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The main aim of any firm to gain maximum profit, this is only possible when they will be able to understand their customers and deliver the products and services accordingly. Further, strategies need to be developed so that the rate of performance can be improved (Grant, 2016). It is important for the organization to understand the changes that take place within the taste and preference of customers and accordingly improvement should be made so that strong customers base can be developed. The present report is about the Virgin Group which was founded in the year 1970 which was headquartered in London. This report covers, Common resources and capabilities link the separate Virgin companies. Lastly, it also includes making changes in the organizational structure and culture of the Virgin Group.

1. Common resources and capabilities link the separate Virgin companies

There are companies that fall under Virgin Group. It includes companies like Virgin Hotels, Virgin Health banks, Virgin Mobile, Virgin Radio, Virgin Rail Group Ltd., etc. All these firms make use of common capabilities and resources. Below given are the resources that are common in these companies:

Human Resource: All the employees that are hired within the companies of Virgin are with high experience. This enables to make that the work that is provided to them are performed effectively and efficiently. Employees are the face of an organization as they have direct interaction with customers (Uddin and Akhter, 2011 ). Management of the companies understand the requirement of workers and provided them training so that they will be able to raise their performance level. They also enable to support the firm in achieving the desired goals and objectives.

Financial Support: All companies are performing their business operations around the world. This way they are able to attract customers and gain huge profit. With this respect, for all the business activities that are planned require financial support and for Virgin all the companies are able to conduct their business operations in effective manner as they financial support for all the firm is high as they are able to get high return from the type of products and services that are delivered by Virgin companies.
Below given are the common capabilities of Virgin companies:

Innovation: With time, all companies conduct market research. This is helpful enough for them to know the customer's taste and preference (Ashwini Nand, Singh and Power, 2013 ). As per the analysis made, the firm will make changes in products and services so that better services can be delivered to customers. Further, they also take suggestion from workers as they know better about the issues or problems that are faced by customers and as per the suggestion provided innovations are made.

Close Customer's Relation: They understand the requirement of customers and take feedback. This is helpful enough to know the issues that are faced by them. Further, they also make use of social media that is helpful to have direct interaction with customers. It helps to have direct interaction with customers and they get to know their perception that they have for each of the products and services that are delivered by the companies (Jakada, 2014 ).

2. A business that should Branson consider divesting. Criteria used in deciding what new diversification strategy to pursue

Companies/Capabilities Virgin Mobile Virgin Health banks Virgin Hotels Virgin Radio Virgin Rail Group Ltd. Virgin Holdings Ltd.
Profitability High Low High Low High Low
Customers satisfaction High Low Low High High Low
Employees performance Low High Low High High Low
Innovation High Low High High Low Low

As per the above, table, it can be started that from the criteria that is determined, it can be stated that the lowest performance is mad by Virgin Holdings Ltd. (Harrison and John, 2013). On the other hand, the firm that is gaining huge profit and with high performance is Virgin Rail Group Ltd. With this respect, Branson should consider Virgin Holdings Ltd. as divesting.

In order to make use of new diversification strategy, Branson should make use of PESTLE analysis. This is a type of tool that enables to determine the performance of the market selected. Virgin holdings is willing to expand their business at China, then they should make use of PESTLE analysis with the help of which business can be established in new market. Below given are the PESTLE analysis:

Political Factor: When changes take place in monitory or fiscal policies on a regular basis, then it affects the pricing for the products and services that a firm is willing to offer. Price can be determined as an import factors changes the buying behaviour of customers (Angwin, 2014 ). Changes in monitory and fiscal policy are not frequently.

Economic Factor: In this context, it includes inflations and recession. When in a market, there is these type of condition, then it affects the business in a negative manner. Customers fail to spend over the products and services that are delivered by the firm.

Social Factor: Changes in taste and preference of customers take place frequently. Market research should be conducted so that the preference of customers can be determined. This way improvement can be made and strong customers base can be developed. The type of services that are preferred by China is different and so proper analysis should be made.

Technological Factor: With time changes in technology take place frequency and it is important for the firm to make use of new and updated technology so that better services can be delivered (Foust, 2010 ). There are companies that deliver their customers with similar products and services. To be competitive changes in technology should be made so that better services can be delivered.

Legal Factor: All the law that are followed in China should be considered. If they are not followed, then customers will develop negative perception with their mind and they will not prefer to make purchases or use the services of the Virgin Holdings ltd.

Environmental Factors: All the products and services delivered should be of high quality. For this purpose environment should not get negatively affected.

Further, key factors that can be considered for diversification are innovation, brand extension, parenting advantages, linkages between business and internal labour market.

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3. Changes in the organisational structure and management systems of the Virgin Group

There are a different type of organizational structures that can be followed. In order to make the business operation run in an effective manner. Cited firm should make use of functional structure. This is a type of structure, in which all the operations within the firm are divided into different groups. Further, all the department is controlled by a manager who has vast information and knowledge about the areas (Yiu, 2011 ). This enables to monitor the performance of each any every workers by the mangers. As per the analysis made, they can be provided with proper training. This the rate of performance can be raised and better services can be delivered. Further, strategies can be implemented as per the performance that are made by each of the worker. Managers will be able to have proper interaction with their employees an all the issues or problems that are faced by them, can be determined. Accordingly, steps can be take with the help of which improvement can be made.

In order to make an improvement in the management system, workers should be provided with the opportunity to work freely. Further, employees have direct interaction with customers and they are one who present the products and services customers. In case workers of Virgin Holdings Ltd. Are not able to perform effectively, then one of the main reason can due to lack of motivation (Li, Li and Li, 2014 ). There are certain motivational factors that workers have and when these are fulfilled, then employee gets motivated. For this purpose, management can also make use of motivational theories like Maslow's need hierarchy . This is an effective theory as it covers all the essential areas with the help of which workers can be encouraged. Further, additional responsibilities should be provided so that workers develop a feeling that they are important for the firm. When these aspects will be followed t, then Virgin Holdings will be able to make improvement in their performance and growth of the organization.


From this report, it can be articulated that workers should understand the part of work that has to be performed by them. There are a different type of reasons due to which performance of work gets affected negatively. Further, it is important for the firm to make frequent innovation so that better high-quality services can be delivered and customers can be satisfied. Further, workers should be provided with the opportunity to make a decision. They work closely with customers and so they know better about the issues or problems that are faced by workers. In addition to this, tools like PESTLE and Porters five forces are helpful for the firm to make use of so that a suitable market for business expansion can be selected.


  • Angwin, D., 2014. In Search of Growth: Choosing Between Organic, M&A, and Strategic Alliance Strategies.
  • Ashwini Nand, A., Singh, P. J. and Power, D., 2013. Testing an integrated model of operations capabilities: an empirical study of Australian airlines. International Journal of Operations & Production Management.
  • Foust, J., 2010. Space launch capabilities and national strategy considerations. Astropolitics.
  • Grant, R. M., 2016. Contemporary strategy analysis: Text and cases edition. John Wiley & Sons.
  • Harrison, J. S. and John, C. H. S., 2013. Foundations in strategic management. Cengage Learning.
  • Jakada, B. A., 2014. Building global strategic alliances and coalitions for foreign investment opportunities. International Journal of Global Business.
  • Li, A. N., Li, S. and Li, H. B., 2014. Resources and biological activities of natural polyphenols. Nutrients.

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