Assesment of Virgin Group Corporate Strategy

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ASSESMENT OF VIRGIN GROUP CORPORATE STRATEGY

‘CREATING

VALUE

IN

THE

MULTIBUSINESS COMPANY’.

ASSESMENT OF VIRGIN GROUP CORPORATE STRATEGY
‘IN RELATION TO PARENTING STRATEGY, THEORY by GOOLD & FROM COMPETITIVE ADVANTAGE TO CORPORATE STRATEGY by M.PORTER’

ASSIGNMENT ; COURSE ; NAME ; STUDENT NUMBER ; DUE DATE ;

01 MBL 93D-U REFILOE MOKEBE 72542683 08 MAY 2012

MBL93D-U CORPORATE STRATEGIC MANAGEMENT

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ASSESMENT OF VIRGIN GROUP CORPORATE STRATEGY

Contents

1. INTRODUCTION........................................................................................................ 1

2. VIRGIN GROUP BUSINESS MODEL .................................................................. 2

3. VIRGIN GROUP CORPORATE (PARENTING) STRATEGY ..................... 3

3.1. Tests for Diversification........................................................................................ 4

3.2. Concepts of Corporate Strategy .......................................................................... 5

3.3. Virgin Group Parenting ........................................................................................ 6

4. REFERENCES ............................................................................................................ 10

MBL93D-U CORPORATE STRATEGIC MANAGEMENT

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ASSESMENT OF VIRGIN GROUP CORPORATE STRATEGY

1. INTRODUCTION
“Virgin Group is one of the UK's largest private companies, founded in 1970 by Sir Richard Branson. The Virgin Group has gone on to grow very successful businesses in sectors ranging from mobile telephony, transportation, travel, financial services, leisure, music, holidays, publishing and retailing. Virgin has created more than 200 branded companies worldwide, employing approximately 50,000 people, in 29 countries. Revenues around the world in 2006 exceeded £10 billion” (OPPapers.com: The Virgin Group Case study). The Virgin Group is formed by various strategic business units (SBU) as indicated on figure 1 below, it is comprised of a loose alliance of companies linked primarily by the Virgin trademark and Branson’s role as shareholder, chairman, and top boss on public relations. “Companies within the Virgin Group are part of a family rather than a hierarchy.” Every SBU in the Virgin Group are “ring-fenced”, separated and independent. Companies within the group do not even share a common accounting year-end. Each of them operates their own business-level strategies to achieve their own competitive advantages in their own segmented markets.

Figure 1 The Virgin Group Source: Virgin Management Ltd.

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ASSESMENT OF VIRGIN GROUP CORPORATE STRATEGY “The Virgin group is likened to both a brand franchising operation and to Japanese keiretsu where member companies have financial and management links and share a common sense of identity” (Grant, Robert M: Richard Branson and the Virgin Group of Companies in 2004). “Sir Richard Branson believe in sacrificing short-term profits for long-term growth as the way the business should be geared, lead to his delisting of Virgin and taking the business back into private ownership during the stock market crush of 1987” (Grant, 2008). This paper aims to closely analyze the Virgin Group’s Corporate Strategy and its potential to add value through its influence on business performance in relation to the theory by Goold, Campbell and Alexander 1994.

2. VIRGIN GROUP BUSINESS MODEL
Virgin Group business model is inclined to its mission statement which states that; “Virgin intends to be the consumer champion, by delivering brand values, which are: value for money, good quality, brilliant customer service, innovative, competitively challenging and fun. To deliver a quality service, by empowering employees and to facilitate and monitor customer feedback for continuous improvement of the customer's experience through innovation. To develop products and services,...
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