The Virgin Group in 2015 Case Solution
1.What common resources & capabilities link the separate Virgin companies?
The company was fully diversified due to a varying range of business lines and investments in different businesses. But there were-still few resources that create a link among virgin companies which includes Virgin name, Richard Branson, Finances, Innovation, and Human Resource.
Virgin was a brand and its companies were linked with each other through a network of parent and subsidiary relations. Virgin companies were operating based on holding companies. Whereas in few companies virgin company was having minority stakes. Virgin companies were linked because of their brand name.
Richard Bronson was a very important person for virgin companies because he was one of the common resources which virgin companies have. He was the one who was behind this wide range of a diversified group of companies. He had a very good reputation as an investor and an entrepreneur. He was the one who knows when to jump in the market with a new business or strategy and when to back off to prevent any loss. He was one resource that was linking the Virgin companies.
Considering the financial reports of the company, it clearly stated in the case that “. No consolidated accounts were available for the group as a whole and track financial results for individual companies was complicated” This depicts that a virgin group of companies were financially independent of each other. The loss or profit of one company cannot counter balance the other company’s profit or loss. So the virgin group was not only getting their revenues from sales but also from the investments and royalties.
Richard Bronson believes in continuous improvement in product and service quality. He continuously strives to re-engineer the products, improve the usability of the product, and integrate new technology into the business to compete in the market because he believes that change with time is necessary. It was his working style that was followed by every parent and subsidiary company and this leadership style was linking the virgin group of companies.
Bronson was a great businessman and entrepreneur He was leading the company management, he hired the managers and provided them with a positive environment where they felt respected. Bronson was also a good leader he trained his Managers well and shared his experience with managers. He encourages his employees to give their best.
Now after resources if we talk about the capabilities which link Virgin companies were Management, customer relationship, and value.
Virgin companies had separate management for each company no matter if its internal issues or external issues which were like the strength of the virgin companies because in this case, one company failure will not affect the success of other company. Branson was a wise man he made hierarchies and assigned the authorities and duties. This autonomy to their managers helped them to move in the right direction with successful stories. The companies were relying on the capabilities of their leaders to hunt the opportunities and face the threats for the company.
The quality of virgin companies was their continuous improvement in product and services to provide quality service to their customers. They were making continuous efforts to meet the customers’ needs. The virgin was famous for its quality service and good relations with customers.
Value of product or service is very essential for its success. Branson was the person who knew that if there is potential then jump into the market and take full advantage by providing quality product or service but if it’s not working then pull it off and find another way out. Branson was following the blue ocean strategy and it ensured Branson to compete in the competitive market with competitors. The value of the company and innovation is the capability of the virgin companies.
2. How could they be said to be a good ‘fit’ with the external environment in the key strategic investments?
As compared to the general environment, the Industry environment has a direct effect on the competitiveness of the company. In the case of the virgin, the external factor was somehow favorable because Branson was wise enough to mold the situations according tothe favorable business environment. If we talk In the PEST Analysis…………………….
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