Assignment on Management - Transformational Corporate Strategy

Running Head: MANAGEMENT
Transformational corporate strategy
Name of the Student
Name of the University
Author Note

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Executive summary
It has been identified that based on the country perspectives, the corporate strategic direction in
different organization gets changed. By critically analyzing the current strategies adopted by
Virgin group in the South African market. The study has focused on understanding its suitability
on the market. Virgin group has faced various ups and downs in the global market. By following
its global expansion strategy, in the South African market the company has followed the
diversification strategy so that it can ensure its strong presence in every sector. However due
improper presentation of marketing approach as well as negative cash flow and improper
management style have impacted on the strategic direction of the company. In this situation if the
company will focus on restructuring process it can be beneficial for the company to ensure its
sustainable position in the market.

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Table of contents
Introduction......................................................................................................................................3
Current corporate strategy adopted by Virgin Group......................................................................3
Critically analyze the strategies and understanding these effectiveness in bringing sustainable
growth in South Africa....................................................................................................................7
Role of virgin group as corporate parent.......................................................................................10
Issue analysis.................................................................................................................................11
Critical argument as the alternative growth strategy.....................................................................13
Conclusion.....................................................................................................................................15
References and bibliography.........................................................................................................16

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Introduction
Sustainable corporate practice in business has become an important strategic move
adopted by the companies for maintaining the strong brand image (Avery 2017). Based on the
country perspectives, the corporate strategic direction in different organization gets changed. The
purpose of this study is to critically analyze the current strategies adopted by Virgin group in the
South African market. Critically analyzing the strategies, the study has focused on understanding
its suitability on the market. As the corporate parent the role of virgin group has been has been
analyzed. In this study understanding the current growth strategy adopted by the company
alternative growth strategy has been suggested that can help in terms of bringing the betterment
in the operational process in South African market.
Current corporate strategy adopted by Virgin Group
Strategies:
 It has sacrificed short term profits for earning the long term goal
 Acquired the innovative partners for matching the persona of Robinson
 Adopted the diversification strategy in the market
 Followed the flat management structure
 Followed the market diversity
Analysis:
Virgin group has a rich varied history that includes the bridal wear, records. Airlines, holidays,
cars, bank accounts, mobile phones cosmetics, vodka and many more. In the year 1970, the
virgin group was founded by Richard Branson (Virgin.com 2019). Especially in case of South
African market, Virgin group has aimed to adopt the ‘go big’ strategy for expanding the

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business. In case of developing the corporate level strategies, the company has changed the
decision making process. The product diversification can be considered as the important strategic
initiative that has been adopted by Virgin group in terms of ensuring sustainable position in the
market. The virgin group has got formed by various strategic business. Analyzing the current
strategy adopted by Virgin group it has been identified that rescuing the bankrupt health club
group, rebranding strategy has been adopted as the name of virgin active. In order to enhance the
business opportunities in the rest of the parts of South Africa, the large business format has been
selected by the virgin group. As stated by Khan (2016), it is true that for gaining the new
opportunities in the South African market, the Virgin Active brand has started expanding from
the year 2001. In this case, the collaborating approach has been adopted by the company in terms
of gaining market success. On the other hand, it is true that making its unique position in the
competitive business environment, the company has stated contributing in community health.
It has been identified that the corporate rationally of virgin group has sacrificed short term profits
in terms of giving the longer term growth. in the South African market the company has adopted
independent business level decision making method sharing the same degree of ownership as
well as produce the proper collaboration among the employees has been maintained. Christoph
Stork, Esselaar and Khan (2016) opined that the company adopted expansion strategy based on
the external diversification process, in that case it can be say that the CEO of the company is
quite creative as well as able to accept the business challenges. The current strategy of virgin
group is based on enhancing the Global potentiality for achieving the aggressive expansion goal.
Excellent management practice can be considered as a major strength of the virgin group.
Ensuring the workplace diversity it has increased the market feasibility. In order to develop a
strong brand image the company has developed its first effective image. By providing the better

