Analysis of Virgin Group's Business Strategy and IT Deployment

This report provides a comprehensive analysis of the Virgin Group, a multinational venture capital conglomerate. It begins with an introduction to the company, its business strategy, and its diverse range of products and services across sectors like travel, media, and finance. The report then employs Porter's Five Forces model to assess the competitive environment, identifying key threats and opportunities. Furthermore, it utilizes Porter's value chain to analyze the primary and support activities of the Virgin Group, highlighting its strengths and weaknesses. Finally, the report concludes with a discussion on how the business could strategically deploy information technology and innovative ideas to enhance its business processes and strengthen its competitive positioning in the global market. The report emphasizes the importance of IT in gaining a competitive edge within the dynamic business landscape.

Managing Information and
Technology

Table of Contents
INTRODUCTION...........................................................................................................................3
TASK ..............................................................................................................................................3
1. Introduction, business strategy and the products and services of company............................3
2. Analysis of the competitive environment of Virgin group with the help of Porter's five
forces model................................................................................................................................5
3. Analysis of the primary activities and support activities using Porter's value chain and the
strength and weakness of Virgin group.......................................................................................7
4. Summarization and reflection on how the business could deploy IT and use innovative
ideas to improve its business processes and to enhance its competitive positioning..................9
CONCLUSION..............................................................................................................................10
REFERENCES..............................................................................................................................11

INTRODUCTION
Information technology is a study of use of systems in order to storing, retrieving and
sharing the information. Due to the vast use of IT in almost every field, it's management in the
organization is also necessary. Use of IT can play a vital role in the success and competitive
advantage of company among the rivals. The organization taken in this report is Virgin Group.
This is a multinational company having its headquarter in London, England, UK (Henderson,
Selwyn and Aston, 2017). In this report, introduction of the company, it's business strategy and
products and services are explained. Porter's five forces model is used to analyse the competitive
environment of the company. Apart from that, two primary and support activities in Porter's
value chain is also analysed with the strength and weakness of the business. In the end, summary
of the business and the ways through which business could deploy IT and gain competitive
advantage among its rivals.
TASK
1. Introduction, business strategy and the products and services of company.
Virgin group is a British multinational venture capital conglomerated and founded by
Richard Branson and Nik Powell. The company was first incorporated in 1989 by companies
house and than it was classed as holding company. Although the company was trading from the
late 1970 and before. The company has net worth of £5-5.5 billion as in November 2014
(Donate, 2015). The brand name of the company was first clicked in the minds of Branson and
Powell when they opened a record shop. They assumed themselves as a virgin in business
activities. Branson has described the logo as expressive trick and than the company has named
itself as Virgin. The company has its headquarter at the battleship building in the Paddington
district, Westminster, London, UK. In today's globalised economy the company is providing its
products and services across the globe. It has invested in many countries and also in many
sectors.
The strategy of Virgin group is to expand its business in mostly five areas such as Travel
and Leisure, Telecoms and media, music and entertainment, financial services and health and
wellness (Business strategy. (2019)). All these sectors are consumer centric and requires better
services rather than the products. Therefore company has invited its investors to make their

investment in the company because they are providing value to their investors through three
ways which are:
 Providing expertise knowledge and track record in the five sectors discussed above.
 A good understanding and experiencing the behaviour of consumer and the brands and
marketing.
 The value states that company has a strong network of investors, management teams and
alumni.
Apart from that, the main aim of company is to deliver long term capital appreciation
through investment in these sectors. In addition to this, it is also a technology focused venture
investor with many companies. These strategies help the companies in expanding their business
across the globe. In addition to this the company is also looking to grab the opportunity in many
sectors explained above (Kawakami, Barczak and Durmuşoğlu, 2015). These sectors will take
the company in new segment through which it can be recognised globally as a respected brand.
The expansion of business will help the company in fulfilling the its business strategy of making
the company as a brand name across the globe. The expansion of company will not only increase
the customer base but also the net worth of company increase. In order to invest in different
countries, Virgin group should test all the threats so that any type of risk can be calculated
already. In order to do this PEST analysis is done here.
Political factor
In case of Virgin group limited, there are various laws, taxation policies and trade
restrictions imposed by the foreign government can leads to produce hindrance in the operation
of company. The tariffs and import customs can leads to a serious issue while operating in other
country.
Economical factor
In case of Virgin group there are many challenges of Economy in foreign country. In case
of investing in foreign countries the company can face issues such as inflation rates, price of
goods and services, interest rates, charge on capital and investment, economic growth and
development of foreign exchange rates.
Social factor

