The Virgin Group - Richard Branson Way - Case Study

The Virgin Group - Richard Branson Way - Case Study

• 1.
  “Screw it, let’sdo it!”
• 2.
   Conceived bySir Richard Branson & Nik Powell as MailOrder Record Business in 1970.  Represented itself as a brand entering every business as aVirgin.  Floated at London Stock Exchange in 1986.  Employed approx. 71,000 in 50 countries.  Estimated net worth £5–5.5 billion as of November, 2014.  Generated revenue £19.5 billion in 2016.
• 3.
  Quality- To create valuein exchange of money Innovation- To make a difference in competitive environment Friendliness- To contribute effortlessly in customer satisfaction
• 4.
  Business opportunities arelike buses, there’s always another one coming. It has to be involving, fun and it has to exercise your creative instinct.
• 5.
  Joint Ventures- To escape hassle- freeentry & sustainability. Ex- Virgin+Green Field start up Licensing- To avoid capital injection, make brand as asset. Ex- Virgin Radio Acquisition- To add value to brand. Ex-Virgin Galactic’s 30% stake Bailout- Selling old business to invest on potential ones. Ex-Virgin direct banking
• 6.
   StartedVirgin Recordsin 1971 & Marked success with Mike Oldfield’s hit record ‘Tubular Bells’.  Expanded in industries such as Airlines, Entertainment, Lifestyle, Health, Mobiles, Media, Financial Services in 1978-94.  Started Virgin Bride in 1999,Virgin cars and mobile in 2000.  LaunchedVirginCinemas, Stores, Express, Galactic in 2002-04.  Created F1Team.
• 7.
   Interacted with50 customers every month since launch ofVirgin Atlantic.  Appeared at airports to gift customers for delayed flights. Wherever we find them(overcharged, unhappy customers), there is clear opportunity area forVirgin to do a much better job than the competition.
• 8.
  Portfolio includes 400different businesses, specially focusing on:
• 9.
  • Organizational Strategy Keiretsu organizational structure  Hands-off policy  No formal managerial structure  Decentralization of decision making  Flat hierarchies, people-oriented
• 10.
  • Corporate Strategy Long-term growth  Business opportunities using internet, competitive advantage  Commitment to deliver niche experience.  Less is more  Combination of services in multiple business
• 11.
  1.Virgin Atlantic 2.VirginMobile 3.Virgin Brides
• 12.
  Parent Parental CorporateApproach
• 13.
   Virgin Student Virgin Cola  Virgin Brides  Virgin Cars  Virgin Clothing
• 14.
  Competitive Rivalry - HIGH Threats of New Entrants- LOW Threat of Substitution - LOW Bargaining power of Customer - HIGH Bargaining Power of Suppliers- HIGH
• 15.
  Diluted Brand Image Too much Dependency ofBranson Extensive Portfolio Financial Risk (Substitute exchange rate) Carry-over Effect Brand over- reliance
• 16.
  The BRANDS thatwillTHRIVE in the coming years are the ones that are the ones that have a purpose BEYOND PROFIT.
• 17.
  1. How isVirginunique in its quest to be a socially responsible and sustainable company?  Corporate Responsibility and Sustainable Development (CR/SD) as its key factor.  Green Fund in renewable energy from solar energy to water purification.  Virgin Unite to protect planet earth through activities.  Earth Challenge to encourage long-term mean for greenhouse gas emissions, awarding $25M.
• 18.
  2. Discuss thecontradiction between Virgin’s negative environmental impact (via air and rail) and the green message and communication efforts behind endeavours such as the Earth Challenge.  Less exploitation of natural, non-renewable resources.  Before,Virgin entered in aviation and rail transport, there existed others.  Thorough review of submissions in Earth Challenge by team of scientists, professors, and environmentalists.  Goal – ‘ To change the way businesses and social sector work together’  Hence, Green Fund is not only a mere PR stunt.
• 19.
   Beginning  CorporateRationale  International Expansion strategy  Expansion  Exclusive Customer Service  Product Diversity  Organizational-Corporate Strategy  Sir Branson’s PR Stunts  Value CreationApproach  Failed Extensions  Porter’s Five Forces  Challenges  Relevant Questions
• 20.
  Created as anassignment during Marketing Management Internship, under Professor Sameer Mathur IIM Lucknow Ph.D.: Carnegie Mellon University By Sharanya Ray West Bengal University ofTechnology