency Planning

Conclusion

B. Hargreaves

B. Hargreaves

B. Hargreaves

M. Bentman

PRESENTATION STRUCTURE


What is tows
WHAT IS TOWS?

“It is proposed as a conceptual framework for a systematic analysis that facilitates matching the external threats and opportunities with the internal weaknesses and strengths of the Organisation”


Richard branson
RICHARD BRANSON

  • Archetypal Hippy Capitalist

  • Aged 16 Established “Student Magazine”

  • 1979 - Started selling LP's by Mail Order

  • Personal Finance of £800m +



Virgin history1
VIRGIN HISTORY

  • 1979 - Virgin Founded

  • 1971 - First London Shop

  • 1973 - Record Company, Music Publishing Company, Recording Studio operation and an export Company

  • 1984 - Virgin Atlantic Airways and Virgin Cargo launched


Virgin history2
VIRGIN HISTORY

  • 1985 - Virgin Holidays formed

  • 1992 - Virgin Music Group sold to Thorn EMI

  • 1993 - 3 separate Holding Companies:

    • 1) Virgin Retail Group

    • 2) Virgin Communications

    • 3) Virgin Holding And Virgin Travel Group


Virgin history3
VIRGIN HISTORY

  • VIRGIN ATLANTIC AIRWAYS

  • The beginning………...


Virgin history4
VIRGIN HISTORY

  • Avoid Mistakes of Laker

  • Economy section combined with 1st class section at business class prices (747 Aircraft)

  • 22nd June 1984 - Inaugural Flight, Gatwick - Newark

  • September 1984 - Fields Contract terminated


Tows step1 enterprise profile
TOWS STEP1ENTERPRISE PROFILE


The enterprise profile
THE ENTERPRISE PROFILE

FUNDAMENTALS

  • What is Virgin’s business

  • Who are Virgin’s customers & What do they want?

  • What should Virgin’s business be?.

    ( Mission statement)


The enterprise profile1
THE ENTERPRISE PROFILE

  • GEOGRAPHIC ORIENTATION

  • Where are Virgin’s customers?

  • Where are those who should be Virgin’s customers but are not at present?


Tows steps 2 3 external environment prepare forecast
TOWS STEPS 2 & 3EXTERNAL ENVIRONMENT &PREPARE FORECAST


Analysis of external environment
ANALYSIS OF EXTERNAL ENVIRONMENT

  • Economic Factors

  • Social & Political Factors

  • Products & Technology

  • Markets and,

  • Competition


Economic factors
ECONOMIC FACTORS

  • What is a threat to one firm is an opportunity to another as shown by:-

  • Depression

  • Boom


Social factors
SOCIAL FACTORS

Opportunity

  • Consumer Expectancy

    Threat

  • Dependent on one person


Political factors
POLITICAL FACTORS

Opportunities

  • Deregulation

  • Article 86 of the treaty of Rome


Product and technology
PRODUCT AND TECHNOLOGY

OPPORTUNITY

  • Virgin provide a high quality product

    THREAT

  • Technological advance


Markets
MARKETS

Opportunity

  • Franchising

  • Far East Routes

    Threat

  • Franchising


Competition
COMPETITION

Opportunity

  • Effects of Dirty Tricks

    Threats

  • Resources

  • Deregulation


Other factors
OTHER FACTORS

Threats

  • Crashes

  • Terrorists

  • Strikes


Dirty tricks
DIRTY TRICKS

In 1991 Virgin launched complaints on B.A. over issues known as “DIRTY TRICKS”

What were these “Dirty Tricks”

  • Predatory Pricing (1991)

  • Lord King stressed Virgin weren’t competitors just poor substitutes.


Dirty tricks1
DIRTY TRICKS

  • B/Cal and B.A. merger (1988)

  • B.A.’s internal task force

  • Operation Barbara

  • Counter Espionage Campaign

  • Operation Helpline


Opportunities for virgin to gain
OPPORTUNITIES FOR VIRGIN TO GAIN

  • Extra free PR

  • Look Clean

  • Reinvestment


What should b a have done instead
WHAT SHOULD B.A. HAVE DONE INSTEAD

  • Better PR To Improve Their Image

  • More emphasis on Quality Service

  • Ethic Control

  • Need For One Message


Questions
QUESTIONS

  • Do you think BA were treated fairly when slots were being taken away from them?