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quality of services the company has strongly focused on customer centric approach rather than
giving tough competition to its competitors (Olufemi and Strydom 2018). In order to sustain in
the market the company has adopted surprised tactic. In the initial stage the company adopted the
slow growth strategy where it becomes harder for the computers to understand if the company
can give tough competition to them or not.
In case of virgin mobile, it has been identified that by following the heels of virgin active, the
virgin mobile has been launched in the South African market. In order to introduce this brand in
the mobile sector, making joint venture with Cell C in the year 2006, virgin mobile has ensured
the smoother entry in the market. In the initial stage, the brand aimed to operate in the cellular
market. However, after getting tough competition of MTN and Vodacom, the company has
changed its marketing strategy (Olufemi and Strydom 2018). Due to availability of strong
competitors in the South African market, it was quite difficult for virgin mobile to get the
subscribers. In this situation for bringing twist in the business operation the company has
improvised its marketing strategies. Adopting the direct marketing approach the numbers of
subscribers have got increased, which has indirectly impacted in the sales revenue of virgin
mobile (September et al. 2016). On the other hand, strong distribution can be considered as the
important part in the strategic initiatives adopted by the company. Through the direct distribution
strategy the company has significantly satisfied the needs of its target market. Introducing
various data packages, the company has gained huge popularity in the market.
In the South African market, Virgin Money is another financial service providing group that has
contributed in dragging the attention of the customers towards the financial sector. Analyzing the
value proposition of the brand, it has been identified that introducing its products without
superfluous fees, it has developed its uniqueness in the market. On the other hand, introducing

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various range of products in the market, virgin money has launched different life insurance
services in the early of 2013. As it does not have any extra charges, which has helped to drag the
attention of the customers.
On the other hand, Virgin Life Care is a health management company that focuses on improving
the health as well as lifestyle of people through the introduction of effective lifestyle
management programs. It has been identified that enter in this particular sector the virgin life
care has adopted partnership strategy, where the company has made its partnership with Virgin
Active, Discovery Vitality and Momentum Multiply. In order to motivate people, the brand has
provided healthy decision to the people. The customer based marketing strategy has been
adopted by Virgin Life Care where providing different rewards to the customers the company
has gained huge support (September et al. 2016).
Virgin Atlantic is another important strategic move adopted by the virgin group, in which the
company has aimed to transform the travel experiences of the travelers in South Africa. It is an
Airline service that has been introduced for improving the travel sector of South Africa.
Providing the extra incentives to the Virgin Money credit card customers, the brand has made a
strong position in the market. In order to expand its business in the market, The Virgin Way has
been introduced. It can be considered as the important strategic decision adopted by Virgin
group. It is true that in order to enter in a new country, researching on the market situation the
company has focused on entering on the areas where it can easily flatter. In terms of maintaining
the global operational standard, Virgin group has introduced itself through different products and
services for ensuring the global presence in the market.
Therefore, analyzing the current corporate strategy adopted by Virgin group, it can be said that
strong leadership as well as increasing sales revenue are the major objectives of the company. In

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terms of ensuring its business expansion, strong reputation has been made by the company.
Focusing on the geographical expansion, the company has made its strong global presence.
Examining all the new opportunities in the market the company has ensured its strong
competitive position in the market (Khan 2016). Emergent approach strategy of Virgin Group
has helped the company in case of explore market opportunities. Focusing on the innovation as
well as differentiation strategy Virgin group has reduced its strategic barriers. On the other hand,
core business strategy of Virgin group has got developed based on the leisure, travel, mobile
phones, personal finance and entertainment industry.
Critically analyze the strategies and understanding these effectiveness in bringing
sustainable growth in South Africa
It is true that through corporate partner shipping Virgin group has entered in the South African
market. Improving the customer experiences, the Virgin mobile has aimed to introduce cost
effective services so that the large numbers of people can be able to experience the service. After
introduction of Virgin mobile in South African market due to large numbers of competitors, it
was quite difficult for the organization to drag the attention of the customers (Khan 2016). In
order to gain popularity in the market the company has improvised its marketing practices. In a
recent report it has been identified that almost 20 to 30 retail mobile stores are going to be closed
in the market. This strategy does not brought the sufficient result for the company. Therefore, it
can be said that the mobile business in South African market has not brought any significant
impact on the South African market.
Virgin Money is another initiative introduced by Virgin group in the South African market.
Virgin money is a popular name in South African financial service providing company that is
providing the financial services since 2006 (Bereznoy 2019). The company aims to grow the

