Virgin’s Ethical
Business ethics is based on broad principles of integrity and fairness and focuses on internal stakeholder issues such as product quality, customer satisfaction, employee wages and benefits, and local community and environmental responsibilities. Virgin doesn’t just do things differently, he does them VERY differently- yet his sometimes over-the-top antics, transparent style and fearless business approach hold great appeal to the next generation of employees. Virgin Airlines blowing the whistle on an illegal airline cargo price collusion and Virgin ponying up a $25 million prize for whoever can develop a commercially viable design to cut down on greenhouse gasses (Virgin Earth, 2007).
Virgin Cultural
Virgin actively encourages personal –in speech, creative thinking, and dress. It’s a key brand value, a management style and a vital ingredient of our culture. We believe in to putting fun. it’s a key brand value, a management style and a vital ingredient of our culture. We believe in putting the fun into functions. We organise heaps of activities designed to promote team spirit and reinforce brand values, not to mention countless social events and staff parties, including Richard Branson’s summer party for all staff. As the creator of Virgin and its unique corporate culture, and the primary promoter of its image and entrepreneurial spirit. Richard Branson was synonymous with Virgi. Robert Dick referres to Virgin as a “counter-culture enterprise” and to Branson as a “ hippie entrepreneur.”( Grant & Neupert, 2003b)
1.5 Virgin Environmental
Virgin Group provided an environment in which talented, ambitious people are motivated to do their best and strive for a higher level of performance. Branson expect high level of commitment, the acceptance of personal responsibility, and long hours of work when needed. Financial social activities company-sponsored weekend getaways, and impromptu parties. In 2006, Richard Branson pledged to invest $3 billion dollars over the next decade in order to ‘fight global warming’. This will include all the profits from his 51% share in Virgin air and rail companies, as well as money from subsidiary companies, such as his online train booking company sold in 2006. $400m is to be invested by 2010.(Eransting, 2008)
Virgin Social Current Standpoints
Virgin has acted very responsibly to balance its social strength. There are countless occasions where virgin has acted for the welfare and betterment of the society by providing better platforms in form of employment globally, by recognizing staff’s input in the form of innovative ideas, running family & friends’ policy, taking into account customer’s problems and acting promptly to resolve it. Its charitable actions have been truly welcomed and admired by the government bodies and it has vastly benefited to the people in need. Virgin provide their service in travelling in all over the world. Virgin mobile registered KIDS company charity funded to collect money to provide practical and emotional support to ‘lone children’. Each year, kids company reaches out to 11925 children and young people, and their families, through three major programme outlets: ‘work in schools’ programme, the Arches ll’ drop in centre and a newly-established educational centre, the ‘Urban Academy’. (Virgin mobile, 2009) To save environment for all 3000 staff of Virgin trains Richard Branson make their uniform from different Wensum- supplies garment which is eco-friendly.
Chapter 2 Business Environment faces by Virgin Group
The most general ‘layer’ of the environment is often referred to as the macro-environment. The consists of board environmental factors that impact to a greater or lesser extent on almost all organisation. It is important to build up an understanding of how changes in the macro-environment are likely to impact on individual establishments. A starting point can be provided by the PEST framework which can be used to indentify how the future trends in the might impinge on organisations. This helps managers consider how strategies might need to change depending on the different ways in which the business environment might change. Within this board general environment the next ‘layer’ is called an industry or a sector. The five forces framework and the concept of cycle of competition can be useful in understanding how the competitive dynamics within and around an industry are changing. The most immediate layer of the environment consists of competitors and markets. The concept of strategic groups can help with the identification of both direct and indirect competitors. Similarly customers’ expectations are not all the same. (Johnson, Scholes, Whittington, 2005)
Output Inputs Consumption Input
Figure 2: Adapted from Business environment influenves (Fieldwork)
2.1 PEST
Political: Politically stable in Britain; Virgin competitive Tendering is carried out in public service sector including railway. Worldwide peace and development have been commonly recognized. Terrorist Attack on 11th Sept impacted on some industries, esp. airlines.
