Virgin

Value-Based Management FCEE-UCP

Corporate & Business Strategies

Virgin is a British organization that started as a mail order records venture. Created in 1970 by Richard Branson, it rapidly grew into a store and, on a later stage, into a recording studio company, signing names like Mike Oldfield and The Sex Pistols internally, or Phil Collins and Boy George’s Culture Club more abroad. By 1983, Branson managed to generate pre-tax profits of £2M on revenues above the £50M. The creation of the Virgin Group as we know today started after those 13 years. From that year on Branson started to gradually invest in every market where he could see an opportunity to create competitive advantage and to build the Virgin brand. After 30 years, the core business areas of Virgin are travelling, entertainment and lifestyle. The group’s major companies are on the most varied sectors which include mobile telephones, transportation, financial services, media, fitness and beverages. All together, Virgin has more than 400 companies all around the world.

Diversification:

The Virgin Group of Companies (only some of them are included):

As we can observe Virgin follows a corporate strategy that emphasizes diversification. Due to this factor, we can find unrelated diversification, for example, when Virgin after making Manuel Coimbra 152110069

Value-Based Management FCEE-UCP success with the recording studio entered in the airlines business, or related diversification, for example, when Virgin Broadcasting was created to develop Virgin’s radio and TV, a business strongly related with the recording studio and where both commercial and technological synergies could be obtained. One important characteristic of all Virgin’s new ventures is that the brand is always present. We can find products and services as different as airplanes, wines or financial services with the prefix Virgin attached. Although if it is one advantage while promoting the product associated with a well-known...