The Corporate Rationale Of The Virgin Group Marketing Essay

The Corporate Rationale Of The thoroughgoing(a) grouping Marketing endeavorRichard Branson,fo to a lower place of sodding(a) and is considered to be the single most important ingredient to e real last(predicate) the successes that has been reaped.This case study examines the complete(a) convocation unified system and it identities the affinitys inwardly the unadulterated congregation. utter(a)es observe make senseing activities and qualities atomic number 18 discussed.The thoroughgoing(a) base is comprised of m whole another(prenominal) contrary assorted mixes of billetes.The virtuous pigeonholing is diversified into 200 backupes and it has a flick in any pie. Looking at the case the overall incarnate rule is simply a ejection of Richards own philosophy and his personal persona that is revered and became respected by the popular.Richards high profile allowed the sodding(a) imperfection represent to be the far most important addition to the lodge. o n the whole the employmentes in the consummate(a) concourse atomic number 18 strategicalally targeted towards a five pillar empire that Richard created. These pillars are travel, leisure, moblie phones, entertainment, retail and personal finance. All the line of businesss in spite of appearance the empire all the managers to arrive at freedom to make decisions singly for addition and allows them to feel the same decimal point of ownership and values.Richard Branson, founder of staring(a) in 1970 is in the authors opinion the single most important reason to all the success that has been reaped up-to-date. The incorporate rationale is simply a projection of Richard Brandons own personal philosophy, which he has come ind into the structure of corporate rational. The complete(a) congregation is comprised with many assorted mix of businesses.(Rob Abdul, 30/01/02)Corporate rationale is the mode in which a corporate name envisages the way that it female genital organ ad d value to its strategic business units. The virgin bases rationale is to diversity into as many foodstuffs feasible, and extend the perfect(a) crisscross trope further at a low cost where summit could be relied upon to reduce barriers to submission into static grocerys. The following will be discussed below.The thoroughgoing(a) Groups rationale is to panopticn into as many commercializes that are feasible.They want to extend the virginal blemish spot further at a low cost where stature could be relied upon to help reduce the barriers for en undertake into a static market. The arrant(a) Group looks for a challenge in e precise gauge and maneuvers to providing breach quality products than the competitors do. The double-dyed(a) Group aims at entering a market that is exempt in the growth phase. (Rob Abdul, 30/01/02)The sodding(a) Group sees itself as a restructurer, this means that it has low central be due to comparatively small corporate centre, with fairly minimal involvement at business level. However they vary from the portfolio managers because they also set ab start trying to let on restructuring opportunities within their businesses and run through the skills and expertise in club to intervene and introduce these changes where necessary. ( Jenn,2008)The complete(a) Group has a wide position of strategic business units about two hundred ranging from airways to drinks, and makeup to publishing. complete(a)s corporate rationale is that they try to enter static market, in which thither are few competitors and where consumers do not get value for money.The virtuous Group enters these markets that are still in the growth horizontal sur hardiness and to try and shake them up, for pillowcase they did this with Virgin Airways and Virgin Cola.By entering the market that is still in its growth stage and has few competitors Virgin managed to produce the product or avail for a slightly lower price than all other competitors within the market then they should , along with their strong Virgin brand hang. Virgin Group gained a big market percent fairly readily because they had lower prices than everyone else.This is a good way in which to enter a market because it surprises the other competitors who may have become too flourishing in this monopolistic market, and has a potentially huge initial gain. development the surprise tactic ensures that the other market leaders will not expected your move and result in a slow chemical reaction , for fashion model when Virgin entered the airways market, the British Airways had not anticipated them as aspiration and so were not prepared to be able to cut costs and compete. So Virgin Airways gained a big share of the market very quickly.Excellent watchfulness practices has also been refer to as a major strength of this group, and is there for one of the most significant components of its corporate rationale. The Virgin Group corporate rationale was also diversify i nto as many markets that were feasible and extend the Virgin brand name at a low cost. The Virgin Group looked for a challenge in every imagine and aimed at providing fall in quality products to their customers and better than their competitors.The Virgin Group corporate rationale was to sacrifice their short- marches profits in order to gain a longer-term growth and therefore they used an independent business level decision making method. This corporate rationale allows the managers to make decisions several(prenominal)ly for growth and feel the same degree ownership and values that any other manager would feel in the Virgin Group. (Rob Abdul,30/01/02)Virgins rationale for elaborateness was based on fierce external diversification strategy and Richards constant quantity need to be creative in his approaches to new challenges. For Richard the brand is very important and is an asset. The ultimate objective is to have an established global name and therefore the Virgin Group needs to have a piece of karyon businesses with global potential, with expansion this can be achieved..Are there any relationships of a strategic nature between the businesses within the Virgin Group?The Virgin Group is formed by various strategic business units (SBU). A strategic business unit is a take leave of an organization for which there is a distinct external market for goods or services that is diametrical from another SBU. (Rob Abdul, 30/01/02) Basically, there are 56 strategic business units in the Virgin Group. For example, there are Virgin Travel and Virgin Trading in the Virgin Group.As antecedently mentioned all the businesses in the Virgin Group are strategically targeted towards a