Economical: • The issue of Euro will push the development of European economy;
China's entry into WTO provides opportunities for world;•Many markets remain stable;•Globalisation will speed up the flow of capital among the nations; the collapse of NASDAQ had a negative effect on global e-commerce.
S:Globally, there is a trend of consumer's requirement for higher service quality and more service types.
Culture: Cultural differences among nations increases the requirements for service localization. Fun at Virgin is not a dirty word; it’s a key brand value, a management style and a vital ingredient of culture. Virgin also belive to putting fun into service and work.
Technological : IT's development provides opportunities for delivering "old" products and service in new ways.
Increased regulation concerning product safety, ecology, etc. affect technological changes. In summary V is in a macro environment with relatively stable politics, both diversified and consistent economic development, increasing and changing social needs and rapidly developing technology.
2.2 SWOT
SWOT is an acronym for the Strengths and Weaknesses of the firm and the opportunities and the Threats posed to the firm by the external environment. Strength is an internal factor. Any resource, skill or special capability in relation to the competition represents a company’s strength. As opposed to strengths, a company’s weakness represent an inadequacy in resources skills or capabilities in relation to the competition. Opportunity is a favourable situation in the environment and the company should make best use of it. A threat is an unfavorable development in the environment which can adversely affect the company.
Figure 3: Pearce and Robinson SWOT Grid Adapted from (Stapleton & Thomas, 1997)
2.3 Porter’s Five Forces
According to Norton, (2007a), as well as the general environment factors, part of external analysis also requires and understanding of the competitive environment and what are likely to be the major competitive forces in the future. A well-established framework for analyzing and understanding the nature of the nature of the competitive environment is porter’s five forces model.
The original competitive forces model, as proposed by Porter, identified five forces which would impact on an organization’s behaviour in a competitive market. These include the following:
Figure 4: Porter’s Five Forces adapted from (Norton, 2007b)
Understanding the nature of each of these forces gives organizations the necessary insights to enable them to formulate the appropriate strategies to be successful in their market (Thurlby, 1998)
Force 1: The Degree of Rivalry
The intensity of rivalry, which is the most obvious of the five forces in an , helps determine the extent to which the value created by an industry will be dissipated through head-to-head competition. The most valuable contribution of Porter's “five forces” framework in this issue may be its suggestion that rivalry, while important, is only one of several forces that determine industry attractiveness. Like Virgin Atlantic is creates value and extended product of virgin group. Their competitors are British Airways, Gulf airlines Ryan Air and soon. Virgin Atlantic is most likely to high in those industries where threre is athreat of substitute product; and existing power of suppliers and buyers in the market.
Force 2: The Threat of Entry
Both potential and existing competitors influence average industry profitability. The threat of new entrants is usually based on the market entry barriers. They can take diverse forms and are used to prevent an influx of firms into an industry whenever profits, adjusted for the cost of capital, rise above zero. In contrast, entry barriers exist whenever it is difficult or not economically feasible for an outsider to replicate the incumbents’ position (Porter, 1980b; Sanderson, 1998) The most common forms of entry barriers, except intrinsic physical or legal obstacles, are economies of scale for example, benefits associated with bulk purchasing; and any new entry of competitor like Virgin Media provide their mdia service very quick but any other new competitor takes entry Cost of the entry is investment into technology; then the distribute channels also, ease of access for competitors;
Government legislations introduction of new laws might weaken company’s competitive position.
Force 3: The Threat of Substitutes
The threat that substitute products pose to an industry's profitability depends on the relative price-to-performance ratios of the different types of products or services to which customers can turn to satisfy the same basic need. The threat of substitution is also affected by switching costs – that is, the costs in areas such as retraining, retooling and redesigning that are incurred when a customer switches to a different type of product or service. Virgin service for tourism are like Airlines and trains, space flight and soon. Generic substitution Like virgin Atlantic complete with space flight service
Force 4: Buyer Power
Buyer power is one of the two horizontal forces that influence the appropriation of the value created by an industry. The most important determinants of buyer power are the size and the concentration of customers. Other factors are the extent to which the buyers are informed and the concentration or differentiation of the competitors. Kippenberger (1998) states that it is often useful to distinguish potential buyer power from the buyer's willingness or incentive to use that power, willingness that derives mainly from the “risk of failure” associated with a product's use. Buyer power is relatively high where athere a few large players in the market like For Virgin Galatic is very morden service which is provide at veryuhigher cost so there are no so amny cometitore for this business so the buyer power of virgin for this serive is stronge.
