Parenting Strategy - Virgin Group

Termpaper. Strategic management for Incomings

Parenting Strategy- Virgin group

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Handed in at the:

ZHAW School of Management and Law

Do to:

Friday, 8th of Mai 2009

Table of contents

Corporate rationale…………………………………………………. 3

1. Strategic natures between businesses ………………………… 3

2. Value adding factors …………………………………………….. 4

3. Issues faced and how to tackle them …………………………… 5

Source:

Paper Virgin group: Strategic directions and corporate level strategy Chapter 7

1. Corporate Rationale

The Virgin Group is a parental developer because of mainly two reasons. Firstly, as the envisioning of value-adding activities, the Virgin Group is developing a strategic mission, and provides clear external image.

The group provides the mission that the Virgin Group challenges the institutionalized market to give good value to customer by innovative way and this mission penetrates all businesses of the group. In addition, the group creates strong image by using the name of the brand “Virgin”.

According to McQuade, Branson, the chairman of the group, said ”the brand is the single most important asset that we have” and Director of Corporate Affairs for Virgin, Will Whitehorn said, “ at Virgin we know what the brand means and when we put our name on something we are making a promise.”

The group expands by adding its brand name which promises the innovativeness and good value on each business the group enters.

Secondly, the Virgin Group doesn’t develop strategic capabilities and achieves synergies. The group organizes many kinds of businesses which are not related with each other. Because their value-adding activity is focusing on the envisioning by using the brand name of Virgin which create strong image, the group doesn’t manage strategic capabilities or synergies among its business units.

To sum up the virgin group full fills the task of a parental manager by identifying and acquiring undervalued businesses...