Running head: THE VIRGIN GROUP 1

The virgin group company

Name
Affiliation
Date
THE VIRGIN GROUP 2

Introduction

The Virgin Group is a British international venture capital conglomerate established in

the United Kingdom that provides value for money, enjoyment, and innovation. Richard Branson

founded a recording studio in 1971, and from there, he was able to launch Virgin Atlantic. The

Virgin Group is a multi-billion-dollar conglomerate with a wide range of business interests. E-

commerce Game companies cannot specialize in the same way, but they can work in various

industries. The company expanded into other endeavors, and its essential ideas are recognized

worldwide. Virgin Group is also a technology investor, with over 35 companies in the consumer

internet, banking, and sharing economy sectors. He et al. (2012) states that Virgin Group has

subsidiaries throughout Georgia, Europe, Japan, California, the Mediterranean, Europe, South

America, Ireland, the Arab World, Siberia, Africa, the United Kingdom, and the United States.

Because Virgin Group has so many divisions, their product line is extensive and ever-expanding.

Within Virgin Group, there are over 56 essential business units. From Virgin Records in 1972 to

Virgin Rail in 1993 to Virgin Galactic in 2006, the Virgin Group has expanded its product line

and activities.

He et al. (2012) states that as is the theme of Virgin Group, the product line, and potential

for additional spheres of activities can now be expanded. This study examines and compares the

motives for the diversification of the Virgin Group and the business game companies. It

furthermore characterizes the product-market combinations possible in the Game regarding their

opportunities, threats, and sustainability. In addition, the study explains what aspects highlight

Virgin's financial management and how those goals are relevant in the International Business

Game and what role the individual interest rate for long-term debt plays in this. Besides, the

study gives reasons why this individual interest rate for long-term debt differs from company to
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company in the Game (and in reality, of course) and aspects that affect this interest rate. Finally,

the study will examine the advantages and disadvantages of outsourcing in general. It will also

highlight under which concrete conditions outsourcing is advantageous in the Gam and show

how one can realize synergies in highly diversified companies like Virgin with outsourcing

through transfer prices.

Please compare the motives for the diversification of the Virgin Group and the

business game companies.

Diversification of the virgin group is usually composed and controlled by three primary

objectives: growth, risk reduction, and profitability. Virgin Group is an organization that offers

and gives growth opportunities that represent its diversification, which began with the

entertainment industry and has since diversified to other types of businesses in various areas such

as transportation marketplaces, movies, commerce, and vacations. The Virgin brand provides

reasonable prices (deluxe strategy), excellent customer service, technology, and a fun and

youthful image. He et al. (2012) states that Virgin's leadership and management are fully

committed to the company's mission of being creative while offering exceptional customer

service. With a flattened hierarchy structure, the Virgin Group allows each business to be

controlled and run independently. The organization lets each business manager run a team-like

environment that fosters creativity and employee involvement. Allowing employees to take

control and providing them with an excellent work-life balance contributes to their happiness.

Happy employees are more likely to support the company and its brand and believe in doing.

This aids Virgin in providing customers with a great overall experience. Genuinely happy

employees will make customers feel more welcome, and more satisfied employees will provide

better service. Virgin operates a subsidiary airline that collaborates with Delta to offer nonstop
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flights worldwide. Virgin Atlantic Airways has a competitive advantage, particularly in

combination with one of Virgin's numerous other travel services. Virgin's partnerships and travel

endeavors demonstrate the potential to grow vertically and horizontally. The airline and travel

businesses have relatively similar expenses, but Virgin has combined them into one program.

Only one other airline came close to offering package deals, and that was the American-based

ATA Airlines, which is now defunct.

On the other hand, most game companies worldwide are usually motivated by increased

compensation which is different from the virgin group company. Employees look for various

elements when it comes to job creation, including compensation packages. Increased salary

packages are more likely to attract many job searchers, making them more successful.

Compensation packages are monetary funds that an employer provides to its employees in a

working injury. To keep their compensation packages as low as possible, they must offer better

working conditions for their employees to avoid workplace injuries. Controlling and managing

pay packages is the function and obligation of the human resource department.

