Acquisition of new Business7
Business Model Analysis8
Basic Strategic Positioning9
Sample Industry and Company Analysis11
Virgin Entertainment Group11
The underlying case study paper depicts the development, nature and profitability of different business units of the Virgin Group of Companies up to the year of 2004. The companies comprised, strongly differ in size, character and industry, all operating under the umbrella of a single brand „Virgin“ founded, owned and represented by the British Richard Branson.
The brand „Virgin“ has been introduced in the early 1970s when Richard Branson, a young and dynamic entrepreneur, founded a mail order records business named “Virgin Records“. Requiring almost no working capital or up-front investment, this was the ideal business to follow Branson’s start-up magazine „Student“ which had already been very successful, gaining great public interest and appealing to values of a youthful target group. The strong entrepreneurial spirit and Branson’s urge to create something new soon made him expand his business successfully to record publishing.
The next business to follow was in the transportation service industry. „Virgin Atlantic Airways“, a cut-price transatlantic airline, was founded in 1984. Of course, entering a new industry made Branson face completely new business challenges of high capital requirement, a high degree of legal regulatory etc.
Fierce competition in the field of aviation during the mid 1980s forced Branson to take his business public in order to raise the capital required. However, feeling his company to be undervalued by the stock markets he grabbed the chance of the 1987 stock market crash to buy those external shares back.
The late 1980s brought further aggressive expansion into new markets by establishing several joint venture businesses in the US and Asia.
During the 1990s Virgin found itself more and more reliant on joint venture contracts to finance its business development, shifting its focus away from entertainment business towards airlines, travelling and retailing.
The foundation of so many new companies led to Branson’s decision to sell off equity stakes in some of his already established enterprises, the biggest deal here being the vending of 49% of “Virgin Atlantic”.
As already indicated, the Virgin group cannot be seen as a single corporate entity. It rather consists of several holding companies and over 200 operating ventures. Following is a list, in order to give a compact overview of the most influencing industries.
Air Travel ( Travel industry forms the core business of the Virgin Empire, comprising “Virgin Atlantic”, “Virgin Express”, “Virgin Blue” as well as “Virgin Cargo”, an airfreight company being an important complement to the passenger service.
Rail ( The rail industry was the group’s biggest but also riskiest diversification. The entry into this new market was only slightly profitable.
Entertainment - Virgin Entertainment Group includes retailing businesses – Virgin Megastores and UK Our Price chain – as well as some cinema chains.
Financial ( The financial services group “Virgin Direct” – later renamed “Virgin Money” - was launched in the UK in 1995 offering retirement plans, life insurance and other financial services.
Retail ( The retail industry is widely dominated by the company “Victory Corporation” selling cosmetics and toiletries as well as clothes, but also by “Virgin Bride”, a quite unconventional venture offering a wide range of wedding goods and services.
Mobile ( The entry into the mobile industry was a huge success penetrating large parts of the markets in the UK, the US, Australia, Asia and Canada.
Virgin Group's date of...