Analysis of Virgin Group Leadership and Sustainable Success Strategies

This report provides a comprehensive analysis of the Virgin Group's leadership and its strategies for success. It begins with an introduction outlining the company's background and key recommendations, followed by an assessment of the measures used to evaluate its success, including both financial and non-financial metrics, and a discussion on the challenges of defining business success. The main body of the report delves into the reasons behind the Virgin Group's achievements, emphasizing visionary leadership, employee relations, business diversification, branding, marketing, and product/service quality. Strategic analysis is conducted using tools like the adapted value chain (AVC) and VRIN framework to assess internal strengths. The report concludes with strategic recommendations for future sustainability. This report aims to provide insights into the leadership and strategic management of the Virgin Group, offering a valuable resource for students and professionals alike. The report is a contribution to Desklib, a platform providing AI-based study tools.

Analysis of the
leadership of the
company Virgin and
suggested strategies to
ensure future success
in a sustainable
manner

Table of Contents
INTRODUCTION..............................................................................................................................3
MAIN BODY......................................................................................................................................3
Measures of success...................................................................................................................3
Reasons of success.....................................................................................................................6
Strategic analysis.......................................................................................................................8
Strategy focus..........................................................................................................................12
Strategic recommendations....................................................................................................12
CONCLUSION.................................................................................................................................13
REFERENCES.................................................................................................................................13
INTRODUCTION
In order to succeed in the modern business marketplace, companies cannot just rely on their

competitive advantage but must assemble a quality brand portfolio backed by solid customer
service and quality of the highest order (Kane, 2022). One of the major examples of such companies
which have built their brand from humble origins to billion dollar conglomerates is Virgin Group
which is a British multinational venture capitalist company which deals in multiple industries such
as travel, leisure and fitness. This report assesses the reasons behind the success of the group and
gave key recommendations in the form of sustainable aviation operations and more aggressive
international expansion.
MAIN BODY
Measures of success
The term business success is used often to measure just how competent and profitable a
business concern actually is but in recent times, the term has become murkier as new metrics and
complex situations are discovered every day. Using simple metrics by focusing on financial ratios
and comparing yearly profits are effective parameters to define business success but they are no
longer enough due to the shift of global businesses towards sustainable development and customer
orientation. There are many problems that come with defining business success as one also has to
take into account the level of sustainability that companies achieve together with their success and
simply looking at financial metrics as measures of success can be disastrous as it does not reflect
the company's capacity to deal with market demand and estimate the customer journey which their
operations contain. Major research papers and extensive publishing has been done regarding this
dilemma of measuring success and celebrated authors such as Jerry Muller who has stated in his
book, 'The Tyranny of metrics' that simply using financial metrics and profit numbers as
determinants of success has made modern businesses go from measuring success to getting fixated
only with the measuring process itself (Best, 2018). When it comes to the Virgin Group, their
success is multidimensional as apart from being sound strategically and possessing elite business
capabilities, their focus on customer satisfaction is also next to none which is why a diverse set of
measures including financial and non-financial metrics have been recommended for the measuring
of Virgin group's success which are listed below.
Financial metrics
 Annual net profit and loss – This financial metric is one of the best ways to determine the
current robustness of Virgin group's business affairs as profit making is still the bread and
butter of modern multinational businesses like Virgin group but such metrics must be

supplemented by non-financial metrics
 Return on investment – ROI is also known as the ration calculated between income and
investment and by looking at the return on investment that companies like Virgin Atlantic
consistently accrue in their target markets is also a great metric to gain a basic overview
regarding their success.
These revenue and financials based metrics have two key advantages over non-financial
metrics with the most important being that it allows the benchmarking of data which can then be
used to compare the metrics against the direct rivals of the group in multiple market segments
(Krishnamoorthi & Mathew, 2018). An example being the revenue metrics comparison between
Virgin Atlantic, an airline company which the virgin group has majority stake in and British
Airways, the market leader of UK in terms of air travel and aviation.
Another major advantage is that such metrics also allow companies like the Virgin group
and its various competitors is that it allows the company to perform various types of financial
analysis through comparison of their financial statements and profits. Such metrics can also be used
to develop robust outlooks on the year to year profit situation of the company which can be used to

