Virgin Trains Swot

History of Virgin

Virgin Trains was born on 29th of November 1996 when it was awarded the Cross Country franchise following the privatisation of British Rail, the franchise will last until April 2012. Along with the Cross Country line, Virgin also won the West Coast franchise and took control on the 9th of March 1997, this franchise will end in March 2012. The West Coast line was the last but one of the franchises to be handed over to the private sector, all of which had been completed in less than three-and-a-half years after the Railways Act had been passed.

Virgin Trains' own definition of the company is on its website, www.virgintrains.co.uk. They describe the company as 'A truly national network, Virgin Trains covers vast areas of Britain.'

Structure of the Company

Virgin Trains is owned and run by Virgin Management and Stagecoach Plc. The Virgin Management team are the majority shareholders and own 51% of the company as opposed to Stagecoach which owns 49%. Virgin Trains is managed by a board known as Virgin Rail Group and is made up of the Virgin Management team and Stagecoach.

Appendix 1.

To give an idea of the size of Virgin Trains, I have prepared a number of facts and figures that were gathered in 2004.

* Turnover in 2004 amounted to Ј579 million.

* Members of staff employed by Virgin Trains reached 4748.

* Total passengers per annum was recorded at 34.1 million.

* Train miles per annum was a staggering 31.6 million.

It is clear that Virgin Trains is truly a national company, both in terms of its size outlined by the figures above but also by the areas that it serves.

Appendix 2.

The geographical map above shows the extent to which Virgin Trains operates throughout the country. It is clear that the company runs services to and from just about every corner of England and also on the main routes in Scotland, around Glasgow and Edinburgh. Once again, this highlights the size and breadth of the company.

History of the Industry

The Conservative governments of the 1980s, led by Margaret Thatcher, began a policy of privatising state-owned assets. However, it was John Major's government that came in with a manifesto of privatising the railways. Major liked the idea of large territorially based companies that had existed from 1923 to 1947 and this is what he sat about doing. The first franchise to be allocated was that of South West Trains. This went to Stagecoach Holdings on 19 December 1995.

Profile of the Industry

It is clearly known by a large proportion of the population that rail travel is a very common alternative to travelling by car. It has many advantages over using a car, the main factor being the cost of travel in the long run. It can also be much faster than travelling by car as there is very little congestion on the train tracks and with Virgin committing to making large investments in new high-speed trains, it may become even faster. These reasons are what makes the train industry as popular and as large as it is. The following statistics highlight the size of the industry as a whole, throughout the UK.

* Total passenger journeys between 2004 and 2005 were calculated at 1,088 million.

* 84 million of these journeys were classed as long distance, the sector of industry that Virgin primarily operates in.

* Total passenger revenue amounted to Ј4,158 million in the year 2004 to 2005.

* The total revenue in this period for long distance operators was recorded at Ј1,465 million.

The above data was taken from the website of the office of rail regulation. The address is www.rail-reg.gov.uk.

SWOT Analysis

Strengths

* Virgin operates the famous West Coast line, one of the most valuable and famous lines in the UK. By owning the franchise to this line, Virgin has a symbolic railway in which it operates.

* The Virgin group has huge financial backing in the shape of both Stagecoach and Richard Branson. With Branson owning the many Virgin brands ranging from radio, airline and soft drinks, the resources available to Branson and the rest of the Virgin group are huge. With the large amounts of investment planned, Virgin will be able to negotiate favourable rates with any lenders of capital. This is if they need anyone to lend them money as Branson may just call upon reserves of the many businesses he owns and runs.

* Virgin has a very big brand name and reputation that is known and recognised around the world. When a business has a recognisable brand name and good reputation, it is far more likely to experience repeat business than a business with a smaller name and poorer reputation. By creating a brand such as Virgin, Branson has created a strong form of customer loyalty.

* 94% of complaints are dealt within the target time set by Virgin. This would suggest a good level of customer service and awareness.

Weaknesses

* With Virgin's Cross Country franchise scheduled to end in 2012, there is potentially the prospect that Virgin may not win the bid to renew the franchise. If this were to happen, Virgin would have