Examination of the Virgin Group corporate strategy

October 9, 2017 Music

Richard Branson, laminitis of Virgin and is considered to be the individual most of import ingredient to all the successes that has been reaped.This instance survey examines the Virgin Group corporate scheme and it identities the relationships within the Virgin Group.Virgine ‘s value adding activities and qualities are discussed.The Virgin Group is comprised of many different assorted mixes of concerns.

The Virgin Group is diversified into 200 concerns and it has a “ finger in every pie ” . Looking at the instance the overall corporate principle is merely a projection of Richard ‘s ain doctrine and his personal character that is revered and became respected by the public.Richard ‘s high profile allowed the Virgin trade name name to be the far most of import plus to the company.

All the concerns in the Virgin Group are strategically targeted towards a “ five pillar ” imperium that Richard created. These pillars are travel, leisure, moblie phones, amusement, retailing and personal finance. All the concern ‘s within the imperium all the directors to hold freedom to do determinations independently for growing and allows them to experience the same grade of ownership and values.

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What is the corporate principle of the Virgin Group?

Richard Branson, laminitis of Virgin in 1970 is in the writer ‘s sentiment the individual most of import ground to all the success that has been reaped up-to-date. The corporate principle is merely a projection of Richard Brandon ‘s ain personal doctrine, which he has introduced into the construction of corporate rational. The Virgin Group is comprised with many miscellaneous mix of concerns. ( Rob Abdul, 30/01/02 )

Corporate principle is the manner in which a corporate parent envisages the manner that it can add value to its strategic concern units. The Virgin Group ‘s principle is to diversity into every bit many markets executable, and extend the Virgin trade name name farther at a low cost ; where stature could be relied upon to cut down barriers to entry into inactive markets. The followers will be discussed below.

The Virgin Group ‘s principle is to diversify into every bit many markets that are executable.

They want to widen the Virgin trade name name farther at a low cost where stature could be relied upon to assist cut down the barriers for entry into a inactive market. The Virgin Group looks for a challenge in every venture and aims to supplying better quality merchandises than the rivals do. The Virgin Group aims at come ining a market that is still in the growing stage. ( Rob Abdul, 30/01/02 )

The Virgin Group sees itself as a restructurer, this means that it has low cardinal costs due to comparatively little corporate Centre, with reasonably minimum engagement at concern degree. However they vary from the portfolio directors because they besides set about seeking to place restructuring chances within their concerns and have the accomplishments and expertness in order to step in and present these alterations where necessary. ( Jenn,2008 )

The Virgin Group has a broad scope of strategic concern units about two hundred runing from air passages to drinks, and make-up to publication. Virgin ‘s corporate principle is that they try to come in “ inactive ” market, in which there are few rivals and where consumers do non acquire value for money.The Virgin Group enters these markets that are still in the growing phase and to seek and agitate them up, for illustration they did this with Virgin Airways and Virgin Cola.

By come ining the market that is still in its growing phase and has few rivals Virgin managed to bring forth the merchandise or service for a somewhat lower monetary value than all other rivals within the market so they should, along with their strong Virgin trade name name. Virgin Group gained a large market portion reasonably rapidly because they had lower monetary values than everyone else.

This is a good manner in which to come in a market because it surprises the other rivals who may hold become excessively comfy in this monopolistic market, and has a potentially immense initial addition. Using the surprise tactic ensures that the other market leaders will non anticipate your move and consequence in a slow response, for illustration when Virgin entered the airways market, the British Airways had non anticipated them as competition and so were non prepared to be able to cut costs and vie. So Virgin Airways gained a large portion of the market really rapidly.

Excellent direction patterns has besides been refer to as a major strength of this group, and is at that place for one of the most important constituents of its corporate principle. The Virgin Group corporate principle was besides diversify into every bit many markets that were executable and widen the Virgin trade name name at a low cost. The Virgin Group looked for a challenge in every venture and aimed at supplying better quality merchandises to their clients and better than their rivals.