five pillar empire system that Richard created. At the heart of Virgins core strategy is to develop the five pillars of the business empire which includes travel, leisure, mobile phones, and entertainment, retailing and personal finances. Looking at the diagram below it shows that all the ve ntures have the same brand name.The Virgin GroupFigure 1, The Virgin GroupAs this diagram shows that the brand name is the of import strategic relationship and this creates a strong acknowledgement from customers. Giving a venture the name Virgin sends out a message to the customers. The brand is associated with the words fun, sophisticated and daring. This can result in transfers of all trade and promotional activities up to the present for the specific venture respectively. (Rob Abdul, 30/01/02)The Virgin Travel consists of Virgin Atlantic, Virgin Holidays, Virgin Aviation and Virgin Balloon. The Virgin Trading consists of Virgin Megastores, Virgin Enterprises, Virgin Clubs and Virgin Cosmetics. Several strategic relationships exist within the Virgin Group. One of the most recent of these strategic relationships involves it convolution to customers of digital and mobile phone services as hygienic as wideband meshwork service.Virgin Digital UK laissez passers digital music to a wide variety of customers in mediums that are compatible with a wide range of software and digital hardware. The conjunction boasts a high preparation for this market as it has deep roots in the music application, beginning with its insert company Virgin Records, because of Virgins Records previous ownership and effectives to many music tracks the company has benefited by it having already at its disposal thousands of tracks to make available to the public (Baker Capital, 2005)This is the partnership involved with the mobile phone service company under the Virgin Label. Downloading music to mobile phones is an advantage that can be offered to Virgin mobile customers as an incentive to subscribe or switch to Virgin mobile service providers. This is also an advantage for the Virgin broadband provider, as it allows the Group to further integrate its digital services to include internet service and offer such packages and exclusive deals that have the potential to pull in ones horns even more customers. (Marivic Butod, 2007)Another strategic relationship exists among the Virgin transportation system companies. The Group of airlines (Virgin Atlantic, Virgin Galactic) have the distinction of offering the lowest fares for packages in the Atlantic and other parts of the world. The ability to offer flights to and from more unknown quantity and less-travelled destinations is granted to Virgin because of partnership between and among the virgin airline companies of the different regions.Furthermore, the benefit is extended by the existence of a partnership with Virgin data track that offers extended service via railway farther into more unapproachable regions of the European continent. The Virgin Group tries to create and grow relationships with directors, managers and pilots within Virgin Galactic and all the business in the Virgin Group strategically targeted towards travel, leisure, mobile phones, entertainment retailing and personal finance.All the busine sses within the Virgin Empire allow the managers to make decisions independently and this allows them to feel the same degree of ownership and values that any other manager. Businesses were ring-fenced in order for the assets not to be switched between companies in the Virgin Group and if any company became too large another company would be put in its place.The name Virgin became synonymous with Richard Bransons name and this key psychological strategy helps with marketing and promotions because this at the end of the day helps them expand and get well known. Therefore many businesses outside the Virgin Group have shown their elicit though sound out ventures as the Virgin brand name is suitable well known.Does the Virgin Group, as a corporate parent, add value to its businesses? If so how?Corporate parenting places collective responsibility on local regimen to achieve good parenting for all children in their care. It requires ownership and leadership at a senior level, this inc ludes all elected members. They make sure all councillors in your council understand their corporate parenting responsibilities and are committed to fulfilling them. (Marivic Butod, 2007)The Virgin Group as a corporate parent values all its businesses. The Virgin Group achieves value by intellectual the institutionalised markets. The Virgins management aggroup has done a good job in identifying satis occurrenceion in the market. The management team expertise and experience matched with the strategy allows the company to offer more for less.The Virgin group also added value to its businesses with the brand name and used the brand name to help overcome barriers to entry. The Virgin brand name is a consumers supporter and as mention before the brand is much respected with the British public. The Virgin Group at a corporate parent also helps with limiting the risks for the other businesses joining in the joint venture.Any company, corporation or organisation that is in a joint venture with the Virgin Group had the benefits of limiting the risks associated in the market place. The other value that the Virgin Group contributes as a corporate parent is that they do not restrict the management teams. The Virgin Group has a flat management structure which helps encourage asylum, flexibility and it can help promote the values of shared ownership and responsibilities. (Rob Abdul, 30/01/02)The Virgin Group ensures that innovation is amongst the staff members and helps ensure that the individuals are successful in their careers. The Virgin Group acquires partners that have the same mind set for the venture and they ensure that they match their ability to be innovative and create differentiation for their particular company. These innovative thoughts and ideas are then applied directly into the business and therefore helping it to be successful.Virgin Mobile is an example of this innovation as it formulated a partnership with the existing telecommunications operators to retail in mobile services. The virgin Group and their management team were successful at identifying that the agreement was in the handling of the network management. Due to their innovation of their joint ventures and networking it promoted a unique service to the market.Virgin as a corporate parent added workable value as well to its businesses by expend and evolution the employees and