Essay about Virgin Corporate Strategy

1824 Words Apr 23rd, 2010 8 Pages
VIRGIN’S GROUP CORPORATE STRATEGY
DIVERSIFICATION

1. Introduction

The Virgin Group is one of Britain’s biggest and successful empires in the 21st century. The company has successfully incorporated a great number of diverse industries under the Virgin brand. This includes travel, mobile, financial services, leisure, cosmetics, retail, and music businesses. Virgin has been able to dominate the British market and has therefore continued to rapidly expand into other regions such as the United States, Canada and Australia. The enterprise was founded by Sir Richard Branson in 1970 as a simple mail-order record retailer and has grown into one of the most prosperous business empires in the business world.
To date, the Virgin Group has
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- Offensive reasons may be getting into new positions, taking opportunities that offers greater profitability than expansion opportunities, or using retained cash that exceeds total expansion needs.
Instead of focusing in increasing the main competencies of their initial core business Virgin focused in diversifying risk acquiring new skills, new techniques and new facilities hence through an offensive strategy. Therefore, they followed not the internal development of new products or markets or acquisition of new firms but alliance or joint ventures with a complementary company which could enable them to operate in a new and unrelated market based on a set of attributes and values rather than a market sector. It was about being the consumer's champion! We can call this type of strategy as Conglomerate diversification (or lateral diversification).
The corporate strategy of the Virgin Group is to operate like a venture capital firm based on the Virgin brand. This strategy involves non-related diversification at the individual business unit level. By leveraging on the Virgin Brand which has established prominence in the minds of consumers, Virgin is able to enter new business areas shaking up existing orders. Branson’s has entered in a business after another in which he perceived a set of consumers that

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