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The General Environment

The environment in general can have an impact on the strategies of a firm. The air lines have changed the way people live. They operate in dynamic environment which includes the social, economical, legal and technological factors that can have an influence on the decision making. One of the most important trends in the recent times has been of an expanding middle class. The rich may have grown richer and the poor have grown poorer, but the size of the middle class has grown considerably.

With the growth of baby boomers at the same time, the airline industry has experienced a constant growth for the past two decades. However, growth and development have not always been easy. There have been competitors, oil price crises and many other challenges that affect the strategy and profitability of airlines. These factors tend to have an indirect impact on a company and on which one cannot exercise much control. Virgin Blue is one of those companies that has been able to take the challenges and emerged as one of the leading and successful airlines of Australia.

External strategic competitiveness Since Virgin Blue falls into the first category therefore we are going to discuss this only. Over the years the number of players in this segment of the industry has changed, previously there used to be around four players Qantas, Ansett, Virgin Blue and Impulse airlines. However today there are predominantly only two players in the industry of its kind. One of the major competitors of Virgin Blue is Qantas Airline since the closure of Ansett; Virgin Blue has given serious competition to Qantas (Qantas v. Virgin Blue, 2009).

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