EL-6403 | Strategic Management

Virgin group SWOT analysis & other

strategic frameworks
Group 3
Abhay Sharma (202) | Ashish Jadhao (213) | Anushka Kyal () |
Sunny Jain (256) | Tushar Singhal (257) | Veenal Bansal (259) | Vishal Tomar (262) |
Ishant Gupta (277) | Shashidhar () | Parimal () | Meet Verma ()
Contents
• About Virgin Group
• Segmentation, Targeting and Positioning
• Value Chain Analysis
• SWOT Analysis
• Porter 5 Forces Analysis
• GE Matrix
• ANSOFF Analysis
• BCG Analysis of group
• Porter Generic Strategic Analysis
Introduction
Virgin’s Business Portfolio
• Started by Richard Branson in 1968.
• Leading entrepreneurial brand with
200+ companies divided in 7
categories.
• Operates in a range of markets across
29 countries
• Complex Corporate structure
• Consumers Champion
Virgin Group Timeline

Virgin Records Virgin Mobile

1971 1998

Virgin Atlantic Airways Virgin Money

1984 Virgin Rail 2000
Students Magazine 1997
1968
Virgin Group
Virgin Holidays In 2015
1985

Virgin Balloons
1987
About the Case

Virgin Group Financial The Virgin Brand Virgin Business Management

Performance Development Model Structure and Style
Segmentation, Targeting, Positioning & Values

Segmentation & Targeting Positioning Values

Virgin remain an entrepreneurial
organization committed to launching
new business ventures designed to
upset the status quo in different
industries.
They are typically markets where the • Value for Money
customer has been ripped off or under- • Good Quality
served, where there is confusion • Brilliant Customer Service
and/or where the competition is • Innovative
complacent. In these markets, Virgin is • Competitively Challenging
able to break into the market and shake • Fun
it up.
Value Chain Analysis

LOGISTICS OPERATION MARKETIN SERVICE

Virgin works with G researches
Virgin is taking High quality services
S
Virgin has
suppliers on a and products through
high level, which has different websites for each and doing analysis about training effectively
provided for many activity that the industry, with their employees and
years, and thus cover the offer different facilities to conduct the technique
offering its services and
standard services its consumers of innovation
product at a
Virgin stets its prices in the right
competitive pricedirection and obtains
PROCUREMENT services and goods at cheaper costs

Quick developments in digital technologies have

TECHNOLOGY created a whole new field of opportunity for Virgin

Relies on high skills, experiences, intellect, talents of its

H. RESOURCES employees

INFRASTRUCTURE Operating in 25 countries with 300 companies

SWOT Analysis
SWOT analysis (or SWOT matrix) is a strategic planning technique used to help a person or organization identify strengths,
weaknesses, opportunities, and threats related to business competition or project planning.

1. Charismatic leadership by Sir Richard Branson 1. Vulnerability due to ‘spillover effect’ of negative publicity,
2. Highly diversified successful businesses within Virgin Group because the group has more than 60 businesses with
portfolio serving 53 million customers worldwide Virgin brand name
3. Effective marketing strategy 2. Lack of focus on specific product and service categories
4. Extensive management experience and capabilities across a 3. Customer perception of being expensive brand
wide range of industries 4. Financial problems of Virgin Atlantic

STRENGTHS WEAKNESS
OPPORTUNITIES THREATS
1. Investments in e-commerce in artificial intelligence (AI) 1. Leadership issues after the departure of Richard Branson
2. Concentrating only on most profitable product and service 2. Negative economic implications of Brexit on UK-based
categories, i.e. narrowing focus businesses
3. Increasing presence in emerging economies such as China 3. Financial problems due to overly risk-taking approach to
and India new businesses
4. Finding and utilising new sources of competitive 4. Intensification of the loss of brand identity
advantage
 Porter Analysis
Entry and Exit Barriers Power of Buyers
• high entry and the exit barriers due to high capital • The airline industry is essentially a buyers’ market because
requirement, regulatory barriers to fulfill contractual of a plethora of choices, intense fare wars, and the ever
obligations towards stakeholders in case of exit. looming threat of low cost carriers eating into the market
• Characterized by tight regulation around the safety share of established rivals.
aspect in addition to the airworthiness and the financial • the increase in the distribution channels to buy tickets and
stability of the carriers. . the removal of the intermediary layer with the proliferation
RIVALRY
of online booking direct from the airlines means that the
• Too many carriers in the
buyers are spoilt for choice.
industry making the rivalry high,
with price wars and low
profitability
• more consolidation as the
mantra of bigger is better and
Power of Suppliers lack of profitability is driving the
Threat of Substitutes
• The suppliers are the aircraft makers like Boeing and Airbus, airlines towards mega mergers
• People in the West most often travel by air and hence, the threat of
aviation fuel companies, the ground support, handling vendors, substitutes is not that high for Virgin Atlantic. But many are now
and also spare parts providers. considering other options like Teleconferencing, virtual meetings,
• A few carriers and many suppliers vying for business, the power and such things to reduce the need to fly
of the suppliers is low. Jet fuel which being expensive and a • Another noticeable trend has been the paring down of leisure travel
premium product implies not too many buyers making Virgin a and substituting it with cheaper options like budget cruises and slow
favored customer for the aviation fuel companies. tourism that entail less dependency on air travel.

