The Virgin Group

subject Type Homework Help
subject Pages 4
subject Words 1502
subject School N/A
subject Course N/A

Unlock document.

This document is partially blurred.
Unlock all pages and 1 million more documents.
Get Access
page-pf1
The Virgin Group
1) What is the corporate rationale of the Virgin Group?
Corporate rational is the way in which a corporate parent envisages the way that it can add
value to its strategic business units. The Virgin Group sees itself as a restructurer; this
means that it has low central costs due to relatively small corporate center, with fairly
minimal involvement at business level. However they vary from the portfolio managers
because they also set about trying to identify restructuring opportunities within their
businesses and have the skills and expertise in order to intervene and introduce these
changes where necessary. The Virgin Group have a huge range of about two hundred
strategic business units ranging from airways to cola, and makeup to publishing. Part of
Virgins corporate rationale is that it tries to invade static markets in which there are few
competitors and where consumers dont get value for money because of this. The Virgin
Group enters these markets to try and shake them up, for example they did this with Virgin
Airways and Virgin Cola. By doing this if they manage to produce the product or service
for a slightly lower price than all other competitors within the market then they should,
along with their strong Virgin brand name, gain a big market share fairly quickly because
they have undercut everyone else. This is a good way in which to enter a market because it
uses the shock tactic to the other competitors who may have become too comfortable in
this monopolistic market, and has potentially huge initial gains. By using this shock tactic,
the other market leaders wont have anticipated it and will be slower to respond, for
example when Virgin entered the airways market, British Airways hadnt anticipated them
as competition and so were not prepared to be able to cut costs and compete. So Virgin
Airways gained a big share of the market very quickly.
2) Are there any relationships of a strategic nature between businesses within the Virgin
portfolio?
I think that although The Virgin Group seems to have many businesses in as many
different fields, there are probably some strategic relationships between the business units.
With these strategic relationships Virgin can achieve some benefits for example,
economies of scale when buying supplies or with their logistics, more control over the
market, access to more consumer information across several related companies or by
making it easier for the corporate parent to understand and manage each strategic business
page-pf2
page-pf3
page-pf4

Trusted by Thousands of
Students

Here are what students say about us.

Copyright ©2022 All rights reserved. | CoursePaper is not sponsored or endorsed by any college or university.