Diversification Strategies Case Study

The Virgin Group in 2005

OR

Abstract:
In 2005, the Virgin Group operated over 200 disparate businesses and the brand virgin was one of the most known brands in the world. Its founder Sir Richard Branson, a brand by himself was famous in media and business circles for his entrepreneurship, leadership style and publicity stunts. The group started by mail order records business, gradually diversified into disparate businesses like music retailing, airlines, beverages etc. Virgin companies were renowned for its innovative service standards, employee and customer-centric approach. Branson’s personal management style encouraged risk-taking, delegation and participation. His disrespect for hierarchy led to a cordial and fun work environment.

The case describes the origin, growth and evolution of the Virgin Group and the indispensable part played by its leader throughout. The guiding principles of the Virgin Group and its insistence on innovative services for the customers and welfare of the employees on a continuous basis has been highlighted. While the group has been successful in majority of its ventures, it also faced failures in quite a few. The case in the end raises the question that whether the unrelated diversification of the Virgin Group has led to the dilution of the virgin brand.

Pedagogical Objectives:

• To analyse the diversification strategies and innovations undertaken by the Virgin Group
• To discuss the personal management style of Sir Richard Branson
• To debate whether extensive unrelated diversification by a company could lead to dilution of its brand.

Keywords : Diversification Strategies Case Study; Richard Branson; Virgin; branding; leadership; entrepreneurship; innovation; Virgin Atlantic; management style; franchising; work environment; diversification; brand stretching; brand dilution; publicity; marketing; space tourism; focus; brand image; brand personality