According to Grant (2012), At the beginning of 2012, there were 228

Virgin companies registered at Britains Companies House, 68 of which

were identified as removed or recently dissolved. There is no overall
parent company for the Group, there are approximately 20 holding
companies that own several operating companies within the same line of
business, each of which owns/employs its own resources.
Operations
Virgin aims to:
Seek new opportunities and innovation within industries
Build businesses, doesnt buy
Operate as individual smaller companies
Build business around people
Give back to consumer and society
Resources
Brand
Finances
Organisational/management structure
Capabilities
Management and marketing
Increasing global presence
Industry links
Organisational structure
The Virgin companies have an entrepreneurial spirit whist
minimizing bureaucracy. It is a cluster of loosely associated
companies instead of a hierarchical company. Branson acts as a
back seat leader, encouraging people to use their creativity and
welcoming good ideas. The culture is one of make work fun and
informality.
The Virgin Group possesses considerable financial and managerial
talent, and what Virgin lacks in formal structure is made up for by a
strong culture with close personal ties. The Groups structure is
virtually flat, offering short lines of communication and flexible
response capability. Employees are given a great deal of
responsibility and freedom in order to stimulate ideas generation,
initiative, commitment and fun. The lack of a corporate headquarter
and the small size of most of the Virgin operating companies are
intended to foster teamwork and a strong entrepreneurial spirit.
Financial organization and performance
Each Virgin Company was financed on a standalone basis. During
the past 15 years, Virgin has relied increasingly on equity partners
to finance new business ventures.
Virgin was able to use the Virgin brand and Bransons celebrity
status to obtain 51% or more of the equity of new ventures while
contributing a minority of the equity capital.

Companies are not public, but privately owned and financed by

internal cash flows and equity. Others are financed through joint
venture agreements or external debt.
The idea is to nurture the companies to stand on their two feet and
compete favorably among themselves and others in their lines of
business.

Problem:
Business analysis from sources such as the Economist and the
Financial Times, have consistently criticized Branson's sense of
business, alleging that most of his companies are underperforming
and making losses; while some are taking cover under the viable
ones.
To avoid damage to the Virgin brand and Bransons image, a
number of unprofitable businesses have kept operational, rather
than being sold or declared bankrupt; yet, other Virgin companies
that were profitable, such as Virgin Records, have been sold in order
to finance new ventures.
Globalization
The group has moved into global markets, with new ventures such as
health clubs, space flight and biofuels.
Virgin has not yet completely established itself in the US, European and
Asian markets. Currently most of the business are in the UK only, and
consequently the majority of sales are generated here. Because Virgin
operates in so many different countries, it faces the risks of fluctuation in
the economic cycle of the different countries. The main obstacle for Virgin
in creating a truly global brand is the geographical balancing of the sales.
Expansion will be needed in countries outside the UK to achieve better
balance.
Brand & Linkages
The common linkage between the entire range of enterprises
include the use of the Virgin brand name, and the role of the
Groups founder, Richard Branson. For most of the Virgin
companies, the ultimate parent was identified as Virgin Group
Holdings ltd.
The use of 'Virgin' brand by this diverse range of enterprises creates
that sense of belonging and cooperation within the group. The
brand name is perceived by many to be the single greatest asset
binding these different companies.
The brand name and the novel entry of Branson into new business
frontiers has become an open door to the entire group, as the
companies collaborates in business. Branson's modest approach to
business has done a lot to strengthen the brand name, which in turn
strengthens the synergies among the separate Virgin companies.
Despite public criticisms over possible over extension of this brand,
the wide spread use of the brand in capturing new and ailing
business is enjoyed by many within the Virgin group.
The business collaborations among the ever expanding Virgin group
of companies are indeed a strong indication that without such

synergies through use of its brand, majority of the Group's firms

would have folded up and cease to exist.
From customers' point of view, Virgin's desire and ambition to be
known as 'customers' champion' is achieved basically by delivering
brand values across the entire Virgin Group.

