Question :
Strategic management ensures the smooth running of the business as it is the method that involves the identification and development of an effective strategy. The company chosen is a virgin group which is based in the UK.
- Application of theoretical models and potential for the development of strategy
- Analysation of the theoretical development of the strategy.
- Evaluation of the process of strategy I multinational company.
- Assessing the impact of strategy making
- Significance and difficulty in implementing and formulating strategy.
Answer :
INTRODUCTION
Strategic management is very important for any organization to smoothly run their business in the industry. It is a method which is used by company for identification and description of strategies which will be carried out in the firm. This process helps them to evaluate the business and set their objectives and goals. Another role of strategic management is to keep a continuous look on the goals and objectives of organization. This report will focus on the strategic development of the Virgin group and their future corporate strategies.
TASK
1) Strategic development by Virgin Group over the period
Virgin group is a private company which operates its business in the UK. Sir Richard Branson is the founder of this company. There is high development in the organization over time period. They grew their business by implementing many strategies in their management system like for example, through acquisitions, by joint ventures and new start-ups which helped them a lot to grow their business in the target industry. Company has expanded their business in early years of 1990's when they provided services in travel or holidays and in music as well. As technological development started in the country, Virgin also grew its retail interests into music as well as in many other products such as in cellular communication and they started Virgin mobiles in the market. It is very important for Virgin group to plan an effective strategic development for its company which can help them gain profit from the market. Virgin group has entered into so many businesses like health club (Virgin active), bio fuels (Virgin Fuels), drinks (Virgin Drinks) as well as in clothing, cosmetics, etc. which has a great impact on them. They are continuously implementing strategic development in the system to improve services and provide the best quality of products to their customers.
2) Corporate rationale for Virgin as a group of companies
Corporate rationale is the process through which a corporate parent imagines the possible means which can add value to their strategic business units. Main aim of Virgin Group's rationale is to diversify their business in many new markets that are viable for them. Sir Richard wants to expand their business and Virgin brand name further at a very low cost which can help them to reduce their barriers for the entry in a new static market. They aim to provide better and good quality of products and services as compared to their competitors in industry. They are planning to enter into a market which is still in its growth phase as this will help them. Virgin group has a wide range of strategic business unit in their company, for example, from airways to drinks and makeup to publishing. Virgin's corporate rationale is that they are trying to enter in a static market which has few competitors and where consumers do not get value for money. Corporate rationale of Virgin group is 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 method allows the manager of Virgin to take decisions which can be beneficial for their growth and values in Virgin Group. For the owner of Virgin, Sir Richard, brand is very important for business and acts as an asset. Main objective of company is to have an established global name in the world.
3) Virgin Group as a Corporate Parent add value to the Business
For company, it is very important to have effective business in industry for which they have to implement many changes in their system. The possible way which helps them to add value to their strategic business can be done by the use of their brand name and image. According to Richard Branson, Virgin Group has added values to their business in three possible ways, i.e., firstly, they have made a strong connection with public which helps them to build a relationship between them and organization. It is possible by organizing gathering where they try to understand needs and preferences which help them to deliver their services accordingly. This is the most beneficial process in company to enhance their business. Secondly, they have effective marketing skills which make their products and services popular in the market. Another factor which has helped them in adding value to business is its experience with greenfield startups in which they have started like health club (Virgin active), bio fuels (Virgin Fuels), drinks (Virgin Drinks), etc. Thirdly, Virgin group understands the opportunities which is been presented by institutionalized market has helped them a lot to expand their business. It is very important for the corporate parent to run all different startups which is operating in company to maintain standards of Virgin Group in industry.
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4) Future Corporate Strategy of Virgin Group
Working as a leading company in the industry, it is very important for Virgin Group to implement effective corporate strategy to increase their sales and reputation in market. Competitive advantage has been established by Virgin Group among its competitors by providing services and good value to the consumers in different ways. Virgin Group's businesses basic and the core competence is to produce goods which are differently from competitors. Virgin Group is investing in operating companies which can help them to increase their business in market. They are planning to expand their business by implementing new products and techniques for their customers. All the businesses within Virgin Group allow their employees to make decisions independently and which helped them to feel the same degree of ownership and values that any other manager has in company. This results in the improvement in products and services. They have also started to tie up with the local businesses as it can help them to understand them more precisely and will increase their business growth.
CONCLUSION
From the above report, it can be concluded that Virgin Group has developed a lot over period which has increased their business. It also explained about their corporate rationale which has helped them to implement new strategies which can add value to their business and also about their future corporate strategy which can enhance the sales of Virgin group in industry.
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REFERENCES
Books and Journals
Albers, S. and et.al., 2017. Strategic management in the aviation industry. Routledge.
Hill, C. W., Jones, G. R. and Schilling, M. A., 2014. Strategic management: theory: an integrated approach. Cengage Learning.
Meyer, G. D., Neck, H. M. and Meeks, M. D., 2017. The entrepreneurshipâ€strategic management interface. Strategic entrepreneurship: Creating a new mindset, pp.17-44.
Robson, W., 2015. Strategic management and information systems. Pearson Higher Ed.
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