Influencing Organization Strategy: Virgin Group's Strategic Analysis
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AI Summary
This report provides a strategic analysis of the Virgin Group, examining its resources, capabilities, and diversification strategies. It explores the links between various Virgin companies and evaluates the company's diversification efforts, including recommendations for divestment and new ventures. The report also assesses the financial and organizational structures, management systems, and suggests improvements. Furthermore, it evaluates the value added by the Virgin Company, and discusses challenges a successor to Richard Branson might face. The analysis covers tangible and intangible resources, diversification criteria, and the application of Porter's Essential Test. The report emphasizes the importance of brand image and provides insights into financial and organizational structure improvements, and the challenges a successor might encounter.

INFLUENCING
ORGANISATION
STRATEGY
ORGANISATION
STRATEGY
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Table of Contents
INTRODUCTION...........................................................................................................................3
MAIN BODY...................................................................................................................................3
1 Various resources and capabilities links the separate virgin companies..................................3
2 Diversification of Virgin group...............................................................................................4
3. Criteria to pursue new diversification.....................................................................................5
4. Recommend changes in financial structure, organizational structure, and management
systems of the Virgin Group.......................................................................................................7
5. Virgin's value as a corporate parent and addition to it............................................................8
6. Challenges faced by a successor to Richard Branson, and practices that he/ she may adopt. 9
CONCLUSION..............................................................................................................................11
REFERENCES..............................................................................................................................12
INTRODUCTION...........................................................................................................................3
MAIN BODY...................................................................................................................................3
1 Various resources and capabilities links the separate virgin companies..................................3
2 Diversification of Virgin group...............................................................................................4
3. Criteria to pursue new diversification.....................................................................................5
4. Recommend changes in financial structure, organizational structure, and management
systems of the Virgin Group.......................................................................................................7
5. Virgin's value as a corporate parent and addition to it............................................................8
6. Challenges faced by a successor to Richard Branson, and practices that he/ she may adopt. 9
CONCLUSION..............................................................................................................................11
REFERENCES..............................................................................................................................12

INTRODUCTION
The Virgin Group set up by Sir Richard Branson practices a great deal of diversification in its
various business and its operations. Through its subsidiaries, Virgin Company engages in a lot of
different activities. This report highlights the Unique Selling Points of the company and how
they are linked to the available resources and their utilisation. Further, this report explores the
divestment opportunities for the company and what should be the criteria for evaluating the pros
and cons before divesting. These pros and cons guide the management team about which new
diversification to pursue. This report also highlights the present financial and organisational
structure and the management system and what changes can be implemented to improve it. Then,
the value added by the Virgin Company and how it can be further increased is also described.
Lastly, challenges which a successor of Richard Branson might face and the possible strategies
that he might adopt have been discussed.
MAIN BODY
1 Various resources and capabilities links the separate virgin companies.
Resources refers to those productive assets which is owned by the organisation. And
capabilities refers to what firm can do. Resources are divided into intangible, intangible and
human resources. In this case of virgin group ,there are various resources identified.
Tangible resources: Virgin group have more focus on the long term capital growth instead of
short term taxable income which tells that virgin group has a strong finance resource.
Intangible resources: Branding is the most important resource of virgin group. virgin runs
businesses with six values which includes money value,good quality,innovative and providing
brilliant customer services. These are the following values which has helped virgin group to face
competition and satisfied the customers. Example the virgin Atlantic which provide customers
messages during the flight ,motorcycle transportation to and from the airport and much more.
This shoes that whatever is done within Virgin brand is based on the Richard Branson
philosophy as they are trying to improve customer services.
Secondly the virgin group culture is very casual and has allowed the workers and
employee to share their ideas , values and goals to achieve the following objective of the
company. Human resources:Its is also a common resource of virgin group. The manager of
virgin group company has power to manage and look over the whole company. And they also
3
The Virgin Group set up by Sir Richard Branson practices a great deal of diversification in its
various business and its operations. Through its subsidiaries, Virgin Company engages in a lot of
different activities. This report highlights the Unique Selling Points of the company and how
they are linked to the available resources and their utilisation. Further, this report explores the
divestment opportunities for the company and what should be the criteria for evaluating the pros
and cons before divesting. These pros and cons guide the management team about which new
diversification to pursue. This report also highlights the present financial and organisational
structure and the management system and what changes can be implemented to improve it. Then,
the value added by the Virgin Company and how it can be further increased is also described.
