Business at work - Virgin

By looking both the data collected and the line graph produced I can see that the primary sector has steadily declined over the last one-hundred and fifty years, the secondary sector has had been even the last one hundred years but then declined quickly over the last fifty years, the tertiary sector however has done the opposite of the primary sector by steadily growing over the last one hundred and fifty years.

Virgin offers many goods and services for instance; airlines, trains, music, banking, cola and wine  

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Task 2: Business Aims and Objectives

The main aims of Virgin are to attract new customers by giving them a service no other competitor can provide for example: customised CD’s which you can take a list your favourite songs of any genre or artist onto one disc or more depends on amount of songs, just take your list to any Virgin Megastore or do over the internet and we’ll let you know when its ready for you pick up.

The main objectives of Virgin are: customer satisfaction, market share, improved sales of goods and services, growth, quality assurance.

1. Profit
2. Global power
3. Brand Recognition
4. Reputation and Image
5. Share Price
6. Satisficing
7. Ethical Issues
8. Efficiency
9. Personal Satisfaction
10. Make a Fortune!
11. Environment
12. Long Term Survival
13. Market Share
14. Social Issues
15. Turnover
16. Customer Satisfaction
17. Brand loyalty
18. Market Power

I believe that Virgin are achieving their aims and objectives because they are a very successful company and that they don’t want to lose any of their customers in all areas for example Virgin Airways achieve customers satisfaction by good staff on flights and the quality of the food and drink and services provided on the flight.  I feel that more money has been invested in the airline and trains part of the business to maintain the quality of the transport.

Task 3: Functional Areas

Virgin Direct for example:

Virgin Direct is the Financial Services arm of the huge Virgin empire, founded by Sir Richard Branson.  It was set up in 1995 as a joint project between the Virgin group and Norwich Union.  Virgin Direct’s aim was to fill a gap in the market, providing financial services over the telephone.  Its main business today is selling investment products such as Individual Savings Accounts and personal pensions, managing over £3bn of customers’ money.

Managing Director

Finance         Production                                 Marketing                              HR                              R&D

Dept                    Dept                                   Dept                               Dept                   Dept                                        

Finance

The finance department has a complicated role to play, perhaps even more so in Virgin Direct than in other businesses.  This is because it deals with two areas of finance – customer finance and company finance.

Customer finance is an extremely important role and is tightly regulated by the Financial Services Authority.  This area of the finance department must deal with all the incoming and outgoing customer money and reconcile (balance) these figures, in order that the correct levels of tax and fees are paid to the government and fund managers.  It must also, by law, finance mistakes made by those in the call centre and administration departments out of the resources of the business itself.

Its second role is as finance department of the company, Virgin Direct.  It is responsible for departmental budgets.  How much can marketing spend on its new advertising campaign?  How much are human resources allowed for hiring and training new staff?  These things must be planned for in an extremely seasonal market, where business in the month of March alone, can be as much in value as business in the rest of the year put together.

Production

Virgin Direct is a financial services provider and as such the production department is the call centre that handles the incoming and outgoing calls from customers and potential customers.  Those who work there are in the frontline of the business, selling the products to new and existing customers.  They deal with customers personally and therefore the performance of each individual reflects on the rest of the company.  As a service sector business, the treatment of each customer is as important as the performance of the product being sold.

Marketing

Virgin Direct was set up with the aim of making personal finance as accessible as possible.  As a result the marketing involved has to be very broad in focus.  It needs to be in the Sunday tabloids, and on peak time television, but at the same time it must appeal to customers who are already interested in buying these products who read publications specialising in personal finance. Timing is also a difficult issue for the marketing team.  A huge proportion of Virgin Direct’s business is done in the last month of each tax year.  Do they concentrate all their spending in the months leading up to then, as other company’s do, or do they spread it across the year, hoping to raise awareness of their products for the crucial time period?  Marketing also spend a lot of time conducting surveys of existing customers and finding out what their needs are.  Existing customers are by far the most important group in terms of launching and selling new products and losing them can be very costly to the company indeed.

Human Resources

The seasonal demand for many of Virgin Direct’s products has important implications for this department.  It has to recruit high calibre people to work in the call centre, with the important jobs of attracting new customers and also looking after existing clients.  It has the very difficult task of finding enough staff at busy times of the year and balancing this against quieter periods when demand for labour is less.  Human Resources also have a much wider role to play in terms of training, promotion and health and safety.  They also co-ordinate the system of industry exam entry, where existing staff gain qualifications, recognised in other companies, relevant to their role in the firm.

