How Have Management Coped this Year with Sustainability Challenges Thrown up by a Changing Business Environment - Coursework Example

How have management coped this year with the sustainability challenges thrown up by a changing business environment? Contents Introduction 3 Businessmanagement 3 Business sustainability 4 Business environments 6 Conclusion 7 Introduction The management copes with the sustainable business environment both ecologically and economically. Virgin group faces lot of sustainability and corporate responsibility issues for operating in different sectors. Richard Branson have adopted various measures for maintaining sustainability in its operations which includes the virgin green fund, ocean elders, carbon war room, picnic green challenges, gigaton awards etc. Virgin has focused on protecting and safeguarding the business environment are by improving the aircraft carbon efficiency, maintaining of sustainable buying policy and supporting the communities at abroad and at home. The sustainability issues faced by the company are that it operates in different sectors and some of its sectors are facing loss. The sustainability program is adopted by virgin for resolving the issues related to sustainability which includes maintaining of good governance, sustainability in aviation fuels, improving the efficiency of fuel and supporting various communities. The company is facing a loss in its business. The company is required to discontinue its business in those sectors which is facing loss. Business management The issue that is faced by the company related to its business management is regarding management of the organization. Richard Branson has neglected the management structure of the company that would result in the loss of control for operating of the enterprise solely. The venture that was taken previously by consulting with the investors and the board were not in accordance with the guiding principles. Branson is very reluctant to the changes that are faced by the company. The company faces the inability of its group in systematically handling the risk and growth of the company. In order to avoid the loss or the decrease in the brand image of the company and also the brand image of Branson, the company has focused on opening a number of businesses. The unprofitable business was kept operational by the group instead of closing or discontinuing those business operations. The unprofitable business could have been easily sold or declared as bankrupt by Branson. The Virgin Group decided to sell the Virgin Records for financing in their new ventures. The main issue in its organizational structure is lack of hierarchical structure and the lack of implementation of business principles by Branson has created a problem. The companies of Virgin group ltd are making losses and underperforming. The companies under Virgin group are not public (Virgin Money Group, 2014). The companies are privately owned and financed by equity and internal cash flows. The company have faced problem in extension of its brand. The financial problem or issue that is encountered by the companies of Virgin group is it is mainly financed by external debt and through the joint venture agreements. The company faced the problem related to its cash flow. When the corporate bureaucracy of Virgin group is taken into consideration it has been observed the company does not have any particular hierarchical structure for dealing with the various issues related to promotion and marketing. The main issue that is encountered by Virgin group is its loss on Virgin Atlantic. Since the company used to completely depend on the profit that is generated from Virgin Atlantic which have encountered stiff competition due to deregulation. Another problem that is faced by Virgin group is that it is being considered as the most unpopular rail operator. The group also faced criticism due to poor or bad quality of services that is offered to its customers (Jackson, 1998). Business sustainability Virgin group have encountered a lot of issues related to maintaining of sustainability. Virgin requires very huge amount of capital for its operation. The company maintains a capital ratio that supports the business development. The high requirement of capital for the business operation increases the risk that is inherent in the strategic planning for performing or complying with the regulatory reform. The company is facing the problem of maintaining profitability in its operation. The profitability of the company is based on the performance of its Virgin Atlantic which is suffering a loss. Virgin Atlantic is facing an increase in competition due to its deregulation which affects the sustainability position of the company. The company has also encountered problem related to its rail service. The company is facing a decrease in profitability which has adversely affected its business sustainability. In order to sustain in the business environment the company is required to focus on all its business operations. Virgin group is not capable of continuing all its business lines. Therefore the company is required to discontinue its loss operating segments. Virgin has diversified its business operation in such a way that it is facing problem in controlling its diversified business operation (Dearlove, 2007). Virgin Group Ltd is inefficient to provide in depth training to its organizational members. As a result the employees of this company are not capable enough to deal with various issues and problems of the business. Therefore they fail to meet the changing needs and demands of the business. This hampers the sustainable development of Virgin Group Ltd. The company is unable to understand the present trend of the markets in which they are operating its business activities. As a result the company faces challenges in achieving its sustainable growth. The company is operating its business in a very competitive market. But it is facing strong challenges in understanding the requirements of its customers. The business policies and procedures of the company do not facilitate the company to understand the changing needs and demands of its customers (Branson, 2012). So the company faces problem in satisfying its customers. The company is facing financial crisis in many of its business units so the shareholders are not satisfied with it. They do not get their dividend on time. This factor has negatively impacted the sustainability of the company. Business environments There are many factors which influence the business environment of Virgin Group Ltd. All of these factors are explained with the help of Porter five forces and PESTEL analysis. These models help to understand several challenges which are company is facing for its changing business environment. As per Porter five force analyses the Virgin Group Ltd faces strong power of suppliers. The company cannot control the price of its fuel. As a result the firm has to agree with the fuel price which the suppliers fix. The company is not being able to manage this external issue. In the competitive industry the power of buyer is also high. This is a strong challenge for the company. As there are many companies present in the market so buyers have high bargaining power. There is no such switching cost for the passengers in this industry. So the company has to consider the buyers opinions for fixing its pricing strategies and operating its business process. Virgin Group Ltd faces little challenge regarding the threat of substitute products. Different other transport system like bus, train, airlines etc are preferred by many passengers which act as substitute threat for the company. This challenge is mainly faced by the company while doing domestic operations (Virgin, 2015). The different industry segment in which the company operates its business faces strong competition for the presence of many strong companies in UK. Virgin Group Ltd is focusing on different ways to handle the competitive environment. According to the PESTEL analysis the Virgin Group Ltd faces challenges for some political factors. The government of UK interferes in the business process of the company. Different policies of UK government affect the growth and expansion of the company. The company is presently experiencing economic challenges (Branson, 2012). The rising oil price in UK market is forcing the company to increase its transport charges. This reduces the profit of the company. With the increase of low cost airlines the customers of airlines industry are more attracted towards the low cost flights. Passengers have become very much concerned about the prices. This reduces the growth of Virgin Group Ltd. The company does not have the technology for using bio-fuel in its aircrafts. As a result the company faces major issues for establishing them as environment friendly company. The tax and trade policies of UK create many obstructions for the company in developing its business. Conclusion Virgin Group Ltd is operating its business in different industrial segments. The company faces various challenges for its management, sustainability and environmental issues. The management structure of the company is not effective enough to deal with various managerial issues of the company. The management structure of Virgin Group Ltd has neglected various important issues which have affected the business negatively. Brand values of the company have also decreased for the bad performance of the company. The company was bound to close many of its business units. Presently Virgin Group Ltd is experiencing many environmental issues which also affect its business growth and operations. The company faces strong competition from its rivals in various industry segments. Strong rules and regulation of UK makes the business process difficult for the company. The financial position of this company is bad. As a result the firm is unable to compete with other companies. References Branson. R., 2012., Like A Virgin: Secrets They Won’t Teach You at Business School. London: Random House. Branson. R., 2012., Losing My Virginity. London: Random House. Dearlove, D., 2007. Business the Richard Branson way: 10 secrets of the worlds greatest brand builder. London: John Wiley & Sons. Jackson, Tim., 1998. Richard Branson, Virgin King: inside Richard Branson’s business empire. London: Crown Publishing Group. Virgin money group. 2014. Annual report and accounts. [pdf] Available at < http://uk.virginmoney.com/virgin/investor-relations/results/virgin-money-group-annual-report-and-accounts-2014.pdf> [Accessed 29 April 2015]. Virgin., 2015. Our Story. [online] Available at < http://www.virgin.com/time-machine > [Accessed 29 April 2015]. Read More