Lastly, challenges which a successor of Richard Branson might face and the possible strategies
that he might adopt have been discussed.
MAIN BODY
1 Various resources and capabilities links the separate virgin companies.
Resources refers to those productive assets which is owned by the organisation. And
capabilities refers to what firm can do. Resources are divided into intangible, intangible and
human resources. In this case of virgin group ,there are various resources identified.
Tangible resources: Virgin group have more focus on the long term capital growth instead of
short term taxable income which tells that virgin group has a strong finance resource.
Intangible resources: Branding is the most important resource of virgin group. virgin runs
businesses with six values which includes money value,good quality,innovative and providing
brilliant customer services. These are the following values which has helped virgin group to face
competition and satisfied the customers. Example the virgin Atlantic which provide customers
messages during the flight ,motorcycle transportation to and from the airport and much more.
This shoes that whatever is done within Virgin brand is based on the Richard Branson
philosophy as they are trying to improve customer services.
Secondly the virgin group culture is very casual and has allowed the workers and
employee to share their ideas , values and goals to achieve the following objective of the
company. Human resources:Its is also a common resource of virgin group. The manager of
virgin group company has power to manage and look over the whole company. And they also
3
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have been trained according to virgin group management new-style. If The virgin group set up
new company the expertise of company are free to switch to work for the new company.
The another intangible resource is corporate culture which describe about the structure of
firm. There is one red line for all the Virgin company which is based on Richard Branson
Philosophy which helps the company to be in structure the same and allow firms to follow the
same rules (Serra and Kunc, 2015).
The capabilities of Virgin group company are management,risk diversification,networking and
also includes innovative business ideas and products. The manager of virgin group has the power
to control finance and management .And also providing advises and managerial support to the
virgin group. This capabilities has supported the virgin group to become more specialized in the
field. Virgin group forms a strong network so that they gain benefits and develop winning
situations. when the virgin group decide to introduce new business first they considered about
what new benefits this business is providing to exiting business which means that virgin group
has a strong network capabilities to expand the business and always ready to bear risk.
Virgin group always developing innovative ideas for both existing and new market
which states that this concept is made to improve the services and products which are already
offered by other firm in the market. This was the philosophy of Richard Branson name called
“sticking it to the big boys”which allows the company to gain market share and profit from both
the markets.
4
Illustration 1: Virgin Company
Source : (Virgin Group Company, 2015)
new company the expertise of company are free to switch to work for the new company.
The another intangible resource is corporate culture which describe about the structure of
firm. There is one red line for all the Virgin company which is based on Richard Branson
Philosophy which helps the company to be in structure the same and allow firms to follow the
same rules (Serra and Kunc, 2015).
The capabilities of Virgin group company are management,risk diversification,networking and
also includes innovative business ideas and products. The manager of virgin group has the power
to control finance and management .And also providing advises and managerial support to the
virgin group. This capabilities has supported the virgin group to become more specialized in the
field. Virgin group forms a strong network so that they gain benefits and develop winning
situations. when the virgin group decide to introduce new business first they considered about
what new benefits this business is providing to exiting business which means that virgin group
has a strong network capabilities to expand the business and always ready to bear risk.
Virgin group always developing innovative ideas for both existing and new market
which states that this concept is made to improve the services and products which are already
offered by other firm in the market. This was the philosophy of Richard Branson name called
“sticking it to the big boys”which allows the company to gain market share and profit from both
the markets.
4
Illustration 1: Virgin Company
Source : (Virgin Group Company, 2015)
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The another capability of virgin group is diversity .due to diversity they expand their
business and brand which has created opportunity for virgin group for growth and development.
And its helping virgin group to diversify risk and to maintain growth of company even when one
company comes at declines position. And it also one more unique capability to successfully
involve the media to grow the virgin's public awareness.
