Strategy and Innovation: Analysis of Virgin Group Case Study

This presentation analyzes the case study of Virgin Group, its resources and capabilities, divestment of business units, and recommendations for changes in management system and organizational structure. It also covers the BCG matrix, diversification strategy, and strategic alliances.

STRATEGY AND
INNOVATION
Virgin Group

INTRODUCTION
 This PowerPoint presentation will analyze the
case study of Virgin Group.
 Resources and capabilities of virgin
 Divestment of business unit and its criteria
 Recommendations for the changes in
Management system and organizational
structure

BACKGROUND OF VIRGIN
 Virgin was launched in 1970 by Richard
Branson. The company's name was
suggested by the associate of Mr. Branson.
The company has grown rapidly and now it is
being counted in one of the top branded
ventures.

VIRGIN GROUP
 The Company possesses 200 individual firms
that are directed by 20 holding businesses.
The brand is involved in the business of
financial services, travel, health and fairness,
music, telephone.

RECOURSES AND CAPABILITIES
 Resources and capabilities of an organization
are the bases to earn competitive advantage
and are considered as the profitability’s
primary source.

RESOURCES AND CAPABILITIES
 Capabilities of the organization states the
routines of the business, organizational
culture, and processes. Recognition of the
core capabilities can be valuable in
classifying what subsidized more to the
customer value and which segment of the
market to be targeted.

RESOURCES AND CAPABILITIES
 Resources do not get productive themselves;
they need to be altered into capabilities by
direction and management. For a company to
get a competitive advantage, it has to
concentrate towards it key strengths in
resources and capabilities and confirm that
both should operate together in place of
operating in isolation.

BCG MATRIX
 Boston Consulting Group (BCG) Matrix is also
known as a four-celled matrix (2*2 matrix)
launched by BCG, USA. It represents an
organization’s graphic depiction in order to
review various business range lie under
single group on the basis of their associated
growth rate and market share of the industry.
The BCG Matrix is consisting of four cells i.e.
star, cash cow, question mark, and dogs.

BCG MATRIX’S

FOUR CELLS OF BCG MATRIX
 Stars - Stars reflects those business units
that possess a huge market share in the
growing industry.
 Cash Cows - Cash cows talks about those
units of business that have a huge market
share in a slow-growing and mature industry.

FOUR CELLS OF BCG MATRIX
 Question Marks - Question mark identify
those units of business that have low relative
market share and operates in an industry
with high growth.
 Dogs - Dogs recognize those business units
that possess a feeble market share in the
markets with low-growth.

DIVESTMENT
 Divestment is the opposite of investment,
and it is also called as Divestiture. The
process of trading an asset for political,
social, or financial goals is known as
Divestment. Resources or properties that can
be divested by a business comprise real
estate, business department, and equipment.

VIRGIN AIRLINE
 Virgin Group has performed efficiently in the
management and formation of new business
since many years; however few of its
business units are not performing the way
they use to considering the present economic
downturn in the world. Some of them must
be noticed like Virgin Airline, Virgin Money,
Virgin cola etc.
 Virgin Airline – Virgin Atlantic is a British
airline company with headquarter in Crawley,
United Kingdom. It was founded in 1984 as
British Atlantic Airways.

VIRGIN MONEY
 Virgin Money is a financial service company
and bank based in the United Kingdom. This
company is a part of a virgin group
established in 1995 by Richard Branson.
Originally the company was called as Virgin
Direct. The Virgin Money extended its
business operations in 2000 across the world.

VIRGIN COLA
 Virgin Cola is a soft drink company and was
introduced in 1994. The company is part of
Virgin Group. The United Kingdom initially
served this drink on Virgin Trains, Virgin
Cinemas, and Virgin Airlines.

DIVERSIFICATION
 A method of managing risk by combining a
broad range of investments in a portfolio is
known as Diversification. It tries to smooth
out the events of risk which is unsystematic
in a portfolio such the optimistic presentation
of some investments defuses the adverse
performance of others.

CRITERIA FOR DIVERSIFICATION
STRATEGY
The Attractive Test
The Cost of Entry Test
The Better of Test

CRITERIA FOR DIVERSIFICATION
STRATEGY
To describe whether diversification will make
shareholder value or not, Porter’s essential test
must be applied by Virgin Group. This test
involves three tests i.e.
 The attractive test
 The cost of entry test and
 The better off test

STRATEGIC ALLIANCE
 A contract between two or more than two
parties in order to follow a set of decided
purposes needed while continuing as self-
governing organizations are known as
Strategic Alliance. Strategic alliances happen
at the time when two or more than two
organizations come together for mutual
benefits.
 Branson successfully constructed companies
from ground-up however strategic alliance
with the companies having capabilities and
resources can be valuable. Branson knows
well about Alliance

RECOMMENDATIONS FOR THE CHANGES
IN ORGANIZATIONAL STRUCTURE
 An organizational structure explains how
business activities like coordination,
allocation of task and supervision are
focussed toward the achievement of
organizational aims.

RECOMMENDATIONS IN
MANAGEMENT STRUCTURE
 Management structure can be defined as
how a firm organizes its hierarchy of
management. In order to enable operative
management, businesses are controlled in
two ways: Horizontally and Vertically (The
Wharton School, 2015).

CONCLUSION
 From the above PowerPoint presentation, it can be
concluded that Virgin is a big and famous brand
however it needs to do some changes in its
operations that might support in long run by
increasing its financial performance. Its resources
and capabilities are supporting positively. The
Group needs to divest some of its business in order
to increase the profitability by investing that
amount in other sectors. Porter’s essential test
model should be adopted by the company to
identify the most suitable business to invest in. The
recommendations that are provided in the end
must be considered by Branson. He should try to
change its organizational and management
structure to reduce the burden.

REFERENCES
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[Accessed 22 April 2018]
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[Accessed 22 April 2018]
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REFERENCES
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[Accessed 22 April 2018]
 Virgin (2018) Richard Branson: What to do when things
go wrong [online]. Available from
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ml