measure financial success. An example has been listed herein which looks at the five year profit
period of the Virgin Atlantic airways company from a period of 2013 to 2020 which can be used to
measure financial trends
Non-financial metrics
 Employee satisfaction – This is a must include criteria for modern businesses like The
Virgin group which has time and again displayed that it is one of the best companies to work
for due to the emphasis it lays down on employee comfort and work life balance.
 Customer service – In order to properly define the success of the Virgin group and any
multinational business in that regard, it is very important to highlight the way it caters to its
customers in various market segments.
These metrics help analyse the business model of Virgin group and gain an idea of the way it
has operated for the past few years as a lot of things about the working efficiency of the firm can be
analysed by looking at the way it treats its employees and customers (Shan & Tang,2020). Virgin
group has built its legacy on the top of excellent customer service and client satisfaction along with
building a great company culture which is why inclusion of such metrics is necessary.

Reasons of success
The Virgin group has built a stellar legacy over the years which has made it turn from an
independent label studio from way back in the day to the multinational billion dollar conglomerate
that is is today and this has not happened overnight but is a result of intense hard work and building
individual recipes for market segment successes. Some major reasons have contributed to the
company's success over the years have been listed herein.
 Visionary leadership – According to Bruijl, 2018, Sir Richard Branson is one of the most
dynamic and impactful entrepreneurs to even come into the business world and it is no
doubt that Virgin group owes most of its success to him (Bruijl, 2018). The man has helped
the group achieve billions of dollars’ worth of success with the shaping of organizational
culture and climate. Employee relations – One of the major reasons behind the success of Virgin group has been
its talented and committed workforce. Sir Richard Branson prioritized the need to value and
empower employees and the company has effectively managed to bind its diverse workforce
as a tightly knit community which has detailed in the book published by her daughter, Holly
titled 'Weconomy' (Sir Richard Branson's Five Billion Reasons to Make Your Employees and
Candidates Happy, 2022).
 Business diversification – The roots of the company signify a set of most humble
beginnings when Branson started it initially as a mail order unit but it has slowly diversified
a lot to corner different sections of the market. According to experts such as Dr. Harrison
Sachs, the firm's diversified strategies that has seen it corner markets such as travel and
leisure, music labels and active lifestyles have had a massive contribution in generating
multiple financial streams (Sachs,2019).
 Elite business branding – According to experts at the Victus consultancy, UK, one of the
major successes of the company also lies in its stellar way to brand the product in a way
which is both cool and unique (Brand it like Branson, 2022). Sir Richard Branson made sure
that every product has a cool tag line, attractive logos and mascots and he also did not let
failures such as Virgin Cola stop him from pursuing his market ambitions. State of the art marketing skills – One of the major ways in which Virgin group have
highlighted the various brand under its portfolio in order to achieve major growth is through
great means of promotion. Richard Branson has gone on record and stated that rather than
investing billions of dollars, his company used to focus on a smart concept and theme which
resonated with people. Brands like Virgin Atlantic and Virgin Active are all marketed as
customer driven luxury experiences which Virgin group specializes in (How to get
marketing right, 2022).

