Business Strategy of Virgin Group


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Business strategies are essential for every organization since they aid in conducting the working of the entity in an adequate manner. Through that organizational resources can also be utilized in an optimum manner (Ketzes, 2003). Thus, in such respect, a present research study has been made on Virgin Group which is a branded venture capital conglomerate with its core business areas as travel, entertainment and lifestyle. The researcher has been focusing on the core competencies and strengths of the business along with the factors that affect the business practices of Virgin Group. Furthermore, the researcher has also discussed the external and internal business environment of Virgin Group. They have formulated several strategies through which the business is entering into a diversified market place and among those strategies; a few are discussed in the present research report. Lastly, the researcher has stated resource requirements to implement a suitable strategy for the business firm.

Task 1

a) Company's background with mission, vision and core competencies

  • Company profile: Virgin Group is a multinational venture capital founded by the entrepreneurs Richard Branson and Nik Powell and the major areas of business are entertainment, travel and lifestyle. Further, the business also manages ventures in financial services, transport, health care, media and telecommunication. Virgin's businesses consist of more than 400 companies worldwide (Hunger and Wheelen, 2001). Being a private company, trade activities are managed as per business policies and frameworks.
  • Mission and Vision statement: The Company’s vision is to be the shopper victor by delivering quality products (Matthews, 2005). Further, the mission also includes value for the employees so that they can enhance the sustainability of the company. The vision of the company is to have a global presence in travel, mobile communication and entertainment areas (Simerson, 2011).
  • Goals and objectives: The aim of the business is to be the largest service provider in the area of telecommunication and entertainment. The business also aims to contribute to environmental initiatives by creating social and environmental awareness among the public and all the stakeholders. Thus, according to the business objectives, Richard Branson gives more importance to organizational values.
  • Core Competencies: Virgin Value has been integrating its core competencies into corporate culture so that internal business processes can be strengthened (Merrilees, Getz and O'Brien, 2005).

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b) Factors considered while formulating strategic plans by using the Ansoff matrix to manage strategic decision

While formulating strategic plans, Virgin Group needs to analyze the resource capability for the purpose of executing strategy in an adequate manner (Merrilees, Getz and O'Brien, 2005). Market research should be conducted at the initial stage so that competitive and other necessary factors can be analyzed. Market research could assist the business entity to formulate effectual and competitive strategy and through this, policies and business framework of other rivalries can be ascertained.

At the same time, Virgin Group is also required to consider strategic facets so that corporate objectives and long-term missions can be acquired (Atkinson, 2006). This is also vital in terms of acquiring better outputs for the overall success of the business. Employee engagement in organizational processes is also imperative because this allows the business entity to undertake crucial decisions. It has been seen that employee involvement in an organisation enhances the competency of the decision-making process which also helps in facilitating innovation and creativity to a greater extent (Matthews, 2005).

c) Effectiveness of strategic planning techniques

Strategic Planning is a comprehensive process which determines what a business should become and how it can best achieve all the defined goals (Jansson, 2008). Virgin Group emphasizes strategic planning so that future uncertainties can be reduced. With respect to that, SWOT analysis, market research and feasibility analysis can be conducted so that internal and external business environments can be ascertained. At the same time, for the present case, internal analysis is required to be conducted so that the core competencies of Virgin Group can be found. With the help of internal analysis, appropriate strategies can be formulated for more success and prosperity (Karami, 2012).

Further, Porter's five forces model can also be applied in the present situation for the purpose of identifying the level of competition prevailing in the marketplace (Ireland and, 2008). PESTLE analysis and Scenario Planning can also be adopted for the same purpose and all such techniques can assist Virgin Group to reduce business constraints and issues. Hence, all such techniques are recommended to Virgin Group for developing suitable strategic and business plans.

