BM627: Innovation Management Report - Virgin Group Analysis

This report provides an in-depth analysis of innovation management within the Virgin Group, a UK-based company with diverse businesses. The report examines the company's innovation history, existing capabilities, and performance, particularly focusing on Virgin Atlantic's role in the airline industry. It explores how Virgin Group, under the leadership of Richard Branson, fosters innovation through technological advancements, customer-centric strategies, and a culture that encourages risk-taking and continuous improvement. The report also discusses the challenges and opportunities within the airline industry, highlighting Virgin Atlantic's efforts to reduce carbon emissions, enhance customer experience, and maintain a competitive edge. The analysis draws on various sources, including academic journals and industry reports, to provide a comprehensive overview of Virgin Group's approach to innovation and its impact on the company's success. The report concludes with a summary of the key findings and insights into the future of innovation management within the company.

Running Head: INNOVATION 0
Managing Innovation in Business
Student Name:
Student University:

INNOVATION 1
Executive Summary
In today’s time, it is essential to make changes in the business while competing in the market
with innovation. The purpose of this report is to know about managing innovation in business
by discussing the operations of the company based on the industry. This research is
conducted from various website and academic sources such as journal articles and books.
There are issues faced in managing innovation as well where the success is possible by
making right decision for better outcomes. The result based on findings of processes and
systems implementation as per the company’s performance along with knowing its
capabilities. The innovation of the company is from the global perspective related to the
customer expectations with the help of supportive workforce. It resulted in the production of
new ideas and products in the industry where the company is based in for better innovation
through performing operations and activities.

INNOVATION 2
Contents
Introduction................................................................................................................................3
Company and its Industry Overview..........................................................................................3
Virgin Group and its Innovation History...............................................................................3
Virgin Group’s existing Innovation Capabilities and Performance.......................................5
Industry in 2016.....................................................................................................................7
Conclusion..................................................................................................................................7
References..................................................................................................................................8

INNOVATION 3
Introduction
In today’s competitive business world, every company works on managing innovation
effectively. Instead of managing, innovation can build processes and systems for creating
something new. This practice can be implemented, developed, prioritized and come up with
ideas while introducing new internal processes, or new products. The combination of
innovation management consists of marketing, product, business process and organisational
innovation. In business, managing innovation consists of aspects that are capabilities, culture,
strategy, and structures (Nieminen, 2018). The purpose of this report is to analyse the
company’s innovation covering its existing capabilities and performance in the market. The
company taken to discuss this report’s topic is the Virgin Group based in the UK.
Company and its Industry Overview
In the UK, Virgin Group is at vast within a global perspective along with its different
businesses covering various industries where the company’s business leader is Richard
Branson. Virgin Group is a whole big family focusing on making its investment in the sectors
of Telecoms & Media, Health & Wellness, Travel & Leisure, Financial Services, and Music
& Entertainment (Virgin, 2020). Here, the company’s innovation is highly in the UK’s
aviation industry named as Virgin Atlantic. It is one of the international airlines utilising
Boeing and Airbus fleet as broad-body aircraft operating a network of services
internationally. The company introduced by holding the travelling public imagination with
products and services innovation. In business, Richard Branson being an enthusiastic
chairman wanted to make the people’s journey experience exciting by giving exceptional
service within new markets emergence (Pantazi, 2014). Accordingly in case of innovation,
Virgin Atlantic is the best airline considered in airline industry across the globe. It provides
entertainment, service, and style options for meet the expectations of individuals with
desirable comfortable in economy seat. Thus, the company is a survivor even after facing
various challenges under the Virgin Group where one is the competitors. There is no risk for
the journey where people arrive safely with providing proper security (Zhang, 2018).
Virgin Group and its Innovation History
According to Richard Branson, there is a change in environment rapidly that requires
innovation as a consistent challenge to keep up with for serving customers and making their

INNOVATION 4
experience better. Virgin Group keeps on making technological innovation for enabling
business effectively and more quickly. It changes the individuals’ way of working and
operations in businesses (Branson, 2018). The company focuses on producing and delivering
best products and services for surviving in long-term. According to the company, innovation
is a “restless pursuit” for building market share and attracts customers based on their
interests. Innovation makes the industry to move forward where the company is challenged
continuously to perform better in its business and for the sale of customers based on the
capabilities. Also, it helps to think of solutions and making improvements by innovation even
in their area of business model (Branson, 2017).
In the company, the value is created, captured and delivered as per its business model for
making money where Virgin think of innovation at a product level. Further, the company
started falling with the falling of revenue growth increased rate in relation to consumer
goods. So, they thought of making its existing product’s new version for being colourful,
faster, cheaper, and sexier to fight for the company’s decreased marginal revenue gains. For
instance, think of Airbnb to re-ignite profits based on innovating business model by building
new hotels chains (Osgood, 2020). Virgin is a brand where Richard Branson keeps on
exploring intrapreneurs based on the climate of innovation while creating cultures. Virgin
Group or even its subsidiary Virgin Atlantic works on incremental innovation where the
company makes improvement in existing products, services or processes (Sloane, 2016).
Along with innovation, company goes on with success, disruption, and passion as well where
the leader redefined its success through innovation. Richard Branson never measured the
company’s success with wealth but with innovation that requires courage by making
improvement. Virgin Group pursued its success by focusing on customer, having fun without
thinking of challenges, tries to make benefits from competition, and think optimistically and
willing (Dreshfield, 2018).
Virgin Atlantic created its first lie-flat bed where the formed a battle with British Airways
due to rushing for delivering new idea based on their horizontal seat’s development. The
innovation made was radical by developing new Business Class product transforming seat
into a flat-bed benefiting both products without compromising any for customers (Clarkson,
2017). In the airline industry, every company is working actively on cutting down on their
carbon footprint and being conscious in relation to environment. Virgin Atlantic has always
been forward in terms of disruption and innovation developing the use of LED lights
altogether to relax customers along with flying experience improvisation. The company is