 Product and service quality – Virgin group has been built on the back of providing a great
service to its massive clientele and have been successful in implementing quality brand
architecture. The company employs a 'branded house model where the quality provided
stays the same despite changes in brands and product lines (The art of brand architecture:
The many faces of the Virgin company, 2021).
 Whether customers use services of Virgin Atlantic for travel or use the studio for music
development needs, everything is done in an efficient manner with customer satisfaction in
mind.
Strategic analysis
In order to further highlight the internal reasons as to why Virgin group has been able to
achieve such a large amount of market success, some important tools of strategic management such
as AVC (Adapted value chain) and the VRIN (Valuable, Rare, Inimitable and Non-substitutable)
will be used in this section of the report. Adapted value chain refers to the framework within which
the competitive advantage that is generated by a company remains agile and able to change
according to external changes and climate and it is very important for multinational businesses like
Virgin Group to have adapted value chains to further their ambitious market vision, in the light of
which an analysis of both AVC and VRIN is given herein.
Adapted value chain analysis
Value chain analysis refers to a comprehensive evaluation of a firm's internal capabilities in
order to find areas which contribute the most towards its growth and also to find avenues where
further room from improvement exists. Michael Porter's representation of the value chain splits the
major activities of businesses into primary and secondary activities which are analysed herein in
context of Virgin Group.
Primary Activities
 Inbound logistics – Virgin group works with suppliers at a very high level and have adapted
their value chains in such a way that all their logistic needs of various departments are
covered by a network of suppliers. The company has a robust division dedicated to
extensive market research which guides the company's future growth and investment
pathways.
 Operations – The company has an extensive portfolio ranging from Virgin Active fitness
studios, extensive production factories which produces electronics and an extensive airways

network for its Air plane brands which all display operational efficiency of the highest
regard.
 Outbound logistics – These activities are related with the network which is responsible for
delivering the final goods and services to its intended customer. Virgin group's biggest
advantage comes from their penchant towards innovation which they display in their
approach to outbound logistics as they have begun pioneering new technologies such as
Hyperloop.
 Marketing and sales – The Virgin group entire portfolio and Umbrella consists of
numerous brands and each one gets marketed in an expert manner. The company uses a mix
of catchy media advertisements, online marketing with cool company mascots and the
popularity of its former CEO, Richard Branson to assure customers that any new product
line or service will offer them world class utility
 Services – These activities add a major art to the Virgin group's value chain and helps in
making it more agile and adaptable as the company has built a robust service architecture
through launching and acquisition of key brands. The group covers most of the major needs
today's generation from safe travels to leisure all the way to fitness and electronics
(Anokhina,2019).
Support Activities
 Infrastructure – Being a global growth investor whose business spans in more than 50
countries while employing more than 50000 people and caters to domains ranging from
fitness to travel and ambiance, the infrastructural capabilities of the company is very strong.
 Human resource management – This is also one of the biggest reasons as to why the
value chain of the company is adaptable to outside changes as the company takes care of
their employees very well. The company keeps their staff motivated to the highest degree
using benefits such as pension schemes, various types of insurance covers and personal
health schemes along with performance related incentives.
 Technology development – In order to continue to dominate the markets it has established
itself in, the Virgin Group's major investments have been in the area of futuristic technology
recently which bears the promise of great rewards in the future. A major example is the
company’s investment in Hyperloop technology which is a revolutionary way to transport
goods and eventually people from one place to another in quick time.
VRIN analysis
From the above conducted value chain analysis, there are some clear cut organizational

capacities and avenues of operations which contribute massively towards developing its competitive
edge and measures of staying profitable in its various target markets (Muegge & Reid, 2018). Some
of those capabilities will be analysed herein in the form of a VRIN analysis to figure out and
highlight the long term competencies of the company and exactly what internal factors are
contributing towards the success of the company. VRIN analysis works on 4 broad guidelines which
are demonstrated herein.
 Valuable – Such resources and capabilities are very valuable to the organization and serve
as a basis upon which they compete and get ahead of their competition
 Rare – The capabilities of the firm are also judged on the basis of their rarity as rare
resources and technologies result in development of competitive edge
 Inimitable – This criteria analyses the internal capabilities of the firm in terms of the ease at
which they can potentially be replicated by competitors. In order to succeed and build
market competencies, capabilities must be rare and remain rare for the foreseeable future
 Non-substitutable – The final aspect of this strategic framework helps to judge whether or
not the internal factors of a firm like the Virgin group is substitutable by the general public
in the long run or not.
The VRIN analysis of Virgin Group is listed herein on the basis of various internal
capabilities identified via the adapted value chain analysis.
Resources and
capabilities of
Virgin Group
Valuable Rare Inimitable Non-
substitutable
Result
Robust
employee
relations
Yes No No No Competitive
Equality
Globally
recognized
service and
brand name
Yes Yes Yes Yes Sustained
competitive
advantage
Innovation and
technology
Yes Yes Yes Yes Sustained
competitive
advantage
Size of Yes No No No Competitive

