VIRGIN – IS THE BRAND MORE

THAN RICHARD BRANSON?

Alejandro Pérez Crespo

Iago Fernández Lorenzo
Who is Richard Branson and what is the Virgin group?

-Richard Branson is Founder of the Virgin Group. Virgin is

one of the world’s most irresistible brands and has expanded
into many diverse sectors from travel to telecommunications,
health to banking and music to leisure.
-The Virgin Group of companies have a complex structure that contains
elements of a generic conglomerate, and sometimes it simply licences
its brand.
-Examples of licensing are Virgin Records and Virgin Media, which are
owned by Universal Music Group and Liberty Global respectively.
-In mid-May 2013, the Virgin Group expressed its intention to seek out
opportunities in Australia’s healthcare industry to consolidate on the
Group's Australian fitness centres an in 2014 the group also announced
the establishment of Virgin Voyages with financial backing from Bain
Capital.
Other examples of important Virgin subsidiaries
COMPANY
SECTOR
COMPANY SECTOR
Virgin Active Health, gyms
Virgin Hotels Travel
Virgin Mobile Communications
Virgin Radio Entertainment
Virgin Books Publishing
What directions of strategic development have been followed by Virgin over the period of the case?

ANSOFF´S GROWTH MATRIX:

-Is a classic corporate strategy
framework for generating four basic
directions for organisational growth
-Virgin's moves exemplify a wide range of Ansoff strategies.
The addition of Our Price to the existing Virgin stores was a
case of market penetration. Most of Virgin's moves have
involved diversification, both related and unrelated.
-The original move from Virgin Stores into the airline business
was a Conglomerate Diversification strategy unrelated.
-Virgin Cosmetics, Virgin Vodka and even Virgin Mobile could all be considered as
launching new products and services. These fit into the related diversification strategy in
terms of product development.
-The extension of the Virgin Mobile business into India could be considered a related
diversification strategy in terms of market development.
Which type of corporate parenting role best describes the Virgin Group?

-Virgin Group is a portfolio manager corporate parent. The Virgin group is one of the one
of the UK’s largest private company. According to 1996 survey, 96% of UK consumers
were aware of the brand Virgin.
-Virgin’s expansion into new markets allows the company to provide the majority capital.
It is involved in mobile telephony, travel, financial services, leisure, music, holidays and
health and wellness.
-Virgin is involved in not only commercial activities but it is involved in finding solutions
to world major issues or problem. With the help of Virgin Unite, a nonprofit foundation, it
is organizing campaign like health, economic empowerment, conservation and climate
change.
How does the Virgin Group as a corporate parent add value to its businesses?

- Through his public relations

- His marketing skills, which have to do above all with Richard Branson's personality
and his way of doing business
- His experience with start-ups and his understanding of the opportunities offered by
institutionalised markets. Richard Branson and Virgin Group create value using
mainstream logic.
some features of virgin group
-Richard Branson launches the Virgin Earth Challenge to ensure
that all Virgin businesses contribute to a sustainable society.

-Created Virgin Unite and Virgin Green Fund to improve social

and environmental issues.

-Resources and activities are shared

- It uses the same brand name for each of its products and
services.

- In many of the countries its offices are shared by its smaller

business units on the basis of geographical diversity.
The Virgin Group transfers its skills to the required industry.

-Virgin Music can transfer its expertise to

Virgin Cinema with the aim of improving its
technology.

- In addition, the Virgin Group has its own

value-added capabilities whereby a business
unit helps each other to share technologies,
skills and knowledge.

https://youtu.be/dG0IAEqYGsU
To what extent are these parenting skills relevant to the differin business units?

-They are very relevant skills for the group

-The Virgin Group sets the project in motion and builds it
thanks to these skills.
-Then the company is liberated,and its managers have a lot
of freedom.
-The strength of the Virgin Group's strategy is that it has
managed to create a brand that people believe in and respect.
- The consequence is that any idea with a good business plan
behind it has a good chance of succeeding.
What should the future corporate strategy be?

-On the face of it, the current strategy (a highly diversified portfolio managed with
minimal central control) works very well and there is no evidence to suggest that this
should change.
 How important is Richard Branson himself in that strategy?

Branson has already withdrawn from operational activities, focusing

on corporate strategy and his charitable work with Virgin Unite

- This suggests that his absence may not be a major issue.

-However, the importance of his presence as a talisman cannot be

underestimated, and there must be concern about what might happen
without him.

-As a result, it may be that a more traditional corporate structure may

have to be adopted after Branson leaves the business.
How to act when Branson leaves?
The Virgin Group should, in general, maintain the same
strategy if Richard Branson leaves. His motives and objectives
must remain the same, otherwise the company's credibility will
be diminished.
-When Branson leaves, it is inevitable that the public will lose
some faith in the brand.
-The Virgin Group should, in my view, be more open about its
financial situation and its economic motives.
-If they make long-term profits and their business is doing
well, it will help their customers regain faith.
-The decision to replace Branson needs to be carefully
considered, as it will have to meet a lot of public expectations.
END