1. The corporate rationale of the Virgin group is to re-entering the inactive industries with brand new ideas and developments and offer the consumer different products. Diversification is an attribute of Virgins rationale. Their SBU’s improve Virgin’s scope and therefore its existing markets and products. Virgin uses the ideas of ‘the corporate parent’ to add structure and direction to its various business units, which in turn adds value due to the effective, closely controlled and come up to that the rationale provides.
2. There are certain strategic relationships between businesses within the Virgin group. This term refers to the notion that the Virgin groups have synergy amongst its SBU’s, therefore utilizing as much as resources in order to fully comprehend and fulfill a particular new environment or market. This adds value to a new market whilst ensuring resources are not wasted. An example within Virgin would be their research into the global oil market and the search for greener fuels for its airlines.
3. Virgin as a corporate parent adds value to its group through the collective ambition and ideas which is discovered through the strength of the Virgin brand. Virgin provides ‘strategic intent’ by laying certain ideas for its SBU’s to follow. This provides discipline and strong methodologies for the units to stick on. Another element of ‘value adding’ by means of Virgins parenthood can be explained using the BCG matrix. The Virgin group’s portfolio shows high market share and strong growth within their markets.
4. The main issues facing Virgin are competition and the search for new markets in which to enter. They purposely look for inactive markets in which they can make an impact, they look at about 50 companies a week and asses their possibilities of success in each market. However they may soon find that they can't find any more markets that are appealing to them. Another key issue facing Virgin is the idea of over-expansion through continued...
References: Johnson, G. and Scholes, K. (2002) Exploring Corporate Strategy 6th Edition Financial Times Prentice Hall, Essex, pp267-308
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