Virgin Southwest: A Hypothetical Hostile Takeover Communications Plan

I’m often asked “So…what exactly do you do?” Fair question, since strategic communications often gets lost under the generalized heading of PR. Strategic communications can involved a whole host of things, from brand positioning to digital strategy, but perhaps the most important tool in a communications professional’s arsenal is the communications plan.

A communications plan is a 25 to 50 page (if not longer, depending on the company or communications goal) document that through a thorough analysis of key publics, objectives, strategies and tactics seeks to achieve a broad of specific communications goal. Every business, communications department and communications initiative needs one.

The case study below is a sample one I’ve made that is quite truncated and in the real world would need much more substantiation via research, but it lays out the format. Feel free to use this strategic framework for your own communications goals! 

Virgin Southwest

A Hypothetical Hostile Takeover Communications Plan Case Study

BACKGROUND

In this hypothetical situation, Virgin America, a US subsidiary of Virgin, has announced a hostile takeover of Southwest. Virgin America CEO Richard Branson seeks to acquire the brand for increased profits and reach within the new market he has entered. Southwest, while financially viable, found itself vulnerable during the recent US economic downturn. Virgin’s diversified holdings in not only air travel but communications, entertainment and consumer goods made them an attractive buyer to Southwest’s lenders and key members of the board.

However, most members are not happy with the takeover. Employees of Virgin, Virgin America and Southwest are all concerned about their job security and satisfaction. Stakeholders worry about brand dilution and undervalued shares. Consumers wonder if the same airlines they became accustomed to will remain the same. Lenders worry about the ability of Branson to sufficiently capitalize in a still-weakened US economy. The FAA is concerned with a smooth transition that does not disrupt air travel, and the SEC is worried Branson may be violating foreign ownership laws with too much of a market share.

Realizing the multilayered problems this hostile takeover poses, Branson has given his communications professionals direction that the takeover will be hereafter referred to as a merger, and that all actions will be done to respect Southwest’s integrity and loyal consumer base wherever possible. The hostile takeover commenced in early May and is set to go public by September of 2012.

SITUATIONAL ANALYSIS

Southwest is an iconic American brand aside from being an iconic airline. A distinct corporate culture and identify, emphasis on employee and consumer satisfaction, campy aesthetic and in-flight humor make Southwest one of the only airlines seemingly unaffected by 9/11 and the recent economic down turn. Consumer loyalty is intense – Southwest enjoys a healthy Twitter and Facebook following with approximately 1.5 and 2.5 million respectively.  Virgin America has 322, 870, United has 7,446 and American Airlines has for 362, 819 comparison.

Founded in 1967,  Southwest started as a Texas-based carrier that overtime grew to support national routes. Famous for its business model of putting employee satisfaction first with the hope that it trickles down to consumer satisfaction, Southwest pioneered the “10 minute turnaround,” ensuring that flights were kept on schedule so as to allow for more profits. Southwest founder Herb Kelleher’s progressive management style and penchant for wearing Hawaiian shirts to work and encouraging employees to do the same gave rise to a company that offered flying the “friendly skies.”

Virgin Atlantic (known simply as Virgin) is a longstanding British airline represented by daredevil entrepreneur Richard Branson, a celebrity in his own right. In 2007, he decided to enter the US airline market with Virgin America, which currently flies select transcontinental routes. A savvy public relations campaign with enticing advertisements showing beautiful people enjoying state of the art luxury announced Virgin’s entry into the American market, which was dazzled by plane mood lighting, in-cabin bike storage and sleek, rotating white enamel check in kiosks.

Both brands are highly patronized, however Southwest is friendly and accessible while Virgin is aspirational and chic. An additional challenge will be to synthesize the brands in a harmonious fashion.

Studies have shown than hostile takeovers are often a logistical nightmare that if not carefully communicated to all stakeholders involved, can dilute the brand, scare away critical employees, threaten loan viability, and put the companies involved under unwanted federal scrutiny. In this specific instance, there is the added complication of a local subsidiary of a foreign brand taking over a beloved domestic brand. Both the Virgin and Southwest brands have strong identities, recognizable logos, corporate figures and perks. Merging the two will require deft navigation.

GOAL

To facilitate a seamless hostile takeover by Southwest on behalf of Virgin America by employing various communications tactics with an emphasis on digital strategy to keep key public confidence intact.