INNOVATION 5
always ready to maintain relevance, take risks, and reinvent for moving forward. This airline
company featured IoT (Internet of Things) on all on-board devices while performing
operations through technology where it provided pilots to monitor the entire aircraft
proactively (Accelya Insights, 2020). Thus, IoT helped in ensuring about the smarter and
safer flights by anticipating issues quickly.
Virgin Group’s existing Innovation Capabilities and Performance
The CEO of Virgin Atlantic is Craig Kreeger who made sure about this airline being the most
efficient by moving steadily towards sustained profitability. The company faced losses till
2013 but boosted to earn profits from 2014 with the help of transatlantic joint venture with
Delta. This helped in funnelling more passengers around its network where Virgin Atlantic
promised customers for doing better in terms of making decisions and innovation
continuously to reach success in business (Drummond, 2020). Moreover, Virgin Atlantic
always worked on aircraft carbon emissions reduction where the company spent a lot on its
new jet engines designed for saving fuel costs and cutting CO2 emissions by some per cent.
The engines are super quiet and efficient that provides smoother and quieter experience to
customers. Virgin Atlantic made a partnership with Lanzatech that is a clean-tech company
creating low carbon fuel. This is possible by recycling present in “waste industrial gases”
where major initiative was to order fuel-efficient Airbus in dozen. Another initiative was in
relation to in-flight food focusing on removing foods contributing in deforestation off the
menu along with the SRA (Sustainable Restaurant Association) being in a partnership
(Maltby, 2015).
Virgin Group being a top innovator was always encouraged by Richard Branson to compete
continuously. So, Virgin Atlantic as its subsidiary was always willing to take step knowing
about the involvement of risk that requires embracement. The CEO of the company, Craig
Kreeger told about the importance of innovation even knowing about the failure. Thus,
Virgin Atlantic always thought for future with its forward thinking by making airline
profitability and customer experience improvisation (SITA, 2014). The company keeps on
creating innovation for keeping customers to stay or come back. Also, this makes the
experiences exciting by working differently with the help of culture and teamwork for
nurturing while taking shape in future (Talbot, 2018). The aim of Virgin Group is delivering
capital appreciation for long-term by making investment in every sector to seek for
opportunities through innovation to generate future success. As, the company focuses on

INNOVATION 6
technology actively along with over 35 companies to share economy sectors, span the
consumer internet and fintech (Handley, 2017). Across the globe, Virgin is one of the leading
brands as a venture capital company recognised and respected.
Further, it is essential to manage innovation that is based on capabilities and performance of
the company consisting competency, strategy and management. For this, it is essential to
examine problem and think of solution to result with better outcomes (Satell, 2013). Richard
Branson as a leader of the Virgin Group is innovative and creative that also encourages
individuals based on the requirement in innovation. No doubt, it is a real work that requires
management while performing activities in business. It is essential to accept the way people
are in innovation management with a wider perspective by producing ideas in the company.
The company needs to be restructured for having an innovative environment while utilizing
and adapting new structure. It involves risks where the company requires to get encouraged
for gaining competitive advantage. Innovation is needed at the time of creating new product
or services in the company acceptable for customers and in the market to achieve business
success. Though, there is a problem of less return on investment so innovation is way
required in every business model, customer service, and networking along with make more
money and spending less for development. This is a challenge but will help in nurturing
change and innovation (Evans, 2012).
In the UK, Virgin Group is the biggest enterprise with mixed businesses for being the venture
capital and respected brand name across the globe. In the environment, the company’s
operations take place differently where customers interpret and outside world impacts their
performance. Being a leader, the capabilities grasped by Richard Branson consists of ability
to employ media successfully for growing public awareness of Virgin along with its superior
negotiation skills and excellent charisma as possessed. The company’s valuable capabilities
supported Virgin Group for external environment if used efficiently to search and analysis
successfully attempting to threats minimisation and seeking opportunities (Sadq, 2016). Thus,
the main marketing strategy of the Virgin Group is innovation along with generating new
ideas or products radically to make experience of customers exciting and better. Also, it
generated a high value where consumers are ready to pay a premium for having its services.
Moreover, the existing capabilities of the company show its performance as well that includes
innovative business products development, entering into additional industries through
diversification, competition faced with well-established companies straight, maintaining close

