The Virgin Group in 2012 - Case Study Example

The Virgin Group in The Virgin Group in The virgin group is one among the principal companies established in theunited kingdom in the year 1970 by Sir Richard Branson and has diversified into many businesses such as the mobile technology, transportation, financial services and retailing. The company has expanded and moved to many parts of the world establishing 200 branded companies and employing over 50000 people in about 29 countries. The company operates at a budget of ten billion Euros yearly with its UK branch rating as the best among all its branches. Branson has been very inspiration towards the achievement of the companies’ mission which is being a shopper victor through delivery of brand values such as superior quality products dazzling customer service and competitiveness. The vision of the organization is implementing its plan of global presence in travel, entertainment, and mobile communications such that their involvement in this existing markets benefits both the organization and the consumers in general The history of the company dates back in 1968 while Branson was a student and he published a magazine which displayed his sub sequential entrepreneurial features. His magazine targeted the young generation appealing to its optimism, irreverence and its interest in fashion, music and avant-grade culture. He later ventured into mail-order record business in a street in London and in 1984 he ventured into airline business( Rosenberg, 2010). His private company expanded in internal cash flows and external financing with his new businesses concentrated around travel, holidays, retailing, IT, deregulation and privitasation and international expansion. With his ample knowledge in business, Richard amplified consciousness in matters of the business relationship with environment, ethics and the social role pressured his business to creating a project aware design to widen reliable business operations. The management in the virgin company has been in the forefront in contributing to issues of its relationship with culture ,ethics and the social role by participating in initiatives and creating awareness to its stakeholders. Branson believes that employees are the holding pillar to the business and attending to their needs helps the feel the sense of belonging to the company and hence take responsibility in running the company smoothly. The company provides spotless, vigorous and a secure working environment for its workers with reasonable terms and conditions of operation(Great Britain press,2013). This motivates the employees to work harder and improve their skills as they evolve professionally to better individuals in terms of knowledge and productivity. Second from the employees the organization adores its stakeholders who play an important role achieving the success of the company and in 2006, the group defines a code of conduct covering human rights environmental concern and business ethics. The virgin group participates in 3 non profit projects which are virgin earth; virgin green fund and virgin unite(Mallory Russell,2012). The virgin earth initiative provided a $25million prize of any person or group that will come up with a design of removing the greenhouse gases that causes climate instability all over the world. The virgin green fund initiative on the other hand focuses in investing in companies that produce renewable energy which conserves the environment by reducing the emulsion of poisonous gases into the atmosphere. He virgin unite initiative that has been a success in South Africa in dealing with HIV/AIDS unites entrepreneurs and distributes their funds in aim of resoling social and environmental issues. PEST analysis framework has been instrumental in success of the virgin group. Before considering a new move, the organizations looks at the political stability of the area due to the negative effects it can lead to. The organization has closed down some of its branches that could not stand due to political unrest in countries such as Saudi Arabia. The economic situation in u has given the group ample time in its growth and development of strategic plans and since most of the branches are located offshore they avoid many taxation fees. The separate companies are linked such that they share an international market although the currency fluctuations affect profitability. Socially, the virgin group has developed a firm foundation among the people due to its energetic way of life which creates good opportunities for development in virgin travel, healthcare and its associated businesses. Richard’s promotion thoughts have made the company aggressive and hence it gets a lot of media coverage which in turn provides public interest. Technologically, they have employed the ecommerce development which provides many distribution channels and to fight back the strong competition in media and telecommunication they have introduced new services and products( Branson & McLimore,2013). Despite the companies’ growth it experienced certain drawbacks in its venture into new markets and new products and it is not a surprise that they have had a few failures under their belt. Failures of Richard began during his first steps into success when he wrote the magazine at school and it didn’t run as he hoped and he ventured into the mail order business. During the companies operation, the company ventured into the drinks industry introducing a product they named as virgin cola that was almost similar t the trending coca-cola. This is the most highly publicized failure in the entire companies’ life and Branson himself names it as his favorite failure. The business taught him the virtue of not underestimating the power of leading soft-drink makers and Branson says that he will never make the mistake again(Robelt, 2012). After the failure in the virgin cola product, he tried the virgin vodka product which never proved any different and it failed as a result of low sales. The virgin group also failed in their venture into virgin brides business where they produced wedding dresses. The management failed to plan for the business well and they opened many branches in England before gaining enough customers to maintain the in business. Their venture was short-lived and they stopped taking orders in 2007 after suffering losses in the highly competitive bridal market(Anonymous 2012). The company also suffered a blow of failure in their venture into the virgin vie business which proved a disaster to the management in the cosmetics industry. They experienced disappointing sales and the brand focused on direct selling and become virgin vie at home rather than the original virgin vie that sold the cosmetics online at virgin stores and at home parties. Another significant failure in the business came when Branson launched the Virgin clothing collection that sold clothes for men and women and also foot ware. The hired an online agency to work in collaboration with them but the brand folded in 2000 with losses to its share holders. Despite the many failures that the company has experienced, the situation is still under control as the company remains among the most successful in United Kingdom. I would recommend that the management of the organization implements the strategy of specialization so that they can avoid venturing into new businesses and failing in the process. Another important strategy could be tradeoff in the ventures that have proved less profitable to the organization. Specializing in a few products will lead to lot improvements on the commodity and this will influence the customers to stick on the product and hence the organization will enjoy the benefits of customer loyalty in the long run. Tradeoff in business such as the virgin cola and the virgin vodka will save the company a lot of money that they would have instead used to compete against giants in the drinks industry. The management should ensure that they do a lot of research in any venture they want to get into so that they have enough knowledge to predict accurately on the success probability of the company. I would recommend that the organization employs more competent managers in their system so that they can implement their knowledge to avoid cases of wrong investments and taking of unnecessary risks through poor risk management strategies. The organization should allow the branches to run on their own as individual companies so that they will have the freedom of socialization depending on the market structure they are in. References Anonymous (2012, July 15). A Company Profile: Virgin - New Orleans celebrity style | Examiner.com. Retrieved April 1, 2012, from http://www.examiner.com/article/a-company-profile-virgin Branson, R., & McLimore, D. (2013). Virgin rebel: Richard Branson in his own words. Chicago: Agate B2. Great Britain press. (2013). Rail 2020: Seventh report of session 2012-13. London: Stationery Office. Mallory Russell (2012, April 22). Richard Branson Fails: Virgin Companies That Went Bust - Business Insider. Retrieved April 1, 2014, from http://www.businessinsider.com/richard-branson-fails-virgin-companies-that-went-bust-2012-4?op=1#!CdPhM Robelt ,M ( 2012).the virgin group 2012. Oxford university press.Oxford Rosenberg, J. M. (2010). The concise encyclopedia of the great recession, 2007-2010. Lanham [Md.: Scarecrow Press. Read More