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financial insurance platform for people in terms of positioning competitive financial service
providing position in the market. Analyzing the strategic direction of virgin group it can be said
that in the South African market. It is a totally new initiative which can significantly contribute
in community development. It is true that virgin money South Africa has ensure the better deal
to the customers which has helped them to understand regarding the financial services as well as
it has brought significant values for them (Hawthorne 2018).
Rather than acting excess insurance charges in the year 2019 money has brought exciting
Insurance of for small and medium-sized Enterprises which was unique in the South African
insurance industry. The premium process that has been introduced was for 24 months. In order to
enter in the Insurance sector of South Africa virgin money has focused on dragging the attention
of the people by providing exciting offers as well as privileges for the people who have virgin
credit cards (Jones 2018). therefore by introducing the diversification strategy in the market
ensuring its presence in every commercial sector virgin group has try to avoid the business risk
as well as has tried to establish its Monopoly on the market. Therefore it can be said that virgin
money in South African market has brought significant impact which directly contributed in the
growth of operation of virgin group.
It has become a powerful international organization, which has strong branding as well as
reputation for entrepreneur flair. The company has made its enthusiastic support through its
sound planning as well as investment process towards Virgin Life Care. Virgin life care is a
fitness proof in South African market which is owned by virgin group. Virgin Life Care can be
considered as one of the important initiative adopted by forging group to earth ensuring the
community health as well as wellbeing (Jones 2018). The principal activity of the company is to
sell health as well as introduce different programs such as Healthcare insurances and health care

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service, which can bring awareness among people regarding the Healthy lifestyle. Providing
exciting cost benefits it has contributed towards tracking the retention of the customers.
Especially in the South African market this strategy has been implemented by virgin group
through partnership with existing companies in the market in terms of avoiding the market risk.
Analyzing the suitability of investment of virgin group in this program it can be said that
bringing the innovation and latest fitness program in this sector direct sales of the company has
got increased.
Analyzing the current Health Insurance sector in South Africa has been identified that the sector
is slowly growing and people have started knowing about the health and wellbeing related
policies. In this situation the particular strategic move can significantly contribute in in
improving the growth process of the company.
It cannot be denied that South Africa is known for its natural resources as well as its scenic
beauty. In order to enter in the travel sector Virgin Atlantic has been introduced by the virgin
family. Here providing the standards travel experiences within reasonable budget company has
dragged the attention of the customers. In this case ensuring the profits for its subsidiaries, offers
as well as benefits have been introduced by interconnecting all the organizations under the virgin
group. In this case extra incentives have been introduced for the travelers who use virgin money
credit card.
therefore it can be said that the strategic relationship based on the transportation the company has
provided airline services in lower pairs that has increased interest of Travelers towards the less
travelled destinations fridge has contributed the empowerment of the local area. In the
partnership involved in the mobile phone service industry, virgin group has provided advantages

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for the customers to get internet services in lower cost. In order to ensure the market growth for
gym group has focused on creating growing relationship with the managers directors and
associated people who can be strategically targeted for providing services.
Therefore this can be said that the CEO of virgin group has introduced the psychological strategy
which is entirely based on marketing as well as promotion. By interconnecting all the
subsidiaries and sharing the interest through joint venture for argent brand has become a popular
name in a global market.
Role of virgin group as corporate parent
 Institutionalized markets have been understood by the Virgin group
Virgin group can be defined as a portfolio manager corporate parent. By decentralizing the
decision making and responsibility of own development, the company has developed its own
management style. Being a parent company, Virgin group has taken its strong role in marketing
and promotional activities of its brands. In all over the world almost 80% people are aware of the
brand name called Virgin (Jones 2018). It can be described as “keiretsu” organization. Being the
strong parent company Virgin group has maintained the common distribution process in case of
maintaining the situation in the market. Adding its brand name with each of the small business
unites, it has ensured the geographical diversity in the market.
 Business aspects have been considered properly
Being a parent organization, Virgin Group has contributed in innovation as well as brilliant
customer service. In order to add value adding skills coaching and training, intervening,
envisioning, expertise and central services have been performed by Virgin Group (Muegge and

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Reid 2018). Virgin Group has adopted the corporate partnering strategy in terms of ensuring the
strong position in the market.
 It has expended the network with partners by combining skills
The entire distribution system across the business is being controlled by Virgin Group. In order
to increase the performance of small brands which are associated with Virgin Group, the
company introduced the knowledge and skills for the employees. On the other hand, ensuring the
strong popularity in the market, Research and development team have been developed. It is true
that based on the industry requirement, Virgin group has significantly contributed in transferring
the skills for ensuring positive outputs in different industry sector. As an example it can be said
that the transferrable skill is being gained by the Virgin cinema from Virgin Music. By adding
the business values the company has significantly contributed in gaining the positive attention
from the customers.
 Contributed in public relationship development
Mostly the Virgin Group gets involved into the commercial activities for finding the solutions for
business challenges faced by the small companies. Being the parent organization for supporting
the ventures, community development campaigns by adding the health, conservation, climate
change and economic empowerment the company has made its strong contribution on different
industry (Muegge and Reid 2018).
Issue analysis
Issues:
 Increasing customer complaints
 Raising concern regarding rapid diversification