2 Diversification of Virgin group
Diversity refers to exploring new market and building new networks which includes new
risks.
Richard Branson should divest in those business which performing badly. There are various
business in which Richard Branson can divest in. virgin group divest in virgin Atlantic
airways .This reason for divesting on this airways because the airlines are providing negative
profits and faced losses. so airline industry require lot of capital,high fuel cost,taxes. so Branson
has this opportunity to divest in airways so to bring a positive profit .
And another business that Branson should invest in is Galactic because the purpose of Galactic is
to increase the brand value. If the virgin group divest in this than it will provide boast to value of
Virgin brand (Zhu, 2015).
Branson can divest in direct selling of goods and services to the customer. As Richard
Branson was looking out for this kind of opportunities regarding in making new deal with
customers. This ventures provide direct sale to consumer with the help of distribution channels.
5
Illustration 2: Diversification
Source : (Virgin Group, 2019)
business and brand which has created opportunity for virgin group for growth and development.
And its helping virgin group to diversify risk and to maintain growth of company even when one
company comes at declines position. And it also one more unique capability to successfully
involve the media to grow the virgin's public awareness.
2 Diversification of Virgin group
Diversity refers to exploring new market and building new networks which includes new
risks.
Richard Branson should divest in those business which performing badly. There are various
business in which Richard Branson can divest in. virgin group divest in virgin Atlantic
airways .This reason for divesting on this airways because the airlines are providing negative
profits and faced losses. so airline industry require lot of capital,high fuel cost,taxes. so Branson
has this opportunity to divest in airways so to bring a positive profit .
And another business that Branson should invest in is Galactic because the purpose of Galactic is
to increase the brand value. If the virgin group divest in this than it will provide boast to value of
Virgin brand (Zhu, 2015).
Branson can divest in direct selling of goods and services to the customer. As Richard
Branson was looking out for this kind of opportunities regarding in making new deal with
customers. This ventures provide direct sale to consumer with the help of distribution channels.
5
Illustration 2: Diversification
Source : (Virgin Group, 2019)

Technology,Media ,Telecom is also given opportunities to the virgin group to divest .This will
help the virgin group to communicate directly with customers by using telephone and internet.
Text messaging helps the virgin group to make reservation for the train and airways passengers
and they can also provide sell discount offer to those customer who are a part of virgin group.
The Richard Branson can diverts in retails venture of Singapore and wireless telecom in Asia.
and they have a option to divest in clothing and cosmetic company which is the best source to
increase the brand value of Virgin Group. To divest in car rental business is also a good option
for virgin group and can also be the part of online pharmacy in the UK. Wireless telecom
enterprises is also a great opportunities to invest.
The Richard Branson has too keep in mind that to invest on those business which provide
maximum customer services,innovative skills which provide growth to the business. virgin group
has the opportunity to invest in cola drinks,customer services,clothes and toiletries and in
financial services as well. Virgin group can also be a part of railways network
3. Criteria to pursue new diversification
When considering the diversification, there are three keys areas which should be
investigated which include growth,risk deduction and value creation. If the company do not
divest in other company than the company will be remain limited within an industry.
diversification is the only option which can help any company to generate more revenue and
growth easier and fastly. so growth is one of the most important part of every business.
If the virgin group is deciding to invest in other company first it face difficulties and
threats. As to invest in the declining industry can be risky for virgin group. so in this case
diversification can help the virgin group to reduce other risk and build opportunities for company
to maintain its financial stability by generating income revenue from the other industries. And
for the virgin group case this diversification can help to distribute the risks into different selected
company. the results which they gain from other company can be used to maintain the condition
of those companies which are not performing well (Porter's essential test,2019).
6
help the virgin group to communicate directly with customers by using telephone and internet.
Text messaging helps the virgin group to make reservation for the train and airways passengers
and they can also provide sell discount offer to those customer who are a part of virgin group.
The Richard Branson can diverts in retails venture of Singapore and wireless telecom in Asia.
and they have a option to divest in clothing and cosmetic company which is the best source to
increase the brand value of Virgin Group. To divest in car rental business is also a good option
for virgin group and can also be the part of online pharmacy in the UK. Wireless telecom
enterprises is also a great opportunities to invest.