Task 2

a) Conducting organizational audit for the chosen organization SWOT analysis



  • Brand name in varied countries
  • Efficient distribution policy
  • Various processes to export
  • IT professionals (Kárpáti, 2001)
  • Availability of huge resources Weakness
  • Lack of supervision
  • Communication gap
  • Ineffective facilities for transportation
  • Outdated machinery
  • Lack of supervision
  • Communication gap
  • Ineffective facilities for transportation
  • Outdated machinery


  • Expand to overseas
  • It could get better deals
  • Opportunities of training
  • Can use high technology goods Threat
  • Virgin has to take care of its strong leadership for a high level of competition in future (Ketzes, 2003)
  • Government and political barriers
  • Increase in cost of operation
  • Virgin has to take care of its strong leadership for a high level of competition in future (Ketzes, 2003)
  • Government and political barriers
  • Increase in cost of operation

Porter’s analysis of Virgin Group

  • Rivalry: Virgin Group operates business in such a market marketplace where a number of rivalries exist; hence the business is facing extreme competition which results in low profits sometimes (Atkinson, 2006). Apart from this, there are diverse reasons that may create challenges and competition for Virgin Group such as a large number of competitors, pricing factors and unsuitable market scenarios.
  • Threat of new entrants: New entrants can easily enter the subsequent marketplace because the terms and conditions allow the entities to make entry and exit adequately. Hence, in such respect, Virgin Group might have experienced issues related to competition from large and small business entities. Further, as per the market scenario, it is clear that new entrants may grab the attention of existing customers of Virgin Group (Cave and Shortall, 2011).
  • Supplier power: Suppliers of Virgin Group are powerful when a number of customers is more with the company however; in the present case, suppliers have huge bargaining power because of many players in the same market. Customers as well as business entities have huge purchasing power therefore; this increases the powers of suppliers to a higher extent (Johnson and Scholes, 2002).
  • Threat of substitutes: There are various competitors of Virgin Group who are engaged in producing the same sort of services for the clients hence; it can be said that threats from substitutes are increasing. Since it is a threat to the subsequent business, therefore; this may lead the organization to lose its potential customers. At the same time, it can also change the profit margin of subsequent business entities.
  • Buying power: The bargaining power of buyers has been increasing because a number of business entities are operating in the same market which gives choices to the customers (Enders and, 2009). It can be said that the buying power of the customers of Virgin Group can highly affect the demand for services thus; frequent provisions are required to be made by the company in existing processes. Hence, the bargaining power of the buyer can influence the demand for the services in the marketplace.

b) Significance of stakeholder analysis while formulating a new strategy

Apparently, stakeholders of Virgin Group are those people who play a crucial role in the company's growth and success and their activities affects the performance of the business. Stakeholder analysis is important for the business entity because that could assist Virgin Group in identifying the needs and desires of the stakeholders (Ireland and, 2008). While formulating and implementing any strategy, Virgin Group has to take many things into account so that the strategy can bring appropriate results to the business entity. Customers are the major stakeholders of Virgin Group and their satisfaction level matters the most to the organization hence; prior to executing the growth strategy, the company has to identify if the strategy will produce optimum results (Haley and Haley, 2006)

Employee interest is also required to be considered in the strategy implementation process because they are the only entity that is responsible for implementing the strategy in practice. Therefore, Virgin Group should get opinions from all the employees so that changes can be made adequately in all the processes. Business owners and shareholders should be involved in all these processes and regular information should be delivered to them. Shareholder engagement is vital in the strategy implementation process because through that, Virgin Group can identify the values given to all the shareholders:

  • Virgin Group needs to acquire the opinions of all the concerned stakeholders (employees, customers and business owners) for the purpose of involving them in business activities. This is also important in terms of improving the quality of services.
  • Stakeholder analysis is beneficial because it aids the business entity get more resources for overall business management (Hansen and Smith, 2006).
  • Further, through proper analysis, Virgin Group will be able to motivate the employees to contribute to producing better outcomes.
  • This will also assist Virgin Group in minimizing communication gaps between employees and top-level management (Hunger and Wheelen, 2001).

