Strategic Management - Virgin Case Study
1) What are Virgin Group’s distinctive resources/capabilities?The Virgin BrandFirstly, the Virgin brand is valuable in the form of brand equity, where ‘Virgin’ is one of the most recognised brand names in the UK, and is also well-known in other important markets including Europe and the U.S.A. Based on 1990s research, the Virgin brand was recognised by 96% of UK consumers (Case, p.685). Secondly, it is rare for a brand to have such positive consumer perceptions; which include value-for-money, fun, innovation, success, and trust across a range of Virgin businesses (Case, p.685). Thirdly, Virgin has built up their excellent reputation over time, and is therefore path dependent and difficult for competitors to imitate. Lastly, competitors cannot substitute resources that serve the same functions as brand equity and corporate reputation.
Richard BransonThe personal reputation and image of Richard Branson is outstanding. He is well respected for his unconventional approach to business, is often cited as a role model, nominated for enterprises, voted the most-popular businessman and named in London polls as the preferred choice for mayor despite never putting his name forward (Case, p.697). Branson possesses distinctive capabilities, including his ability to effectively use the media to raise public awareness of Virgin, his superior negotiation skills and his excellent charisma. Furthermore, as an ‘international celebrity’, he is easily able to acquire access to the right people and obtain partnerships or alliances when necessary. Therefore, Branson’s reputation, and the rare tacit knowledge that he possess, creates value for Virgin Group and is imitable and non-substitutable by competitors.
Innovation, company structure and cultureVirgin Group’s innovative environment creates value for the organisation as innovation promotes employee motivation and can lead to more efficient/effective processes, thereby improving performance. Additionally, Virgin’s organisational
Richard BransonThe personal reputation and image of Richard Branson is outstanding. He is well respected for his unconventional approach to business, is often cited as a role model, nominated for enterprises, voted the most-popular businessman and named in London polls as the preferred choice for mayor despite never putting his name forward (Case, p.697). Branson possesses distinctive capabilities, including his ability to effectively use the media to raise public awareness of Virgin, his superior negotiation skills and his excellent charisma. Furthermore, as an ‘international celebrity’, he is easily able to acquire access to the right people and obtain partnerships or alliances when necessary. Therefore, Branson’s reputation, and the rare tacit knowledge that he possess, creates value for Virgin Group and is imitable and non-substitutable by competitors.
Innovation, company structure and cultureVirgin Group’s innovative environment creates value for the organisation as innovation promotes employee motivation and can lead to more efficient/effective processes, thereby improving performance. Additionally, Virgin’s organisational
References: ess. (2007). Strategic Management: Creating competitive advantages (3rd Ed.), The McGraw-Hill Companies. Case:De Vries, D.R.K. & de Vitry d’Avaucourt, R. (2004) “The house that Branson built: Virgin’s entry into the new millennium” In: B. De Wit & R. Meyer Strategy: Process, Content, Context, Thomson: London, pp. 680-701.