The Richard Branson has too keep in mind that to invest on those business which provide
maximum customer services,innovative skills which provide growth to the business. virgin group
has the opportunity to invest in cola drinks,customer services,clothes and toiletries and in
financial services as well. Virgin group can also be a part of railways network
3. Criteria to pursue new diversification
When considering the diversification, there are three keys areas which should be
investigated which include growth,risk deduction and value creation. If the company do not
divest in other company than the company will be remain limited within an industry.
diversification is the only option which can help any company to generate more revenue and
growth easier and fastly. so growth is one of the most important part of every business.
If the virgin group is deciding to invest in other company first it face difficulties and
threats. As to invest in the declining industry can be risky for virgin group. so in this case
diversification can help the virgin group to reduce other risk and build opportunities for company
to maintain its financial stability by generating income revenue from the other industries. And
for the virgin group case this diversification can help to distribute the risks into different selected
company. the results which they gain from other company can be used to maintain the condition
of those companies which are not performing well (Porter's essential test,2019).
6
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When deciding to diversify or not,it is suggested to use the Porter's Essential Test .This test
included there criteria s which are attractiveness test, cost-of-entry test and the better -of-entry
test.
The first criteria is the attractiveness test. This test ask the question about whether the chosen
industry for diversification has future potential growth or not. Railways,Atlantic airways ,cola
drinks,cosmetics and wireless telecom are the selected industries in which Branson wants to
divest. But this test is not enough to to make decision regarding whether to divest in other
company or not. However the second test “the cost -of-entry test”should be carried out to find
out whether the cost of entering the industry is could be capitalized in the future or not and
whether it provide future. Profitability.In virgin case the Branson could investigate the desire
industry and finds out whether the potential of future can bear the cost .If the cost of entering in
to the new industries is costly,than the Richard Branson should not take interest in
diversification.
After testing on the attractiveness test and Cost -of-entry test. Lastly,Richard Branson can able
to evaluate the decision for diversification after doing the final test which is “The Better-Off
Test”.this better-off test is asks the question whether the new industries alone able to bring
competitive advantages or will it able too give competition to other existing products or services.
If the new company is able to do work with existing products it can be a good advantage for the
Richard Branson to divest (Roos and Von Krogh, 2016).
7
Illustration 3: Diversification
Source : (Ansoff Matrix, 2016)
included there criteria s which are attractiveness test, cost-of-entry test and the better -of-entry
test.
The first criteria is the attractiveness test. This test ask the question about whether the chosen
industry for diversification has future potential growth or not. Railways,Atlantic airways ,cola
drinks,cosmetics and wireless telecom are the selected industries in which Branson wants to
divest. But this test is not enough to to make decision regarding whether to divest in other
company or not. However the second test “the cost -of-entry test”should be carried out to find
out whether the cost of entering the industry is could be capitalized in the future or not and
whether it provide future. Profitability.In virgin case the Branson could investigate the desire
industry and finds out whether the potential of future can bear the cost .If the cost of entering in
to the new industries is costly,than the Richard Branson should not take interest in
diversification.
After testing on the attractiveness test and Cost -of-entry test. Lastly,Richard Branson can able
to evaluate the decision for diversification after doing the final test which is “The Better-Off
Test”.this better-off test is asks the question whether the new industries alone able to bring
competitive advantages or will it able too give competition to other existing products or services.
If the new company is able to do work with existing products it can be a good advantage for the
Richard Branson to divest (Roos and Von Krogh, 2016).
7
Illustration 3: Diversification
Source : (Ansoff Matrix, 2016)
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As it is not mention in Porter's Essential Test,there are some factors that Richard Branson must
consider such as Brand image. The image of company plays very important role in development
and growth because the brand image is the building structure of any company. so its is very
essential that the new company do not effect the existing company brand image. If there is any
possibility damaging the image. Branson should ignore the diversification into the market.
So this are the following factor which can easily help the Branson to make decision regarding the
diversification .And it will help Branson to reduce berries and make clear vision of
diversification. By following this steps Branson could able to make judgement regarding
whether to invest in other company or not. And provides all the information of other industries
for the awareness before making investment.