Low cost of switching between suppliers, such as from one fleet supplier of trucks to another.
Force 5: Supplier Power
Supplier power is a mirror image of the buyer power. As a result, the analysis of supplier power typically focuses first on the relative size and concentration of suppliers relative to industry participants and second on the degree of differentiation in the inputs supplied. The ability to charge customers different prices in line with differences in the value created for each of those buyers usually indicates that the market is characterized by high supplier power and at the same time by low buyer power (Porter, 1998). Bargaining power of suppliers exists in the following situations: Where the switching costs are high (switching from one Internet provider to another); High power of are like Mcdonals British Airways, Tesco. Possibility of forward integration of suppliers ; Fragmentation of customers (not in clusters) with a limited bargaining power.
The nature of competition in an industry is strongly affected by suggested five forces. The stronger the power of buyers and suppliers, and the stronger the threats of entry and substitution, the more intense competition is likely to be within the industry. However, these five factors are not the only ones that determine how firms in an industry will compete – the structure of the industry itself may play an important role. Indeed, the whole five-forces framework is based on an economic theory know as the “Structure-Conduct-Performance” (SCP) model: the structure of an industry determines organizations’ competitive behaviour (conduct), which in turn determines their profitability (performance). In concentrated industries, according to this model, organizations would be expected to compete less fiercely, and make higher profits, than in fragmented ones.
Chapter 3 Core Competences
According to Barney & Clark, (2007) the relationship between resource heterogeneity and immobility; value, rarity, imitability and organization; and sustained competitive advantage is summarized in Figure 5. This has been developed into a framework that can be applied in analyzing the potential of a broad range of firm resources to e applied in analyzing the potential of a broad range of firm resources to be sources of sustained competitive advantage.
Figure 5: The relation between resource and heterogeneity adapted from (Barney & Clark, 2007)
Virgin Four core competencies. There are:
The ablitity to identify appropriate growh opportunities, The ability to move quickly. The willings to give day-to-day management control to relatively small operating teams. “They try to keep their company small,” he says. The ability to create and manage effective joint ventures, others have suggested Branson’s own real core competence is the ability to motivate people and push them to limit. Still others, point to his relentless and sometimes ruthless negotiating skills. Careful dissection, however, reveals that the truth is more subtle. The Branson phenomenon can be reduced to a number of lessons that can sharpen the business acumen of any manager or entrepreneur. But that doesn’t mean that the formula can be special individual to run a business the Branson way.
3.1 Sustainable Competitive Advantages
Sustainable competitive advantage of an organization depends on its internal environment and external environment. The internal factor is ‘what the firm can do’ and the external factor is ‘what the firm might do’.
A firm is said to have core competences when it has a bundle of capabilities and a firm is said to have capabilities when it has a bundle of resources. These resources can be tangible or intangible.
They could be assessed with a tool called VRIO framework (V = Value, R = Rarity, I = Imitability, O = Organisation). Here along we have accessed the core competences of Virgin Group and have concluded that they are strong enough to sustain a competitive advantage.
V (Value): Is the unique value of product or service. A price that consumer could happily pay providing it matches their needs and preferences and no other competitor could beat that. Virgin Atlantic provide airline service but the consumer cant pay that rate happily because their are so amny another airlines like, British Airways, Emirates, Ryan and soon fulfil consumer expectation at less price.
R (Rarity): The availability of alternatives and their supply in conjunction to its price.
I (Imitability): The product or service should be imitation proof. Say for instance it should be difficult to imitate technologically, cost effectively and so on.
O (Organisation): What is the brand image of the company? Does the organisation hold good reputation in the market for the goods and service it is providing?