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c) Presenting a new strategy for the chosen business based on organizational audit

As per the organizational audit, Virgin Group should emphasize market penetration and market development strategy so that business reach can be enhanced. It is recommended that Virgin Group conduct market research at each stage so that internal and external factors can be identified properly (Hunger and Wheelen, 2001). Thus, the appropriate future strategy for Virgin Group is market development as that will also assist the business in getting ideas about new customers. Services can also be promoted to different marketplaces hence; this can enhance the opportunities for more growth and prosperity. However, prior to formulating any new strategy, it is essential for Virgin Group to audit the internal and external business environment so that each and everything can be properly planned. This is also useful in terms of reducing business complexities (Enders and, 2009).


a) Evaluating the appropriateness of alternative strategies related to market entry, substantive growth, limited growth or retrenchment strategy

Growth strategies are typically used for the purpose of enhancing the opportunities for success and more revenue (Ireland and, 2008). The categories of all the three strategies are discussed in the below-mentioned section:

Substantive growth strategies

  • Market development: According to the strategy, it is essential for Virgin Group to enter new marketplaces with existing products and services (Cave and Shortall, 2011). Businesses can adopt this strategy in the case if more customers are required to be persuaded towards the business services.
  • Diversification: Virgin Group can diversify the business by adding new products and services to the existing service provision (Jansson, 2008). Virgin Group has to select a new market for the business so that long-term sustainability can be acquired.

Limited growth strategies

Market penetration: The subsequent strategy is useful for Virgin Group to achieve growth with all the existing products and services. As per the strategy, the business has to remain in the same market place and according to the changed market conditions, modifications can be made to the work processes (Atkinson, 2006).

Retrenchment strategy

Retrenchment strategies are used at the time when any business entity wishes to wind up its operations or when it decides to downsize the existing firm. This strategy will be useful for Virgin Group at a time when the business is unable to reach the growth stage. Hence, at this time, Virgin Group has to dissolve all the business operations and in this situation, the business can also merge with another entity (John, 2005). Hence, this subsequent strategy is used at a time when the opportunities for expansion and diversification are fewer. With the help of a retrenchment strategy, the entire business process of the company can be changed to survive in the marketplace.

b) Appropriate future strategy and justification

It is essential for Virgin Group to select a market development strategy and according to the strategy; the business should select new markets for expanding its services. The strategy has been recommended to the subsequent business entity because, through that, numerous customers can be persuaded towards business services (Johnson and Scholes, 2002). Thus, Virgin Group will be able to promote the products to a larger extent for more customer satisfaction. As per limited growth strategies, Virgin Group is required to invest funds through current revenues and this can also assist the business entity to reduce the level of debts. Therefore, the strategy seems to be beneficial in terms of achieving growth aspects with a minimum amount of investments.


a) Analyze how would you plan for the implementation of the strategy from the following perspectives

I) The roles and responsibilities for strategy implementation in the selected organization

While executing any strategy in the business entity, it is essential for Virgin Group to delegate roles and responsibilities appropriately to all the members so that the strategy can bring optimum results to the organization (Karami, 2012). All the major three levels in the organization (managerial, tactical and operational level) have to play their roles in a different manner as per the aims and objectives defined. In the below-mentioned section; specific roles are discussed:

  • Managerial level: The managerial level department is entitled to monitor all the practices that are related to the strategy implementation process (Ireland and, 2008). The managers of Virgin Group have to identify whether all the employees are playing their roles and responsibilities in an adequate manner or not. Similarly, on the other hand, the managerial level should also change the areas of strategy implementation as per the area required.
  • Operational level: The operational level of Virgin Group has to align the strategy implementation process with aims and objectives. Hence, on that basis, all the operations of the organization should be conducted and managed (Kárpáti, 2001).
  • Tactical level: The technical department of Virgin Group has to ensure that technically the strategy is implemented in the work process. The subsequent strategy should be related to the goals and mission of the organization and on that basis, all the operations should be managed.

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ii) Resource requirements to implement a new

It is an apparent fact that every organization should make arrangements for diverse resources while executing any business strategy. Here, in the below-mentioned section, essential resources are stated that are responsible for playing varied roles while implementing strategies for the business.