4. Recommend changes in financial structure, organizational structure, and management systems
of the Virgin Group
Knowledge of the present structure is necessary for identification of the changes that need to be
implemented to improve the working of organisation.
Financial Structure of the Virgin Companies was very weak initially since the company was
poor and was incurring losses. Earlier in the 1990's, each company was financed separately by
Branson and each loss incurred was personally guaranteed by him or was cross guaranteed
within the company. This poor financing left Virgin Group in a vulnerable position and when the
recession period started in 1990-92, it was near collapsing. This forced Branson to shift his
resources from loss generating ventures to profitable ones like Virgin Atlantic. Also, lack of
preparation of any consolidated accounts has created dis ambiguity in the investor's mind (Ivanov
and Mayorova, 2015).
Though there is limited availability of data relating to financial figures of the Virgin Company,
Branson has claimed that each of his company is self financed. They rely more on their taxation
profits rather than focusing on Net profits. This points out the fact that the cost of running
business i.e. cost of capital is unnecessarily more than it should be and in the event of crisis they
cannot support each other. This highlights that Branson should propagate setting up of a single
company as holding company or issue IPO's for capital intensive branches of the company. Also,
Branson has always created profitable diversifications for the company and his willingness to
enter into new ventures even if there are minor stakes of the Virgin Company have created a
brand- franchising image of the company.
8
consider such as Brand image. The image of company plays very important role in development
and growth because the brand image is the building structure of any company. so its is very
essential that the new company do not effect the existing company brand image. If there is any
possibility damaging the image. Branson should ignore the diversification into the market.
So this are the following factor which can easily help the Branson to make decision regarding the
diversification .And it will help Branson to reduce berries and make clear vision of
diversification. By following this steps Branson could able to make judgement regarding
whether to invest in other company or not. And provides all the information of other industries
for the awareness before making investment.
4. Recommend changes in financial structure, organizational structure, and management systems
of the Virgin Group
Knowledge of the present structure is necessary for identification of the changes that need to be
implemented to improve the working of organisation.
Financial Structure of the Virgin Companies was very weak initially since the company was
poor and was incurring losses. Earlier in the 1990's, each company was financed separately by
Branson and each loss incurred was personally guaranteed by him or was cross guaranteed
within the company. This poor financing left Virgin Group in a vulnerable position and when the
recession period started in 1990-92, it was near collapsing. This forced Branson to shift his
resources from loss generating ventures to profitable ones like Virgin Atlantic. Also, lack of
preparation of any consolidated accounts has created dis ambiguity in the investor's mind (Ivanov
and Mayorova, 2015).
Though there is limited availability of data relating to financial figures of the Virgin Company,
Branson has claimed that each of his company is self financed. They rely more on their taxation
profits rather than focusing on Net profits. This points out the fact that the cost of running
business i.e. cost of capital is unnecessarily more than it should be and in the event of crisis they
cannot support each other. This highlights that Branson should propagate setting up of a single
company as holding company or issue IPO's for capital intensive branches of the company. Also,
Branson has always created profitable diversifications for the company and his willingness to
enter into new ventures even if there are minor stakes of the Virgin Company have created a
brand- franchising image of the company.
8

Organizational Structure of Virgin Company comprises a group of companies linked solely by
the Trademark and Branson being their head i.e. acting as their chairman. Branson however
specifies his company as the one which is people – oriented i.e. employees themselves play a
bigger role in deciding their promotion and growth by their performance. Despite so many
evidences of companies with many divisions or departments becoming stagnant, Branson
strongly believes that due to so many diversifications of it, Virgin Company can meet any crisis
(Gray, Kirkwood, and .et.al., 2019). There is a lot of ambiguity amongst the investors regarding its
holdings, investments and the guidelines according to which its various brands operate. Virgin
Company should clear dis ambiguity surrounding the brand and modify the methods in which the
brand and its diversifications are presented before the public and the potential investors of the
company. To improve this, Virgin Group should focus on establishment of an efficient top
management and they should employ efficient personnel who, when given the task of decision
making can successfully handle it and this will promote employee empowerment.
