...Strategic Management case 3: Virgin Professor Fereira, 2011-2012 Sanne Adriaensens 159111512 1. Virgin Who? WHO? WHAT? WHERE? HOW? Sir Richard Branson, founder of Virgin (1970) and entrepreneur Travel, leisure, mobile phones, entertainment retailing and personal finance Britain Getting the business out of the public level by turning it back into the private level of ownership and handle the principles of the ‘Keiretsu’ concept (a structure of loosely linked autonomous units run by self-managed teams that use the Virgin brand name). Branson is finding success by sacrificing short-term profits for long term growth. The corporate rationale is based on his own personal philosophy. 2. CORPORATE STRATEGY 2.1 Nature of diversification The Virgins rationale contains to diversify in as many markets as possible to expand the equity base of the group and to extend the brand so widely with a broad appeal of values and business principles. This because the brand is their greatest single asset, which is identified with innovation, unconventional strategies and marketing that counts for most of the starting ventures of Virgin. They try to differentiate from the established markets in the way they define the nature of the companies and how they are related to the customers. In this way, they aim to give customers a better alternative than their competitors. The markets they enter are also always in a growing phase of the industry’s life cycle, where it’s possible to find a lot...
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...Problem Statement Virgin Mobile is launching its services in USA in the summer of 2002. It has to decide on its pricing strategy that would attract and retain subscribers. Situation Analysis Customer: The target consumer group is youth aged between 15 and 29 years. Penetration in this segment is significantly lower and the growth rate is projected to be robust in the coming years. Most of them have a history of poor credit quality, no credit cards and no facility to pass credit checks. The revenue generated is lower than the average acquisition and the cost of serving of the industry. Hence this group is largely under served. This consumer segment has their specific needs that are not being met by the mobile service providers. Virgin Mobile is addressing these specific needs. Virgin Mobile is targeting value added services like Text Messaging, downloading information, ringtones, graphics, etc. These are more popular and considered trendier by these young adults. Virgin Mobile also plans to introduce more new value added services via ‘VirginXtras’. Virgin also will have more ‘easy to buy’ mechanism and communicate it to the target segment through more youth focused media channels such as MTV, WB and advertorials in The Complex, Vibe & XXL. Company: Virgin Mobile, a venture of Virgin Group, was the 1st company to introduce a mobile service using Mobile Virtual Network Operator (MVNO) model. Virgin Image emphasizes on value for money, quality, innovation, fun & sense of...
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...EXECUTIVE SUMMARY This Virgin Blue will be discussing about Virgin Blue history and when it began, its establishment as the first low fare airline in Australia. This report will also examine about Virgin Blue’s business model their advantages, in the market as a low fare airline and their financial circumstances that the airline industries have faced during their operation. In Australia first low fare airline, the report will analyze how they are keeping their position in the competitive market airline and what are their plans for expansion. Virgin Blue’s marketing strategy will be included to analyze their “no thrills” method. Further on the marketing strategy, the report will analyze how Virgin Blue manages their operations in a way to expend their target market across Australia effectively. This report will further examine how their future plans can give them the opportunity to take on the big competitor in the Australian airline industry like Qantas, Jet airways and Tiger. As summery of Virgin Blue’s financial report will be discussing how their profit and loss margin is performing and the risks that the Virgin Blue could be facing on their restructuring scheme. By anticipating, Virgin Blue’s plan, the report will discuss how the plan will be implement and how effective and efficiently will this approach be internationally. 1. HISTORY (Marketing Situation) I. AUSTRALIAN AIRLINE HISTORY : The idea of passengers flying between cities in Australia was imagined...
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...Research Case Study Virgin Blue ‘You can’t make a business case that you should be who you are not’ Shayne Connell Student Number: 9809317 Case Study GSBS6010 – Foundations of Marketing Theory Due: 11 March 2010 th Lecturers: Penny Crittall and Joel Goodsir Page 113 Table of Contents 1. Executive Summary………………………………………………………3 2. Situation Analysis a. Identification of case issues………………………………....…. 4 b. Analysis of case issues using marketing theory…...........……5 3. Evaluation of alternative courses of action……………………………. 7 4. Recommendations………………………………………………………..7 5. References………………………………………………………………...9 Page 114 1. Executive Summary This analysis examines Virgin Blue’s strategy to increase share of the business and government travel market. This is the third change of strategic direction for the low cost carrier since 2000. The key issues are the challenge of repositioning the company while maintaining the brand strength of the airline, and continuing to meet the needs of the leisure market while offering value to business travellers. Virgin Blue has targeted the full service market leader, Qantas, by positioning itself as an airline for executives who can avail themselves of ‘Premium Economy’ services. The situation is analysed drawing on International case examples, strategic planning principles and growth strategies to evaluate alternative courses of action. Virgin Blue needs to target the business market in the unique Virgin way to differentiate...