    - How would Virgin feel?


Tows step 4 internal environment
TOWSSTEP 4INTERNAL ENVIRONMENT


Control
CONTROL

  • Branson-Fields become partners (1984)

  • Branson buys out Fields (1985)

  • Sells 10% for £36m in loan equity (1989)

  • Buys back shares for £45m (1993)

  • BRANSON HAS TOTAL CONTROL

    (can develop long term strategy without worrying about shareholders)


Management structure
MANAGEMENT STRUCTURE

  • Branson is a leader, he made Virgin with a ‘hands-on’ style of management. However he maintains Virgin Holdings could exist without him.

    “Virgin is one of the best delegated companies you could come across.” RB.

  • He has little involvement in anything other than Virgin Atlantic Airways.


The value of richard branson
THE VALUE OF RICHARD BRANSON

  • PR mouthpiece & publicity generator

  • Long term strategist

  • Role model

    (for target customers & staff)


Employee relations
EMPLOYEE RELATIONS

  • Staff get a relatively low wage

    However Richard Bransons philosophy of ‘making work fun’ means that people want to work for Virgin. Staff feel valued because:

  • He flies with the crews at least once a month, working with them.

  • He rewards staff when possible.

    HIGH MORALE = QUALITY SERVICE


Company work ethic
COMPANY WORK ETHIC

  • When it comes to Management & the Organisation, Branson believes in the Japanese work ethic: going for growth, quality, and creating valuable assets.

  • He says:

    “They invest for the long haul and really care for the attitudes of employees.”


Business operations
BUSINESS OPERATIONS

  • Growth, quality, creating valuable assets.

  • Low fixed costs enable Virgin to provide quality services at discount prices.

    = COMPARATIVE ADVANTAGE


Dealing with the giants
DEALING WITH THE GIANTS!

  • Despite their comparative advantages Virgin is underthreat from competitors with vast resources.

  • Protection and opportunities can be obtained from political bodies;

    - the C.A.A. (Civil Aviation Authority)

    - E.U. (Treaty of Rome)

    However, Virgin still has to compete in terms of advertising, developing new technology, and meeting changing demands.



Is size important1
IS SIZE IMPORTANT?

“Airlines should be kept small and personal. They should be run like private clubs. we try to manage ours from the bottom up.”

“As far as I am concerned in the airline business small is beautiful. Mans instinct to grow must be taken out on other businesses.”

“ create the best airline in the world, not the biggest.”

Richard Branson


Organic growth
ORGANIC GROWTH

Branson intends for Virgin Atlantic to grow organically until it reaches his goal.

  • Maximum fleet of 20 Boeing 747’s

  • Servicing 12 cities around the world.

    “employee satisfaction can only be guaranteed in a company up to a certain size.”

  • ‘Small & friendly’ cabin teams.

  • Virgin Pacific???


Destinations
DESTINATIONS

“The 12 most exciting cities in the world”

They also happen to be some of the most profitable!

By keeping costs low and citing the most profitable routes (no loss leaders), Virgin Atlantic have reasonable margins despite discounting.

3RD MOST PROFITABLE AIRLINE!


Improved access
IMPROVED ACCESS

  • Link with Delta Airlines (USA) increased Virgins’ access in the US from 8 to over 200 cities.

  • This move was seen as vital as it enabled Virgin to remain both independent and competitive in the face of an increasing number of global alliances.

    - similar link in Australia, Far East???


Liquidity current ratio current assets current liabilities
LIQUIDITYCurrent Ratio = Current AssetsCurrent Liabilities


Gearing debt ratio total borrowings capital employed 100
GEARINGDEBT RATIO = Total Borrowings Capital Employed *100


Activity net asset turnover sales net assets
ACTIVITYNet Asset Turnover = Sales Net Assets


Profitability r o c e operating profit sales 100
PROFITABILITYR.O.C.E = Operating Profit Sales *100


OPERATING PROFIT MARGIN = Operating Profit Sales *100


Marketing price
MARKETING (PRICE)

Strengths

  • Cut Price Airline

  • Niche Business Travel Pricing


Marketing price1
MARKETING (PRICE)

