The Virgin Group

1522 words 7 pages
The Virgin Group

1) What is the corporate rationale of the Virgin Group? Corporate rational is the way in which a corporate parent envisages the way that it can add value to its strategic business units. The Virgin Group sees itself as a restructurer; this means that it has low central costs due to relatively small corporate center, with fairly minimal involvement at business level. However they vary from the portfolio managers because they also set about trying to identify restructuring opportunities within their businesses and have the skills and expertise in order to intervene and introduce these changes where necessary. The Virgin Group have a huge range of about two hundred strategic business units ranging from airways to cola,
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This means they may gain some economies of scale. They may also gain expertise and services from the corporate centres which is an 'easy' supply of knowledge available to them. The corporate parent may also provide investment when necessary to companies by sharing out the available finds to companies which need them the most. By covering your costs and money over many different companies you are also spreading your risk over different industries so that if one is struggling then you would hope that another is doing well to 'cover their backs'. Virgin may also use one company to set realistic standards for other companies. This means that because the Virgin Group consider themselves to be a 'restructurer' they will intervene if they feel their standards are not being met. This element of control over the companies means that no company is able to go off on its own objectives and steer to far away from the overall corporate goals. 4) What are the main issues facing the Virgin Group and how should they be tackled? The main issues facing Virgin are competition and the search for new markets in which to enter. They purposely look for static markets in which they can make an impact, they look at about 50 companies a week and asses their possibilities of success in each market. However they may soon find that they can't find any more markets that are appealing to them. This would mean expansion of the company portfolio

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