The Management System of Virgin Company plays a very important role. The key personnel
and the senior executives, though by position are only executives but due to their long assistance
with Branson, they participate i.e. more widely and extensively in the management of the
company. Although, there is no formal structure of the company classifying the different
mangers and their roles, they collectively form an expert team where each of them has an
extensive knowledge about the field or position on which they act as well as the branch of the
9
Illustration 4: Financial statement
Source : (Virgin Case Study, 2016)
the Trademark and Branson being their head i.e. acting as their chairman. Branson however
specifies his company as the one which is people – oriented i.e. employees themselves play a
bigger role in deciding their promotion and growth by their performance. Despite so many
evidences of companies with many divisions or departments becoming stagnant, Branson
strongly believes that due to so many diversifications of it, Virgin Company can meet any crisis
(Gray, Kirkwood, and .et.al., 2019). There is a lot of ambiguity amongst the investors regarding its
holdings, investments and the guidelines according to which its various brands operate. Virgin
Company should clear dis ambiguity surrounding the brand and modify the methods in which the
brand and its diversifications are presented before the public and the potential investors of the
company. To improve this, Virgin Group should focus on establishment of an efficient top
management and they should employ efficient personnel who, when given the task of decision
making can successfully handle it and this will promote employee empowerment.
The Management System of Virgin Company plays a very important role. The key personnel
and the senior executives, though by position are only executives but due to their long assistance
with Branson, they participate i.e. more widely and extensively in the management of the
company. Although, there is no formal structure of the company classifying the different
mangers and their roles, they collectively form an expert team where each of them has an
extensive knowledge about the field or position on which they act as well as the branch of the
9
Illustration 4: Financial statement
Source : (Virgin Case Study, 2016)
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Virgin Company that they are heading. The informal structure of the Virgin Company is based
upon Branson's eccentricity and his habit of keeping the environment light and friendly.
However, this portrayal of informal structure and lack of any proper management system led
some of those traditional organisations to form a misconception about Virgin Company and its
operations and underestimate their efficiency. This empowerment given to employees and lack
of any formal structure has indeed fostered the work culture and encouraged growth in the
company. Therefore, the company should maintain the enthusiasm of its employees and keep its
key managerial personnel satisfied (Franzen and Moriarty,2015).
5. Virgin's value as a corporate parent and addition to it.
Virgin Company has generated a lot of goodwill. The major brand values of the Virgin company
are:- Great Quality, Excellent Customer Service, Money's Value. If any company attaches the
prefix 'Virgin' before its company, this automatically creates a particular image in the mind of
the public or the targeted customers of the company. They perceive the company to be fun loving
and the one with innovative ideas or products and also it is presumed to be daring in its activities.
Branson, with his own eccentric ideas and personality, created Virgin Company depicting the
exactly same qualities amongst its public. However, all the diversified companies of Virgin
Company were 'Ring – Fenced' so that switching of assets between its different ventures could
not take place. Being the superpower company and a corporate parent, Virgin Company has
added a great value in the market through its business activities. To create more value, it can do
following things :-
Developing Understanding of Market :- The management team of Virgin Company has to
successfully identify the complacencies prevalent in the market. The management team
formulates a strategy, their experience coupled with the expertise. This strategy formulation is
then applied in the market strongly backed by the Virgin Company, their management and its
employees. This helps the company in avoiding stressful situations and keeping the company
afloat in crisis situation so that the company never fails in providing what the consumer actually
desires and through tactics like 'environmental scanning' can predict the changing trends in
market.
Brand Name :- The brand name Virgin Company has been successful in creating a fun image in
the minds of the consumers, yet it still leaves a feeling of dis ambiguity in the minds of the
investors. Therefore, the company by initiating some strong decision making tactics, should try
10
upon Branson's eccentricity and his habit of keeping the environment light and friendly.
However, this portrayal of informal structure and lack of any proper management system led
some of those traditional organisations to form a misconception about Virgin Company and its
operations and underestimate their efficiency. This empowerment given to employees and lack
of any formal structure has indeed fostered the work culture and encouraged growth in the
company. Therefore, the company should maintain the enthusiasm of its employees and keep its
key managerial personnel satisfied (Franzen and Moriarty,2015).
