Strategic Management of Virgin Group: Industry Structure, Positioning, and Evaluation

This report analyzes the industry structure and market positioning of Virgin Group, a British multinational conglomerate. It examines the company's diversification, innovation, and technological advancements. The report also evaluates the company's performance, including its successes and controversies. Based on the analysis, recommendations are provided to enhance the company's strategic management.

STRATEGIC
MANAGEMENT

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................3
MAIN BODY...................................................................................................................................3
Industry structure and market positioning of the Virgin Group..................................................3
Critical evaluation of the company.............................................................................................4
Judgement for the company........................................................................................................5
CONCLUSION................................................................................................................................6
REFERENCES................................................................................................................................7

INTRODUCTION
There are a lot of goals and objectives which the businesses have in a market which have
to be achieved and for that the organization will have to have the right strategic management.
There is a proper analyses of the external factors which could affect the operations and also
reflects upon the processes and procedures which are being followed in the market. Virgin group
is having its headquarters in London, England and the founder of the organization are Richard
Branson and Nik Powell. The organization belongs to conglomerate industry and the business
has expanded themselves in a lot of products like banking, films, health care, internet, travel, etc.
The report consists of the structure and positioning of the organization and after this there are
judgements and critical evaluation of the business in the market.
MAIN BODY
Industry structure and market positioning of the Virgin Group
Virgin Group Ltd. is a British multinational venture capital conglomerate company which
is headquartered in London UK. Mr Richard Branon is the founder of the Virgin Group who is
famous as great leader (Redpath, O'Connelland Warnock-Smith, 2017). This company operates
into multiple sectors like banking sector, retail sector, technology sector, healthcare sector, travel
sector, e-commerce market, telecommunication sector and jewellery sector. So, it has wide
category product portfolio and services due to this it enables to build strong customer base in the
business market. It operates into multiple sectors that’s why it has strong global presence. It
offers worldwide services through it’s numerous subsidiaries which are located in multiple
countries across the world. So, Virgin Group has wide industry structure. It contains more than
400 companies which runs their business separately. Complex organizational structure is
followed by Virgin Group because it operates into multiple sectors so it have to follow different
organizational accordingly business nature. For example, Virgin Atlantic is a Airline company
that follows hierarchical organization structure. Virgin Group Ltd. is a multinational company.
Richard Branson has become one of the famous person who have earned12 billion dollar
companies in eight different business sectors (Clancy, 2017). Additionally, company has
established large customer base in multiple sectors due to this it enables to generate high profit
margin on each product and services like airline, travel, rail service and others. It contains 400
companies that’s why each has earned high revenue on in different sectors. The company has
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been using a lot of innovate measures for the company to be able to operate effectively in the
market. Innovation is very essential since the trends and demands of the customers are chnaging
and therefore the comapny will have to make sure that they are having the right competitive
advnatage for a long run.
The company has included information technology so that the organization will be able to
operate effectively in the market. Information technology is very helpful because the employees
are going to have a better sense of direction for a long run which is going to be very ehlpful for a
long run. The management of the organization is very active for the decision making and the
employees are involved in the decision making as well so that there are right decisions which can
be made for the organization. The competition in the market is also increasing which is why the
organization will have to have the right strategies for themselves. Technological changes are
very essential in competitive advantage because the demands of the customers are going to be
met easily which is a very good factor for the company to have (Hill, 2017). The company is
working for profitability in the market and for that the organization will have to have the right
strategies and measures to be able to do that. The company is taking feedbacks from the
customers and improvements are being done effectively so that there is going to be a good
functioning which is a very good factor for the organization's operations and performance. There
are new ideas as well whcih are generated due to this factor and the company is going to benefit
from it as well.
It is very essential for the organization to be able to maintain the ethics in the production
which is the internal and external factor. The customers have different believes and culture
which is why it is very essential for the comapny to be able to maintain that factor which is going
to be very effective for a long run of the business.There are a lot of offers as well which are
being provided to the customers so that the organization is going to have loyal customers which
is a great factor for the company. The organization always follows the rules and regulations
which is why it is very essential for the comapny to implement them in the business which is
going to amke the functioning of Virgin group have a strong base for themsleves in the market.
The shareholders of the comapny are being provided a transparent functioning and decisions
which are being provided to them so that there is going to be a a higher performance in the
market. The data is provided to all the employees of the comapny easily by using information
technology which is making the functioning of the organization increase. The company is very
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much engaged in providing the base for themselves in this competitive market so that the risks of
the organization are going to be minimum to operate in the market and chnages can come in
easily and effectively (Barros, Hernangómez and Martin-Cruz, 2016).
Critical evaluation of the company
It is necessary to identify the issues faced by the company and the overall measures or
steps they take in order to reinstate the position in which they have put themselves in ( Grant,
2016). Virgin Group which is an extremely diversified and expanded business has also, over
their course of operation, taken a variety of decisions and implemented strategies where they
have succeeded in some and been held responsible in others.
The company Virgin Group has achieved rapid growth and advancement where they have