OBJECTIVES

1.) Create awareness of the merger among all key publics

2.) Raise support among government agencies by June 2012

3.) Leverage key partnerships with other identified brands by July 2012

4.) Assess employee confidence in the merger at 85% positive by July 2012

5.) Achieve majority shareholder buy in by August 2012

KEY PUBLICS

Employees

Employees of both Southwest and Virgin America will be concerned about their job security and satisfaction. Because this takeover directly affects their livelihood, they will be the most concerned and quick to panic. Since the company needs to operate efficiently, especially during this time, appealing to this key public through regular communication respectful of their needs is crucial. Employees are of a variety of ages and races. Their primary sources of news will be mainstream outlets as well as industry unions or publications. Their self-interest is their livelihood.

Stakeholders

Financial stakeholders will be especially concerned during this time. Some who have large shares of the company or who have held stock for years will be especially prone to feelings of anxiety over the continued profitability of the company after the takeover. As with employees, stakeholders must be catered to closely in a way that respects their needs for rapid, constant communication during the takeover. Stakeholders are likely to be older, financially secure white men. Their news sources will be a mixture of mainstream and business-specific outlets. Their self-interest is their financial assets.

Lenders

Lenders and investors will have similar concerns to stakeholders. They will wonder if the financial viability of the company post-merger will affect the ability of the new company to follow through with loan agreements or financing stipulations. Constant communications, transparent financial records and respect to their concerns will be key during this time. Lenders will be large financial institutions, most likely older males, who gather their news from mainstream and business-specific outlets. Their self-interest is their financial assets.

Government Agencies

Concerned government agencies, such as the FAA and perhaps the SEC, will want to make sure that the takeover is happening in accordance with federal regulations. Their needs during this time will be access to top airline officials, financial and planning documents, and consistent communication.  They will most likely be a range of ages and races. Their news sources will be a mixture of mainstream outlets and industry specific outlets, as well as inside government information that they’re privy to on account of their federal status. Their self-interest is ensuring the airline’s accountability.

Consumers

Consumers will be concerned at the change in their beloved brands, as well as continued affordability and quality of service. They will need the new brand to be clearly communicated to them, and have ready access to content in all forms of media, especially digital, to feel part of the conversation. Consumers will be a mixture of ages and races, and will most likely obtain their news from mainstream outlets. Their self-interest is the relationship with the brand and affordability.

STRATEGIES AND TACTICS

Employees

Strategy 1: Utilize in-person communications sessions to engender employee confidence in the takeover.

Tactic 1: Host frequent town halls with a variety of stakeholders from across the company, from pilots to baggage workers and stewardesses. Have communications specialists moderate the town halls between employees and Richard Branson and Gary C. Kelly. Encourage employees to air candid concerns and respond in kind.

Tactic 2: Make communications professionals available in specific locations (employee and airport hubs) along with health insurance and pension specialists to answer any nuts and bolts questions employees may have during all business hours.

Tactic 3: Create job function-specific closed door meetings with communications specialists and HR representatives to address specific concerns (i.e., separating into groups of baggage workers, pilots, stewardesses, administrative professionals). Be sure to invite their job-specific union representatives for a comprehensive stakeholder conversation.

Strategy 2: Leverage digital strategies to engender employee confidence in the takeover.

Tactic 1:  Immediately create a Google-enabled intranet for employees with an introductory email walking them through its features – latest news, live chat with transition consultants, communications professionals and HR specialists.

Tactic 2: Create a locked Twitter and Facebook account for employees to tweet and post their concerns 24/7. Staff accounts with trained community managers headed by current Southwest community manager Christi Day McNeill, known in the industry for her command of best practices.

Tactic 3: Send frequent electronic updates in the form of individual emails and e-newsletters detailing the specifics of the takeover as its happening, links to social media resources and reminds of support, in-person, and live chat assistance.

Stakeholders

Strategy 1: Conduct in-person meetings to convey presence and accountability.

Tactic 1: Host frequent meetings between stakeholders and C-suite executives on financial happenings as they evolve.

Tactic 2: Invite third party analysts (mergers and acquisitions attorneys, financial analysts, etc.) to separate meetings to candidly answer stakeholder’s questions and lend outside credence C-suite’s initiatives during the takeover.

Tactic 3: Dispatch representatives to key stakeholder’s offices and create an atmosphere of intimacy with one-on-one dinners.

Strategy 2: Leverage digital strategies to engender stakeholder confidence.

Tactic 1: Create access for shareholders to intranet and locked social media platforms geared towards stakeholder concerns.

Tactic 2: Send constant e-mail updates and electronic newsletters offering the latest news and reminders of resources both in person and online.

Strategy 3: Create goodwill through strategic gestures.

Tactic 1: Offer stakeholders complimentary flight passes and related perks.

Tactic 2: Offer exclusive initial buy in of the new company’s IPO to key stakeholders (i.e., those with the most shares).

