Virgin Group Reflective Report: Strategic Insights

1.0 Overview

The reflective report is recognized as an effective way of acquiring knowledge and insight about a subject. It usually involves an in-depth critical analysis and is considered to be useful for students to improve their critical thinking abilities (Lucas & Tan, 2007). Accordingly, this report presents the individual reflection on the case of “The Virgin Group. Accordingly, the individual reflection of the case encompasses the critical discussion of the case along with the analysis of the case. Moreover, this report also provides some strategic recommendations to Virgin Group based on the analysis of the case study. Finally, the report considers the factors that have been missed in the first attempt and also identifies the reason for it.

2.0 Initial Discussion on the Case

The initial discussion of the case yielded valuable understanding of the Virgin Group’s business model as well as its organizational structure and Sir Richard Branson, the founder of the Virgin Group. Accordingly, it has been learned from the given case of the Virgin Group that Sir Richard Branson has reached to 65 years is still very enthusiastic about his business ventures and is constantly looking for new opportunities to exploit and expand the business. Accordingly, it has been noted that Virgin Group has undertaken several investments across different domains including electric automobile, hospitality, and space among several others. However, it has also been observed from the initial evaluation of the case that even though the Virgin Group has undertaken significant investments across different fields and areas, but it also undertook some disinvestment. Despite the disinvestment of some of its business, the Virgin Group remains as one of the most diversified businesses with its investments in different types of business including mobile telephony, travel, financial services, music, holidays as well as health and wellness. Moreover, it has been learned from the initial evaluation of the case that the Virgin Group has 312 registered companies in Britain alone while it has also registered it business in 28 more countries across the world. At the same time, it has been learned from the initial analysis of the case that Virgin Group has grown in its size as well as the numbers of subsidiary business owned by it. Notably, with this growth and expansion, the Virgin Group has also been getting matured and has gradually moved from previous unconventional structure to a more conventional business structure. At the same time, the initial discussion of the case study also postulated how Richard Branson created the Virgin Group empire from his first business venture which was a magazine known as “Student.” Indeed, the journey of Richard Branson from rag to riches is inspirational for any individuals who desire to be an entrepreneur. Moreover, the initial discussion of the case postulated the timeline of the Virgin Group and its achievements since its formation. In this regard, the initial evaluation of the case of the Virgin Group further illustrated the main areas in which the Virgin Group has most active. Correspondingly, it has been learned that the Virgin Group has mainly concentrated its business in areas including travel, holidays, retailing, information and communication technology, leisure and entertainment. Moreover, the initial discussion about the Virgin Group demonstrated that since 2000, the Virgin Group has undertaken aggressive international expansion strategy and has been largely effective in replicating its successful business in the UK to the international sphere. For example, it has been comprehended from the initial discussion that Virgin Mobile, Virgin Active and Virgin Money has been greatly successful both in the home country that is the UK as well as in the international domain.

3.0 Analysis

Even though the initial discussion about the case of the Virgin Group rich understanding about the Virgin Group and its business model and structure, the more critical analysis at the end of the module offered a different insight and understanding. Accordingly, at the end of the module, the analysis of the case offered an in-depth understanding of business strategies of the Virgin Group. More specifically, it led to the identification of strategic challenges faced by the Virgin Group. Accordingly, it has been observed from the analysis of the case that even though Sir Richard Branson has been enthusiasm entrepreneur who has constantly been looking for new opportunities and making regular investments in the new ventures but he has not been able to retain the business success for a long time. The Virgin Group has witnessed several disinvestment decisions which probably reflect the poor strategic thinking. Moreover, an in-depth analysis of the case illustrated that there absence of formal organizational structure in the Virgin Group. It has been learned from the analysis of the case that the current structure of the Virgin Group is highly complex and the subsidiaries of Virgin Group are linked with the parent Virgin Group in a complex network. Even though the dispersed ownership, as well as control of the Virgin Group, has resulted in dynamic entrepreneurial growth to some extent, but it has been ascertained that the Virgin Group’s business is getting matured and Branson’s is identified to consolidate his business to fewer businesses. However, some changes are being witnessed in the Virgin Group concerning the structure of the Group, but from the strategic viewpoint, there lack any major changes when it comes to strategy. Correspondingly, it has been observed that the future of the Virgin Group is largely uncertain which implies that if the existing strategy of the Group fails to respond to the changes in the condition effectively, it may have a severe negative impact on the performance as well as the survival of the Virgin Group. At the same time, the analysis also illustrated that due to the highly fragmented nature of the Virgin companies, it has become difficult to track the performance of the Group as a whole. Correspondingly, many have raised their doubt on the financial health of the Group. At the same time, it has been learned from the analysis that Virgin Group’s profit is increasingly dependent on the brand royalties as well as dividends from associated companies rather than on its own business. Moreover, it has been learned from the critical analysis of the case that the current structure and management practice within the Virgin Group is firmly influenced by the persona and values of Richard Branson and has been relied on his leadership for its survival and success but it can be argued that in this world nothing is permanent so is the role of Richard Branson which is more likely to diminish over the time and may create huge challenge for the Group to survive and remain viable in highly dynamic business environment.

