QUESTION 1: What examples does the case give of links between Branson’s
strategy for Virgin and the environment in which it operates?
The Virgin Group Ltd is a group of separately run British companies with the Virgin brand under the leadership of English celebrity business tycoon Sir Richard Branson. The core business areas are travel, entertainment and lifestyle, among others.
Richard Branson’s strategy comes from his deepest inner beliefs;
“in principle there were no product or service boundries
limiting a brand name, provided it was associated with
quality products/services on offer”
The corporate strategy of the Virgin Group is to operate like ‘a venture capital firm based on the Virgin brand.’ This strategy involves non-related diversification at the individual business unit level. Meanwhile, synergies are created from hierarchical relationships and the interaction of the corporate head office with individual business units. By leveraging on the Virgin Brand which has established prominence in the minds of consumers, Virgin is able to enter new business areas with a bang and shake up existing orders. The unique Virgin culture also allows Virgin to break into new markets and execute its ventures very effectively.
Virgin’s corporate strategy is best described in the Virgin Charter – the individual businesses are focused and develop as autonomous enterprises under a single unified brand name. This decentralization of organizational structure and decision making allows an entrepreneurial environment for managers to pursue their businesses effectively, while avoiding the bureaucracy associated with large centralised corporations.
At the same time, the individual businesses benefit from the world-wide, inter-industrial reputation of the parent corporation’s Virgin brand and are able utilize this brand recognition in their marketing efforts. This benefit of corporate parenting would not be available... [continues]
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