Problem:
Branson places too much emphasis on the brand. The power of the
Virgin brnd has overshadowed Bransons ability to successfully align
his strategic and tactical objectives. He must realize that in the
competitive world, the brand may not be enough. The global
consumer is requiring more from marketers, not just the product but
also all the elements that add to its position in the market.

Bransons reputation is closely linked to the Virgin company

reputation, thus if he were to tumble, the Virgin brand would also
tumble. As they are so closely linked, the risk is also high should
Richard Branson abruptly depart or die.

Diversification

Virgin has penetrated a large number of very diverse industries, from the
music industry, airline industry to the telecom industry and online car
selling. Although the industries are unrelated, Virgin has penetrated each
of them with great or reasonable success. The markets that virgin has
been able to successfully penetrate tend to have features in common:
they are typically markets where the customer has been taken advantage
of or under-served.
Problem:
Branson has led the Virgin Group in many different ventures within
completely different business segments, including cola, vodka,
utilities, train services, computers, mobile telephony, etc. However
over diversification and lack of focus have caused problems. For
example, intense competition in its airline business forced Branson
to sell Virgin Records to help the airline survive.
Virgin decided to run part of the British Rail by promising that it
would improve the service and punctuality. Unfortunately, Virgin did
not deliver on either promise.
Although being involved in various businesses can give the people
the image of being competitive and diversified, it can also send out
mixed messages regarding the image of the Virgin brand.
Analysis of Virgins Corporate Strategy Model

The Virgin culture

Since its start up as Virgin Records, the Virgin Group has retained a
strategic model that devolves from its original culture and values.
Distinctly entrepreneurial, the organization has no headquarters yet
has presided over and managed a period of massive growth and
continued profitability.
Virgins Linkages and Diversification
One risk-mitigating strategy that Virgin employs is to keep most of
the individual Virgin companies legally independent from one
another, thus avoiding many legal pitfalls faced by more traditional
conglomerates; yet the companies are linked in their strategy and in
certain areas of knowledge sharing, much like a family rather than a
hierarchy.
The individual entities are empowered to run their own affairs, yet
help on another, and solutions to problems from all kinds of sources.
In a sense, Virgin is a community with shared ideas, values,
interests and goals.
When entering into a new industry, Virgin attacks the dominant
companies, playing strongly the David against the industrys
Goliaths, carefully picking its battles and trying to hit the Goliaths
where it hurts. In the mean time, Virgin is proactive and quick to
act, avoiding paralysis by long analysis, which is one advantage to
having a small, close-knit management team. To fill the expertise
gaps, the company uses joint ventures or other partnerships.
Future outlook
Organizational Restructuring:
Virgin is described by many, as a flat organization that is centered
on an individual.
The inability of Virgin Group to operate under a formal structure
leaves many of its performances to questioning.
As it is today, Branson calls the shot and determines the business
and policy direction. It is true, that Branson has excellent business
acumen and charisma, and it has been working for him under this
loosely structured arrangement. How would it be if Branson retires?
To ensure a proper succession plan, Branson should follow a formal
structure, with centralized decision-making body, such that any
other top opinion former coming after him can easily fit in. Virgin
Group should also have a corporate headquarters, where the
group's policy and financial decisions are centralized.
Financial Restructuring
As it is today, financial structure and accounting system in Virgin
remains fragmented.
No consolidated accounts exist for the group, not even for some
holding companies and their subsidiaries. Tracking the financial
results of the separate Virgin companies appears to be the most
daunting part of Branson's business.
Even though, Branson consistently argued that all his business
investments are financed on a standalone-basis, but analysts also
pointed many instances where monies accrued from viable

companies have been transferred to other ailing companies to

resuscitate them without proper accounting.
For example, records available proved that in 1992, Virgin records,
one of the most profitable businesses of Branson, was sold to
safeguard Virgin Atlantic; and about 49% of Virgin Atlantic again
given up to Singapore Airline to survive Music Retail Business. In
view of this, and to ensure continuity, Virgin should have a more
structured and centralized financial accounting system for the
group.