Virgin Group's Strategic Development: A Comprehensive Analysis

This case study provides an analysis of Virgin Group's strategic development, starting with a company background highlighting its multinational presence and complex business model. It examines the characteristics of the company's growth, emphasizing innovation and brand image across various sectors like music, travel, and media. The corporate rationale of Virgin Group is defined by its diversification into numerous markets, aiming for long-term growth over short-term profits. The study also addresses challenges such as brand dilution and customer complaints, proposing future corporate strategies focusing on structural and functional aspects to ensure long-term sustainability. Recommendations include focusing on key competencies, adapting the business structure, and prioritizing succession planning to secure the company's future after Richard Branson's departure. Desklib offers this case study and other solved assignments to aid students in their learning.

Strategic Development at Virgin

Introduction
• Discussion about strategic development at
Virgin Airlines has been presented.
• Analysis of the business strategy has been
done.
• A brief overview on the operations of the
company in the competitive environment has
also been stated.

Company Background
• Commended by Richard Branson in the year
1970.
• One of the largest Airlines group worldwide.
• Company is a British Multinational and it
operates in various areas of product and service
development in aviation.
• Follows a complex business model.
• Employs around 50,000 employees in 34
countries with revenues more than ₤ 13 Billion.

Strategic Development at Virgin
Characteristics
• Complex business model
• High emphasis on
innovation
• String brand image
Growth of company
• Music
• Travel
• Lifestyle
• Media and Mobile
• Financial sector

Breadth of the Group Activities are Virgin
The
Virgin
Group
Virgin
Travel
Virgin
Rail
Virgin
Cinemas
Virgin
Media
Virgin
Group
Virgin
Music
Virgin
Trading

Corporate Rationale of Virgin Group
• It can be defined as the way in which the company
adds the values to its strategic business units.Definition
• To diversify its business into as many markets as
feasible.
• Enter the markets at low costs where there are less
entry barriers.
CR of Virgin
• Sacrifice short term profits in order to achieve long
term growth.
• Manage deals with innovative companies and leaders
in their fields.
Aim
• The operating companies under the group are separate
entities and are financed on a standalone basis.
Rigged Fence
Business

Corporate parent adding values
A corporate parent can be defined as the entity which is responsible for allocating
resources and capabilities such that company might achieve economies of scale
and synergy.
Gaining an understanding about the institutionalized markets
Ensuring a strong position of the brand name of the
company.
Maintaining an extensive network of partners and customers.
Paying emphasis on the marketing in the company

Challenges faced by Virgin
• Due to heavy diversification of the group, the
image of the main company might get diluted.
• There are many customer complaints
regarding Virgin Rail due to which the image
of whole group is getting affected.
• There are rising concerns about survival of
company after the exit of Richard Branson.

Future Corporate Strategy
• The company should pay emphasis on
accommodation of both long and short term
ventures in order to facilitate short term profits.
• It is important to save revenue making
companies in order to support the group during
low times.
Structural
strategy
• The company should save its brand
image from further dilution in the
industry.
• It is important for the company to plan
its succession after the departure of
Richard Branson.
Functional
Strategy

Conclusion
• It is important for the company to focus on its
key competencies.
• The company should focus on changing its
business structure and objectives.
• The company should also pay emphasis on the
development and fulfillment of its short term
goals.
• It is required by Virgin Group to pay emphasis on
its succession planning as well.

References
• Buckley, P.J. and Casson, M., 2016. The future of the
multinational enterprise. Springer.
• Burns, P., 2016. Entrepreneurship and small business. Palgrave
Macmillan Limited.
• Cairns, T.D., 2013. What Will Tip the Scales for Flexible Work
Arrangements—Motivation or Collaboration?. Employment
Relations Today, 40(2), pp.29-33.
• Grant, R.M., 2016. Contemporary strategy analysis: Text and
cases edition. John Wiley & Sons.
• Johnson, G., 2016. Exploring strategy: text and cases. Pearson
Education.