5. Virgin's value as a corporate parent and addition to it.
Virgin Company has generated a lot of goodwill. The major brand values of the Virgin company
are:- Great Quality, Excellent Customer Service, Money's Value. If any company attaches the
prefix 'Virgin' before its company, this automatically creates a particular image in the mind of
the public or the targeted customers of the company. They perceive the company to be fun loving
and the one with innovative ideas or products and also it is presumed to be daring in its activities.
Branson, with his own eccentric ideas and personality, created Virgin Company depicting the
exactly same qualities amongst its public. However, all the diversified companies of Virgin
Company were 'Ring – Fenced' so that switching of assets between its different ventures could
not take place. Being the superpower company and a corporate parent, Virgin Company has
added a great value in the market through its business activities. To create more value, it can do
following things :-
Developing Understanding of Market :- The management team of Virgin Company has to
successfully identify the complacencies prevalent in the market. The management team
formulates a strategy, their experience coupled with the expertise. This strategy formulation is
then applied in the market strongly backed by the Virgin Company, their management and its
employees. This helps the company in avoiding stressful situations and keeping the company
afloat in crisis situation so that the company never fails in providing what the consumer actually
desires and through tactics like 'environmental scanning' can predict the changing trends in
market.
Brand Name :- The brand name Virgin Company has been successful in creating a fun image in
the minds of the consumers, yet it still leaves a feeling of dis ambiguity in the minds of the
investors. Therefore, the company by initiating some strong decision making tactics, should try
10
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to lift this sense of vagueness and present the brand in clear purview within the minds of its
investors.
Relationship Building :- Virgin Company, has made very few yet profitable joint ventures with
other companies in its years of operations. It has always preferred expansion or diversification of
it own company rather than going into joint ventures. To minimize such increased cost of capital
of the company, Virgin Company needs to adapt itself and modify its ideologies and methods.
These practices also promote building of relationships in the industry and these act as an increase
in the value of the company (Elsmore, 2017).
PR Management :- Virgin Company has held a supremely prestigious name in the mind of the
customers. But slowly, due to bad press attraction and poor PR activities, it has gradually slipped
away. Virgin Atlantic due to its bad service facilities and Virgin Rail due to its disastrously bad
publicity garnered a lot of negative attention which affected all the 200 other diversified
businesses of the Virgin Company Group. This PR activity failure lead to a lot of negative
consequences and therefore the company should hire a personnel whose sole purpose should be
to monitor the news and attention that the company is garnering in the market and should try to
present all the positive aspects of the company.
6. Challenges faced by a successor to Richard Branson, and practices that he/ she may adopt.
Challenges Faced By Successor of Richard Branson:-
After the failure of Connaught Publications business, he established the Virgin Records in 1970
but this business also face the problem of fines imposed by tax authority (Catano and Morrow Hines,
11
Illustration 5: Values
Source : (Value Driven
orgaisation,2017)
investors.
Relationship Building :- Virgin Company, has made very few yet profitable joint ventures with
other companies in its years of operations. It has always preferred expansion or diversification of
it own company rather than going into joint ventures. To minimize such increased cost of capital
of the company, Virgin Company needs to adapt itself and modify its ideologies and methods.
These practices also promote building of relationships in the industry and these act as an increase
in the value of the company (Elsmore, 2017).
PR Management :- Virgin Company has held a supremely prestigious name in the mind of the
customers. But slowly, due to bad press attraction and poor PR activities, it has gradually slipped
away. Virgin Atlantic due to its bad service facilities and Virgin Rail due to its disastrously bad
publicity garnered a lot of negative attention which affected all the 200 other diversified
businesses of the Virgin Company Group. This PR activity failure lead to a lot of negative
consequences and therefore the company should hire a personnel whose sole purpose should be
to monitor the news and attention that the company is garnering in the market and should try to
present all the positive aspects of the company.
