virgin group
TRANSCRIPT
CHAPTER 10
Anggi PramitaEster Gani
Ricky WRobino I
Emmanuel Priandito
PROFILE & HISTORYPROFILE & HISTORY
PROFILE & HISTORYPROFILE & HISTORY
MAIN ACTIVITIESMAIN ACTIVITIES
BRAND VALUES OF VIRGIN GROUPBRAND VALUES OF VIRGIN GROUP
COMPETITORCOMPETITOR
SWOT Analysis of Virgin Group
Strength:1.It is the master of building brand value.2.Offers a choice for every customer.3.The creation of partnerships.4.Virgin reviews the industry.5.The awareness of opportunities for restructuring a market.6.Branson’s reputation.
Weakness:1.Virgin’s constantly expanding empire could take it to reck.2.Virgin could be considered as a monopolistic company.3.They aren’t leaders in their markets.4.Virgin has minimal management layers, no bureaucracy, a tiny board and no global HQ.
Opportunities:1.Virgin can offer something better, fresher and more valuable.2.Virgin delivers “old” products and services in new ways.3.Virgin considered using in-store listening kiosks, while reducing operating costs.
Threats:1.The global copetition in the market.2.The network of rivals in the market.3.Its not domination of the markets may disappear with competition.
Marketing Strategy and Target Market:
Virgin Marketing Strategy is based in Branson’s intuition. The company uses its strong brand name to guarantee quality of diverse products and services. The strategy of “public figure marketing”. Two types of objectives define their marketing strategy. These objectives are strategic thrust (future direction of the business) and strategic objectives.
Target market segments are ranging from modern, traditional working class, to upper conservative.
Advertising:
Objectives:1.To encourage people to try our services and products.2.To raise awareness of new product developments.3.Capture the attention of the media and consumers.4.To gain new consumers and brand recognition.
Media:TV, press, magazines, outdoor posters, and taxi sides.
The company uses direct mail to send ads so people can be aware of any new product, service, and our promotions. This advertises uses
famous artists and singers.
Competition Between Virgin Airways vs British Airways
General informationAirline British Airways Virgin Atlantic Airways
Airline Website British Airways (britishairways.com) Virgin Atlantic Airways (virgin-atlantic.com)
Airline Category Luxury LuxuryAirline Type International International
Primary Airline Alliance Oneworld -
RatingsSmart Rating 77 74Skytrax Rating 4 out of 5 4 out of 5
Travel and Leisure 2011 Rating - 86.62 out of 100
Contact Information
Airline Website British Airways (britishairways.com) Virgin Atlantic Airways (virgin-atlantic.com)
Phone 0 (844) 493-0747 (800) 862-8621Email Type Web Form on Site Web Form on Site
Checked Baggage1st Bag (Checked) $0 $02nd Bag (Checked) $51 $603rd Bag (Checked) $51 $140
Max Checked Bag Dimensions 81 inches 81 inches
Max Checked Bag Dimensions with Extra Fee
130 inches 35 inches
Max Checked Bag Weight 51 lbs 50 lbs
Max Checked Bag Weight with Extra Fee 70 lb 70 lb
Checked Bag Overage Fee (low) $51 -
Checked Bag Overage Fee (high) $51 $50
Airline Leg RoomEconomy Seat Pitch 31 inches 31 inches
Business Class Seat Pitch 73 inches 76 inches
Preferred Seating Options
Choose your seat Choose your seatExit Row Exit RowExtra Legroom Extra LegroomNone Offered None OfferedSeat Upgrade Seat Upgrade
Preferred Seating Cost (low) $75 -
Meal Price $0 -Snack Price (low) $0 -Snack Price (high) $0 -
Unaccompanied Minor Type Per Child Per Child
Unaccompanied Minor Fee $75 -
Booking Fees $0 -
Carry On BaggageCarry-On Weight 51 lbs 13 lbs
Carry-On Dimension: Length 18 inches 9 inches
Carry-On Dimension: Width 10 inches 14 inches
Carry-On Dimension: Height 22 inches 22 inches
Carry-On Dimension: Volume 3,960 cubic inches 2,772 cubic inches
Specialty Baggage Special Baggage may incur special fee?
