A useful tool for assessing the internal capability of a firm is through the use of the SWOT analysis. Although it is a simplified view, a SWOT analysis gives a snapshot view of the strengths and opportunities on which the company needs to capitalise to create a ‘distinguishing edge’. Also, it is useful to see the weaknesses and threats which can challenge the competitive position of the firm.
Figure 2: SWOT analysis of the Virgin Group of Companies
Value of the global brand
Network of global contacts in a range of industries
Value creation ability
Innovation and marketing know-how in generating ideas and driving business Positive and admired public image of personality of the company Lowered risk due to the diversification of businesses
WEAKNESSES Too great a reliance on the brand name
Dilution of the brand due to diversification
Heavy reliance on Branson as the face of the brand – risky Business losses and failures which could affect the group
Continued expansion into new and emerging markets
The linking of the subsidiaries via the brand – negative press from one company could affect the image of one or more of the others
VIRGIN’S FOCUSED STRATEGIES
The corporate statement provided demonstrates that Virgin’s global strategy has its roots in creating value for the customer, which in turn creates value for the company, specifically the brand. Its executives seek out industries and markets which under-serve the customer and, predominantly via partnerships and its internal resource capabilities (the brand), they fill the customer’s expectation gap.
The company adopts and emphasises throughout all its businesses a set of global strategies. Porter (1985, p. 12) asserts that if a firm is to attain competitive advantage, it must make a choice about the type of competitive advantage and the scope within which it is to be attained. He identifies three generic strategies which a firm...
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