Case Study of Virgin Group

Topics: Richard Branson, Virgin Group, Virgin Atlantic Airways Pages: 6 (1944 words) Published: September 16, 2009
This report closely examines the Virgin Group’s corporate strategy / rationale and identifies the relationships namely of strategic nature within the Virgin Empire. Virgin’s value adding qualities shall be discussed and the main issues faced by Virgin shall be identified and categorically solutions recommended respectively. Corporate Rationale

The Virgin Group comprises of an assorted mix of businesses. It has its “finger in every pie”, so to speak. The Virgin has group diversified into 200 businesses. Please see Figure 1 below: {draw:frame}

Figure 1 The Virgin Group
Sir Richard Branson, founder of Virgin in 1970 is in the author’s opinion the single most important ingredient to all the success that has been reaped up-to-date. As the saying goes ‘you reap what you sow’ thus, corporate rationale is merely a projection of Sir Richard Branson’s own personal philosophy, which he has sown into the fabric of corporate rational. A personal philosophy and a personal persona that is revered and respected by the British public and beyond. Sir Richard Branson’s high profile already won over the general public and almost anything he would pursue or was associated with would be given the benefit of the doubt. Thus the word Virgin and Sir Richard Branson are almost interchangeable. The Virgin brand name is by far the most important asset to the company. Being known as the “customers’ champion” inevitably has done wonders for public relations. This fact was capitalized on; in British advertisements for Apple Computers. Sir Richard Branson was associated with great names such as Einstein and Ghandi, and featured as a ‘shaper of the 20th century’. Sir Richard Branson, tired of the public listings obligations and corporate bureaucracy sought to take the business back into private ownership. His understandings lead him to believe that sacrificing short-term profits for long-term growth was the way the business should be geared. As for corporate bureaucracy its significance in the Virgin Group, was reduced profoundly. No real sense of management hierarchy can be found in the group except for when it comes to marketing and promotion issues, Sir Richard Branson would take a more involved role. Therefore Sir Richard Branson adopted a ‘hands-off’ policy with his managers and by doing so, encouraged their own initiatives. By proving such freedom, managers would inevitably feel more of a sense of responsibility, ownership and would try their up most to make a success of it. Sir Richard Branson knew this fact. He was providing an enriching atmosphere in which managers would flourish just as he had done. It’s not surprising then, that management recruited carefully selected individuals to be innovative people, pioneers in their field, and to have the competitive streak in their personalities. It was also of importance for candidates to be able to share values and to work effectively as team players. It is the author’s opinion that Sir Richard Branson employed managers who were made up of his image; in terms of personal characteristics and persona. The key emphasis was in innovation and differentiation. The aim was to offer more for less and that each company was truly a Virgin in its own field. Although to some this notion may seem a bit too good to be true, no one can deny that “the Virgin Group is one of the UK’s largest private companies” (with reference to the case study) with an annual turnover (estimated) at £3bn by the year 2000. The Virgin Group’s rationale is to diversify into as many markets feasible, and extend the Virgin brand name further at a low cost; where stature could be relied upon to reduce barriers to entry into static markets. The Virgin Group sought a challenge in ever venture. They would aim to provide better quality products than any competitor in a complacent market. The key point is that the market to be entered must be still in its growing phase. The alluring factor to...
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