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Virgin Group Case

Essay by   •  March 23, 2013  •  Case Study  •  881 Words (4 Pages)  •  1,498 Views

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Assessment: The primary issue in the case is which sectors in which ways should Virgin Group invest into. They have over 40 years of business experience and they have faced with many different scenarios since the beginning. Some were successful, and some were not. Now they need to make a decision if health & wellness, and financial service sectors are the best options for them to invest.

Virgin Group adds value for its' customers by differentiating the Virgin brand with innovations, willingness to challenge, and high quality services. Value adding achieved by understanding of institutionalized markets by the top management team, using Virgin brand name to overcome barriers to entry, a flat management structure provides flexibility, shared ownership, and responsibility, Group's strategy to partner with companies who can match their ability to innovate and differentiate their products. Virgin has been the most admired brand in UK. Even though they had tough financial times in the past, now being one of the biggest private companies in UK their financial situation is in good standing. Of course they are facing with some financial barriers because of the limitations of being a private company while they are trying to expand as well. Virgin Group's business model is "more customer value for the money through innovations and better quality services"

Analysis: The key to the successful expansion of the group lies in founding a strong identity for the brand name, and creating interest from any business initiative. Virgin Group usually focuses on service businesses. They diversified their business mostly in related diversification by leveraging their core competencies. They tried to find areas and businesses, which they thought consumers are being underserved and then invest in that area t differentiate themselves through their business model. Since they diversified their business into many different segments, it was not possible for them to take advantage of deriving cost savings. However they took great advantage of enhancing revenue & differentiation. Since they are mostly in service business, and were not successful in merchandise business in the past, it is difficult for them to use any market power as a related diversification strategy. However they can try to enhance revenues by advertising their different services in similar markets. For example promoting a personal health insurance for their gym members.

They have been successfully using unrelated diversification advantages. Corporate Parenting is one of the key success points for Virgin Group. By providing competent central functions to their partners, and even to the companies that they have no equity, helped them to keep their "Virgin" brand as one of the most positive recognized brands. Especially for their service business it is very important to provide human resource and procurement services that are



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