INSEAD
About the case
Between 1984-1994 Virgin Atlantic Airways (VAA) had brought many innovations to the airline industry and won a variety of awards for its service. It had fought against giants on an international scale and survived the airline industry’s most difficult years. But its founder Richard Branson faced many questions on VAA’s future such as what sort of airline should it be? And how could it remain profitable?
Discover why the authors think this case has been so popular over the last 50 years.
For sure, the airline industry has always attracted educators and students alike. The success of the little Virgin Atlantic Airways (VAA) against the giant British Airways was intriguing. And at the time the case was written, Richard Branson was one of the best known entrepreneurs in the world.
But from a pedagogical point of view, Virgin Atlantic Airways is the ultimate example of the “more for less” approach based on customer centricity that I developed in my book The Momentum Effect. The case shows how, starting on an impulse decision with a doomed-to-fail strategy, VAA became a successful profitable and growing airline over the space of ten years. While low-cost airlines had already proved their merit in the USA, Virgin was the first to offer at the same time low prices and high quality service. When students analyse and discuss the case, they realise that this seemingly impossible combination is achieved by a virtuous circle of continuous small discoveries, service innovations, engaged employees and customers, which fuel further discoveries… The final observation is that such a business model was sustainable only because it was cemented by a strong culture.
Author perspective
Discover why the authors think this case has been so popular over the last 50 years.
For sure, the airline industry has always attracted educators and students alike. The success of the little Virgin Atlantic Airways (VAA) against the giant British Airways was intriguing. And at the time the case was written, Richard Branson was one of the best known entrepreneurs in the world.
But from a pedagogical point of view, Virgin Atlantic Airways is the ultimate example of the “more for less” approach based on customer centricity that I developed in my book The Momentum Effect. The case shows how, starting on an impulse decision with a doomed-to-fail strategy, VAA became a successful profitable and growing airline over the space of ten years. While low-cost airlines had already proved their merit in the USA, Virgin was the first to offer at the same time low prices and high quality service. When students analyse and discuss the case, they realise that this seemingly impossible combination is achieved by a virtuous circle of continuous small discoveries, service innovations, engaged employees and customers, which fuel further discoveries… The final observation is that such a business model was sustainable only because it was cemented by a strong culture.