Archery Equipment Archery Equipment
Special Baggage $80 -Pet (Cabin) $0 -Pet (Cargo) $0 -Pet (Checked) $0 -
Additional Airline Information
Primary Geographic Region Internationally-based Airlines Internationally-based Airlines
Hub AirportsLondon Heathrow Airport (LHR), London Gatwick Airport (LGW).
Charlotte/Douglas International Airport(CLT), Philadelphia International Airport(PHL), Phoenix Sky Harbor International Airport(PHX)
Frequent Flyer Program Executive Club Flying Club
Richard Branson as Image of Virgin Group
StructureStructure
Virgin group Global Product Structure– Activities within the companies are organized around
specific products or product groups– Department/division is responsible for all functions
in specified products– Very heterogenous product lines
Virgin’s StrengthVirgin’s Strength Virgin’s WeaknessVirgin’s Weakness• Duplication of functions• Low knowledge transfer to
other regions• Complicated coordination
and cooperation between product divisions
• Intensive knowledge transfer concerning product
• Focus on differences between products
• Expertise on specific products
• Flexible response to changes in product requirement
• High market orientation of product divisions
• Promotion of enterprenual behaviour
Management StyleManagement Style
• Integration between brand franchising operation and Japanese keiretsu system– Brand franchising: identity as purchasable asset– Keiretsu: business relationship and shareholdings
between a set of companies
Management StyleManagement Style
• Decentralised structure responsibility and control in the management of each unit. – Unorthodox version centralised long-term
business direction and financial control of the group in the executives of the Group
Management StyleManagement Style
• Holfsteed’s Cultural Dimension– Low power distance
• No barrier between employees and superior• Minimum layer in chain of command
– Low uncertainty of avoidance• Innovativeness and enterpreneurship
– Individualism• Self-directed team
Leadership StyleLeadership Style
• Transformational leadership– Focus on positive changes to members/employees– Work = fun employees gain pleasure from their
role and gain sense of fulfillment from contributing a larger goal
– Create sense of belonging and loyalty as well as dedication of employees to the companies
– Employees’ involvement in decision making process
– Lead to very few problems with the employees
Communication StyleCommunication Style
• Upward communication style– Provide feedback, ask questions, obtain assistance
from higher level management– Get input from employees and their concerns through
employees survey– Great ideas oftenly came from the employees
Virgin Atlantic vs British AirwaysVirgin Atlantic vs British Airways• Difference in its size and culture
• British AirwaysBritish Airways– Formal structure with precise rules and procedures
due to its size and global scope of activity
• Virgin AtlanticVirgin Atlantic– Cost conscious, lean organizarion– Small, networked and dynamic structure– Relies more on personal initiatives
Management Style: Head-to-headManagement Style: Head-to-head
British Airways• Bureautratic and distancing• Neglect of subordinates• Depersonalisation and
hierarchy
Virgin Atlantic• Flat organization with an
open and flexible culture• Informal organization
climate• Ability to move quicky,
innovate and react well to threats
• Power culture to to central figure: Richard Branson
• Virgin put staffs first on priorityVirgin put staffs first on priority• Generate 99% of staff retention Generate 99% of staff retention stability and stability and
continuity continuity
CORPORATE CULTURE
• Virgin Group Tough guy, macho culture
• Types of corporate culture- Tough guy, macho culture : success and failure come
very quickly, higher risk- Bet-your-company culture : the result of decisions
pay off in long time- Work hard/play hard cultures : small risk, rapid
feedback- Process culture : little or no feedback, small risks
CORPORATE CULTURE
CORPORATE CULTURE
• Virgin Group Tough guy, macho culture
• WHY higher risk and fast market feedback- Virgin Group is a venture capital company- Long term planning, decisions are taken from growth
perspective- Companies operates independently, loosely structured
under a common brand name: VIRGIN- Brand dependent on Branson- Virgin get business opportunities where customers
were being treated badly
CORPORATE CULTURE
How Virgin Group develop a strong corporate culture:• Building a shared vision 3 criteria- Clarity: corporate vision needs to be simple,