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...all the marketing and promotional activities up to the present for the specific venture respectively. For example: Virgin Digital UK offers digital music to a wide variety of customers in the mediums that are compatible with wide range of software and digital hardware. The company has deep roots in music industry begins with its record company Virgin Records. The company has benefited by the ownership and right to many music tracks and make available to the public. Virgin mobile can takes the advantage of download music to mobile phones as an incentive for customers to subscribe to Virgin mobile service providers. It allows the Group to offer packages and exclusive deals that have potential to draw even more customers Virgin has the ability to take long term perspective as another parenting added-value. corporate rationale was to sacrifice their short-term profits in order to gain a longer-term growth and therefore they used an independent business level decision making method. This corporate rationale allows the managers to make decisions independently for growth and feel the same degree ownership and values that any other manager would feel in the Virgin Group. Sir Richard has also argued that he pursues growth, not profits, and builds companies for the long term. By entering the market that is still in its growth stage and has few competitors Virgin managed to produce the product or service for a slightly lower price than all other competitors within...
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...THE VIRGIN GROUP CASE STUDY QUESTION 1: What examples does the case give of links between Branson’s strategy for Virgin and the environment in which it operates? The Virgin Group Ltd is a group of separately run British companies with the Virgin brand under the leadership of English celebrity business tycoon Sir Richard Branson. The core business areas are travel, entertainment and lifestyle, among others. Richard Branson’s strategy comes from his deepest inner beliefs; “in principle there were no product or service boundries limiting a brand name, provided it was associated with quality products/services on offer” The corporate strategy of the Virgin Group is to operate like ‘a venture capital firm based on the Virgin brand.’ This strategy involves non-related diversification at the individual business unit level. Meanwhile, synergies are created from hierarchical relationships and the interaction of the corporate head office with individual business units. By leveraging on the Virgin Brand which has established prominence in the minds of consumers, Virgin is able to enter new business areas with a bang and shake up existing orders. The unique Virgin culture also allows Virgin to break into new markets and execute its ventures very effectively. Virgin’s corporate strategy is best described in the Virgin Charter – the individual businesses are focused and develop as autonomous enterprises under a single unified brand name. This decentralization...
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...VIRGIN GROUP Resource: Exploring Corporate Strategy Introduction The Virgin Group is one of the UK's largest private companies, with an annual turnover estimated at £3bn per annum by 2000. Virgin's highest-profile business was Virgin Atlantic, which had developed to be a major force in the international airline business. However, the group spanned over 200 businesses from financial services through to railways; from entertainment mega stores and soft drinks to cosmetics and condoms. (Figure 1 shows the breadth of the group's activities.) Its name was instantly recognizable. Research showed that the Virgin name was associated with words such as 'fun', 'innovative', 'daring' and 'successful'. The personal image and personality of the founder, Richard Branson, were high profile; in British advertisements for Apple Computers, together with Einstein and Gandhi, he was featured as a 'shaper of the 20th century'. Origins and ownership Virgin was founded in 1970 as a mail order record business and developed as a private company in music publishing and retailing. In 1986 the company was floated on the stock exchange with a turnover of £250 million. However, Branson became tired of the public listing obligations. Compliance with the rules governing public limited companies and reporting to shareholders were expensive and time-consuming, and he resented making presentations in the City to people whom, he believed, did not understand the business. The pressure to create short-term profit...
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...Answer1 Richardson Branson is the CEO and founder of virgin group. Virgin group consists of many companies such as Virgin brides, Virgin Atlantic, Virgin Blue, Virgin cars, Virgin mobile, Virgin trains, Virgin Airlines and many more. Virgin is a well known brand all over the world especially in Europe & United Kingdom and his leader Richard Branson reached the status of a celebrity due to its great contribution in the emergence of the virgin group. An important element in Branson's success is his belief in delegation. Entrepreneur can be defined as an individual who organizes and operates a business that involves certain risks. In the modern age, one of the most successful examples of this is Sir Richard Branson. He displays a disciplined work ethic that demonstrates a passionate devotion to business. He is recognized as a highest achiever in the world of entrepreneurs. Sir Richard Branson has many entrepreneurial chacteristics and qualities that made him a successful man. Some of the entrepreneurial chacteristics that Richard exhibits: Visionary Evangelist As a visionary evangelist, the leader is able to communicate with other on the behalf of organization. Branson believes that there are industries which can be “Virgined” and his main concerned is to extend the virgin name while maintaining its high standards. This shows that Branson has a vision of captivating new and challenging future prospects. Self-awareness: Human beings are complex & diverse and for great leaders...
