Table of Content

Introduction

Virgin Business Model

Virgin Financing

Virgin SWOT

Virgin Porter Five Forces

Virgin Product

Branson Leadership style

Introduction

Branson was born and raised in UK, he attended different schools in UK, but he had a poor

academic performance, at the last day of school the head school told him you either become a

millionaire or you end up in prison. His mother was considered an entrepreneur she used to build

and sell wooden tissue boxes and wastepaper bins. Along that Branson has dyslexia which is

reading disorder even though he had a high level of intelligence.

Today Richard Branson in an English businessman and investor who started his entrepreneur

carrier at the age of 16 found and had of Virgin Group which today control over 400 companies,

and considered to be between the richest people in UK. Richard Branson has powerful

personality, and possesses great potential for success, but this power is delicate and conditioned

by a strong commitment of his to his ideals and vision, which must be used to inspire others to

join him in his dream. Branson is considered to be good in business and politics since he is able

easily to think on a large scale, international scale. He understands diversity and treat it with

respect and is able to deal with variety of people and still understand their difference in order to

direct them into one common goal. As the visionary with both his feet on the ground, Richard

Branson is gifted with uncommonly sound common sense. He welcomes new ideas and take

them into consideration to enhance his business and develop them to be able to generate profit

and sustain. Richard Branson is a steady partner in any relationship, and offers sound advice and

consistent emotional support. He avoids airs and pretension, does not suffer from flights of

fancy, and resists the emotional heights. However, Richard is also very difficult to live up to.

This ambitious personality of his makes him a most difficult master who drives all that is around

him to accomplish the utmost of what they are capable of. Richard Branson is full of energy,

always on the go, fidgety, and quite hyperactive. Life is in a constant motion for him and he

devours it powerfully. Entrepreneurial and progressive, Richard Branson is ever-striving,

heading for the top, and enjoying an enterprising, ambitious and determined personality to do

things well, and an unyielding dedication to his plan until the goals are achieved.

Virgin Business Model

Virgin megastores focus mainly on one business model which is a large store format that able to

sell and present different product to the community, most of these products are media-related

items. Although it might be similar to stores like RadioShack but it is more organized and

enjoyable to people for shopping. Along that the turnover of the employees at Virgin megastore

is lower than other competitor this implies that the company have experienced workers who

maintain the required standard for operations.

Virgin Financing

Virgin is an exception: who associates that brand with only one product or service? Indeed,

Virgin now comprises 200 companies and 25,000 people working for the brand worldwide. It has

a turnover in excess of s7 billion, and has become one of the world’s top 50 brands. Even in

countries in which it does not operate, it is still a famous brand.

Still in order to finance this expansion and this development of the whole group Branson used his

connections to build partnerships in order for him to minimize his own investment and in some

part of the group he isn’t the majority stakeholder. Such in Virgin Megastore in the UK Branson

only own 25 percent while W H Smith group has 75 percent. While other part Virgin Vodka is

50/50 percent owned between William Grant and Branson.

Virgin believe that the innovation and entrepreneurship will continue to expand in the future

across borders, because of the existence of these six circumstances: global market conditions,

entrepreneurial mindset, eroding confidence in established institutions, shifting business

environment, international collaboration and environmental/technological advancements.

As per below we can see the thought of Virgin on the two terms:

- Global market conditions: Trade barriers are easing. Economies are interdependent.

Communication via the Internet has never been easier or more accessible. These

conditions drive political reform, cultural transparency, social progress and a great deal of

wealth creation.

- Entrepreneurial mindset: Entrepreneurs have the ability to see, understand and take

advantage of evolving markets. The entrepreneur’s ability to think differently, use

insights, see what others don’t, envision what doesn’t yet exist, and identify opportunity

when it’s ripe – these are the prized qualities of today’s entrepreneur.

- Eroding confidence in established institutions: The recent world economic meltdown is

removing any last confidence that most people had in governments and large enterprise

banks and other financial entities. The resulting mistrust will lead to reinventing

ourselves as individuals, communities, countries and societies. As such, many more

entrepreneurs will be joining the field.