The Virgin Group corporate principle was to give their short-run net incomes in order to derive a longer-term growing and therefore they used an independent concern degree determination doing method. This corporate principle allows the directors to do determinations independently for growing and experience the same grade ownership and values that any other director would experience in the Virgin Group. ( Rob Abdul,30/01/02 )

Virgin ‘s principle for enlargement was based on ferocious external variegation scheme and Richard ‘s changeless demand to be originative in his attacks to new challenges. For Richard the trade name is really of import and is an plus. The ultimate aim is to hold an established planetary name and hence the Virgin Group needs to hold a figure of nucleus concerns with planetary potency, with enlargement this can be achieved.


Are there any relationships of a strategic nature between the concerns within the Virgin Group?

The Virgin Group is formed by assorted strategic concern units ( SBU ) . “ A strategic concern unit is a portion of an organisation for which there is a distinguishable external market for goods or services that is different from another SBU. ” ( Rob Abdul, 30/01/02 ) Basically, there are 56 strategic concern units in the Virgin Group. For illustration, there are Virgin Travel and Virgin Trading in the Virgin Group.

As antecedently mentioned all the concerns in the Virgin Group are strategically targeted towards a five pillar imperium system that Richard created. At the bosom of Virgin ‘s nucleus scheme is to develop the five pillars of the concern imperium which includes travel, leisure, nomadic phones, and amusement, retailing and personal fundss. Looking at the diagram below it shows that all the ventures have the same trade name name.

The Virgin Group

Figure 1, The Virgin Group

As this diagram shows that the trade name name is the chief strategic relationship and this creates a strong recognition from clients. Giving a venture the name Virgin sends out a message to the clients. The trade name is associated with the words merriment, advanced and make bolding. This can ensue in transportations of all selling and promotional activities up to the present for the specific venture severally. ( Rob Abdul, 30/01/02 )

The Virgin Travel consists of Virgin Atlantic, Virgin Holidays, Virgin Aviation and Virgin Balloon. The Virgin Trading consists of Virgin Megastores, Virgin Enterprises, Virgin Clubs and Virgin Cosmetics. Several strategic relationships exist within the Virgin Group. One of the most recent of these strategic relationships involves it offer to clients of digital and nomadic phone services every bit good as broadband cyberspace service.

Virgin Digital UK offers digital music to a broad assortment of clients in mediums that are compatible with a broad scope of package and digital hardware. The company boasts a high readying for this market as it has deep roots in the music industry, get downing with its record company Virgin Records, because of Virgin ‘s Records old ownership and rights to many music tracks the company has benefited by it holding already at its disposal 1000s of paths to do available to the populace ( Baker Capital, 2005 )

This is the partnership involved with the nomadic phone service company under the Virgin Label. Downloading music to mobile phones is an advantage that can be offered to Virgin Mobile clients as an inducement to subscribe or exchange to Virgin mobile service suppliers. This is besides an advantage for the Virgin broadband supplier, as it allows the Group to further incorporate its digital services to include internet service and offer such bundles and sole trades that have the possible to pull even more clients. ( Marivic Butod, 2007 )

Another strategic relationship exists among the Virgin transit companies. The Group of air hoses ( Virgin Atlantic, Virgin Galactic ) have the differentiation of offering the lowest menus for bundles in the Atlantic and other parts of the universe. The ability to offer flights to and from more unknown and less-travelled finishs is granted to Virgin because of partnership between and among the virgin air hose companies of the different parts.

Furthermore, the benefit is extended by the being of a partnership with Virgin Rail that offers drawn-out service via railroad further into more unapproachable parts of the European continent. The Virgin Group tries to make and turn relationships with managers, directors and pilots within Virgin Galactic and all the concern in the Virgin Group strategically targeted towards travel, leisure, nomadic phones, amusement retailing and personal finance.