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...Research on Virgin Galactic Richard Branson's Virgin Galactic has us all excited about space travel, but we are slightly less excited about the Virgin Galactic cost. Those tickets into suborbital space are not cheap, and most of us will not be able to afford the trip for a while. What is the Virgin Galactic Cost? A 2008 book about space tourism stated that, "The cost of suborbital flight advertised by private space companies such as Virgin Galactic and Starchaser Industries is in the order of U.S. $200,000." [Source: Erik Seedhouse, page 27]. Virgin Galactic's webpage confirms that $200,000 is still the cost of a ticket of admission, and that at least 100 people have already paid that fare in full. [Source: virgingalactic.com]. Apparently, the company intends to keep the cost of tickets at this level for the time being. Will the Virgin Galactic Cost Come Down? In a 2008 interview, Stephen Attenborough, commercial director for Virgin Galactic said he thought competition would eventually drive ticket prices down to $50,000 or lower. [Source: The Independent]. He did not give any timeframe for this decrease. It seems inevitable that competition will force Virgin Galactic and other space flight companies to lower their prices. Low price is, after all, the most obvious way for a company to distinguish its product. But with $200,000 spaceflights still a thing of the future, it might be a while before the average Star Trek fan can afford a trip to space. Conclusions...
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...Virgin Mobile USA : Pricing for the Very First Time 1) Virgin Mobile targets the 14 to 24-year olds market. The case lays out three pricing options. Which option woul you choose and why ? All three options are very interesting for Virgin Mobile to introduce the American market. Considering Virgin Mobile’s background, goals and strategy, I would have choose the option 3 « A Whole New Plan » There are few reasons that explain this choice : Firstly, Virgin Mobile’s cultural values are to be innovative, fun. It also wants to make things different from its competitors and continuously improve customers’ experience through innovation. Indeed the options 3 offer something very different than competitors. Secondly, regarding the segment target, 14–24 years old, it is known that those categories can not pass the credit check with the current carriers due to their lack of revenue. The result is that this target market has been forgotten. Moreover, it is an age where teenagers are looking for “independence” and like to do things without parents. It is why the option 3 fit well. Thirdly, I believe that the option 3 is the one that fit the best selling model that has been chose by Virgin. In fact, it does not require any salespersons...
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...Suicide: The Lisbon Girls’ Only Escape From the Lies of a Dying Society One of the major underlying themes in The Virgin Suicides is the idea of a dying society, dying not from disease, but from boredom and conformity, not a physical death, but a cultural death, a spiritual death. We see death in the dying fish flies, the dying Elm trees as well as the Lisbon girls. The perspective of the world in the novel is cruelly and unrealistically pessimistic. The “…town is covered by the flotsam of those ephemeral insects. Rising in clouds from the algae in the polluted lake…flying scum” (4). But is not just fish flies that are polluting this town. Life itself in the Suburbs is morally and spiritually polluted. Eugenides writes that “Winter is the season of alcoholism and despair” (175). If this is the case then the entire novel seems to be one eternal winter. Or one could consider summer in comparison to winter, as the season of suicide, and no matter what the season, the world in the novel is a cruel, dark, hopeless place. The world is viewed in the novel as a sort of wasteland from which mankind has attempted to escape, moving to Suburbia seeking perfection and thus salvation. Only perfection is an unrealistic goal, and is therefore naturally unobtainable. Part of the American ideal of happiness is to strive for the unobtainable. The suburbs only exist as an attempt to cover up reality, hiding problems, worries, anxieties, realities, and skeletons behind the monotonous...
