IT Strategy

IT Strategy

Promote Your Page Too

Subscribe: Posts | Comments | Email

  • Home
  • About
  • Contact me
  • Business Intelligence
  • Business Strategy
  • Change Management

Virgin America’s IT Strategy

August 31, 2007 by Raj Sheelvant

Wall Street Journal tech blog, How to Do IT on the Cheap is about the IT strategy at Virgin America. If you have paid access to Wall Street Journal’s Web Site then you can also read about Virgin America flies new IT path. Both these articles discuss how Virgin America is breaking new ground when it comes to IT infrastructure. They are planning on reducing their IT related costs by mainly outsourcing everything including customer support. Instead of mainframes that is used by the other airlines, they are using Linux based servers. Both the articles talk positively about the Virgin America’s IT initiatives.

Before we applaud this move as ‘out of the box’ thinking, let’s evaluate this from the company’s strategic perspective. According to Micheal Porter there are 2 types of competitive advantage which a company can utilize to build ‘economic moat’.

1.  Cost Advantage
2.  Differentiation Advantage

If Virgin America is planning on using Cost Advantage strategy then they are setting themselves to fail. Guess what; in the overcrowded airline industry especially in the US there is cutthroat competition for being the low cost carrier. Southwest has a proven successful model and it is difficult to beat them on the merits of cost advantage by itself. Many airlines have tried in the past and have failed. Jet blue might be the only exception. I will write more about Jet Blue’s IT strategy in my later blog.

But based on other Virgin products, personally I would like bet that Virgin America is planning on using Differentiation strategy. To start off they have a well known brand ‘Virgin’ that is widely recognized in US. They also intend on using ‘plush’ features on their airplane (like leather seats, entertain system etc.) to make the in-flight experience comfortable. I believe providing superior ‘flying experience’ is the only way they are going to survive this airline industry.

Crowded airports/ runway and long lines at security is making travelers long for a comfortable flying experience and may be willing to pay higher for that experience. Who are these customers? This is where gathering customer related information becomes very vital. Ferreting out intelligence from that information is equally critical. In my opinion Virgin America needs to start investing in CRM, Data Warehousing and BI tools to identify the right customers. They can get away by outsourcing initially. But as the data grows, depending on an outsourced company to provide the infrastructure to gather the intelligence from information is extremely risky proposition. Never outsource your core competency!

Buried in the WSJ blog they do talk about Virgin America’s homemade software (no details available). If that homemade software is specific to Virgin America’s business strategy, they are doing everything right. If the customized software is only about cost savings and nothing to do with understanding ‘customer life time value’, then sorry to say, in a few years they will be Southwest look alike.

Update: Nov 30, 2007

Finally, today I got motivated to blog about Jet Blue’s IT Strategy.

Popularity: 93% [?]

Related posts:

  1. Jet Blue’s IT Strategy
  2. Google and Microsoft reveal their Data Center Strategy?
  3. Coca Cola’s Business Intelligence Strategy
  4. Enterprise Application Implementation Strategy
  5. IT Strategy Amid Economic Uncertainty

Comments (3)

 

  1. Yaz Okulu says:
    March 28, 2008 at 2:43 pm

    hello everybody. my Italian is not good but it seems like a very nice web site. thanks

  2. londra says:
    September 12, 2008 at 7:18 pm

    спасибо для этого красивейшего вебсайта

  3. Sharsico says:
    January 29, 2009 at 9:27 am

    Долго думать вредно.Если линии в штатах и так дешевы,переходите на другие рейсы.
    1.дифференциация–дешевые самолеты(устаревшие)при дорогой цене мест.Подгрузка и сокращение ожидадия пасажиров в аеропортах.
    Маршруты.комерцию(торговлю авиа).Можно обсудить прри наличии самолетов типа Ил-14!!!!
    О линиях в штатах г-нРичард Бренсон можно начинать с хорошей теме по иннвестиции:СО.это по химии.

Leave a Reply

Click here to cancel reply.

