Virgin Atlantic Case Study Essays

Virgin Airline Case Study

EXECUTIVE SUMMARY

Virgin began in the 1970s with a student magazine and small mail order record company. Virgin's growth since then has not only been impressively fast, it's also been based on developing good ideas through excellent management principles, rather than on acquisition.

Virgin looks opportunities where we can offer something better, fresher and more valuable, and seize them. Besides, Virgin often moves into areas where the customers have traditionally received a poor deal, where the competition is complacent. In addition, with their growing e-commerce activities, they look to deliver 'old' products and services in new ways. Virgin's are pro-active and quick to act, often leaving bigger and more cumbersome organizations in virgin's wake.

Virgin known as third most recognized brand in Britain, now becoming the first global brand name of the 21st century. Virgin involved in planes, trains, finance, soft drinks, music, mobile phones, holidays, cars, wines, publishing, bridal wear and a lot. What tie all these businesses together are the values of their brand and the attitude of virgin's employees. Virgin created over 200 companies worldwide, employing over 25,000 people. Their total revenues around the world in 1999 exceeded US$5 billion.

Virgin's companies are part of a family rather than a hierarchy. They are empowered to run their own affairs, yet other companies help one another, and solutions to problems come from all kinds of sources. In a sense, virgins are a community, with shared ideas, values, interests, and goals. The proof of their success is real and tangible.

In this report, Virgin Group is being analyzed in three aspects: General Environment, Industry Analysis and Value Chain Analysis. Besides that, this report also discussing diversification strategy, its relation with its stakeholders and the overstretching of Virgin brand name in Virgin Group.

GENERAL ENVIRONMENT: VIRGIN'S GROUP

The general environment is composed of dimensions in the broader society that influences an industry and the firms within it. These dimensions comprise of six environmental segments: demographic, economic, political / legal, socio-cultural, technological and global. However non of any firm's or organizations can only understand and gather information regarding their general environments and its implications for the selection and implementation of the appropriate strategies.

Most firm face external environments that is highly turbulent, complex and global. For Virgin itself, may face external environment difficulties in understanding and to predict their general environment because they were in different industry. In addition, different industries may lead to different risks. In order to increase their understanding of the general environment, company like Virgin...

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1 Executive summary

"Virgin" is currently the third most recognized brand in Britain and it is commonly associated with the identity of its founder Richard Branson. Branson is not your typical corporate businessman but rather a risk-taking entrepreneur that emphasizes the fun in every activity he is driving the Virgin group into. Virgin's best known operations are probably air travel (the Virgin Atlantic and Virgin Express airlines) and music stores (Virgin Megastores), but they are also involved in trains, finance, internet services, soft drinks, mobile phones, cars, wines, publishing, and bridal wear to name but a few. Although Virgin has successfully developed a differentiation strategy in each of these sectors, some of the group's companies are currently experiencing financial difficulties.

Through a SWOT analysis, we identified four main strategic issues that will determine Virgin's future success:

*Leadership - how to foster a new Branson that will be able to lead Virgin trough its new challenges?

*Globalisation - how to leverage the Virgin brand recognition in the UK to an international one?

*Reorganization - how to organize such a large number of different companies with different business focus?

*Financial structure - how to structure the company's capital for an optimal return on investment?

Following a through analysis, using tools such as "the BCG matrix", leadership model analysis and Internet analysis, we concluded that in order to survive, the Virgin brand has to become global.

We believe that building a leading worldwide Internet portal, giving access to all Virgin's business, is critical both for globalizing the brand and for managing the different business trough one platform. Furthermore, we believe that Virgin should finance its expansion to the electronic commerce by raising money in the capital markets trough an initial public offering of its shares.

2Project background

"Virgin" is the third most...


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