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 Improper management style
 Limited cash flow
 Job cuts
Analysis:
It is true that through the introduction of diversification strategy, Virgin group has ensured its
strong presence in the global market, but it is also true that due to its diversification strategy the
company has faced various challenges in the market. Being a UK based company, the marketing
as well as promotional activities introduced by the company is especially based on the needs of
the UK people (Fin24.com 2019). However, due to this reason, the CEO of Virgin Group has
faced big controversies for using the white photo. The photo was about launching new Centre for
thee entrepreneurship in the South Africa where the project managers, administration and legal
function participants were the white people (Muegge and Reid 2018). The issue aroused because
rather than appointing the local people when the CEO has started the Centre with the people
from UK. In this case, the racism issue has increased the concern regarding its ethical values,
which negatively impacted on the growth strategy in the company.
In case of Virgin Atlantic, it has been identified that the virgin group entirely depends on the
profits of this organization. In this sector worst deregulations have been introduced by the South
African government which has increased the loss in the market. Therefore, it can be said that
negative cash flow and issues regarding the equity stake (Techinasia.com 2019). Although the
company aims to maintain the diversified working culture in the workplace, however, the CEO
of the company faced allegation where the majority of population have been avoided. In case of
understanding the situation of Virgin mobile, it has been identified that due to repeated loss in
the market, staff members have got terminated. Improper cost structure as well as high profile

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publicity do not brought any significant impact on the South African market (Bereznoy 2019).
The flat management structure, no bureaucracy and improper autonomy level have created
challenges for virgin group for sustaining in the market. Increasing customer complaints has
made the company portfolio week. Due to group diversification, it has become challenging for
the company to maintain its clean image (Fin24.com 2019).
Critical argument as the alternative growth strategy
Analyzing the above situation, it has been identified that especially in the South African market,
it is important for the company to understand the behavioral aspects of the local people.
Strategy 1: Especially in the South African market, understanding the needs of the
customers market campaigns needed to be introduced, where the company can be able to
share the same value that the customers need.
Implementation:
As the company has faced controversies regarding its racism as well as job cuts, in that case,
regaining the brand image is necessary for the company. In this situation, the celebrity
endorsement can help to drag the attention of the customers (Fin24.com 2019). In this case, the
popular personality from South Africa can help to satisfy the values of the customers in the
market. On the other hand, it is true that this initiative can help to recover from the racism
allegation.
Risk analysis:
In the words of Khan (2016), it is true that being celebrity endorsement requires the huge
investment in the market. However, being a popular brand in the Global market, the company
can be able to adopt this strategy. The biggest risk in this strategy is here the company may face

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failure if the promotional objective will not be presented properly to the customers, as the
company has already faced failure for its marketing initiative.
Strategy 2: Unique product selling strategy can be adopted by the company.
Implementation:
As stated by Olufemi . and Strydom (2018), in order to implement the unique products selling
strategy, new product can be introduced by the company, where it can help to gain the
competitiveness in the market. In this case, first 1 month free service for the aged and disable
people can drag the attention of community.
Risk analysis:
It is true that current virgin mobile is facing the loss in the market due to limited cash flow, in
this situation implementing this strategy can be little difficult for the company. However, it is
also true that if the strategy can successfully increase the numbers of subscribers, in that case, it
will be beneficial for the long term.
Strategy 3: Organizational restructuring process is needed for the company in terms of
ensuring its survival in the market.
Implementation:
In order to restructure the company, centralized decision making body needs to be developed so
that the CEO can bring the financial and group policies directly for bringing the betterment. In
case of centralizing the decision making body, complexity needs to be reduced by bringing the
formal structure (Grant 2016). In this case, the top opinion former who will be coming after the
CEO can easily fit in the structure.

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Risk analysis:
It is true that restructuring the managing body is a long term process. While restructuring the
organizational style, internal conflicts can get aroused.
Appropriate alternative growth strategy
Analyzing all the alternative strategies introduced in the analysis, it can be said that the
organizational restructuring process will be beneficial for the company in case of bringing the
sustainable growth in the market.
Conclusion
In the conclusion, it can be said that being a popular brand in the market, Virgin group has faced
various ups and downs in the global market. By following its global expansion strategy, in the
South African market the company has followed the diversification strategy so that it can ensure
its strong presence in every sector. However due improper presentation of marketing approach as
well as negative cash flow and improper management style have impacted on the strategic
direction of the company. In this situation improvising the organizational structure can be
beneficial for the company in terms of ensuring its sustainable growth in the market.

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References and bibliography
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Telcos?.
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