Chapter 4 Strategic development for Virgin media& Communication BusinessVirgin Media is the first people in the UK to offer you TV, Broadband, Phone and Mobile – all from one place.The future is bursting with fresh entertainment and communication possibilities. That's why we're here - to bring all the excitement to you and make your digital place the brilliant place it should be. Virgin Media provide unique combination TV that puts you in control, superfast and reliable broadband, phone packages that fit around you, mobile service that gives you just what you want. Whatever you choose with Virgin Media, we're aiming to make the whole experience as effortless as the award-winning service our Virgin Mobile customers have enjoyed for years.
According to Johnson and Scholes, (2002), strategy is likely to be concerned with the long term direction of an organization. Strategies exist at a number of levels in an organization. These are corporate level strategy, Business level strategy and functional level strategy. The corporate strategies can be classified as growth strategy, stability strategy and retrenchment strategy. The types of growth strategies are vertical integration (forward & backward), horizontal integration, concentration, diversification (related or unrelated) and international. The most famous portfolio analysis was devised by the Boston Consulting Group(BCG). It is called the BCG Matrix and views an organization’s products as
Figure 5: BCG Matrix adapted from (Business Environment, 2005))
Dogs : low market share, little potential growth.
Problems Children (or question marks) – low market share, high potential growth
Cash Cows – High market share, low potential growth
Stars - high market share, high potential growth.( Business Environment, 2005)
Virgin media has established infrastructure facilities and has a high market share in a mature market With its three digital home shopping channels bid tv, price-drop tv and speed auction tv, the company’s live programs are available to viewers in more than 20 million homes throughout the UK. Launched in 2000, sit-up Ltd. generated revenues of GBP 242 million in 2008 (Virgin Media, 2009). Therefore, Virgin Media can be considered as a cash cow.
Chapter 5 Implementation
5.1 7-S Frame work
The 7-s Framework of Mckinsey is a management model that describes 7 factors to organize a company in a holistic and effective way. Together these factors determine the way in which a corporation operates. Managers should take into account all seven of these factors, to be sure of successful implementation of a strategy. Large or small. They’re all independent, so if you fail to pay proper attention to one of them, this may effect all others as well. On top of that, the relatives importance of each factor may vary over time
Figure 6: McKinsey 7-S model Adapted from (Value Based management .net, 2009a)
Shred Value
The interconnecting center of Mc Kinsey’s model is; Shared Values. What does the organization stands for and what it believes in. Central beliefs and attitudes.
Strategy: Plans for the allocation of a firms scarce resource, over time, to reach identified goals. Environment competition,customers.
Structure: The way the organization’s units relate to each othe: centralized, functional divisions(top-down); decentralized (the trend in large organizations); matrix, network, holding ,etc.
System Plans for the allocation of a firms scare resource, over time to reach identified goals, Environment, competition, customers.
Staff: Numbers and types of personal within the organization.
Style: Cultural style of the organization and how key managers behave in achiving the organization’s goals
Skill: Distinctive capabilities of personal or of the organization as a whole core competence. ( Value based management.net, 2009)
5.2 Implementation Plan for Virgin Media
Step 1: Develop the strategy (20 Days)
Virgin believes in making difference for their consumer to compare with their competitor. It also stand value for money, quality, innovation, fun and a sense of competitive challenge. These principals should be known to everyone in the organization. It has been suggested that Virgin Media should focus on its market development while maintaining its culture, innovation and customer satisfaction.
Step-2: Structure (1 month 15 days)
According to develop the strategy is suggested that the structure should be centralized with hierarchies and various functional levels. The organization should have level as well as operational level managers.
Step 3: Training (1 month)
The training is always bring some good changes in their performance and quality. The training should be a continuous process in the organization. All employees should be trained to improve their skills. The cultural, social, environmental and ethical standpoints of the organization should be communicated to every one. It is estimated that it requires a four weeks’ time to create a base for continuous improvement of the process.
