Virgin America’s segmentation strategy focused on diverse groups of clients. The company served people traveling across the US and was named “Best US Airline” and “Best Domestic Airline” for several years in a row (Hill et al., 2019). Virgin America was known for offering customers from its core segment flights equipped with leather seats, legroom in coach class, and in-seat power outlets (Hill et al., 2019). The airline also provided onboard Wi-Fi and served full-service meals under cocktail-lounge-style lighting (Hill et al., 2019). Virgin America used to be one of the leading carriers in the nation because the company prioritized the clients’ comfort.
Nevertheless, Virgin America faced some challenges affecting the airline’s strategy. In opposition to its low-cost competitors, Southwest Airlines and Jet Blue, Virgin America pursued Porter’s differentiation generic business-level strategy (Hill et al., 2019; Islami et al., 2020). Differentiation implies that an organization should develop a unique product or service to distinguish itself from rivals through its quality (Islami et al., 2020). Accordingly, the management of Virgin America was certain that people would be willing to pay more for good service (Hill et al., 2019). Moreover, the company’s founder stated that the brand represented “innovation, quality, and a sense of fun,” suggesting that it was unlike other carriers (Hill et al., 2019, p. 166). In particular, some functional-level actions that enabled the airline to implement its strategy were designing high-quality offerings and establishing well-developed customer care (Hill et al., 2019). The company has accomplished these actions, as Virgin America had loyal clients, the fewest complaints, and the lowest level of denied boardings and mishandled baggage (Hill et al., 2019). Virgin America did not strive to become the most affordable airline but sought to provide the best quality.
References
Hill, C.W. L., Schilling, M. A., & Jones, G. R. (2019). Strategic management: Theory & cases: An integrated approach (13th ed.). Cengage Learning US.
Islami, X., Mustafa, N., & Latkovikj, M. T. (2020). Linking Porter’s generic strategies to firm performance. Future Business Journal, 6(1), 1-15.