- Shifting business environment: Large-scale firms are synonymous with bureaucracy

which tends to stifle innovation. In response, the business environment is shifting to

accommodate the needs of its rapidly changing market players. Innovation and

entrepreneurship are beginning to flourish around the world and will likely take the form

of much smaller, yet bolder companies. Knowing and catering to this is how

entrepreneurial ventures beat corporate giants to the punch. Any company, large or small,

that continues down the same path it has always taken will find it to be a losing

proposition.
- Entrepreneurial collaboration: Also, on a global scale, there will be more entrepreneurial

collaboration, which in turn will make shared innovation between countries a far more

common occurrence at the company to company level – not just at universities and

research institutions. One of China’s approaches for creating an innovative nation is the

Technology Business Incubator (TBI). China’s mission is to nurture “technopreneurs”

and technology-based start-ups. Business incubation is considered a viable option for

countries that want to expand economic opportunities.

- Growth of environmental and sustainable engineering technologies: A growing

consciousness about the value of protecting our world will fuel the demand for products

and services that can accomplish this goal.

- Virgin Group also believe that the benefit received from both innovation and

entrepreneurship is interesting since today all the business reached a leading stage just

because of using these two actions. For starters, innovation had become a necessity in

today’s business setting. This is due to the new reality that competition for any business

extends way beyond its local area. Now companies in local markets are competition with

international companies, which is represented why we see major accusation between big

companies and small one.

- Virgin Group is a striving company in the innovation climate, since they have the

innovation plans in place. Since also the Preoccupations that consume the minds of

today’s entrepreneurs are very different from those of the 1980s. Just over a year ago,

most American businesses were forced to shift back as the economy was brought to its
 knees at home and abroad. Although entrepreneurs are known for turning such conditions

into opportunities, this crisis hit hard and shows no signs of abating anytime soon. In the

book, Webs of Innovation: The Networked Economy Demands New Ways to

Innovate(Financial Times Prentice Hall, 2001) author Alexander Loudon argued that

even during recessionary times, the need for innovation persists. He recommended a

concept of “networked innovation” as the way to help corporations adapt to carrying out

innovation in the Information Age. This was one of the major steps that Virgin Group

picked up and done, with the integration of all the information age from software and

hardware to all its computers and process. Companies with ongoing commitment to

innovation, he noted, are both able to take greater advantage of new markets and

opportunities during boom times, and to maintain and grow existing business during

downward cycles. Companies that don’t take charge of their innovation processes cannot

expect to profit from innovation, he concludes.

- The Virgin Group is committed to using the power of innovation and entrepreneurship to

tackle problems and create opportunities. The scale and urgency of the issues facing

humanity today range from the devastating depletion of natural assets to the millions of

people around the world facing abject poverty, conflict, and a lack of basic resources and

education. We try to identify the gaps and see where we can have the biggest impact, for

example, through the creation of global leadership models such as The Elders, the Carbon

War Room, and the Branson Centres of Entrepreneurship. We address challenging or

difficult subjects like conflict and economic empowerment and the role of business in

addressing carbon reduction to benefit the future of humanity. We work with our
 businesses and utilize our networks to bring together people that have relevant experience

and expertise in these areas.

- One of the connection between innovation and competitive advantages can be sense in

the Virgin Unite incubated the Carbon War Room (CWR), which harnesses the unique

influence, resources, and spirit of entrepreneurs. The vision is to mobilize capital,

innovation, expertise, and international collaboration to deliver sustainable new market

models. The Carbon War Room will increase the effectiveness of climate change efforts

already underway; it is not about duplicating existing efforts but will focus instead on

filling gaps. This alone gave them the power to reproduce new markets and gain more

advantages over others.

- Because of innovation Virgin Group was able to come out with create outcome around

the world. From USA to Africa were they invested in people and were able to develop as

what Branson Say: “ I’m always amazed at the incredible entrepreneurial spirit of the

people in Africa and their can-do attitude. Together with the Virgin businesses in South

Africa, we launched The Branson Centre of Entrepreneurship in 2006, located in

Johannesburg, which supports aspiring entrepreneurs. It isn’t a profit-making venture; it

is about providing a launch pad for spirited small businesses and entrepreneurs to help

them power our economies: they create jobs, fuel growth, and ultimately transform

communities. Virgin businesses in South Africa and successful entrepreneurs are actively

involved in the Branson Centre, offering practical business skills such as IT, finance, and

HR, as well as mentoring”.