real expertise. With all the joint ventures that the Virgin Group have made they did indeed limit well-nigh risks but they also contradicted some signals to the customers by having so many businesses and if the one performed badly the other recess businesses with the brand name stand a chance on been labeled as the same. (Rob Abdul, 30/01/02)In a sense the Virgin Group is a community, every Small Business Unit in it share ideas, values, interests, goals, and the most important, they share the same brand. Therefore the Virgin Group as a corporate parent have set standards and helped the business es know precisely how to create value to the customers and how to ensure that the brand name is upheld.The Virgin Group as a corporate parent does value to its businesses and has achieved it though understanding the institutionalised markets, using the Virgin band name to overcome barriers to entry, it curb risks by going into joint ventures with different companies, it does not restrict the management team and the Virgin Group shows innovation.Virgins management team have been doing very well when it comes to identifying a market that is still in its growth stage and markets with very little competitors. It is this expertise and experience that is coupled with the strategy to offer more to the customers for less and it has helped the Virgin Group plough though content business industries.As a corporate parent virgins brand name has helped to overcome barriers to entry. The fact the brand name is well established and authentic by the public it has helped with getting into certa in markets and to expand into areas where the Virgin Group believes it can make a difference and offering something different to the consumers and a good price.Virgin has limited the risks by going into joint ventures and any company that goes into a joint venture with Virgin also benefits the limitations of risks in the market place. As a corporate parent it helps the new venture as one have limited risks as it is under a well known brand of standards and low cost. It also encourages the management teams to be independent and make choices that will better the growth of the company.Virgins corporate rationale to innovation allows the staff members to be successful in their careers. The Groups acquires partners that think similarly and that match their abilities to innovation and differentiation. This should then be applied to the whole business. For example Virgin Mobile formulated a partnership with existing telecommunications operators to retail in the mobile services. This innov ation leads them to promote unique services and better offers to the customers.What are the primary(prenominal) issues facing the Virgin Group and how should they be tackled?The Virgin group of companies was faced with two main issues. In the short term was the groups financial situation. A number of Virgins businesses were experiencing substantial negative cash flows. contempt plans to generate funds this still left poorly performing companies such as Virgin Express, Virgin Megastores, and Virgin Money, where offloading Bransons equity stakes would arise more difficult.Looking at virgin Atlantic which is an airline assiduity it indicates that the Virgin Group relied on this airline to make the profits and when deregulation change magnitude the competition within the market place caused Virgin Atlantic to make some Losses. According to the Virgin Rail the biggest business that they face is that the uses of this form of transport is voted as the unpopular rail operator and the fact that Virgins rail statistics were ranked low.Virgin Groups brand name was slowly chipped outdoor(a) by the press due to their reputation of the rail transport. The Virgin Group, been a larger empire, faces publicity blindly due to the fact if things were going right all is good, but then all it takes is a handful of businesses in the empire to either experience unavoidable consequences. Virgin Atlantic is an example of this as when there was bad services provided and with the bad publicity of the Virgin Rail it caused a disastrous effect opn the other areas within the empire. (Marivic Butod, 2007)Virgin name became diluted and doing analysis of the environment must be lettered and that is what they did after these events occurred. The public is sensitive and as a corporate parent Virgin can add value to its businesses by investing and developing real expertise. Therefore Virgin should change its policy to accommodate both(prenominal) independent and joint ventures to depose on short term profits.The main issues facing the Virgin Group is Virgin Atlantic and virgin Rail. Virgin Atlantic is the airline industry and like any other industry it id cyclic. This proved to be dangerous in 2001 because the Virgin Group take careed to rely entirely on the profits of Virgin Atlantic. To make matters worse deregulations increased the competition in the market place and this caused all most competitors were experiencing losses.The biggest problem faced by the Virgin Group though was the strategic Rail Authority review in 2000 because it was the most public. Virgin Rail was voted as the unpopular rail operator and it was ranked 23rd and 24th out of 25 operators. This was a major issue as it damaged a part of the Virgin reputation. That was not bad until the press slowly chipped at the company. (Marivic Butod, 2007)CONCLUSIONThe key emphasis on this case was innovation and differentiation. The aim was to offer more for less and that each company was truly a Virgin i n its own field. Although to some this notion may seem a bit too good to be true, yet no one can deny that the virgin group is one of the UKs largest close companies. Success was the result of Richard Bransons philosophy and approach in his company.By using effective leadership, giving motivation, employing effective communication, interaction, job redesign, building trust and respect, it is very clear that the company has been performing well in various industries that it manages. The main aspirations of the Virgin Group of the companys key stakeholders is to continue expanding operations and various outside(a) business locations, new kind of business ventures and to enhance the reputation of the brand.Virgins marketing is customer focused and is apparent that every major and minor decisions and plans created are based on the result of researches conducted and founded on the customers. Furthermore the services and products are something better and more valuable. Virgin bases its pricing strategy on several key trends that shape the global marketplace.