Virgin Managing Strategy

Cost leadership strategy

The creation of a low cost basic no-frills airline is a perfect example of implementing this form of strategy. If you ever think of low-cost you realise that Virgin low running cost in order to provide low prices for customers. This is not easy to implement as it is necessary to cut costs at every opportunity in order to stay competitive and have a competitive advantage or edge over your rivals. Another example would be that, how would you hold a competitive edge over your rivals, in the earliest days of Virgin, Virgin began as a mail order business offering popular records at prices around 15% below those charged in shops.

As time went on, Branson adapted towards the differentiation strategy

Differentiation strategy

We can once again use the above example, Branson was obvious when he offered a mail order service providing records that were 15% cheaper than what they were receiving in the high street shops.

Branson realised by opening joint ventures what he could achieve, after the early success of with the immediate success of, and the start of virgin retail. These retail interests were later consolidated around the Megastore concept in a joint venture with a major retailer. In prestige locations in major cities Megastores, began to sell home entertainment products- music-videos-books, on a large scale . They replaced the string of small secondary retail outlets for which Virgin had become known . The success of the Megastore concept was exported to major cities throughout the world, frequently through joint ventures.

Virgin was so successful with this concept, that it has gained loyalty of customers over the years.

As time moved on, and Virgin had to move to keep hold of that competitive advantage they had over the business market and