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Virgin case study: strengths and weaknesses

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case study
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  1. Introduction
  2. Understanding the business identity and culture
    1. The general policy of the company
    2. The culture
    3. The moto
  3. Strategic segmentation
    1. Competitive edge
    2. Key success factors
    3. Competencies that the company can gain to experience in segments
    4. The grouping
    5. Value chain
  4. Conclusion

The Virgin Group is a group of subsidiaries whose activities are centerd around the leisure sector, in line with the image of a dynamic, innovative and charismatic president Richard Branson. Sir Richard Branson is the head of a business empire that includes 250 companies in 23 countries, most located off-shore, secret-accounting and has approximately 25,000 employees. (His fortune is estimated to be at 1.5 billion euros.)

Virgin is a conglomerate of variable geometry, driven by an exceptional brand, endorsed by an unusual and charismatic boss, Richard Branson.
This conglomerate leads the group through numerous acquisitions, resales and times in order to develop elsewhere. Thus, it can be said that Richard Branson wants to sell his business at the best price and the best time.

The Virgin empire does not hesitate to dispose of peripheral activities to be redeployed into new areas. This dynamism is accompanied by some risk-taking.

Virgin is characterized by a rather successful diversification of the sectors considered difficult. Virgin's strategy is to be grafted on growing markets such as emerging markets or newly deregulated markets.
The example of Virgin Trains can be cited, which takes advantage of the opening to competition of rail transport market in Britain.

From a financial point of view, Virgin is a holding company, that is to say, a holding company, which has no commercial activity but which manages investments. This conglomerate is comprised of a myriad offamily trusts registered in the Channel Islands for tax reasons and who control a group financially fragile. The independent nature, opaqueand flexible mode of operation has long been a key asset divestiture and development.

The group pursues a logic of recovery or the creation of industrial activity. It offers opportunities in stagnant markets by applying a young and innovative look.

Despite its large size the Virgin Group should receive only very few synergies. What is the relationship between Virgin and Cosmetic Virgain Rail? In addition Virgin Group acts as a risk capital and not looking at any cost synergies and does not act as a manager synergies.

However this policy is, with few exceptions, full of success. Virgin is called an association and joint venture by large groups that offer money in exchange of know-how of the brand.

Despite its tremendous growth Virgin Group has some weak points as financial difficulties, problems with the image, in the generic brand and despite his legendary charisma Richard Branson himself can be considered a point to watch. To overcome these financial difficulties Virgin Group should use the external financing by opening its capital, but also by consolidating certain financial activities.

About the brand itself, Virgin should focus on the heart of a trade or risk a failure that would affect the whole group (and the image as a whole).

Virgin is first of all a flexible internal organization, that is to say, based on a light hierarchy , leaving much room for autonomy and responsibility to its stakeholders. Proximity leaders / staff, community perceptions and attitudes are essential values conveyed by the company.

Tags: Virgin Group, Richard Branson, business diagnosis, strategy analysis



[...] STRENGTHS WEAKNESSES High awareness (among the 25 most - No traditional attributes of a recognizable brands in Europe) multinational company Coordination: partners - Cannot talk about the group Financial activities isolated (company accounts) from each other - Opaque group structure Conglomerate, non-traded - Autonomy of the units Involvement of employees - Split into two entities depending Skills in public relations and on the size of the subsidiary marketing - Control by remote headquarters Experience in Entrepreneurship - Exhibition of Branson media Best offer by competitors at lower prices -Initial public offering for a range of activities Comments Strengths The company uses partners, enabling it to limit the risks associated with investing. [...]


[...] In the case of development in mobile, Virgin has only used its expertise in brand development, and its youthful image is based on existing operators, who brought them their networks and expertise. This is a method that has paid off in this sector since Virgin, thanks to some innovations in the UK, such as prepaid cards or payment by the minute without a subscription. This group won the trophy for the best mobile operator. However, this technique is based on a different logic, a logic of competence on the part of the group. [...]


[...] In general, business travel has cash cow business activities, as rail and air are not successful, except for Virgin Atlantic remains a "key activity". The same applies to Virgin Blue, the low cost airline that is a success. Everything must be considered as the airline industry and it is a cyclical industry that faces intense competition. This can lead to deadweight activity. As we have said before, the telecommunications business has slowed placing it in the dial cash cow, but it can resume growth and become an active star. [...]

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