Virgin Corporate Strategy

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VIRGIN’S GROUP CORPORATE STRATEGY
DIVERSIFICATION

1.Introduction

The Virgin Group is one of Britain’s biggest and successful empires in the 21st century. The company has successfully incorporated a great number of diverse industries under the Virgin brand. This includes travel, mobile, financial services, leisure, cosmetics, retail, and music businesses. Virgin has been able to dominate the British market and has therefore continued to rapidly expand into other regions such as the United States, Canada and Australia. The enterprise was founded by Sir Richard Branson in 1970 as a simple mail-order record retailer and has grown into one of the most prosperous business empires in the business world. To date, the Virgin Group has globalized and established in over 200 small to mid-sized firms, employing over 25,000 people. As a result, the company has exceeded over $7 billion in revenue in 2002. Each one of Virgin’s 200 firms operates as a single entity. Branson either holds ownership of a firm as CEO, or has a minority or majority stake. The Virgin Group does not hold a hierarchal presence within the empire, which allowed its various subsidiaries to operate in an autonomous manner.

2.Richard Branson: The strategic thinking

As the creator of Virgin and a famous personality around the world, Richard Branson has created an entrepreneurial culture that is carried throughout the Virgin group of companies. His anti-corporation and anti-bureaucracy spirit resulted in a flat organizational structure with transparency and quick communication; his loyalty and care for friends let to an organization with great employee focus, and also attracted some of the best people to work for him for a moderate salary. Looking into his kind of strategic thinking, we can see that it is characterized by having a strong relationship with risk. His attitude towards risk is explorative, willing to take risks in order to enter into completely new businesses that the company knew nothing until now. In addition to this, their type of thinking, as an image of their leader, is characterized by being intuitive, requiring no systematic risk analysis, based largely only in the rapid perception of alternative strategic intuition. This kind of thinkers are formerly known as entrepreneurs but in this situation combined with a strong social component as Sir Richard Branson often uses himself to convey the group’s message into the media or as a tool to promote the group’s brand. Is this kind of strategic thinking that explains the high level of unrelated diversification of the group that we are exploring in this report.

3.Organizational Analysis and Corporate Strategy Values

The Virgin Group’s overall brand identity is built upon the founder Richard Branson’s philosophy which states that “if you keep your staff happy then the customer will be happy, and if you keep the customer happy then the shareholders are happy”, “shape the business around people”, “Build don’t buy”, “Be the best, not the biggest”, “Pioneer, don’t follow the leader” or “staff first, then customers and shareholders” are some the main guidelines of Richard Branson and we can see it as some of the company values. This underlying belief transcends into each one of Virgin’s subsidiaries and into each individual organizational culture. This is evident in the way in which members of the Virgin group interact with one another, as it is apparent that all members at Virgin agree strongly about certain beliefs, values, and assumptions, which are reinforced within the company. Virgin has continually retained a strong belief that it is their employees who: deliver brilliant customer service; give the company its personality, shape its culture, and innovate. They are viewed as Virgin’s greatest asset and as such, management believes that employees should be treated with respect. Management looks after their employees’ welfare and allows them the freedom to grow and be themselves....
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