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...Virgin Mobile USA is a brand extension of Virgin, a U.K.-based company founded by Sir Richard Branson. The company led by CEO Dan Schulman was founded under Virgin's mission statement which stated "we believe in making a difference. In our customer's eyes, Virgin stands for value, for money, quality, innovation, fun and a sense of competitive challenge... we look for opportunities where we can offer something better, fresher, and more valuable, and we seize them. We often move into areas where the competition is complacent... We are pro-active and quick to act, often leaving bigger and more cumbersome organizations in our wake." (1) Virgin Mobile USA had a number of things going for them despite a crowded cellular marketplace. For starters, they had a CEO who had experience in telecom as he was formerly an executive with AT&T. Schulman also had experience with successful pricing strategies and technology as former CEO of Priceline.com. The biggest plus for the startup was the support and backing by its management and stakeholders who genuinely wanted to garner success against the perception of another market saturated run poorly with complacency and poor customer service. The bar was set high for success, as Schulman's goal was to have acquired 3 million customers by their fourth year of operation. I believe that Virgin Mobile USA took a big gamble in targeting a niche that was essentially written off by the other players in the industry as being largely unprofitable. Perhaps...
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...Study - Virgin Mobile USA PGXPM 10 – ARJUNAS – GROUP VI SERVICE MARKETING Assigned by Prof. D. Sriram MEMBERS: NIRANJAN DAUTKHANI Virgin Group Profile: * Virgin, a leading branded venture capital organization, is one of the world's most recognized and respected brands. * Conceived in 1970 by Sir Richard Branson, the Virgin Group has gone on to grow very successful businesses in sectors ranging from mobile telephony, to transportation, travel, financial services, leisure, music, holidays, publishing and retailing. * Virgin has created more than 200 branded companies worldwide, employing approximately 50,000 people, in 29 countries. [ “ We believe in making a difference. In our customers' eyes, Virgin stands for value for money, quality, innovation, fun and a sense of competitive challenge. We deliver a quality service by empowering our employees and we facilitate and monitor customer feedback to continually improve the customer's experience through innovation.” ------- Virgin Group Website Virgin Values: * Virgin stands for value for money, quality, innovation, fun, and a sense of competitive challenge. * Successful cellular operations in U.K.- 2.5 million customers in 3 years. * Unsuccessful operations in Singapore (2001) - Virgin hip and trendy positioning failed. Virgin Mobile...
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...Virgin Mobile 1. Given Virgin Mobile’s target market (14 to 24-yeard-olds, how should it structure its pricing? The case lays out three pricing options. Which option would you choose and why? In designing your pricing plan, be as specific as possible with respect to the various elements under considerations (e.g. contracts, the size of the subsidies, hidden fees, average per-minute charges, etc.) 2. How confident are you that the plan you have designed will be profitable? Provide evidence of the financial viability of your pricing strategy. 3. the cellular industry is notorious for high customer dissatisfaction. Despite the existence of service contracts, the big carriers churn roughly 24% of their customers each year. Clearly, there is very little loyalty in this market. What is the source of all of this dissatisfaction? How have the various pricing variables (contracts, pricing buckets, hidden fees, off-peak hours, etc.) affected the consumer experience? Why haven’t the big carriers responded more aggressively to customer satisfaction? 4. How do the major carriers make money in this industry? Is there a financial logic underlying their pricing approach? 5. What do you think of virgin Mobile’s value proposition (the VirginXtras, etc.)? What do you think of its channel and merchandising strategy? 6. Do you agree with virgin Mobile’s target market selection? What are the risks associated with targeting this segment? Why have the major carriers been slow...
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...Problem Statement Virgin Mobil is venturing into the US market and their launch date is July 2002. The company’s goal is to have one million total subscribers by the end of the first year and three million by year four. In order to achieve their goals, the company has to come up with a competitive pricing strategy to attract and retain customers in an already mature market. Recommended course of action Despite a mature US market, the cellular service industry has a market penetration of only about 15% in the segment comprising of users aged between 15 and 19 years. This segment is characterized by inconsistent cell phone usage, low credit ratings and usage pattern different from the typical businessperson. Hence, Virgin Mobile USA is looking to penetrate this segment and create brand loyalty through attractive pricing and additional feature in mobile entertainment. Based on our analysis, we recommend the following: 1. Aim for the non-contractual prepaid segment with a new pricing structure: Virgin Mobile USA should look to price at 20-30 cents per minute. 2. Increase the off peak hours: The company could extend the off-peak hours by 2 hours, starting at 7pm instead of 9pm. 3. Lowering of Acquisition Cost (AC): Virgin Mobile USA should keep its AC around $130 by passing on a part of the handset cost to the customers. Rationale for Recommendation We can see from Exhibits 1 & 2 that if Virgin Mobile opted for a contractual service plan with rates at par with industry...
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