INNOVATION 7
customer relationship, and making better marketing & sales, engineering with operations.
Virgin Group keeps on making innovation in industries no matter its Virgin Atlantic or any
other along with seeking new opportunities as well through its global presence (Bindi, 2017).
Previously, Virgin’s performance was poor but through innovation, the company is looking
forward potentially for future success. The performance can be measured by ensuring about
management continuity and control along with monitoring. Also, the performance is directed
through objectives dependent on defining and focusing along with the company’s goals and
goals of employees as well (Parsons, 2011). Also, Virgin Atlantic consists of sustainability
performance as well while making improvements along with IATA (International Air
Transport Association) (Virgin Atlantic, 2019).
Industry in 2016
In the UK, the airline industry is compromising with large airlines multitude along varied
models of low-cost carrier to airline groups internationally said to be active (Sönnichsen,
2019). Further, there is a challenging environment and intense competition within the airline
industry working to gain new competitive advantage through innovation. This industry drives
creativity and technology consisting entertainment, seating, connectivity, convenience,
comfort, catering, and check-in and themed experiences. They do it for delivering the best
experience possible and making innovation continuously for better on-board customer
experience as well (Euromonitor International, 2014). There is continuous expansion in this
airline industry while making aircraft and engines quieter, lighter, and quicker where
individuals keep an expectation of improvisation constantly along with digital technology and
innovation having a huge impact in the market (Accenture, 2016).
Conclusion
To conclude, in recent times of airline industry, Virgin Atlantic is making a huge difference
in the market under Virgin Group through making innovation for producing new ideas or
products radically and incrementally for making customer experience better. The capability
of doing innovation depicts the company’s performance where development is necessary for
long-term success in future. The performance can be measured along with innovation in
operations and activities fulfilling the future requirements effectively and efficiently by
enhancing and encouraging individuals and the company to achieve its goal through
innovation.

INNOVATION 8

INNOVATION 9
References
Accelya Insights, 2020. Customer Spotlight: Innovation at Virgin Atlantic. [Online]
Available at: https://w3.accelya.com/blog/customer-spotlight-innovation-at-virgin-atlantic
[Accessed 27 January 2020].
Accenture, 2016. Turbulence ahead: plotting a course through digital disruption. [Online]
Available at: https://www.accenture.com/t20160601t043737z__w__/my-en/_acnmedia/pdf-
17/accenture-airline-tech-vision-pov.pdf
[Accessed January 2020].
Bindi, T., 2017. Virgin Group makes strategic investment in Hyperloop One. [Online]
Available at: https://www.zdnet.com/article/virgin-group-makes-strategic-investment-in-
hyperloop-one/
[Accessed 27 January 2020].
Branson, R., 2017. I is for Innovation. [Online]
Available at: https://www.virgin.com/richard-branson/i-innovation
[Accessed 27 January 2020].
Branson, R., 2018. 5 tips on how to innovate in business. [Online]
Available at: https://www.virgin.com/richard-branson/5-tips-how-innovate-business
[Accessed 27 January 2020].
Clarkson, N., 2017. How Virgin has innovated across industries. [Online]
Available at: https://www.virgin.com/entrepreneur/how-virgin-has-innovated-across-
industries
[Accessed 27 January 2020].
Dreshfield, E., 2018. A Chat with Sir Richard Branson: Innovation and the Entrepreneur’s
Keys to Success. [Online]
Available at: https://apttus.com/blog/live-from-accelerate-18-a-discussion-with-sir-richard-
branson/
[Accessed 27 January 2020].
Drummond, M., 2020. 5 Airline CEO's Rising to the Innovation Challenge. [Online]
Available at: https://w3.accelya.com/blog/5-airline-ceos-rising-to-the-innovation-challenge?

INNOVATION 10
hsCtaTracking=6ebb4db5-14da-4ee8-981f-5c7cf49ae95f%7C40e6e368-afca-4002-b66b-
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[Accessed 27 January 2020].
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[Online]
Available at: https://www.euromonitor.com/innovation-airline-trends-advancing-the-airline-
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[Accessed 27 January 2020].
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Available at: https://www.europeanbusinessreview.com/effectively-managing-innovation/?
__cf_chl_jschl_tk__=267625c98d4277604a66117727c1605f216c775c-1580110825-0-
AbKhmWJsjEsdR4EDZJZax15F6lsxhSp4qGx66_bFCQmEfYC8VMWBn55NBL67a7qABI
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[Accessed 27 January 2020].
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Available at: https://www.thrillist.com/travel/nation/15-things-you-didn-t-know-about-virgin-

INNOVATION 11
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