international
operations
equality
In order to identify the internal success factors of the company with absolute certainty, the
Virgin group was subjected to a combined and synthesized application of both AVC and VRIO
analysis which were beneficial to analyse all the major capabilities of the group. It was found that
the company's source of long term growth and competitive edge comes from its technological
capabilities and penchant for innovation and from their globally recognized brands such as Virgin
Active and Virgin Atlantic. The VRIN analysis was pivotal to highlight these factors and through
the AVC analysis, we can place the reasons for sustained competitive growth in marketing and sales
department of the company in terms of the global brand name and advent of new technologies like
Hyperloop can be placed in operations for primary activities and in technology and development for
the sake of support activities.
Contribution of leadership
In order to run a successful business like Virgin group which has multinational industry
segments and a vast number of brands under its umbrella, it very important for the leadership of the
company to be astute and visionary to make the most out of the limited market opportunities of
mass lucrative reward that comes their way. The current leadership of the massive Virgin group lies
under the watchful eyes of its current CEO, Josh Bayliss who took over from the legendary Sir
Richard Branson who is the one responsible for building the brand of Virgin group to the level that
we see it today. The road has not been kind to him as he go to take over the reins of one of the most
popular and celebrated leaders of the world in Richard Branson who is renowned far and wide for
being a genius motivator and innovator of the business world. The leadership styles which Josh
Bayliss follows are the same ones that Branson used to follow which are listed herein.
 Transformational leadership – The leadership of Virgin group has always been reflective
of its organizational culture which is proactive and deals with employees on a friendly and
respectful basis. Both Bayliss and Branson get the job done through holistic relationships
and treat employees as the prime asset of the company (Hunt & Fitzgerald, 2018)
 Democratic leadership – Bayliss has followed and modelled his relationship with his
subordinates in a democratic manner. Bayliss encourages participation of people in all key
decision making areas and he has also helped the employees navigate through the COVID-
19 pandemic with great urgency.
The leadership of Virgin Group under Bayliss has been getting increasingly progressive and

the company has also charted a great way to progress towards future endeavours. The company has
made several high profile investments under his eye such as unbranded venture capital, real estate
and a range of ESG investments and also work on Virgin Orbit and galactica is in full force (Senior
team, 2022).
Strategy focus
When it comes to the most recent strategic endeavours, the innovation strategies of Virgin
Group deserves closer scrutiny as there have been many instances where the company has shown
great penchant for innovation and most of its future growth is set to come from its rapid advances
into cutting edge technologies. Major examples of the firm’s innovation strategies include
Hyperloop which is a super advanced transportation technique made possible via large tunnels and
Virgin Group has successfully did human and material trials and it is also working towards new
electrical and digital technology integrations to make its Hyperloop service as emission free as
possible (Fast, effortless journeys that expand possibilities, 2022). The firm is known for its
disruptive innovative strategies which enter a market and shake the set players in the process which
is currently doing through Virgin Orbit which has successfully launched satellites all over space
with great efficiency and payload and is on its way to help mankind uncover more information
about space. A major part of the firm’s innovation strategy and process is also its focus on
environmental sustainability which it is pushing through projects such as Virgin Wines which is an
initiative to bolster wine production and make the process relatively environmentally friendly with
no material wastage. The future of the company in regards to innovation rests in creating dynamic
products and service using brand new technological avenues (Chatzoglou, 2018).
Strategic recommendations
Taking into context the major research into the capabilities and operations of the Virgin
group in this report, the following recommendations have been suggested to the company to achieve
sustained competitive advantage in the future based on factors identified using both AVC and VRIN
analysis conducted in earlier sections of the report.
 Making aviation more sustainable – The Virgin Atlantic, one of the most major brands
under the portfolio of the Virgin Group has taken major losses due to the pandemic and in
order to properly regroup, the firm must prioritise sustainability. The safety and hygiene
standards must be enforced with renewed vigour and the company should reduce emission
and pollution originating from its planes using new sustainable fuels and emission control