Step 4 : Monitoring and Evaluation ( 1 month 7 days)
Performance measures are used to establish a baseline measures and to compare goals with actual performance. It determines the overall performance of the organization and indicate process gains and losses. It provides information to make informed decisions. The suggested measures for Virgin media are monitoring of customer feedbacks or complaints, human resources, research and development, suppliers, marketing and sales etc. Monitoring and evaluation is a continuous process. However, it is estimated that it requires a four weeks time for establishing a base for monitoring and evaluation.
Conclusion
To conclude Virgin group is very fastest growing company in all the fields like in airlines, rail, tourism, space flight provider as well. Richard Branson also think that he want to make his group as number one position in the market. Virgin group has also very intelligent staff for all the services like for it sector and airlines.
As above you seen my case study it shows ther are somany strength, weakness, opportunities, threats. Their relationship with social, environment and so on is very nicely managed. Virgin group is very active to improvement in their seervice they are always finding for their default strategies and what the planning ahead to change that all mistake or problem not take place again in the future. For that thaey always make strategic planning and implementation with the help of their working group to Start from Richard Branson to the minor level employee.
BIBLIOGRAPHY
-
Barney, J., Clark, D., (2007) “ Resource- Based theory: creating and sustaining competitive advantage” 1st ed, Published by Oxford University.
- Business Environment, (2005) Published by Elearn Limited (Great Britain), Pergamon Flexible Learning
-
Ernasting, A. (2008), “Richard Branson And Virgin group’s biofuel investment” [online] Available from > Access on 24th March,2009
-
Funding universe, (2009) [online] Available From < > Access on 26th March, 2009.
- Finlay, P., (2000), “Strategic Management”, Published by Person Education
-
Grant, R., M., Neupert, K., (2003A) “ Case in contemporary strategy analysis” 3rd ed, Published by Wiley- Blackwell.
- Thurlby B (1998) “Competitive forces are also subject to change”, Management Decision London
- Johnson, G., Scholes, K., Whittington, R.(2005) “Exploring Corporate Strategy” (7th ed) FT Prentice Hall, England, Chapter 2.
-
Johnson, G. & Scholes, K., 2002. Exploring Corporate Strategy : Text and Cases. 6th ed., Essex : Prentice Hall.
- Kippenberger, T. (1998) Strategy according to Michael Porter, The Antidote, Vol. 3 Issue 6, pp. 24-25.
-
Value base management.net, (2009), “ McKinsey 7-S model” [online] Available from < > Access on 30th April, 2009.
-
Norton, A., (2007A), “ CIMA Official Learning System Integrated Management” 4th ed, Published by Elsevier.
-
Norton, A., (2007B), “ CIMA Official Learning System Integrated Management” 4th ed, Published by Elsevier.
- Porter, M. (1980a) How Competition Forces Shape Strategy, Harvard Business Review, September-October, pp.137-145.
- Porter, M. (1980b) Competitive Strategy, New York: Free Press.
- Porter, M. (1998) Competitive Strategy: Techniques for Analyzing Industries and Competitors, New York: Free Press.
-
Porche, D., J., (2004), “ Public & Community Health Nursing Practice : A Population Bases- Approach” 1st ed, Published by SAGE.
- Sanderson, S. (1998) New approaches to strategy: new ways of thinking for the millennium, Management Decision, Vol. 36 issue 1, pp.9-13.
-
Scientific Bloging (2008) “ Virgin Trains Changes To Eco-Friendly Uniforms” [online] Available From < > Asses on 22nd April, 2009.
-
Sapleton, J., Thomas, M., (1997), “ How to prepare a marketing plan: A guide to reaching the consumer market” 5th ed, published by Gower Publicating.
-
Virgin mobile, (2009) [online] “Kids Company” Available from < > Access on 13th April, 2009
-
Virgin Media, (2009) “Virgin Media Reports Fourth Quarter 2008 Results”[Online] Available at <> Access on 24th April, 2009)
-
Value base management.net, (2009), “ McKinsey 7-S model” [online] Available from < > Access on 30th April, 2009
Strategic Planning and Implementation – DMS 2009