- Virgin Owner Branson, Measure all the aspect in any perfect storm caused by the

economic, poverty, and environmental crises demands we build new models to solve the

global issues we face. Today, billions of aid dollars go into emergency solutions focused

on ending immediate suffering. There is often very little focus on lasting solutions and

job creation that will permanently lift people out of poverty. As business leaders, we need

to use our entrepreneurial energy to create jobs and businesses that will scale our

response to issues and deliver true economic freedom. They believe in creating jobs and

markets, and give the economy a new wheel to keep the cycle running. Virgin Group

believe that their prime focus on short-term fixes, an economic model based solely on

profit, and a predilection for business, government, and NGOs to work in silos will cause

us to continue down the path of extreme inequalities and depletion of our natural assets.

- The good news is that there are the tools to build a better world, and consumers are

demanding this change. Businesses will only survive if they evolve into a new model that

puts people and planet at their core, rather than just focusing on their shareholders and

pure profits.

- Entrepreneurs tend to thrive on challenges, embracing them and creating solutions. We

would like more entrepreneurs to come forward and contribute.

- With high unemployment and budget deficits, philanthropists can improve the impact of

their work by partnering to focus on trying to solve the biggest market failures that are

preventing cost-effective efficiency measures from succeeding.

 - In a new venture to encourage entrepreneurship, Branson launched PitchTV in March as

part of Virgin Atlantic’s 25th anniversary celebrations. The show will air the video

pitches of wannabe entrepreneurs onboard and online. Virgin Atlantic’s business

travelers, many of them executives, will see the pitches, and each year Branson will

select a favorite with a yet-undisclosed prize for the winner.

- Branson remains mindful of his own entrepreneurial beginnings, as well as the fact that

great ideas from up-and-comers help fuel the Virgin Group today. He tells SUCCESS that

one key to entrepreneurial success is to “get a great group of people around you who

believe in your idea.” Just as he had his family’s support from his childhood to his

earliest business ventures to his space flights today, Branson aims to provide

encouragement and inspiration for other entrepreneurs. But, he says, the ultimate reward

for an entrepreneur is individual and personal.

- “Entrepreneurship is business’s beating heart. Entrepreneurship isn’t about capital; it’s

about ideas. Entrepreneurship is also about excellence. Not excellence measured in

awards or other people’s approval, but the sort that one achieves for oneself by exploring

what the world has to offer.”

The Virgin SWOT

Strengths

1.       Charismatic leadership by Sir Richard Branson

2.       Highly diversified successful businesses within Virgin Group portfolio serving 53 million customers

worldwide.

3.       Effective marketing strategy

4.       Extensive management experience and capabilities across a wide range of industries

Weaknesses

1.        Vulnerability due to ‘spillover effect’ of negative publicity, because the group has more than 60

businesses with Virgin brand name.

2.       Lack of focus on specific product and service categories

3.       Customer perception of being expensive brand

4.       Financial problems of Virgin Atlantic

Opportunities

1.         Investments in e-commerce in artificial intelligence (AI)

2.         Concentrating only on most profitable product and service categories, i.e. narrowing focus

3.         Increasing presence in emerging economies such as China and India

4.         Finding and utilising new sources of competitive advantage

Threats

1.       Leadership issues after the departure of Richard Branson

2.       Negative economic implications of Brexit on UK-based businesses

3.       Financial problems due to overly risk-taking approach to new businesses

 4.       Intensification of the loss of brand identity

Porter’s Five Forces

Michael Porter introduced five basic competitive forces that defined the competition in an

industry as shown in Figure. According to Porter (1980), the collective strength of these forces

determines the ultimate profit potential in the industry, where profit potential is measured in

terms of long run return on invested capital. Not all industries have the same potential. They

differ fundamentally in their ultimate profit potential when the collective strength of the forces

differs.