Characterize the product-market combinations possible in the Game regarding

their opportunities, threats, and sustainability furthermore.

He et al. (2012) states that several product-market combinations are possible in the Game

regarding their opportunities, threats, and sustainability. First, the company uses trending

influencers to promote its products and services. This makes it easy for people to acknowledge

and understand the new products and services that come from the company. Also, the company

has strong management that usually helps motivate the employees, increasing innovation and

creativity. This, in turn, allows the company to create appropriate content for the clients, which

makes it easy to market. Also, the company is very diverse in such a way that it is has built an
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online presence. This makes it easy to market their products and services. The company also has

excellent reviews, which have made it easy to attract new customers to their site.

Please explain what aspects highlight Virgin's financial management?

Three primary aspects highlight Virgin's financial management; Investment Decision,

Financing Decision, and Dividend Policy Decision. Investment is one of the most important

long-term decisions for any company. The purchase or construction of assets to profit in the

future is an investment. Investing typically entails using financial resources to purchase a piece

of equipment, building, or another item that will provide a return to an organization over time.

For instance, the Virgin Group's investment portfolio is structured in diffrent asset classes and

geographies, as stated by Sadq (2016). These asset classes and geographies include venture

capital, real estate development, airlines, private companies, and many others. The financial

decision is also appropriate, which contributes to its success. Any business's primary purpose is

to maximize profit margins.

The leaders and managers of the Virgin group company typically employ a variety of

sales and production strategies to fulfill their organization's primary goal purpose; profits can

only be maximized by one of two methods: lowering all relevant production costs or growing

sales volume. He et al. (2012) states that Cost accounting procedures and accompanying

budgetary tools are among the techniques used by managers to reduce production costs. Finally,

the Dividend Policy Decision of the virgin group company is based on their financial

management. The dividend policy decision entails deciding whether to distribute profits to

shareholders or keep them for the company. The dividend policy decision, in which the

corporation must choose between distributing earnings to shareholders and plowing them back
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into the company, is crucial in financial management. The impact on the Financial Management

goal of increasing shareholder wealth would affect the decision.

How are those goals also applicable in the International Business Game, and what

role does the individual interest rate for long-term debt play in this?

These goals are relevant in the International Business Game in such a way that they

create a game theory. Game theory is a strategy that is used on international markets as a

simulating competitive technique among market participants. Organizations such as virgin group

company usually face operational decisions that have an effect or influence on their potential to

generate income. He et al. (2012) states that business leaders and managers can utilize game

theory to acknowledge and understand if they have a first-mover advantage, what adversaries

might do with new products, and how they may improve their strategies, among other things.

Similarly, game theory is being applied in the virgin group company to examine whether to enter

or exit a market opportunity. Interest rates are one of the most crucial figures in the business

since they decide whether or not individuals will borrow money. Borrowing money is expensive

when interest rates are excessive. Borrowed funds are typically used to finance large purchases

such as new business.

Why can this individual interest rate for long-term debt differ from company to

company in the Game (and in reality, of course), and what does affect this interest rate in

the Game?

He et al. (2012) states that this individual interest rate for long-term debt differs from

company to company in the Game (and in reality, of course) because some companies invest

differently and in specific ways. It is essential to understand that accounting becomes more
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complicated when a corporation or an organization gives and offers individual interest rates with

more than one year of maturity. A corporation debits assets and credits long-term debt at the time

of issue. Some of the organizations’ objectives and rates are usually due within a year, while

others will be due in more than a year as it repays its long-term debt hence bringing in the

difference. Several things usually bring and impact the interest rates in the Game. The first factor

is the credit score. It is the best indicator of risk whenever a creditor extends debt. The payment

history, credit consumption, duration of credit record, categories of loans, and the frequency of

current credit requests are all key aspects that affect credit score. The second aspect that affects

the interest rate in the Game is Debt-to-income. When it concerns debt repayment, debtors with a

massive debt proportion are more highly leveraged. This is because they have the most

significant impact on the interest rates.