Research and Development

Although the business does not produce a product as such, it is still necessary for it to innovate.  This is particularly true for Virgin Direct, which was a business made possible by advances in technology.  A huge area for research and development in relation to the growth, and indeed survival of the company is the internet.  Customers can now check the value of their investments on-line, and also switch money between products, as and when they choose.  The research and development of new products in this area has huge financial implications – the more customers can achieve on-line, the less need there is to recruit expensive human beings to perform these tasks on the end of a telephone.  As with any other business, every opportunity to limit costs needs to be investigated.

The functions of Virgin inter-relate because for example the R&D dept, Production dept and the Marketing dept do to because the R&D dept research the market and inform the production market what make next or if they need produce more of some particular products.  Then the Production Dept inform the Marketing what they are producing and how they can market the product.

Medium:

• Letters
• Memo
• Report
• Notice board
• Faxes
• Telephone
• E-mail
• Face to face
• Body language
• Video/video conferencing
• Internet

Barriers to Successful Communication

• Ability of the sender – how much the sender understands of the message they are trying to send
• Content – including technicalities and jargon
• Method of communication – including style and body language where appropriate!
• Skills and attitude of the receiver
• Organisational factors – complexity of the organisation, scope of the organisation
• Cultural attitudes
• Perceptions, prejudices and stereotypes
• Inappropriate target for the message
• Technical capabilities – ICT

 

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Task 4: Management Style & Culture

Management Styles

How you go about investigating and satisfying your employees motivational needs boils down to something call a management style; example might be:

• You believe that your employees are basically lazy and the only way to motivate them is to shout or even threaten your staff.
  - Your motivator is fear and intimidation build on the notion that your staff are lazy 
• You may value the opinions of your staff and believe you can motivate your staff through mutual trust and respect.  
  - Your motivator is trust and respect for your employees.

• You may believe strongly in recognising achievement and excellence by rewarding employees. 
  - You motivator is rewarding for good work

Motivational needs

Motivational needs simply means what your employees need to help them do their work and how important that need is; for example, an employee might feel that they need a lot of recognition from their employer or manager to boost their ego.  Once their ego is boosted this motivational need is fulfilled.  An employee might have many motivational needs all varying in importance; your task as employer/manager is to detect these needs and act to allow fulfilment.

You may now be thinking that you have to bend to the pressures of the workforce so that they will work for you, however, you would be wrong in this assumption.

Motivational Factors

Here are just a few examples of what employees feel are their motivational needs or factors:

• The working environment - poor or inadequate equipment or work facilities
• Working Conditions - too hot, too cold, no breaks, long hours
• Social Interaction - isolation, socialisation discouraged etc
• Job Security - redundancies, feeling not part of company etc
• Skill or intellectual use -inability or discouragement to use intellectual or skill 
• Promotional prospects and job title - lack of promotion, others promoted but not them
• Responsibility - not allowed to work off own initiative
• Recognition and appreciation - lack of praise or recognition for achievement
• Trust and respect - treated as a machine
• Participation in decision making - not allowed to get involved with company
• A sense of belonging - 
• Salary - pay poor for job they are doing

• Management issues - conflicts with management, etc

Once you are aware of these needs and act to resolve and maintain them, you will find that the staff are more content and hopefully motivated.  If you invest in your staff you are investing in your company.

The only way you can find out what truly motivates your staff is:

• Asking your employees what motivates them
• Monitoring the changes in work levels as a result of your motivational philosophy

Once you know what makes your employees tick you can formulate a management style which will assist to motivate your staff.  For many employers or managers this task is simple, but for many it has been a sadly neglected skill

SWOT Analysis

SWOT stands for strengths, weaknesses, opportunities, and threats. Strengths and weaknesses are internal factors.

A strength could be:

• Airlines because more money is invested in that part of the company.
• a new, innovative product or service (e.g. customised CD’s, explained above)
• location of the business
• quality processes and procedures
• any other aspect of your business that adds value to your product or service.

A weakness could be:

• lack of marketing expertise
• undifferentiated products and service (i.e. in relation to your competitors)
• poor quality goods or services (most goods and services are good)
• damaged reputation

Opportunities and threats are external factors. For example:

An opportunity could be:

• a developing market such as the Internet.
• mergers, joint ventures or strategic alliances
• moving into new market segments that offer improved profits
• a new international market
• a market vacated by an ineffective competitor

A threat could be:

• a new competitor in the market
• price wars with competitors
• a competitor has a new, innovative product or service
• competitors have superior access to channels of distribution
• taxation is introduced on your product or service