In 2008, Porter has updated the five forces by mentioning that the five forces framework is to

understand strategic implications for individual firms within an industry (Porter, 2008). Various

authors have interpreted the theory favorably and adversely. However, this study applied the

theory to assess in terms of customers, suppliers, substitutes, potential entrants and competitive

rivalry.
The portfolio of Virgin group is built from different items and suppliers and exist worldwide.

Because of that there is always a high threats regarding new market entrance in different part of

group. Virgin Mobile for example was launched in India in collaboration with Tata Teleservices

Ltd. India is a big market and is gaining rapid advancement in GDP and technology. Despite it

was ranked at the top in customer service in its first year of launch, there exists already some

international player such as Vodafone and it faces threats from many other national and

international company which are interested to enter the India market. Along when the buyer

power is high it will cause the numbers to go down since people can take responsibility very

serious. Still organization like Virgin has poses more advantage over the retailers. Since they

use direct selling to the customers which can present a benefit to the company which is cost

saving and bypassing the long distributive channels. For example how the Virgin Car and Bike

challenged the existing dealership system of the automobile and bike manufacturers by offering

direct sales at discounted price While on the other hand Virgin Mobile in India, the suppliers

have strong brand and are also in the retail themselves. Again if we consider the case of Virgin

Mobile in India, the threat of substitute product is very high. Considering the fact that most part

of India being underdeveloped, there is no presence of retailer there and also second hand phone

market is very popular because of its availability and cheap price. Competitive rivalry lies in the

middle of the Porter five forces. As the Virgin group enters the market with its competitors well

establish in that industry, the rivalry is very intense like the way when Virgin Atlantic entered

the Airline business when British Air was the fully established well and well known.
Virgin Group Product
Branson Leadership style

Virgin Group worked on the above term, that’s why Incorporating innovative ideas became a

highly esteemed management goal. Virgin Group executives required their people to learn the

innovation and entrepreneurship, as Peter Drucker wrote in his book, so he became their teacher,

in the other hand the story continue with the leadership of Branson the first innovation story in

Virgin Group history. Were he said “We give our entrepreneurs guidance, connections and

opportunities through our peer and partnership network to help them become a force for good”.

Virgin Group believes in the revolving doors of innovation and entrepreneurship that is why they

keep on updating their knowledge and process. Today after more than 25 years on the old book

written by Drucker, Virgin Group do it differently since there is new ways for everything from

breeding, executing and practicing those concepts around the world. Virgin believes that with

the combination of Innovation and Entrepreneurship, they can get better financial life. Like the
story of Virgin Atlantic which start as an entrepreneurial example. Richard Branson, founder and

entrepreneurial director behind Virgin Group, his first business venture in 1967 at the age of 17.

Branson started his second business three years later. It was a mail-order retail record company:

Virgin Mail. Three years after that he expanded to establish Virgin Records

What can now be called a Virgin empire contains a mix of companies with different stories and

management team, but is all under Branson direction and innovation stories. Branson actually

maintains a controlling interest in every company he starts. What gives him such a unique

entrepreneurial spirit? Since, he advocates social responsibility by sticking to his belief that

employees’ personal needs come first. While others cannot figure out how, he still manages to

avoid layoffs. Also, Branson believes in the power of informal communication. Each of his

companies is kept small and controllable even though they’re run under a conglomerate

structure. Virgin is diversified in countless directions, with interests in airlines, retail stores, a

travel group, an entertainment group, a hotel enterprise, financial services, cinemas, radio

stations and much more. The man is doing something right, and many believe a large part of it is

his earnest consideration of his employees.

References:

https://www.josephchris.com/richard-branson-leadership-style-commandments#:~:text=Branson
%20has%20a%20participative%20leadership,to%20caring%20for%20his%20employees.

https://en.wikipedia.org/wiki/Virgin_Megastores

https://www.fool.com/investing/general/2014/10/19/how-richard-branson-built-a-5-billi.aspx

https://www.virginmegastore.ae/about-us