Virgin Case Study

Virgin Case Study

1. What is the corporate rationale of Virgin as a group of companies?

* “Ring –fenced” businesses- lenders of one company did not have rights over another. This refers to provision of financial protection as well as on business ethics aspect (e.g. Supermarkets selling cheap CDs).

* Shakes institutionalized markets by being innovative

* From being comprised of private companies Virgin become group where some of companies are publicly listed.

2. Are there any relationships of a strategic nature between businesses within the Virgin portfolio?

* Initial idea was to be virgin in every business they enter having brand as the most important asset.

* In joint ventures Virgin provided its brand name and other partners contributed with their capital.

* “Keiretsu” organization- form of loosely linked, independent units controlled by self-managed teams that use a common brand name.

3. How does the Virgin Group, as a corporate parent, add value to its businesses?

There 3 main ways for adding value besides brand name;

a) Company’s understanding of the opportunities presented by “institutionalized” markets (market dominated by fewer players that are not provide good value to customers due to inefficiency or preoccupancy with each other)

b) Public Relations and marketing skills

c) Experience with Greenfield start-ups

4. What are the main issues facing the Virgin Group at the end of the case and how should they be tackled?

* Possible failure due to negative association of brands that failed to satisfy customers with others.

* Entrance into fuel business, that is maybe not so attached to brands