All the concerns within the Virgin Empire allow the directors to do determinations independently and this allows them to experience the same grade of ownership and values that any other director. Businesss were ring-fenced in order for the assets non to be switched between companies in the Virgin Group and if any company became excessively big another company would be put in its topographic point.

The name Virgin became synonymous with Richard Branson ‘s name and this cardinal psychological scheme helps with selling and publicities because this at the terminal of the twenty-four hours helps them spread out and acquire good known. Therefore many concerns outside the Virgin Group have shown their involvement though joint ventures as the Virgin trade name name is going good known.

Does the Virgin Group, as a corporate parent, add value to its concerns? If so how?

Corporate parenting topographic points corporate duty on local governments to accomplish good parenting for all kids in their attention. It requires ownership and leading at a senior degree, this includes wholly elected members. They make certain all council members in your council understand their corporate parenting duties and are committed to carry throughing them. ( Marivic Butod, 2007 )

The Virgin Group as a corporate parent values all its concerns. The Virgin Group achieves value by understanding the institutionalized markets. The Virgin ‘s direction squad has done a good occupation in placing satisfaction in the market. The direction squad expertness and experience matched with the scheme allows the company to offer more for less.

The Virgin group besides added value to its concerns with the trade name name and used the trade name name to assist get the better of barriers to entry. The Virgin trade name name is a consumer ‘s protagonist and as reference before the trade name is much respected with the British populace. The Virgin Group at a corporate parent besides helps with restricting the hazards for the other concerns fall ining in the joint venture.

Any company, corporation or administration that is in a joint venture with the Virgin Group had the benefits of restricting the hazards associated in the market topographic point. The other value that the Virgin Group contributes as a corporate parent is that they do non curtail the direction squad. The Virgin Group has a level direction construction which helps promote invention, flexibleness and it can assist advance the values of shared ownership and duties. ( Rob Abdul, 30/01/02 )

The Virgin Group ensures that invention is amongst the staff members and helps guarantee that the persons are successful in their callings. The Virgin Group acquires spouses that have the same head set for the venture and they guarantee that they match their ability to be advanced and create distinction for their peculiar company. These advanced ideas and thoughts are so applied straight into the concern and hence assisting it to be successful.

Virgin Mobile is an illustration of this invention as it formulated a partnership with the bing telecommunications operators to retail in nomadic services. The virgin Group and their direction squad were successful at placing that the understanding was in the handling of the web direction. Due to their invention of their joint ventures and networking it promoted a alone service to the market.

Virgin as a corporate parent added feasible value every bit good to its concerns by puting and developing the employees and existent expertness. With all the joint ventures that the Virgin Group have made they did so restrict some hazards but they besides contradicted some signals to the clients by holding so many concerns and if the one performed severely the other separate concerns with the trade name name stand a opportunity on been labelled as the same. ( Rob Abdul, 30/01/02 )

In a sense the Virgin Group is a community, every Small Business Unit in it portion thoughts, values, involvements, ends, and the most of import, they portion the same trade name. Therefore the Virgin Group as a corporate parent have set criterions and helped the concerns know precisely how to make value to the clients and how to guarantee that the trade name name is upheld.

The Virgin Group as a corporate parent does value to its concerns and has achieved it though understanding the institutionalized markets, utilizing the Virgin set name to get the better of barriers to entry, it limited hazards by traveling into joint ventures with different companies, it does non curtail the direction squad and the Virgin Group shows invention.

Virgin ‘s direction squad have been making really good when it comes to placing a market that is still in its growing phase and markets with really small rivals. It is this expertness and experience that is coupled with the scheme to offer more to the clients for less and it has helped the Virgin Group plough though complacent concern industries.

As a corporate parent virgin ‘s trade name name has helped to get the better of barriers to entry. The fact the trade name name is good established and accepted by the populace it has helped with acquiring into certain markets and to spread out into countries where the Virgin Group believes it can do a difference and offering something different to the consumers and a good monetary value.

