You are required to read the case on Richard Branson and the Virgin Group and prepare a PowerPoint presentation that addresses the following questions:
What common resources and capabilities link the separate Virgin companies?
Which business if any should Branson consider divesting? What criteria should he use in deciding what new diversification strategy to pursue?
What changes in the organisational structure and management systems of the Virgin Group would you recommend?
- The success of the organization can be traced to the aspect of organizational structure.
- The success of the organization can be traced to the aspect of organizational culture.
- The capability of Virgin to operate effectively owes much to the team’s organizational culture
- For probing the business strategy of the Virgin group, it is necessary to ask about the resources.
- The resources should be similar for the different companies of Virgin group.
- The two key resources are the brand ‘Virgin’ and Richard Branson himself.
- Brand acknowledgement is considered being a key resource
- One of the common resources is finance.
- Financial standing of quick accessibility is not occurring
- Different financial years are followed by some organizations(Johnson 2014)
- In late 2014, the revenue of the Virgin group was £15bn.
- Only sixty organizations under the subsidiaries did the using of the Virgin name (Johnson 2014)
- It is necessary to note the revenue source of organizations will not include sales based profit
- Another common resource is considered being innovation
- Use of the VRIO (Value, Rarity, Imitable , Organization) evaluation is done (Lechner 2017)
- Advanced knowledge will be received regarding product value.
- Human resources is another key resource
- It links separate Virgin companies
- Hiring of efficient managers are being done
- Fair treatment is received by them by feeling valued and having satisfaction
- Major ability is varied organizational management style
- Management refers to its internal operations
- Management also deals with the external stakeholders (Johnson 2014)
- A hierarchical structure is being followed within the different companies under Virgin group
- Effective customer service is considered being the means to survival.
- Virgin group is constantly keeping up with the present requirements and demands (Lechner 2017).
- Actualization of customer needs should be ensured
- Virgin group is famous for its public relations
- Product value as well as service value is considered crucial
- Richard Branson makes an entry to a market having demand
- Blue ocean strategy is functioning effectively to gain competitive advantage (Johnson 2014)
- Separate companies are having distinct capabilities
Discussion on business that needs to be divested
- Divestment is required for businesses performing poorly
- Better information regarding the company’s financial performance cannot be actualized (Johnson 2014)
- Performances of the current scenario as well as of the past are not considered being a better guide for future potential (Lechner 2017)
- The attributes of the business should be considered
- There is a list of strategic attributes relating to the types of businesses for building the competing advantages (Chen 2015)
- This will include the consumer businesses and start-up businesses
- Virgin is required appreciating the limits relating to brand appeal
- Another major criteria is considered being industry attractiveness (Chen 2015)
- The aspect of innovation, brand extension, internal labour market and key resources are also to be considered
- Factors concerned with the content of business portfolio focuses attention on identifying the business model (Goetsch 2014)
- The probable alternatives will include an organization of brand licensing, an organization of venture capital and a diversified corporation
- The organization’s success can also be traced to the organizational structure and culture. (Ganter 2014)
- Virgin’s capability to function effectively owes much to the team’s organizational culture
- The staffs of the organization are motivated for developing business ideas regarding new businesses
- ‘Virgin Bride’ was originally the brain child of a Virgin Atlantic staff.
- Staffs are having stakes in the group (Ganter 2014).
- Staffs are striving to make the organizations achieve success.
Changes in the organizational structure
- To identify the present structural aspect of the Virgin group.
- To have very less in the means of formal structural aspect
- The operating organizations are connected by a number of holding organizations (Ganter 2014)
- There is no clarity who is having the ownership of the Virgin trademark
- At minimum, the brand is required to receive protection
- Ensuring steadiness within the image that the Virgin brand is projecting (Slater 2014).
- There is limitation of financial data
- There is financial instability regarding the Virgin group (Camison 2014)
- Each organization is financed in an independent manner (Peppard 2016)
Changes in management system
- Only Branson does the exercising of an official management control (Barnett 2015).
- He is advising each company board regarding appointments
- He is identifying and advising on matters having inter-organizational coordination (McGrath 2013)
- It is required finding a new source in respect of financing.
- The status quo of Virgin has to be analyzed (Grant2016)
- There occurs centralization of the senior management (Pisano 2015)
- The means to motivate, the increased work level, the huge deal of accountability and employee freedom should be considered
- The recommendations in the management system does the centralization of the senior management
- There is a systematic method to do the managing of the Virgin group
- A list of strategic attributes are there in relation to the different kinds of businesses
- These criteria will rule out the rail services, cola drinks, designer clothes and toiletries
- There will also be the ruling out of the financial services.
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