tapped multiple industries and not just tapped into them but have also successfully positioned
themselves in these industries. As per the Muthee (2019), the reason that the company has
succeeded is mainly because rather than competing with their competitors they were able to
identify the new opportunities that arose before them. In terms of innovation, the company has
been regularly experimenting and technologically as well the company has positioned itself as a
strong competitor. The company British Airways is one of the key competitors of the company
where the Virgin Group was able to innovate by implementing extremely innovative and
advantageous options that attracted a lot of customers to the company despite it being a private
aircraft company.
Similarly, in context of CSR as well, the company Virgin Group was able to integrate the
objectives and vision that company had with the kind of culture that the implemented and the
growth ideologies that they had in relation to the society (Figueiredo, 2016). The company has
always tended to engage in those projects which make earth a better place to live. This tendency
can be seen right from the beginning when the terms like CSR and social responsibility were in
its initial phase and had not been quite accepted by the companies. The competitor of the
company i.e. Hilton Hotel has been regularly involved in the controversies regarding racial
discrimination, pay inequality etc. whereas, on the other hand, the Virgin Group has promoted
solidarity and equality amongst the employees themselves and this is mainly done because of the
ideologies that have been presented by the Richard Branson who is the CEO of the company.
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However, there are not just positive aspects that have been faced by the company but some
controversies as well in which the company has got itself caught (Lohmann and Spasojevic,
2018). There have been numerous instances when the company was found to be involved in
things or practices that could not be justified as ethically correct or moral practices.
As the authors, McCurdy (2019), state, company has not been entirely true in terms of
ethics and its compliance. The company was recently found to be involved in a controversy
where it was stated that a subsidiary company of Virgin Group i.e. Assurance wireless sold cell
phones that had an inbuilt Chinese malware that was pre installed in the phone and could not be
removed. This was a controversial point both on the ethical front and on the governance aspect
also where the company failed to respect and protect the privacy of their customers. It took
company a long time to remove its contents that were harmful and despite being of a cheaper
range with multiple facilities and benefits, the product turned out to be a failure.
Another major controversy as it has been illustrated by Bereznoy (2019), arose when the
Virgin Group was involved in a clash with NHS which is the largest healthcare institute of UK.
When the company lost a contract worth 82 million to NHS it sued the clinical commissioning
groups where they were blamed behind the reasons that the company lost the contract were
invalid and unjustified and NHS has had a foul hand. This matter was although settled out of
court by NHS but the continuous coverage of the NHS in bad light turned people against the
Virgin Group itself. This was a dig on the overall governance of the company and the backlash
that it received was also severe.
Although there are many controversies that can be enumerated and there are a multiple
number of positive aspects as well that can be included in the context of the company, it can
overall be ruled out that it is natural for any company to involve in certain controversies in the
long time period in which it has been operating.
Judgement for the company
Based on the overall findings of the research and the analysis that was done respectively, it
can be analysed that there are certain weak points of the company that needs to be worked on so
that the key benefits can be generated and the overall practices can be improved by the company.
Some recommendations that can be made for the Virgin Group company are as follows:
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 The diversification of the Virgin Group is huge and hence it is necessary to implement the
proper evaluation and monitoring techniques where the company needs to develop check
points which can help them in identifying the areas of fault and the reasons behind this
proposition or aspect.
 The second key aspect is to work on the ethical compliance where the company has been
repeatedly questioned and presented negatively on this aspect. The CSR image of the
company is extremely well developed but the ethical compliance needs to be improved
further.
 The organization will have to focus on the internal factors as well so that they can get a
competitive advantage which is going to be very effective for a long run in the market.
 The company has got a strong portfolio for themselves which is why it is very essential for
them to have a good functioning and analyse the internal and external factors is going to be
very helpful for a long run.
CONCLUSION
The research conducted in the report above helps in concluding that the overall strategic
positioning of the company i.e. of Virgin Group is very strong and illustrative and they have
been able to resort to a multiple number of strategies and techniques which have assisted them
throughout the process. The market structure and positing of the company was analysed initially
indicating the diversity and vastness of the company and further the report also included an
analysis of the company critically. All the issues that were faced and the opportunities that were
grabbed have been illustrated and discussed. Lastly, the justification or recommendation was also
given based on the analysis done and the findings obtained.
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REFERENCES
Books and Journals
Barros, I., Hernangómez, J. and Martin-Cruz, N., 2016. A theoretical model of strategic
management of family firms. A dynamic capabilities approach. Journal of Family
Business Strategy. 7(3). pp.149-159.
Bereznoy, A., 2019. Changing competitive landscape through business model innovation: The
new imperative for corporate market strategy. Journal of the Knowledge
Economy, 10(4), pp.1362-1383.
Clancy, M.I.C.H.A.E.L., 2017. Power and profits in the global cruise industry. Cruise ship
tourism, pp.43-56.
Figueiredo, A., 2016. How can virgin mobile differentiate itself by focusing on mobile data in
collaboration with virgin mobile (Doctoral dissertation).
Grant, R.M., 2016. Contemporary strategy analysis: Text and cases edition. John Wiley & Sons.
Hill, T., 2017. Manufacturing strategy: the strategic management of the manufacturing function.
Macmillan International Higher Education.Hill, T., 2017. Manufacturing strategy: the
strategic management of the manufacturing function. Macmillan International Higher
Education.
Lohmann, G. and Spasojevic, B., 2018. Airline business strategy. The routledge companion to
air transport management, pp.139-153.
McCurdy, H.E., 2019. Virgin Galactic: Promoters and Prizes. In Financing the New Space
Industry (pp. 73-83). Palgrave Pivot, Cham.
Muthee, D., 2019. Keiretsu business structure in Virgin group: A literature review of advantages
and disadvantages of Keiretsu.
Redpath, N., O'Connell, J.F. and Warnock-Smith, D., 2017. The strategic impact of airline group
diversification: The cases of Emirates and Lufthansa. Journal of Air Transport
Management, 64, pp.121-138.
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