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Richard Branson is the person who started Virgin Empire in London in 1972. The business was started with successful Virgin Record Company, and it is now expanded into more than 340 businesses around the globe. Branson was always the man behind this well known brand “Virgin”. Virgin is a fully private enterprise under Branson in which he did not want to any other joint venture partners to have the control over any of Virgin businesses. He is the backbone of the company in term of public relation and promoting Virgin brand. And due to this reason, Branson believed that he can do whatever he wants to the Virgin groups.

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This brand became globally famous without any intense emphasis on brand-building campaigns on the company. Instead, Richard Branson used his popular personality and smart public relation skills as a major tool to build up the brand awareness to people. His eccentric move in the launching ceremonies of Virgin products was always recognized by people. Branson’s actions have undoubtedly attracted people’s attention. It also matches the concept of Virgin group in which it represents the sense of youth, innovation and fun to young people. Branson appeared dressing up in full bridal finery to launch Virgin Bride was a humorous event to people.

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His driving a tank up to the Coke sign at Times Square to launch Virgin Cola was also the main attention of the whole ceremonies. As a result, this may consider as a positive impact rather harm the brand name. The journalists’ attentions are caught by Branson and his pictures will always appear in the newspaper without any investment on advertisement. Therefore, the brand is well aware by people and then they can become potential customers to any of Virgin ventures. Question Three: Why do you think so many of Virgin’s businesses failed over the years? Answer.

Richard Branson and its Virgin groups started with the record business back in 1972 in London, England. Over the years, the Virgin group has used its strong brand name and extends itself into many other industries such as airline service, mobile phone, railway, soft drinks, internet, clothing etc. However, extending the brand name too much does not necessary result in a positive outcome. As what Jeremy Bullmore stated, an advertising industry veteran for advertising firm WPP Group said, “Overstretching ends up in only one way: snapping. ” This is exactly what happened to Virgin Group.

They focused too much on trying to be widely diversified, but at the same time, they failed to analyze the market situation the first hand. In addition, Virgin group failed to deliver what they promised to the consumers. In the railway venture, the Group took over the business and tried to make the trains run better and on time. However, they were not able to do so and the forces from the union works also proved to be a problem for Virgin. The failure to deliver what they promised proved to be detrimental as the brand lost its credibility in consumers’ minds.

We shall give Virgin Groups credit as they are willing to take on new challenges and trying to embed the company image into consumers’ everyday life is also the right marketing strategy to do. However, before a business decides to invest into a new field of industry, the business shall carefully examine the market, both the market potential and also the financial ability the company can handle. As what has been mentioned in the case study, there had been cases where Richard Branson tried to save a newly developed business by selling the ones that had been successful.

For example, Branson sold his successful business such as in music or flight to support the failed ventures. What could have been done was to concentrate on the businesses that have been making money; instead of selling them, try to build stronger financial position for the Group. And maybe later in the years, the Group may consider reinvest into other business sectors when the time and financial supports are adequate. Question Four: What do you think about the tightly controlled and opaque way in which the Virgin group of companies is run? Answer.

There are two aspects that we could look at Virgin Group’s tightly controlled and opaque way of operation: the financial part and the operation part. In the financial aspect, Branson bought back its entities after the stock market crash in 1988 and the Virgin Group became a fully private enterprise. Since it is a private enterprise, they are not obligated to publicize their financial statements to the public. This may be both pro and con for the Group. Even though most of Virgin’s businesses are not making money, they do not want the general public to find out about it; therefore, being a privatized company has that advantage.

In addition, if their financial situation is revealed, it could also damage Virgin’s overall image, and people might feel insecure to use their products or services. In addition, if the public knows their poor financial status, people might choose not to consume from them because people do not want to be related to the bad imaged corporation. The negative impact for not being opaque about their financial situation is that people may not trust of what the Group says about their status.

Even though they do not reveal their financial situation, people may take wild guesses and speculations about the condition of their company. This may hurt the company image as well. When false rumors are made on Virgin, they will need to react quickly in crisis management. On the operation’s perspective, Branson emphasized that “fortunately, we are not a public company, we are a private group of companies, and I can do what I want. ” Without letting people know about what they will be doing next might be and advantage as it could may prevent any competitors’ from copying their strategy.

On the other hand, if the head office does not give advance guidelines on what the company’s next step is, it may cause confusion in employees’ minds. As what Virgin had done, they sell one of their brand extension businesses to cover the losses of the new operation, the employees who work in the business being sold may get fired under new management. This uncertainty may make employees loose their concentration on the job, thus, creates poor services to consumers. And finally reflect on the consumers as the image of the brand is damaged which will result in switching to other companies for the same products or services.

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Kylie Garcia

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