relevant, and important- Continuity: organizational values and strategic
objectives need to be constant over time- Consistency: all people in organization must share
the same vision
CORPORATE CULTURE• Virgin group has strong corporate culture as coordination
mechanism
• Virgin slogan: Being the best, not the biggest (Clarity Criteria)
• Culture of Virgin Group (Continuity Criteria):- High priority for the staff- Capturing ideas- Virgin community- Be the best not the biggest- Priority to the customers- Create new business instead of taking over an already existing
company
CORPORATE CULTURE• All the companies under Virgin Group must have
typical Virgin identification represented by values (Consistency Criteria)
CORPORATE CULTURE
How Virgin Group develop a strong culture:• Building a shared vision• Role model- Visible behavior and public actions of senior
management- Corporate cultures are shaped by company founders
or long term management- Through charisma of founders that are seen as
heroes which personify culture’s value
CORPORATE CULTURE
• Richard Branson PARTICIPATIVE LEADERSHIP style
• 3 styles of leadership (buku abu-abu CH 13, hlm 461):- Authoritarian leadership : one way downward flow
of information and influence from authoritarian leader
- Paternalistic leadership : continual interaction and exchange of information and influence between leader and subordinates
- Participative leadership : continual interaction and exchange of information and influence between leader and subordinates and between subordinates
CORPORATE CULTURE
• Minimal management layers, no bureaucracy• Management through empowerment, companies
under virgin group are all empowered to run their own affairs
• Virgin’s employees are valued as individual• Involving employees in the organizational process• Little hierarchy take employees like family
“Our companies are part of a family, rather than a hierarchy” – Richard Branson
CORPORATE CULTURE
• BRANSONISM- Unafraid of failure, refuse to stay within the confines
of single core of business- Virgin Group failed ventures : VIRGIN COLA, VIRGIN
RAIL, VIRGIN BRIDES- “If you know one business, you know any
businesses”- Organic growth prefer to create new business
rather than taking over an already existing one
VIRGIN COLA
• Join venture between Virgin Group and Cott Corporation (Canadian) in the early 1994
• Market : US Market and UK Market
• Aimed to rival Coca Cola and PepsiCo
VIRGIN COLA• Why it failed?- Too ambitious one of the culture of Virgin: COMPETITIVELY
CHALLENGING- Coca Cola and Pepsi have established strong brand of
carbonated drinks worldwide- Not good enough products- Did not fit with the brand image- Little on advertising
“That business taught me not to underestimate the power of world’s leading soft drink makers. I’ll never again make the
same mistake of thinking large, dominant companies are sleepy” – Richard Branson
CORPORATE CULTURE
How Virgin Group develop a strong culture:• Building a shared vision• Role model• Initial socialization- Process of socialization of individuals through
communication of the way doing things- Organization has to pass elements of its culture
on to new members of the organization
CORPORATE CULTURE
• Virgin Group’s initial socialization done through VIRGIN COMMUNITY
• Members of an organization must share certain values specific to the group
• Everyone is expected to be familiar with corporate culture
• Ideas, values, interest, and goals are shared in the community
RECOMMENDATION
• Become less diverse- Virgin name has become diluted and its brand
a purely endorsement brand Virgin Cola
• Reduced dependence on Richard Branson to ensure future beyond Branson
- Introduce new role model- Connection between Branson and role model
RECOMMENDATION
• Less emphasize on the brand- In the competitive market, brand may not be
enough- Global consumer required not only product but
also elements that add position in the market (positioning)
• Attack less dominant companies at first market penetration
- To avoid failure such as Virgin Cola
CONCLUSION• Virgin is a leading branded venture
capital organization and is one of the world’s most recognised and respected brands
• Virgin had Minimal Management Layers, No bureaucracy, a small board of directors and no massive global headquarter
• Virgin’s flexible structure, dynamic culture and charismatic leadership and ability to understand employee needs can face up to challenges and grow to a great degree
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