methods. This method will appease the stakeholders as both shareholders and customers will
appreciate the drive towards environmental safety and recovery of Virgin Atlantic will boost
the share value of the company considerably.
 Entering new markets – Despite being one of the largest multinational conglomerates
around, the Virgin group is surprisingly missing some major markets wherein it has either
flopped or not tried hard enough to penetrate. The firm should look to enter markets like
India with urgency as there is huge potential for profit for multiple brands of the group. This
recommendation will serve its stakeholders well as it will lead to more growth and
prosperity in the long run but will put additional burden on both upstream and downstream
suppliers of Virgin group. Expanding and once again trying to enter India in full force is
feasible as the country has no shortage of manual labour and the new government has made
the country a great place for companies to conduct business in.
CONCLUSION
The above report went into detail regarding the way multinational conglomerate and their
success in the target market are defined using both financial and non-financial metrics and also
included the various reasons as to why they are successful in the first place. The internal capabilities
of such large scale companies were undertaken using models of strategic analysis such as AVC
(adapted value chain) and VRIN analysis which resulted in identification of firm’s technology and
innovation along with globally recognized brand name as major reasons behind its success. The
report was concluded with a look at the company’s leadership and current strategic outlook towards
innovation and included key recommendations regarding use of more sustainable aviation practices
and enter new markets like India for profitability.
REFERENCES
Books and Journals

Anokhina, M. E., Maksimov, M. I., & Seredina, N. S. (2019). A guide to contemporary strategic
analysis.
Best, J. (2018). Numbers Games: Review of The Tyranny of Metrics by Jerry Z. Muller (2018).
Numeracy: Advancing Education in Quantitative Literacy, 11(2).
Bruijl, G. H. T. (2018). Sir Richard Branson: A Global Leader with a Difference. Available at SSRN
3115239.
Chatzoglou, P., Chatzoudes, D., Sarigiannidis, L., & Theriou, G. (2018). The role of firm-specific
factors in the strategy-performance relationship: Revisiting the resource-based view of the firm and
the VRIO framework. Management Research Review.
Hunt, J., & Fitzgerald, M. (2018). Styles of leadership. Leadership: Global and regional
perspectives, 62-98.
Kane, P. (2022). The Not So Subtle Art of Caring: Letters on Leadership. John Hunt Publishing.
Krishnamoorthi, S., & Mathew, S. K. (2018). Business analytics and business value: A comparative
case study. Information & Management, 55(5), 643-666.
Muegge, S. M., & Reid, E. (2018, August). Richard Branson and virgin galactic: A case study of
entrepreneuring as emancipation. In 2018 Portland International Conference on Management of
Engineering and Technology (PICMET) (pp. 1-10). IEEE.
Sachs, H. (2019). How The Virgin Group’s Market Diversification Strategy Has Led Them To
Attain Extreme Financial Success And Pragmatic Examples Of Companies That Built Their Value
Proposition Around The Image Variable
Shan, C., & Tang, D. Y. (2020). The value of employee satisfaction in disastrous times: Evidence
from COVID-19. Available at SSRN 3560919.
Online referencing
Sir Richard Branson's Five Billion Reasons to Make Your Employees and Candidates Happy, 2022
[online] available through https://www.forbes.com/sites/pavelkrapivin/2018/07/09/sir-richard-
bransons-5-billion-reasons-to-make-your-employees-candidates-happy/?sh=339acb766710
Brand it like Branson, 2022 [online] available through https://www.victusconsultancy.co.uk/brand-
it-like-branson/
How to get marketing right, 2022 [online] available through https://www.virgin.com/branson-
family/richard-branson-blog/how-to-get-marketing-right

The art of brand architecture: The many faces of the Virgin company, 2021 [online] available
through https://fabrikbrands.com/incredible-story-of-naim-audio/
Senior team, 2022 [online] available through
https://www.virgin.com/about-virgin/virgin-group/senior-team
Fast, effortless journeys that expand possibilities, 2022 [online] available through
https://www.virgin.com/virgin-companies/virgin-hyperloop