Virgin Group Strategic Management essay

Virgin Group’s mission and values The Virgin group comprises is composed by over 200 companies with more than 25,000 employees worldwide.

It has revenues of about 7 billion, and has become one of the world’s top 50 brands. Although there is no official mission, we can infer that by the company statem ents throughout the years: Be the shopper victor, by delivering brand values, which are: value for currency, superior quality, dazzling customer service, pioneering, competitively testing and fun. o provide a quality service by motivating employees and to assist and examine consumer feedback or nonstop enhancement of the customer’s experience through improvement; to create products and services that make the customers life more enjoyable It is clear the intention by its leaser to create a very large conglomerate sharin g the same name, and although the values are not necessarily the same, they all share the common base stated above.T his policy results in a product range totally different from those of its competitors, targeting a younger audience and bett ervalue for money, all under the umbrella of an aspirational brand. Virgin Group’s diversification goals and criteriaProduct / Service Market Present Market Penetration Product Extension Attract competion costumers, or non-users The simple retailing has led the company to through publicity, self-publicity and start music production and publishing exploitation of Virgin name Market Extension New Products-Markets Divesification Although it did not gone as expected, the Group tried to extend the market opening Virgin Megastores around the world and a music business in the US Films, computer games Related Virgin Atlantic Airways Virgin Holidays Virgin Galactic Unrelated Table 1 coal Virgin’s Ansoff Matrix Achieved Through Growth – Disrupting established markets – Moving through different stages of markets Risk Spreading – Entering emerging industries – Investments of small scale with small correlation with existing business Profit Exploitation scale and scope economies – New sources of cash generation Table 2 – Virgin’s Goals Virgin originally started as a record store and owning Virgin Megastores and now the company has some business that are totally different among themselves . The Ansoff matrix is probably the best way to explain this evolving growth strategy. Unlike it might be expected as first looking at the company, the Virgin group has extremely focused goals.

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The wide span of activities on which it is engaged, may lead to thinking Virgin’s portfolio is not taking advantage of synergies and scale and scope economies. Yet, considering Virgin attitude of being against establishment, and by using a pioneer and innovative criteria, we realize Virgin’s portfolio makes total sense. What unites Virgin companies is the desire to share the “Virgin experience” and in so doing, generate growth and profit, all while reducing risks, for the group. The approach of the company regarding the diversification criteria is what ma kes Virgin completely unique. It has a rather unconventional metric to evaluate diversification options.

Rather than relying on traditional criteria, it follows Brandon’s entrepreneurial philosophy. Drive for change Staff comes first, followed by the customers and only after that are the shareholders Capture every idea, as crazy as it may look Be creative, don’t stick only to leaders opinion The Greater is the challenge, the greater is the fun Figure 1 – Richard Branson’s entrepreneurial philosophy Virgin Group’s diversification strategy and competencies As previously stated the Virgin Group is composed of several companies in different areas with high independence in strategy definition. The group is positioned in industries where the leveraging of the brand can serve as additional driver for costumers demand.Some of the companies aren’t doing very well, and because of that Virgin is rethinking its participation (which may even lead to a massive sellout of assets).

Curiously (or maybe not) those companies happen to be the ones where customer interaction is most limited. Figure 2 – Richard Branson’s entrepreneurial philosophy The following table portrays Virgin’s competencies. Its core competencies are easily explained by the autonomy of each company in pursuing results in their specific industry due to the group’s structure and als o all the brand power that the Virgin group has, pushed primarily by the “social aura” that Richard Branson r etains.Competitive Position Low Average High Grow Carefully Invest to Grow Protect Position Virgin Care Expand with Limits Attractiveness Active Holiday Manage Return Media Atlantic Improve Return Disinvest Strengthen Position Mobile Protect Return Money Rail Table 3 3 Virgin’s Strategy Virgin Galactic’s Vision, Mission and Objectives Virgin Galactic, is a company that is developing technology in order to sell commercial space flights to ordinary citizens at an affordable value. It has a very strong basis in its vision, the logo itself is a human eye.

According to Burt Rutan (Founder and Technical Officer): “We need affordable space travel to inspire our youth, to let them know that they can experience their dreams, can set significant goals and be in a position to lead ll of us to future progress in exploration, discovery and fun. By this statement we can determine: Vision Affordable space travel to inspire the youth Mission Virgin Galactic mission is to democratize space, eventually making comercial space travel affordable and accessible to all Objectives – Create and Develop new space travel reusable technology in order to decrease costs – Provide na ultimate space travel experience – Be a pioneer in the space tourism industry Table 4 – Virgin Galactic Vision Mission and Objectives Virgin Galactic’s Products-Markets Strategy Virgin Galactic’s present services, at least for today, only have the possibility of suborbital flights for tourists, which the clients can be either individuals or corporations for events. These flights have also been used for scientific investigations experiments in suborbital conditions as well as small payload delivery, such as small satellites (as small as ldm2) in low orbits.Similarly to the parent company, in the following table it was recreated the Ansoff model applied to Virgin Galactic, considering recent trends and possible future product/sen,’ice uses. present Space Tourism for suborbital flights for individuals and corporations. Top of the line facilities for rocket launches and vehicle testing Space Tourism for orbital and interplane flights for individuals and corporations Rocket launches Satelite Delivery for multiple purposes (military, comunications, weather, scientific) Orbital hotel Table 5 – Virgin Galactic Ansoff Matrix 4 Spacecraft Design Spaceship Company Components Production Differentiation Virgin Galactic’s is developing a type of service that, at least Cost Leadership nowadays, isn’t provided by any other company.

There has actually High ave been six space tourists already (Exhibit 4) (besides professional pure Differentiation Differentiation w cost astronauts) were space tourists aboard Russians Soyuz missions, leadership usually staying for a period of time at the International Space Station Galactic or the late Russian space station MIR. Currently the Russian Space No Advantage pure Cost Leadership Agency is the only provider of this type of service but has limited availability, different characteristics (as it is an orbital flight and stay at the ISS), and especially the price is astronomically higher than the ne we will be paying to Virgin Galactic. Table 6 – Virgin Galactic Differentiation Virgin Galactic’s flights, cost around 1% the cost Of the Russian commercial flights and once the technical development of the aircraft is comp leted, can be scheduled several times a year and from several origin locations, although the characteristics are slightly diff erent.VG is probably facing a potential strong competitor which is developing reusable rockets capable of transporting heav y payloads into orbit at much lower rate than todays prices (at least 10%). Virgin Galactic’s Vertical Integration Strategy Virgin Galactic’s has a very deep vertical integration, as almost every step of th e process is controlled, directly or indirectly, by Virgin. At the beginning there were several companies evolved in the process but nowadays it’s almost exclusively managed by Virgin.

The Spaceship Company is the joint-venture formed by Virgin Galactic and Sca Composites with the purpose of building a reusable spacecraft capable of ma fined suborbital flights and transporting several customers at a time.

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