Competitive Strategy & Innovation - Analysis of Virgin Group

This presentation provides an analysis of the competitive strategy and innovation of Virgin Group. It covers the key resources, capabilities, and changes in organizational structure and management system. The presentation also includes recommendations for divestment and strategic attributes for different kinds of businesses.

Competitive Strategy & Innovation
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Introduction
 The success of the organization can be traced to the aspect of
organizational structure.
 The success of the organization can be traced to the aspect of
organizational culture.
 The capability of Virgin to operate effectively owes much to
the team’s organizational culture

Resources
 For probing the business strategy of the Virgin group,
it is necessary to ask about the resources.
 The resources should be similar for the different
companies of Virgin group.
 The two key resources are the brand ‘Virgin’ and
Richard Branson himself.

Contd…
 Brand acknowledgement is considered being a key
resource
 One of the common resources is finance.
 Financial standing of quick accessibility is not
occurring
 Different financial years are followed by some
organizations(Johnson 2014)

Contd…
 In late 2014, the revenue of the Virgin group was
£15bn.
 Only sixty organizations under the subsidiaries did
the using of the Virgin name (Johnson 2014)
 It is necessary to note the revenue source of
organizations will not include sales based profit

Contd…
 Another common resource is considered being
innovation
 Use of the VRIO (Value, Rarity, Imitable,
Organization) evaluation is done (Lechner 2017)
 Advanced knowledge will be received regarding
product value.

Contd…
 Human resources is another key resource
 It links separate Virgin companies
 Hiring of efficient managers are being done
 Fair treatment is received by them by feeling valued
and having satisfaction

Capabilities
 Major ability is varied organizational management
style
 Management refers to its internal operations
 Management also deals with the external
stakeholders (Johnson 2014)
 A hierarchical structure is being followed within the
different companies under Virgin group

Contd…
 Effective customer service is considered being the
means to survival.
 Virgin group is constantly keeping up with the
present requirements and demands (Lechner 2017).
 Actualization of customer needs should be ensured
 Virgin group is famous for its public relations

Contd…
 Product value as well as service value is considered
crucial
 Richard Branson makes an entry to a market having
demand
 Blue ocean strategy is functioning effectively to gain
competitive advantage (Johnson 2014)
 Separate companies are having distinct capabilities

Discussion on business that needs to be divested
 Divestment is required for businesses performing
poorly
 Better information regarding the company’s financial
performance cannot be actualized (Johnson 2014)
 Performances of the current scenario as well as of the
past are not considered being a better guide for future
potential (Lechner 2017)

Contd…
 The attributes of the business should be considered
 There is a list of strategic attributes relating to the
types of businesses for building the competing
advantages (Chen 2015)
 This will include the consumer businesses and start-
up businesses

Contd…
 Virgin is required appreciating the limits relating to
brand appeal
 Another major criteria is considered being industry
attractiveness (Chen 2015)
 The aspect of innovation, brand extension, internal
labour market and key resources are also to be
considered

Contd…
 Factors concerned with the content of business
portfolio focuses attention on identifying the
business model (Goetsch 2014)
 The probable alternatives will include an
organization of brand licensing, an organization of
venture capital and a diversified corporation

Contd…
 The organization’s success can also be traced to the
organizational structure and culture. (Ganter 2014)
 Virgin’s capability to function effectively owes much
to the team’s organizational culture
 The staffs of the organization are motivated for
developing business ideas regarding new businesses

Contd…
 ‘Virgin Bride’ was originally the brain child of a
Virgin Atlantic staff.
 Staffs are having stakes in the group (Ganter 2014).
 Staffs are striving to make the organizations achieve
success.

Changes in the organizational structure
 To identify the present structural aspect of the Virgin
group.
 To have very less in the means of formal structural
aspect
 The operating organizations are connected by a
number of holding organizations (Ganter 2014)

Contd…
 There is no clarity who is having the ownership of
the Virgin trademark
 At minimum, the brand is required to receive
protection
 Ensuring steadiness within the image that the Virgin
brand is projecting (Slater 2014).

Contd…
 There is limitation of financial data
 There is financial instability regarding the Virgin
group (Camison 2014)
 Each organization is financed in an independent
manner (Peppard 2016)

Changes in management system
 Only Branson does the exercising of an official
management control (Barnett 2015).
 He is advising each company board regarding
appointments
 He is identifying and advising on matters having
inter-organizational coordination (McGrath 2013)

Contd…
 It is required finding a new source in respect of
financing.
 The status quo of Virgin has to be analyzed (Grant
2016)
 There occurs centralization of the senior management
(Pisano 2015)

Conclusion
 The means to motivate, the increased work level, the huge
deal of accountability and employee freedom should be
considered
 The recommendations in the management system does the
centralization of the senior management
 There is a systematic method to do the managing of the Virgin
group

Recommendation
 A list of strategic attributes are there in relation to the
different kinds of businesses
 These criteria will rule out the rail services, cola drinks,
designer clothes and toiletries
 There will also be the ruling out of the financial services.

Reference
 Barnett, M.L., Darnall, N. and Husted, B.W., 2015. Sustainability strategy in
constrained economic times. Long Range Planning, 48(2), pp.63-68.
 Camisón, C. and Villar-López, A., 2014. Organizational innovation as an enabler
of technological innovation capabilities and firm performance. Journal of
business research, 67(1), pp.2891-2902.
 Chen, Y., Wang, Y., Nevo, S., Benitez-Amado, J. and Kou, G., 2015. IT
capabilities and product innovation performance: The roles of corporate
entrepreneurship and competitive intensity. Information & Management, 52(6),
pp.643-657.
 Ganter, A. and Hecker, A., 2014. Configurational paths to organizational
innovation: qualitative comparative analyses of antecedents and
contingencies. Journal of Business Research, 67(6), pp.1285-1292.

Contd…
 Goetsch, D.L. and Davis, S.B., 2014. Quality management for
organizational excellence. Upper Saddle River, NJ: pearson.
 Grant, R.M., 2016. Contemporary Strategy Analysis Text Only. John Wiley
& Sons.
 Johnson, G., 2017. Exploring strategy: text and cases. Pearson.
 Lechner, C. and Gudmundsson, S.V., 2014. Entrepreneurial orientation, firm
strategy and small firm performance. International Small Business
Journal, 32(1), pp.36-60.
 McGrath, R.G., 2013. The end of competitive advantage: How to keep your
strategy moving as fast as your business. Harvard Business Review Press.

Contd…
 Peppard, J. and Ward, J., 2016. The strategic management of information
systems: Building a digital strategy. John Wiley & Sons.
 Pisano, G.P., 2015. You need an innovation strategy. Harvard Business
Review, 93(6), pp.44-54.
 Rothaermel, F.T., 2015. Strategic management. McGraw-Hill Education.
 Slater, S.F., Mohr, J.J. and Sengupta, S., 2014. Radical product innovation
capability: Literature review, synthesis, and illustrative research
propositions. Journal of Product Innovation Management, 31(3), pp.552-
566.

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