6. Challenges faced by a successor to Richard Branson, and practices that he/ she may adopt.
Challenges Faced By Successor of Richard Branson:-
After the failure of Connaught Publications business, he established the Virgin Records in 1970
but this business also face the problem of fines imposed by tax authority (Catano and Morrow Hines,
11
Illustration 5: Values
Source : (Value Driven
orgaisation,2017)

2016). He started the chain of business under the group of virgin but many of business faced the
financial weakness which can be clearly seen in cash flow and economic value addition of the
company. Today, the main issues that the successor might face are Virgin Atlantic and Virgin
Rail as he might face the problem of insufficient capital due to some restriction on his existing
companies. Many business under the virgin are not generating the sufficient profit which has
decreased the companies' goodwill and also, many companies of virgin group are not performing
according to the expectation of Branson. If the potential successor intends to expand his
business, he might not have the sufficient finance and cash flows. At this point he might face the
problem to sell the existing business at lower price or borrow funds from the market at high
interest for the expansion. He might face the problem of working capital and insufficient
investment problem for the establishment of any new business. Undervaluation of the Virgin
Company by the investor analysts can also pose as a major threat for Branson's successor.
Some of the various methods which the Virgin Company can adapt to improve the
decision making abilities of the company and also improve its wok ethics are :-
Reduce Diversification :- Due to so many brands and its multi- diversified work
practices, the customers have not been able to identify or attach the company with any
particular image. Due to their so many divestments, Virgin Company has lost in
establishing or gaining any competitive advantage or monopoly in the market of any kind
and the competitors, by attracting public's attention through application of strategies
frequently have benefited. The company should focus on unifying its various operations
and work on establishing a brand image which radiates the huge power and control over
its competitors (Baptista and.et.al., 2017). Apart from establishing brand image, it also dilutes
the risk factor that the business currently faces and also it encourages development of real
expertise of the company.
Strategical Change :- Virgin Group headed by Branson, has always shown the tendency
to divest in businesses rather than going for joint ventures etc. The company should make
some strategical changes I its business ideologies, accepting and venturing for new ideas
rather than businesses. Also, joint ventures are for a relatively short term which reduces
the risk of the business and clarifies the situation i.e. whether it is loss generating or
profitable. This profit generation in short term and with minimal or no investment will
help the Virgin Company in raising their capital and thus improving the value of their
12
financial weakness which can be clearly seen in cash flow and economic value addition of the
company. Today, the main issues that the successor might face are Virgin Atlantic and Virgin
Rail as he might face the problem of insufficient capital due to some restriction on his existing
companies. Many business under the virgin are not generating the sufficient profit which has
decreased the companies' goodwill and also, many companies of virgin group are not performing
according to the expectation of Branson. If the potential successor intends to expand his
business, he might not have the sufficient finance and cash flows. At this point he might face the
problem to sell the existing business at lower price or borrow funds from the market at high
interest for the expansion. He might face the problem of working capital and insufficient
investment problem for the establishment of any new business. Undervaluation of the Virgin
Company by the investor analysts can also pose as a major threat for Branson's successor.
Some of the various methods which the Virgin Company can adapt to improve the
decision making abilities of the company and also improve its wok ethics are :-
Reduce Diversification :- Due to so many brands and its multi- diversified work
practices, the customers have not been able to identify or attach the company with any
particular image. Due to their so many divestments, Virgin Company has lost in
establishing or gaining any competitive advantage or monopoly in the market of any kind
and the competitors, by attracting public's attention through application of strategies
frequently have benefited. The company should focus on unifying its various operations
and work on establishing a brand image which radiates the huge power and control over
its competitors (Baptista and.et.al., 2017). Apart from establishing brand image, it also dilutes
the risk factor that the business currently faces and also it encourages development of real
expertise of the company.
Strategical Change :- Virgin Group headed by Branson, has always shown the tendency
to divest in businesses rather than going for joint ventures etc. The company should make
some strategical changes I its business ideologies, accepting and venturing for new ideas
rather than businesses. Also, joint ventures are for a relatively short term which reduces
the risk of the business and clarifies the situation i.e. whether it is loss generating or
profitable. This profit generation in short term and with minimal or no investment will
help the Virgin Company in raising their capital and thus improving the value of their
12
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