Weaknesses

  • Marginal Profits

  • Can be copied by competitors


Marketing promotion
MARKETING (PROMOTION)

Strengths

  • PR by Richard Branson - Stunts

  • Brand Awareness

  • Word of Mouth


Marketing promotion1
MARKETING (PROMOTION)

WeaknessesRichard Branson is the sole promoter at the moment

  • Not as many promotional resources as competition

  • Statistics could be exposed


Marketing place
MARKETING (PLACE)

Strengths

  • Now in Heathrow & US Cities (Via Delta)

  • Far East


Marketing place1
MARKETING (PLACE)

Weaknesses

  • Too much expansion (places) too quickly

  • Not as much coverage as competitors

  • Difficult to get in to other airports


Marketing product
MARKETING (PRODUCT)

Strengths

  • Innovators

  • Service

  • Quality

  • Family Atmosphere


Marketing product1
MARKETING (PRODUCT)

Weaknesses

  • Difficult to now expand and retain profit

  • Limited number of routes

  • Need to keep ahead of field


Tows step 5 developing alternatives
TOWSSTEP 5DEVELOPING ALTERNATIVES


Alternative strategies

IS IW

EO

ET

WT (mini-mini)

WO (mini-maxi)

ST (maxi-mini)

SO (maxi-maxi

ALTERNATIVE STRATEGIES


Time dimensions
TIME DIMENSIONS

s w

o so wo

t st wt

s w

o so wo

t st wt

Present

PP-T2

s w

o so wo

tst wt

Past

PP-T1

s w

o so wo

t st wt

Time


Interaction matrix
INTERACTION MATRIX

Strength

1 2 3 4 5 6 7 8 9 10

Opportunity

+ + 0 0 0 0 + 0 0 0

+ 0 0 + 0 0 0 + 0 0 0 0 0 + 0 0 0 0 0 +

+ + + + + + + + 0 0

+ 0 + 0 0 0 + 0 0 +

+ + 0 + + 0 + + + +

0 0 0 0 0 0 + 0 0 0

+ 0 0 + 0 0 + 0 0 0

+ 0 0 + 0 0 0 + 0 0

+ + 0 0 + 0 0 0 0 0

1

2

3

4

5

6

7

8

9

10



Developing alternatives
DEVELOPING ALTERNATIVES

  • WO (mini maxi)


Developing alternatives1
DEVELOPING ALTERNATIVES

  • ST (maxi mini)


Developing alternatives2
DEVELOPING ALTERNATIVES

  • WT (mini mini)


Developing alternatives3
DEVELOPING ALTERNATIVES

  • SO (maxi maxi)


Tows step 6 stategy choices
TOWS STEP 6STATEGY CHOICES


Strategic choices available to virgin
STRATEGIC CHOICES AVAILABLE TO VIRGIN

  • WT (mini-mini) = RETRENCHMENT

  • WO (mini-maxi) = NO CHANGE

  • ST (maxi-mini) = SPECIALISATION & INNOVATION

  • SO (maxi-maxi = DIVERSIFICATION & JOINT VENTURES


Dynamics of tows analysis
DYNAMICS OF TOWS ANALYSIS

s w

o so wo

tst wt

s w

oso wo

t st wt

Present

PP-T2

s w

o so wo

tst wt

Past

PP-T1

s w

o so wo

t st wt

Time


Tows step 7 consistency contingency
TOWS STEP 7CONSISTENCY & CONTINGENCY


Consistency testing
CONSISTENCY TESTING

  • Is the strategy consistent with the enterprise profile, the present and projected environment, and the resources of the firm

  • Are the strategies in line with Richard Branson as the claimant of Virgin’s organisation

  • Are the strategies in congruence with with Medium and Long Range plans which, in turn can be adjusted from the master strategy


Contingency plans
CONTINGENCY PLANS

  • Have contingency plans have been taken into account that are crucial to the survival and success of Virgin?

  • Yes, already analysed in alternative strategies (see handout)


Conclusion
CONCLUSION

“To be the best airline in the world by the year 2000”


Conclusion1
CONCLUSION

“To be the best airline in the world by the year 2000”

“To be the best airline in the world.”

- through organic growth until Virgin reaches its maximum size (12 destinations serviced by 20 Boeing 747s)


ad