Conclusion
 Virgin Atlantic faces an external environment that is relatively tough for newer entrants to entrench themselves. Having said that, it must be remembered that once a carrier enters
the industry, the situation is different as it can then engage in all out price wars and a race to the bottom.
 Virgin Atlantic faces a competitive and a challenging external environment that directly affects its operations as it has to innovate and be lean and mean in its operational capacities
and capabilities if it has to survive competition.
GE-McKinsey Matrix
GE matrixis one of the most commonly used tools in strategic planning. GE matrix can be used according to the business unit in the
market’s strength and market appeal to evaluate these units

Invest Grow • In the Invest/Grow box we place virgin flights as it

has a significant market share in an industry with
Attractiveness

high barriers of entry.

Industry

Selective • Virgin Media also belongs in the same box as the

Earnings
company is one of the largest broadband services in
the country
Harvest/ • Virgin Records needs to use its resources to expand
Divest
into the growing entertainment market or its
resources can be allocated to Virgin Media
• Virgin Cola needs to be Sold as it has a 3% share of a
Competitive market with low attractiveness.
strength
 Ansoff Matrix
The Ansoff Matrix, also called the Product/Market Expansion Grid, is a tool used by firms to analyze and plan their strategies for
growth. The matrix shows four strategies that can be used to help a firm grow and also analyzes the risk associated with each
strategy. It presents the product and market choices available to an organization. In this markets may be defined as customers and
products as items sold to customers.

The launch of Virgin Megastores is an example of a market

penetration strategy. It gave the original music production
business a new and more direct route to its ultimate
customers.
PRODUCT
Existing

MARKET PENETRATION
DEVELOPMENT
STRATEGY
STRATEGY Having successfully targeted holiday-makers with Virgin
Atlantic, it showed a product development strategy when it
launched Virgin Holidays; new product, same market.
MARKETS

Virgin’s expansion outside the UK began with its

Megastores. After 2000, Virgin replicated several of its
successful UK businesses overseas, including Virgin Mobile,
Virgin Active, and Virgin Money.
MARKET DEVELOPMENT DIVERSIFICATION
New

STRATEGY STRATEGY
From its origins in music and magazine publishing, Virgin
entered video games, book publishing, radio broadcasting ,
airlines, retail, information and communication technology.

Existing PRODUCTS New

BCG Matrix Analysis
Virgin group has a total of 59 group companies spread across 7 categories namely Entertainment, Health & Wellness, Leisure,
Telecom & Tech, Planet & People, Travel and Money. BCG Matrix shows the relation market growth rate and relative market share.
We have hereby analyzed the company based on the same.

Relative Market Share

High Low
High

Entertainment Finance
Market Growth Rate
Low

Flights Virgin Cola

BCG Matrix Analysis
Stars: Virgin Entertaiment unit of business has high market growth and market share across the world. The company
has 8 brands in this business unit. Some of them are Virgin Games, Virgin Radio, Virgin Productions, Virgin Festivals,
Virgin casino, Virgin management etc. They invest a lot in this sector along with marketing.
 
Question Marks: Various business units like Finance with Virgin money have created a lot of interrogance within the
company. The company is investing a lot of money in this because they think Virgin Money can win big market in UK
because many people do not believe in the concept of banks. But for Virgin money, they incorporated branches in the
US in 2007 where after one year closed branches due to low market share and growth, now only have in UK,
SouthAfrica and Australia. In the Social and Enviroment brands like Virgin geen Fud and Earth Challenge are in this
category.

Dogs: Virgin cola was launched in 1994, which was not successful, Richard Branson said he did not succeed because
they never realized how big the market for coke in the world, the philosophy of virgin is crearn disruptive products but
in the soft drink market nobody wanted something disruptive, all people were happy with the traditional cola.
 
Cows: Flights are one of the most important brands in Virgin company, because they are keeping in the top of
companys airlines. They won the best airline award in 2015. Major amount of cash inflow is through the airline services
for Virgin company.
 
Porter Generic Strategies
The strategically choice of Virgin Group normally follows the pattern of Porter’s generic strategies which determines that organization’s
capability to sustain in market can be put into two categories: cost advantages and differentiation. 

Virgin organization uses the concept of low cost services and

products for market advantages. Virgin provides services in
multiple businesses those are not so unique in industry but the
market is achieved with proper pricing of products and services.
Addition to it, Virgin organization uses cost leadership style to
lower the pricing of products and services. Organization has no
specific group of customers due to general services and economic
pricing and needs to control the business in industrial level.
In cost leadership approach, Virgin mostly use the resource and
capital effectively. For instance, the airline cost of Virgin in cheaper
than others because organization has own control on pricing and
management. Organization also uses the low cost direct and
indirect operating in business processing. It is effectively done with
technical setup in organization and outsourcing of supplementary
business activities.
The cost at each dimension like finance, travels, media and others
businesses are reduced with proper analysis of market conditions
and product utilization.
Thank You