Lenders

Strategy 1: Conduct in-person meetings to convey presence and accountability.

Tactic 1: Host frequent meetings between stakeholders and C-suite executives on financial happenings as they evolve.

Tactic 2: Invite third party analysts (mergers and acquisitions attorneys, financial analysts, etc.) to separate meetings to candidly answer lender’s questions and lend outside credence C-suite’s initiatives during the takeover.

Strategy 2: Leverage digital strategies to engender lender confidence.

Tactic 1: Create access for shareholders to intranet and locked social media platforms geared towards lender concerns.

Tactic 2: Send constant e-mail updates and electronic newsletters offering the latest news and reminders of resources both in person and online.

Government Agencies

Strategy 1: Conduct in-person meetings to convey presence and accountability.

Tactic 1: Host frequent meetings between government agencies and C-suite executives. Offer an official record interview or paperwork to ensure accountability.

Tactic 2: Invite third party analysts (mergers and acquisitions attorneys, financial analysts, etc.) to separate meetings to candidly answer government agencies’ questions and lend outside credence C-suite’s initiatives during the takeover.

Tactic 3: Offer agencies an advisory role in the process to make them feel as if they have a direct participatory role and buy in.

Tactic 4: Craft targeted messaging to buy in support from airline environmental units such as Airports & ENV law division that place an emphasis on environmental precautions such as cleaner fuel.

Strategy 2: Leverage digital strategies to engender government agency confidence confidence.

Tactic 2: Send constant e-mail updates and electronic newsletters offering the latest news and reminders of resources both in person and online.

Consumers

Strategy 1: Launch a comprehensive advertising campaign over various outlets and mediums to explain the brand and promote its services.

Tactic 1: Utilize the services of a high profile PR firm such as Virgin America’s agency Ogilvy or Edelman to create a fun, sexy ad campaign that features a refreshed branding ( the Southwest heart logo with a ‘V’ overlaid, so that the V or Virgin looks like a heart monitor squiggle), commercials should feature trendy music and scenes of what will now happen on Virgin Southwest flights (chances to win prizes, free WiFi, Starbucks coffee, use of Apple electronics, news exclusives via inseat entertainment consoles, and green fuel initiatives)

Tactic 2: Strategically place print, electronic and mobile ads among key markets. Target mainstream television outlets for commercials, mainstream publications for print ads, radio station in older population markets and mobile advertising among select populations.

Strategy 2: Exploit digital resources to communicate messaging points to consumers.

Tactic 1: Announce the merging of Virgin America and Southwest social media platforms on all respective platforms several weeks prior to the merge so that consumers can switch to liking and following the new combined brand platform.

Tactic 2: Host live chats, Twitter town halls and Facebook Q&A’s.

Tactic 3: Present Virgin Southwest as incredibly tech savvy by pitching intended social media platform best practices to tech outlets such as Mashable and Technorati. Create Instagram, Twitter, Vimeo, Tumblr, Facebook and Pinterest accounts so that there is a comprehensive presence across all social media platforms displaying the latest on Virgin Southwest promotions and a visual introduction into its new corporate identity.

Tactic 4: Unveil new site with enhanced features such as latest happenings, a suite of new flyer perks (frequent flier miles doubled during the first week of the new brand’s flights, a new VIP Virgin Southwest lounge with exclusives such as first look and opportunity to purchase partner products featured during commercials)

Tactic 5: Tie incentives to online traffic. Host prize contests accessed exclusively through social media links and QR code scans in order to ultimately build an online following to maintain customer engagement and satisfaction.

Strategy 3: Offer incentives to build goodwill, retain older customers and entice new ones.

Tactic 1: Offer free flights to select winners, consumer contests such as a “design our new plane skin,” new frequent flier offers (double the miles the first week of the brand’s debut), a new airport lounge, etc.

Strategy 4: Partner with hot brands to bring prestige and attractiveness to Virgin Southwest as it builds its new brand.

Tactic 1: Offer the use of Apple electronics in-flight. Arrange agreements with Apple to let fliers see new products first (i.e. The New iPod. Come see it first at 30,000 feet. Only on Virgin Southwest)

Tactic 2: Offer Starbucks coffee and snack products in-flight.

Tactic 3: Tout clean fuel use for that “feel good” moment when a consumer makes an eco-conscious choice and chooses Virgin Southwest for its lower carbon footprint.

EVALUATION MECHANISMS

In both short and long term intervals, gauge key public confidence in the merger and satisfaction with communication outreach efforts via in person temperature checks and online surveys. Calibrate accordingly to accommodate which strategies and tactics are working, and which ones are not.

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