Virgin Group: Finding New Avenues for Growth

Virgin Group: Finding New Avenues for Growth

Case Summary

Virgin Group was originally set up in 1970 as a mail-order record business in London by Sir Richard Branson. In 1973, Branson moved into the music production business. In 1987, the London stock market crash and it was the year that the company became a public company then Branson bought back Virgin’s shares and was a private company again in 1988.

At the end of the 1990s, Virgin invested further in transportation of the British train network and the deregulation of the world’s airline sector. After that in 1995, the company invested in consumer service businesses such as financial services by being partnered with and insurance company and health and fitness sector. In 1999, Virgin invested in telecommunications and launched Virgin Mobile.

By the mid-2000s, the Virgin Group’s portfolio covered 9 main sectors: air travel, rail travel, mobile phones, finance, leisure, retailing, music retailing, drinks, and online retailing. In 2005, Stephen Murphy, the Virgin Group’s CEO, focused on two additional pillars of growth health & wellness, and financial services. He had organized the group’s companies into 6 main business sectors: Aviation and tourism (the largest sector), Telecom and Media, Retail Financial Services, Health & wellness, U.S. Hotels, and The Virgin Green Fund. In 2010, the company started developing a new business Virgin Hotel in USA by forming a partnership. Lastly, the company was considering to enter in a new business, Virgin Gaming.

Five Forces Analysis

Competitive rivalry: High

As Virgin Group do many kinds of business and each of them have many existing competitors. So, the level of competitive rivalry in the markets is high.

Bargaining power of buyers: High

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