There are many social factors of Virgin group to enter into any country (Kerzner, 2017).
The company can face issues in perception, taste, income groups of customers etc. All these
aspects can become hindrance in the success of company.
Technological factor
In this factor, before investing in any country the company should test the technological
factors also such as increased rate of technological change, cost of acquiring new technology,
acquisition of advanced machinery etc.
Virgin group has engaged itself in many sectors such as banking, books, commercial
aviation, commercial space flight, consumer electronics, films, healthcare, internet, jewellery,
mobile phone, music, radio, retail travel and rail transport. Engagement in all these sectors shows
that company is working conglomerate across the globe. The company is not interest in selling a
particular type of products ans services. The sectors allows the company to provide different
services. The services provided by the company can include different products and services. All
these products and services will help the company in expanding its business across the world.
Although the company is serving its facilities in many areas such as Australia, UK, USA and in
many countries also. Since the engagement of company is huge therefore its serving area is also
huge as compared to its rivals (Laudon, 2015). Apart from serving these countries and in specific
products the company is also seeking to expand its business in many sectors. According to the
business strategy of Virgin group, the company is also looking in specific field such as Travel
and Leisure, telecom and media, music and entertainment, financial services and health and
wellness. With the help of these areas also the limits of products and services of company gets
increased.
2. Analysis of the competitive environment of Virgin group with the help of Porter's five forces
model.
Virgin group is a multinational company which is operating its business in many
countries. Apart from its business, this company has many rivals in every sector and in every
country. Therefore to overcome these challenges the company should focus on adopting new
trends and technology and keeping updated itself from time to time (Mason, 2015). Apart from
that to be ahead from the rivals, the company should focus on meeting the demands of customers
as soon as possible. Apart from these steps the company also can install IT into its premise and

its services. The services within Virgin group can leads to satisfaction when IT is imposed in
providing services to the customers.
To analyse the competitive environment of Virgin group, Porter's five forces model is
used. This model help the company in identifying its future rivals so that they can take effective
decision to stand among them. There are several threats such as threat of new entrant, threat of
substitute etc. which can influence the operations of company. Therefore this model help the
company in identifying the potential rival so that it can adopt new and advanced technology.
Threat of new entrant
The countries in which virgin group is engaged in providing products and services have
very high competition therefore the threat of new entrant in the same profile is higher. The
companies in the same profile will try to grab the market of same hence the company will face
many serious issues in retaining its customers from them. If the demand of products and services
within the country is higher, higher is the chances of getting competition from those companies
to Virgin group.
Threat of substitute
This threat deals in providing the same products to the customers in which Virgin group
is already engaged. This will deflects the interest of customers towards the new products and
thus competition increases (Nambisan, 2017). In order to counter this issue Virgin group should
provide unique features into its products so that customer retention can be possible. Apart from
that, companies can reduce the price of their products so as to retain its customers.
Bargaining power of customers
This threat occurs when the bargaining power of customers increases. In addition to this,
if number of customers are more than the available products than the power within customers
increases. They can alter the rate of products because this power. Thus competition among the
same product profilers increases. The rate of competition will be higher if the customers will
gain this power. Apart from that, some countries maintain this power in order to decrease the
price of products.
Bargaining power of suppliers
This power exists when the number of suppliers are limited in comparison to the buyers.
If the ratio is lower in the side of suppliers than they will gain the power of negotiating the price
of raw materials (Powers and et. al., 2017). This will increase the prices of products and thus the