4.0 Strategic Recommendations

The critical analysis of the case of the Virgin Group postulated several weaknesses and challenges. Correspondingly, it is important for the Virgin Group and its founder Richard Branson to overcome these weaknesses and effectively deal with the challenges to survive profitably and remain viable in the current turbulent business environment. Accordingly, it has been observed from the case that the Virgin Group also act as a venture capitalist but is engaged in financing new venture but has also been engaged disinvestment of many of its businesses in the recent years. Moreover, it has been analyzed that the Virgin Group usually earns revenue from the royalties that it received for licensing its brand and divided earned from the associated companies while its own business has largely been struggling to generate adequate revenue. Correspondingly, it is recommended to the Virgin Group to make a careful assessment of the market opportunity, potential of capital appreciation as well as the quality of management prior making investments in the new venture (Šimić, 2015).

At the same time, it has been analyzed that there is a significant amount of confusion when it comes to the organizational structure and management system of the Virgin Group. In this regard, it has been noted that even though the Group has recently moved on the adoption of formalized structure and management system, the business seems to be significantly influenced by the unique management system of Richard Branson.

Accordingly, the contrast between the conventional structure and management system with that of Branson’s management system is more likely to increase uncertainty for the business. Hence, it is recommended to the Group to develop the organizational structure and management system based on a clearly defined vision and mission of the Group (Tran & Tian, 2013). Moreover, it has been analyzed that Richard Branson has involved family and friends in his business. Even though the involvement of the family and friends in business helps him to seek more dedicated and committed personnel for his business than any outsiders but it is suggested to him that all resources of the organizations are specifically used for the organization instead of meeting any personal needs or requirements (Westhead & Howorth, 2006). Finally, it has been ascertained that the Virgin businesses are highly fragmented which makes it difficult to track the financial performance of the company which in turn create challenges for framing the most appropriate strategies for the business. Hence, it is suggested to the Group to reduce complexity associated with its network of subsidiaries and companies and adapt standard financial reporting system for its all companies so that performance of each company of the group is tracked based on their financial performance suitable strategies can be formulated which can increase it revenue earning capacity and reduce its dependency on dividends received from its associated companies for its profit (Ailwan et al., 2013).

5.0 Factors That Were Missed In the First Attempt and Its Reason

In the first attempt, I believe I have missed identifying the challenges and weaknesses in the strategies of the Virgin Group. Accordingly, in the first attempt, I was mainly drawn by the positive side of the Virgin Group and the entrepreneurship skills of Richard Branson. This is because Richard Branson is a great personality and I have been a personal admirer of his leadership skills and his unique management system. I have been inspired and impressed by the entrepreneurship skills that Branson has brought to Virgin Group over years.

References

Ailwan, B. M. et al. (2013). The Efficiency of Disclosure in the Financial Reports in Companies in the Presence of International Accounting Standards and its Effect on Achieving Profits, Success, and Being Unique. International Journal of Humanities and Social Science, 3(17), 174-183.

Lucas, U. & Tan, L. (2007). Developing a Reflective Capacity Within Undergraduate Education: the role of work-based placement learning. York: Higher Education Academy.

Šimić, M. (2015). Investment Criteria Set By Venture Capitalists. Econviews, 457-479.

Tran, Q. & Tian, Y. (2013). Organizational Structure: Influencing Factors and Impact on a Firm. American Journal of Industrial and Business Management, 229-236.

Westhead, P., Howorth, C. (2006) Ownership and Management Issues Associated With Family Firm Performance and Company Objectives. Family Business Review, 14(4), 301–316.