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Virgin group

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by

Kyle Han

on 28 May 2013

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Transcript of Virgin group

Picture-Word Association Game Corporate Rationale relationship of a strategic nature between business Conclusion and Recommendation Virgin's corporate rationale is merely the reflection of Richard Branson's personal philosophy - "to be consumer's champion" Become Less Diverse:
limit risk
avoid brand dilution
Changing in Strategy:
focus on short-term profit to raise capital and investment Virgin group and Sir Richard Branson are interchangeable
Research indicate: fun, innovative, daring, successful are key elements of Virgin group/ Richard Branson Virgin Group
minghui han (42916232)
Takaaki Fujiwara (42899370)
Jonathan Lee (42456479) Joint venture Licensing Acquisition form partnership with experienced alliance
flexibility of entering
free from regulatory restriction

Virgin's Brand and green field start up
+
partner's capital(majority) Bail - Out Licensing to reduce potential risk
eg: Virgin Mobile Australia
avoid capital injection while as maintain reasonable income
(normally 0.25% of annual income)
licensing the brand as an asset
eg: Virgin radio acquire rest of stakes when sees market potential/value adding
rely on the experience that Virgin learn from its partner
eg: Virgin Galactic acquiring the rest of 30% stake held by its partner "the spaceship company" selling chunks of some businesses to fund new and existing business
eg: Virgin direct banking losses euro: 20.4M Institutionalized Market market is dominated by a few players

they are not giving good value to customers
because they are inefficient or preoccupied with each other

Virgin kicks in by offering higher value for less price

rely upon global branding image to overcome barriers

Key emphasis on innovation/differentiation Virgin's corporate rationale on Market evaluation Virgin name was chosen to represent the idea of the company being a virgin in every business they enter- diversification on business unit
Treat Virgin brand as an asset

Virgin's criteria of entering new market
must innovative
challenge authority
offer value for money by being better than competitors
be good quality
market must be growing Keiretsu structure– example for illustrative purposes Keiretsu Structure Value adding of Virgin group The strategic nature between business How does Virgin add value? support provided from experience and wealth of resources brand recognition corporate culture fosters innovation Virgin groups' value adding to its companies Reference

Abdul, R 2003, Virgin corporate strategy Case Study, Rob Abdul, viewed 23 May 2013, <http://www.robabdul.com/the-virgin-group-case-study.asp>

BK strategic, 2012, Virgin international strategy analysis, BK strategic, viewed 15 May 2013<http://bkstrategic.com/marketing-portfolio/virgin-international-strategy-analysis/>

Campbell A & Sadtler D 1998, “Corporate Breakups” Strategy plus Vol:3 Iss: 12 viewed 05 May 2013 <http://www.strategybusiness.com/article/18963?gko=89d9d>

Mahr, J., 2005, Virgin Spreads, Brand Channel, 24 Jan 2005, last viewed 28/05/2013, < http://www.brandchannel.com/features_profile.asp?pr_id=215>

Marketing Doctrines, 2012, Marketing Strategies of Virgin Group: SWOT Analysis, 31 Jul 2012, last viewed 28/05/02013,
< http://marketingdoctrines.blogspot.com.au/2012/07/marketing-strategies-of-virgin-group.html>

News 2013, “The spaceship company” Virgin galactic News, viewed 20 May 2013,<http://www.virgingalactic.com/news/item/the-spaceship-company-2/>

Strategic Relationships between Businesses within the Virgin Group 2012, power point presentation, Slideshare, viewed 23 May 2013, <http://fr.slideshare.net/tapabroto_rc/strategic-relationships-between-businesses-within-the-virgin-group>

Sullivan M 2013, “Branding is the key stake in Virgin: Branson”, The Age, viewed 18 May 2013, <http://www.theage.com.au/business/branding-is-the-key-stake-in-virgin-branson-20130507-2j5po.html#ixzz2USXVG1DZ>

The Virgin Group 2013, The Virgin Group, viewed 23 May 2013, <http://www.virgin.com.au/about-us>

Virgin, 2013, Virgin History, Virgin.com.au, last viewed 28/05/2013, < http://www.virgin.com/history>

Wachman, R 2012“Virgin brands: What does Richard Branson really own?” The guardian, viewed 20 May 2013<http://www.guardian.co.uk/business/2012/jan/08/virgin-brands-richard-branson-owns>

Yamamoto, M. “All hail the Kleiner keiretsu–not!.” Cnet News. 1 November 2008 viewed 30 November 2010. <http://news.cnet.com/All-hail-the-Kleiner-keiretsu–not/2010-1071_3-281592.html&gt> SWOT Analysis of Virgin Group Weakness Threat Opportunity Strength Strong brand name (Too great reliance on brand name)
Mixture of brand product image
Heavily rely on Virgin Atlantic approximately 23% of total revenue Huge market sector (Broad business area) - Diversification
Strong brand name (High brand recognition) New market entry Virgin Group could have opportunities of new entry in market by JV/licensing strategy through strong brand recognition Strong Brand is not from business that they offer, but strong name and identity
Attachment of brand with owners eg: Virgin Record belong to Universal Music group British multinational branded venture found in 1970 by Richard Branson and his partner
public in 1986 and privatising two years later
Started business from Record shop and expanded through JV and Licensing strategy with partners in different business sectors
More than 400 business sectors
Approximately 50,000 employees in the world & total revenue $21 Billion in 2011
Special Organizational Structure: KEIRETSU- Horizontal Diversified Business Group (“Kigyo Shudan”) Virgin Group International Expansion Strategy
Full transcript