overall cost of product also increases. This power can leads to increase the rate of inflation also.
Apart from that, the companies which have lower rate can grab the customers of market and thus
competition increases.
Intensity of competitive rivalry
The increase in rivalry of the companies can result into zero profit margin. This will
allow both the companies to access low profit. Therefore companies should take competitive
advantage among themselves so that they gain some customers towards their premise. Rivalry
among companies increases due to three factors such as when the number of companies are
higher in the same product than the number of customers, when cost of product is higher in
comparison to the profit margin and when companies will try to grow them with rapid speed.
There are many rivals of Virgin group such as BT group which manly deals in mobile and
communication, Balta, Delta and Spirit airlines which have aviation industry (Rivals of Virgin
group. 2019). Since Virgin group is multinational venture capital conglomerate therefore the
rivals of this company can give good competition to the company.
Opportunities and threats for Virgin group
Opportunities
 The biggest opportunity for Virgin group is to enter into global market. Since company
has a large brand name therefore it can launch itself in the emerging market. Another opportunity company can grab is that it can improve its business operations with
high end of technology. This will help them to gain competitive advantage.
Threats
 The decision making in Virgin group depends upon Richard Branson. This could lead to
a great threat in failure of the strategies in future.
 Virgin group is working in diverse field therefore mismanagement can lead to a serious
threat in future for the company.
3. Analysis of the primary activities and support activities using Porter's value chain and the
strength and weakness of Virgin group.
By analysing the group of events occurs within the company, the products can be
differentiated within the company with the help of Michael Porter's model. Each and every
company manufactures the goods with a proper chain. This chain is helpful in producing the
goods from raw materials to the final goods (Price and Shanks, 2016). In order to change the

requirement at any time, further value to the final product can be added. In companies there are
two elements such as primary element and secondary element. In order to find the primary
activities and two support activities in Virgin group, illustration is done below:
Primary activities
These activities are used by the company to produce final product from starting to ending
process. In case of Virgin group, these activities can provide competitive advantage to the
company. Following are the factors of primary activities:
Marketing and sales
This is the factor in which advertisement of the products and services is done with the
help of different channels such as social media, digital marketing etc. All these channels can help
Virgin group to take competitive advantage. This will help the company to know about the
product and services to the customers so that it will be aware about the company and its product.
In order to support these activities human resource management can be an effective supportive
activity. Due to engagement of Virgin group in different sectors, advertisement is necessary
(Rowley and Farrow, 2018). In most of the countries where digital technology is not in run,
human resource management will be an effective tool for the companies in order to advertise
their products.
Service
This facility is imposed after the launching of products and services to the customers.
This service will help the customers in retaining their faith towards the product of company. In
case of any defect and issue these service stations will provide assistance to the customers. Thus
the demands and requirement of customers will be met and thus increases customer base. In
order to support this activity, development of technology is helpful in Virgin group.
Secondary activities
The main aim of these activities is to support the running of primary activities smoothly.
If their could be any changes in primary activity, this activity will provide assistance to it.
Human resource management
This department is one of the important department in a company. In case of Virgin
group, human resource department is helpful in conducting the marketing activities. This
department is helpful in increasing the sales of company.
Technological department

This department is helpful in applying new and advanced technology in conducting any
task. This leads to gain the competitive advantage to the company. In case of Virgin group, this
department is helpful in providing the services to the customers (Sadgrove, 2016). When any
type of issue occurs in the services of customers this department provide assistance
technologically so that minimum problems will be faced by the customer.
Gaps and Areas of Improvement
Virgin group is using marketing and sales to advertise their products and service in
various nations. The issue found by the company is to increase their advertisement and sales
also. They have two options whether they can collect data and allow its employee to meet the
target customers in order to know them about their product or they can meet randomly with the
customers. The company should find this gap and needs some areas of improvement.
SWOT analysis of Virgin group
Strength
Virgin is a strong brand name therefore company will gain a competitive advantage
among its rivals automatically (Schwalbe, 2015). Apart from that, Virgin groups has different
types of distribution channels such as online and offline. This strength allows the company to sell
their products with different channels thus increasing the sell in future. Apart from that, it can
also increasing its selling by improving in technology.
Weakness
There is a lack of different communication channels among the different companies of
Virgin group. These groups does not have proper communication while having same base. They
are connected only through website of company. Miscommunication will leads to improper
management of the firm. Virgin group is a large company which cannot run without proper
management. This weakness will decrease the overall productivity and profitability of the
company in future.
Opportunities
Virgin group can expand itself in the global market. Although, the company is running in
many countries with excellent performance but still it can expand its business in many emerging
countries. This opportunity can make this company as a global giant in many sectors. Thus
increasing the business of company.
Threats