Translate

    Translate to EnglishÜbersetzen Sie zum Deutsch/GermanTraduzca al Español/SpanishTraduisez au Français/FrenchTraduca ad Italiano/ItalianTraduza ao Português/Portuguese日本語に翻訳しなさい /Japanese
    한국어에게 번역하십시오/Korean中文翻译/Chinese Simplified中文翻译/Chinese Traditionalترجمة الى العربية/ArabicVertaal aan het Nederlands/DutchΜεταφράστε στα ελληνικά/GreekПереведите к русскому/Russian
    Oversetter til Norsk/NorwegianÖversätta till Svensk/Swedishहिन्दी अनुवाद करने के लिए/HindiTradueix al català/CatalanTulkot uz latviešu/LatvianPreložiť do slovenčiny/SlovakПереклад на українську/Ukrainian

Popular Posts

  • Dell’s Game PC Turnaround Strategy
  • Virgin America's IT Strategy
  • Enterprise Application Implementation Strategy
  • SaaS CRM Disadvantages
  • McKinsey’s 7-S Strategy Framework
  • Evolving role of the IT Project Manager
  • A New Breed of IT Workers
  • SaaS in Large Organizations
  • About
  • Globalization of Labor - II

Recent Comments

  • Ava Klena on Ethnocentric Corporate Culture
  • Poker on Simplicity Minded Management
  • Intrenet marketing Consultants on Enterprise Application Implementation Strategy
  • sara on Evolving role of the IT Project Manager
  • sara on Evolving role of the IT Project Manager
  • Shiva on Evolving role of the IT Project Manager

Archives

  • March 2010
  • February 2010
  • December 2009
  • November 2009
  • October 2009
  • September 2009
  • August 2009
  • July 2009
  • June 2009
  • May 2009
  • April 2009
  • March 2009
  • February 2009
  • January 2009
  • December 2008
  • November 2008
  • October 2008
  • September 2008
  • August 2008
  • July 2008
  • June 2008
  • May 2008
  • April 2008
  • March 2008
  • February 2008
  • January 2008
  • December 2007
  • November 2007
  • October 2007
  • September 2007
  • August 2007
  • July 2007

Blogroll

  • Enterprise Irregulars
  • Internet Evolution
  • Nicholas Carr’s Blog
  • OnStrategies Perspectives
  • Sramana Mitra’s Blog
  • Steve’s IT Rants
  • Straight to the Source
  • Tech IT Easy
  • The Long Tail
  • The Visible Enterprise
  • Wikinomics

Categories

  • Business Intelligence
  • Business Strategy
  • Change Management
  • Cloud Computing
  • Collaboration
  • Cultural Intelligence
  • Enterprise 2.0
  • Enterprise Applications
    • CRM
    • ERP
  • Globalization
  • Green IT
  • Human Resource
  • Internet Strategy
  • Interview
  • IT Management
    • CIO
    • Knowledge Management
    • Project Management
    • Talent Management
  • IT Strategy
  • Marketing Strategy
    • Branding Strategy
  • Nicholas Carr
  • Outsourcing
  • PaaS
  • SaaS
  • Web 2.0

Meta

  • Log in
  • Valid XHTML
  • XFN
  • WordPress

Recent Posts

  • Management by Analytics?
  • What’s the role of IT Business Analyst?
  • Borderless Innovation
  • Millennials’ Impact on Organization Structure
  • Crowd Sourcing Business Process Improvement
  • 2010, The Year of IT Project Managers?

Recent Comments

  • Ava Klena on Ethnocentric Corporate Culture
  • Poker on Simplicity Minded Management
  • Intrenet marketing Consultants on Enterprise Application Implementation Strategy
  • sara on Evolving role of the IT Project Manager
  • sara on Evolving role of the IT Project Manager
  • Shiva on Evolving role of the IT Project Manager

Author

About Me

Raj Sheelvant has more than 15 years of varied experience in the field of Information Technology and is passionate about aligning IT with Business needs.

Raj strongly believes that IT can be leveraged to create, sustain and enable Business Strategy. This is a blog that demonstrates value added by IT to the Strategy

Design by Web Hosting. In collaboration with HostMonster Review. Hosting Talk. HostGator Coupon.

© 2009 Copyright. All Rights Reserved.