Advantages of outsourcing

There are several advantages of outsourcing. First, it brings about Expertise and

quickness. Projects are frequently and appropriately issued to the right management or suppliers

who specialize in that specific industry. This makes it easy for the organization to increase its

productivity since its operations are delegated to the right management as stated by Grossman &

Helpman (2015). Also, outsourcing contributes to the completion of projects and tasks. Most of

the roles and duties in the organization are delegated to the right personnel who effectively

perform them and achieve higher quality results. This makes it easy for the customers to

acknowledge the products and establish long term relationships with the organization.

Outsourcing also provides greater experience and better technologies. To gain access to new

technology and greater expertise, the majority of businesses outsource computer programming

and other IT activities. This is especially advantageous for small businesses that may not have
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the financial resources to recruit computer professionals or create high-tech in-house.

Outsourcing these tasks allows the organization to compete with larger corporations. Because IT

is the vendor's primary strength, they make certain that all of their employees and staff are well-

trained. The IT provider will also assist in making efficient company decisions by covering a

wide range of information technology functions. Outsourcing provides you with cutting-edge

technology and a team of experts to keep it running smoothly. Outsourcing IT automatically

improves the quality of the work and allows it to be completed quickly and efficiently.

Disadvantages of outsourcing

However, there are several drawbacks to outsourcing that must be considered. For

starters, outsourcing can result in a poor customer experience. Customers of a corporation may

encounter a strange accent or even someone uninterested in the company. Multiple organizations

frequently employ outsourced employees simultaneously; thus, your company's emphasis may

not be represented. Outsourcing increases the risk of a bad customer experience because many

people may not consider your customers (Earl, 2016).

Under which concrete conditions is outsourcing advantageous in the Game.

Outsourcing is the act of transferring or contracting services to another company or

individual that the company itself would otherwise perform. In the modern gaming industry,

outsourcing is a strategic instrument and one of the most popular business tactics. It's all about

task division and completing tasks cost-effectively and efficiently. Outsourcing allows

businesses to gain knowledge, save money, be more flexible, and save time. In today's global

market, it's hard for a company to exist without outsourcing, as specialization in all business

areas is difficult and expensive. When it comes to innovation, outsourcing is advantageous.

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Outsourcing effectively manages costs and risks. It's also advantageous when it comes to forging

solid business ties with the right partner who can deliver the correct product and services most

cost-effectively and efficiently from the right place. It is also advantageous for maintaining

operational control and developing internal staff.

How can you realize synergies in highly diversified companies like Virgin with

outsourcing through the use of transfer prices?

There are several ways one can realize synergies in highly diversified companies like

Virgin with outsourcing through transfer prices. First, one can recognize synergies by outlining

and examining the Revenue increase. For instance, one can realize synergies on virgin group

companies via transfer prices by marketing more and various goods and services via a broadened

product distribution strategy. This will help the organization attract new customers, increasing

their productivity. Also, one can realize synergies in highly diversified companies like Virgin

with outsourcing through transfer prices by understanding and noting the Expenses reduction.

For example, many diversified companies such as virgin group have optimized internal positions

and introduced more responsibilities to the existing roles via merging and acquisitions. Also, one

can realize synergies in highly diversified companies like Virgin with outsourcing through

transfer prices by implementing Process optimization. Process optimization usually happens

when companies such as virgin group implement improved marketing strategies, having the most

appropriate technology, using the right brand, using the most appropriate distribution strategy

and marketing their products.

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References
Earl, M. J. (2016). The risks of outsourcing IT. Sloan management review, 37, 26-32.

Grossman, G. M., & Helpman, E. (2015). Outsourcing in a global economy. The Review of

Economic Studies, 72(1), 135-159.

He, C., Bassik, M. C., Moresi, V., Sun, K., Wei, Y., Zou, Z., ... & Levine, B. (2012). Exercise-

induced BCL2-regulated autophagy is required for muscle glucose

homeostasis. Nature, 481(7382), 511-515.

Sadq, Z. M. (2016). Virgin Group Success Businesses: Diversification, and Key

Strengths. Account and Financial Management Journal, 1(02), 78-83.