  • Human resources: Apparently, human resources are the only possessions that aid the organization in conducting all the roles and responsibilities in an adequate manner (Ketzes, 2003). Human resources of Virgin Group manage all the tasks and activities and their efforts also enhance the company to deliver proper services to the customers. While implementing subsequent strategies for the business, human resources are required to align their duties and responsibilities with organizational aims and objectives as that will assist them in reaching the defined targets. Hence, while implementing the strategy for subsequent business, human resources will be managing different roles and activities.
  • Financial resources: Finance is considered the core essential for every business as no work can be performed without the arrangement of financial resources. It is mandatory for Virgin Group to identify its financial capability prior executing any strategy so that resources can be adequately allocated in all the necessary activities. At the same time, financial resources are required because that helps the business entity to find out its own capability in terms of remaining in the marketplace.
  • Physical resources: In order to implement any strategy, it is essential for Virgin Group to make arrangements for physical resources such as machines, tools and necessary equipment (Matthews, 2005). Physical resources will assist Virgin Group in producing optimum results afterwards implementing the strategy in business.

b) Contribution of SMART targets to the achievement of the strategy implementation

Virgin Group should have to emphasize SMART objectives so that prominent results can be acquired. At the same time, while implementing the strategy, it is crucial for the business entity to align the strategy with organizational objectives. SMART objectives aid the business entity in achieving measurable and specific goals by defining each and every criterion in an adequate manner. The market share of Virgin Group has been increasing by 2.5% every year therefore; it is essential for the business to allocate the resources in an optimum manner for more productivity. The time limit defined for the strategy will be 8 months and during that period, the manager will be monitoring each and every practice so that changes and modifications can be made accordingly (Merrilees, Getz and O'Brien, 2005).

The overall success criteria of the strategy implementation process will be measured in terms of growth and contribution it will make to the business entity. The growth strategy of Virgin Group should aid the business entity to enhance its level of market share by focusing more on a customer-oriented approach. A subsequent strategy will be implemented in the business entity for the purpose of accelerating the customer satisfaction rate and this is also implemented in the business process for the purpose of increasing the opportunities for more growth. Virgin Group aims to acquire long-term sustainability in the competitive market place and for that the business will be emphasizing better and quality services (Simerson, 2011).


Summing up the entire study, it can be articulated that all business entities have to develop diverse strategies so that long-term aims and objectives can be acquired within the expected time frame. From the discussion, it is evident that human resources, technical resources and financial resources are vital for the business entity because they help in maximizing the potential of the organization to survive in a competitive marketplace. On the basis of the organizational audit, it is clear that competition has been increasing in the same industry thus; Virgin Group should focus on substantive strategies for optimum and limited growth.


  • Atkinson, H., 2006. Strategy implementation: a role for the balanced scorecard? Management Decision
  • Cave, M. and Shortall T., 2011. The extended gestation and birth of the European Commission's Recommendation on the regulation of fibre networks.
  • Enders, A. and, 2009. Towards an integrated perspective of strategy: The value-process framework. Journal of Strategy and Management
  • Haley, V. C. U. and Haley, T. G., 2006. The logic of Chinese business strategy: East versus West: part II. Journal of Business Strategy.
  • Hansen, F. and Smith, M., 2006. The ethics of business strategy. Handbook of Business Strategy.
  • Hunger, J. and Wheelen, T., 2001. Strategic Management and Business Policy. Addison-Wesley. Reading Massachusetts.
  • Ireland, D. R. and, 2008. Understanding Business Strategy: Concepts and Cases. 2nd edition, Cengage Learning.
  • Jansson, H., 2008. International Business Strategy in Emerging Country Markets: The Institutional Network Approach. Edward Elgar Publishing.
  • John, R., 2005. Global Business Strategy. Cengage Learning EMEA.
  • Johnson, G. and Scholes, K., 2002. Exploring Corporate Strategy. Prentice Hall.
  • Karami, A., 2012. Strategy Formulation in Entrepreneurial Firms. Ashgate Publishing, Ltd.

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