The biggest threat Virgin group can face in future is of decision-making. Since the
company is operated and management by Richard Benson, therefore company is having
autocratic environment in the premise. All the branches in the world are leads by top
management. In case of failure, this could lead to severe damage to the company.
4. Summarization and reflection on how the business could deploy IT and use innovative ideas to
improve its business processes and to enhance its competitive positioning.
Virgin group is one of the largest groups in UK. This company has many areas where it is
serving its services to the customers. The areas in which Virgin group is engaged are banking,
books, aviation, space flight, electronics, films, health care, internet, jewellery, mobile phone,
music, radio, retail, travel, rail transport etc. All these areas are huge in their aspects therefore the
serving are of Virgin is very large. The company was first incorporated in 1989 by companies
house. As of November 2014, the company is giving competition with net worth of £5–5.5
billion. The strategy of Virgin group is to expand it's business in the areas such as travel and
Leisure, telecom and media, music and entertainment, financial services and health and wellness.
By expanding in such areas the company is expecting a huge investment from its investors. The
company is expecting to provide long term investment in these sectors therefore it can expand
across the globe with an ease. The products and services of the company are very large because
there are many sectors in which the company is dealing. Therefore it has vast range of services
and products to its customers.
In order to find the threat to the company in future, Porter's five forces model is used.
This model specifies that there are different threats to the company in future such as threat of
new entrant in which if new company arrives will give competition to Virgin groups. Another
threat suggests that if new product arrived within market of same field, it can also attract the
customer towards its side. Apart from that, bargaining power of suppliers and customers are also
threat for the company. In the end, the level of rivalry is also discussed with the help of Porter's
five forces model. In other section of this report, Porter's value chain model is also explained
which helps in identifying the primary and secondary activity. Primary activity are helpful in
developing the products and services from starting to end. Apart from that, secondary activity are
also used to support the primary activities in case of any change. Virgin group is stronger in
terms of brand name and distribution channel while it is weaken in communication with its
branches because they are only connected with websites.

Virgin group can implement different IT services into its premise. These services will
provide help to support the satisfaction of customers. The IT services which Virgin can
implement in civil aviation are stated as below:
Block-chain technology
This is the IT technology which is helpful in identifying the ID proofs of the customers
every time (Suryadevara and et. al., 2015). Since the on-boarding passenger has to provide its ID
proofs each time when it is going to travel. In order to overcome this issue, company can use
Block-chain technology which can help them in storing the data of passengers which are
travelling fluently. This will not only saves time but also attract the customers towards their
premise and thus gaining competitive advantage.
Augmented reality
This is an IT facility through the customer can find its way in the complex airport
structure. Sometimes the customer cannot recognise the ways and procedures of following the
flight. This will consume a lot of tie and increases frustration among the customer. In order to
provide solution, the company can use AR technology to navigate its passengers (Zhou, 2016).
This will satisfy the customers with the services of Virgin group and hence getting the
competitive advantage.
Suggestions and improvement
There are many areas which should be improved by the company in order to make the
business to run smoothly.
 The company was facing the issue of increasing their sales through advertisement. They
can improve this issue with the help of collecting the data of their target customers. This
data can be collected with the help of two methods such as primary method and
secondary method. Secondary method will help the company in finding their target
customers easily and the primary method can be used to identify the proper needs and
wants of target customers. These needs and wants can be collected with the help of
sample questionnaire. With the help of this method company can satisfy the customers
and thus improving the productivity and profitability of company.
 Another suggestion company can use is that they should distribute their decision-making
procedures in different branches. This will remove the risk of failure in decision-making

and also engages all the employee in that branch. Therefore increasing the productivity of
company.
CONCLUSION
In this report, it can be concluded that Virgin group is dealing in large number of sectors
so as to provide huge products and services to their customers. This company has business
strategy to expand its business in many areas. Apart from that, due to large business, the
competition to the company is also higher which is identified with the hep of Porter's five forces
model. The strength and weakness of the company are also explained through which effective
measures can be taken to improve them. In the end, Effective IT systems help the company in
gaining competitive advantage among its rivals.