Case Assignment: The Virgin Group

Case Assignment: The Virgin Group in 2015

I recommend that Branson considers divesting some businesses that are not in line with his companies’ strategy, resources & capabilities, and brand image. My recommendation is to further divest from the clothing industry by selling victory corporation, I also think they should divest the virgin money corporations as well as the virgin health and wellness company groups. Furthermore, the case mentions Branson’s interest in creating a tesla competitor which I think should be put off until much later for the virgin company as virgin cars proved to be a failure and they already have many new startups currently. Brand Image: In recent years, the virgin group seems to have strayed from its original

The virgin group is highly diverse as it is with the many businesses they own, they risk diluting their brand image and name and so customers may not believe them to be the “consumer champion”. Furthermore, the case suggests Branson’s ‘popular appeal’ could be waning due to discrepancies between his behavior and public image. Since this is a large advantage for Virgin that makes customers trust the brand it could significantly hurt the group, especially combined with dilution of the brand. Moreover, not only a failure in Branson’s image can harm the group, but also a failure in one of Virgin’s businesses can contaminate the entire virgin brand and make it lose its appeal. Additionally, from the Virgin Wings financials we can see that although they seem to be managing their debt, their management of assets and revenue is declining, suggesting that they have grown too large too quickly. Overall, the risk of not divesting is larger than the risk of divesting for the Virgin Group. Besides, the industries I have chosen are ones where virgin has already sold off many shares successfully and are not the groups core businesses. Therefore, they can be easily divested and replicated at a future point in time if they wish to return

The complex system of ownership within the group makes it hard to track investments and cash flow. This makes it difficult for the group to assess its financial position and could lead to loss of revenue and false calculations of budget and forecasts. There needs to be a consolidated account for the Virgin group companies and especially the parent company. This is necessary for stability and future growth of a corporation like Virgin that is dependent on creating startups, especially in the travel and hospitality industries. As a final note I think Virgin should continue divesting businesses from the group to create new sources of financing. This approach is what works for them as the Virgin Group repeatedly created new successful businesses through the flotation of its other