Virgin has limited the hazards by traveling into joint ventures and any company that goes into a joint venture with Virgin besides benefits the restrictions of hazards in the market topographic point. As a corporate parent it helps the new venture as one have limited hazards as it is under a good known trade name of criterions and low cost. It besides encourages the direction squads to be independent and do picks that will break the growing of the company.

Virgin ‘s corporate principle to invention allows the staff members to be successful in their callings. The Groups acquires spouses that think likewise and that match their abilities to invention and distinction. This should so be applied to the whole concern. For illustration Virgin Mobile formulated a partnership with bing telecommunications operators to retail in the nomadic services. This invention leads them to advance alone services and better offers to the clients.

What are the chief issues confronting the Virgin Group and how should they be tackled?

The Virgin group of companies was faced with two chief issues. In the short term was the group ‘s fiscal state of affairs. A figure of Virgin ‘s concerns were sing significant negative hard currency flows. Despite programs to bring forth financess this still left ill executing companies such as Virgin Express, Virgin Megastores, and Virgin Money, where offloading Branson ‘s equity bets would turn out more hard.

Looking at virgin Atlantic which is an air hose industry it indicates that the Virgin Group relied on this air hose to do the net incomes and when deregulating increased the competition within the market topographic point caused Virgin Atlantic to do some Losingss. Harmonizing to the Virgin Rail the biggest job that they face is that the utilizations of this signifier of conveyance is voted as the unpopular rail operator and the fact that Virgin ‘s rail statistics were ranked low.

Virgin Groups trade name name was easy chipped off by the imperativeness due to their repute of the rail conveyance. The Virgin Group, been a larger imperium, faces promotion blindly due to the fact if things were traveling right all is good, but so all it takes is a smattering of concerns in the imperium to either experience ineluctable effects. Virgin Atlantic is an illustration of this as when there was bad services provided and with the bad promotion of the Virgin Rail it caused a black consequence opn the other countries within the imperium. ( Marivic Butod, 2007 )

Virgin name became diluted and making analysis of the environment must be learned and that is what they did after these events occurred. The populace is sensitive and as a corporate parent Virgin can add value to its concerns by puting and developing existent expertness. Therefore Virgin should alter its policy to suit both independent and joint ventures to trust on short term net incomes.

The chief issues confronting the Virgin Group is Virgin Atlantic and virgin Rail. Virgin Atlantic is the air hose industry and like any other industry it id cyclic. This proved to be unsafe in 2001 because the Virgin Group seemed to trust wholly on the net incomes of Virgin Atlantic. To do affairs worse deregulatings increased the competition in the market topographic point and this caused all most rivals were sing losingss.

The biggest job faced by the Virgin Group though was the strategic Rail Authority reappraisal in 2000 because it was the most public. Virgin Rail was voted as the unpopular rail operator and it was ranked 23rd and 24th out of 25 operators. This was a major issue as it damaged a portion of the Virgin repute. That was non bad until the imperativeness easy chipped at the company. ( Marivic Butod, 2007 )


The cardinal accent on this instance was invention and distinction. The purpose was to offer more for less and that each company was genuinely a Virgin in its ain field. Although to some this impression may look a spot excessively good to be true, yet no 1 can deny that the virgin group is one of the UK ‘s largest private companies. Success was the consequence of Richard Branson ‘s doctrine and attack in his company.

By utilizing effectual leading, giving motive, using effectual communicating, interaction, occupation redesign, constructing trust and regard, it is really clear that the company has been executing good in assorted industries that it manages. The chief aspirations of the Virgin Group of the company ‘s cardinal stakeholders is to go on spread outing operations and assorted international concern locations, new sort of concern ventures and to heighten the repute of the trade name.

Virgin ‘s selling is client focussed and is evident that every major and minor determinations and programs created are based on the consequence of researches conducted and founded on the clients. Furthermore the services and merchandises are something better and more valuable. Virgin bases its pricing scheme on several cardinal tendencies that shape the planetary market place.


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