Afamous quote by Richard Branson says: “Businessopportunities are like buses, there’s always another one coming”(Story, 2015) Apart from swearing by this quote, the author notesthat Sir Richard Charles Nicholas Branson has also lived to provethat this is factual. He owns the Virgin Group of companies,comprised of more than three hundred autonomous firms. Branson is aself-made billionaire who was diagnosed as a ‘dyslexic’ in theearly years of his life. However, despite his academic challenges, hestill emerged successfully and is a huge inspiration to many hopefulentrepreneurs (Story, 2015).
Itis the opinion of Greathouse (2013) that the Virgin Group businessstory began with Richard’s first successful business startup, ahigh school magazine called TheStudent. It was first published on the 13thof January, 1968. In Oxford Street, Richard opened up his secondbusiness venture, the mail order called VirginRecords.Being new in the industry, Richard and his associates chose the name‘Virgin’ to imply their naivety in the business market(Greathouse, 2013). However, the author notes that this commercialinnocence gave them the advantage of signing up clients who wererejected by the larger record labels. This ability to go the extramiles saw their business grow rapidly, signing popular celebritieslike Phil Collins (Greenhouse, 2013).
Fromprevious ventures, Richard learned that he could easily take up on anew field and actually succeed in it. At the suggestion of aCalifornian lawyer, Richard embraced the idea of starting a cheaperairline (Humphrey, 2013). Having cheaper flights meant bringing theoperational costs down. As the author notes, this led to theprocurement of a second-hand plane resting on the formation of newstrategic alliances. At this point of the Virgin Group life cycle,Branson gave the first initial public offering (IPO) for VirginAtlanticand other businesses in his group. However, Richard felt that theshareholders and the financial community expectations on him wereimposing, so he took control of the company during a stock marketcrash through a buy-out (Story, 2015).
Asa private investor, Richard Branson opened more businesses out ofwhims, advantageous business partnerships, and even the mostcurrently one, VirginGalacticall to inspire a child who wanted to see space (Humphrey, 2013). Themain fields of his ventures include: transport, aviation, holidaytour companies, and resorts. Others are the retail business ventures,such as the bride chain of stores called VirginBride,and information and communication technology field with firms likeVirginBroadcasting.Currently, the Virgin Group contains more than three hundredstand-alone businesses, some of which cannot even be classified inany one field as they fit across dimensions (Greathouse, 2013).
Accordingto Story (2015), the main principle of the Virgin Group is innovationand diversity. The company has grown to become the largest privatecompany in the United Kingdom, and also holds other big percentagesof internationally accredited. The main idea of the company is todiversify into as many feasible markets as possible and offer morequality for less. Recently, Richard Branson enhanced the business’strategy by eliminating unsuccessful companies he owns to “free”capital for more lucrative ventures (Humphrey, 2013).
TheVirgin Group employs more than fifty thousand people in differentcontinents, and has changed their lives by empowering them so as toput them in a position to give better service to their customers. Foreach new venture, the management has a carefully installed process toselect individuals within Virgin Group to be the pioneers in thefield (Greathouse, 2013). The Virgin Brand, although extensive,guarantees its clients that they can always be sure to get goodquality for every time they have been underserved or overchargedelsewhere. With the Virgin Group objective of being the consumers’first choice, they have different qualities that include (but notlimited to): transparent pricing, quality products, excellentcustomer service, innovation, and fun in everything they undertake(Humphrey, 2013). By adopting the fun personality of its founder,Virgin is able to provide a less “traditional” system ofdelivering services.
Initially,new business ideas would come from any direction: other employees,friends, or partners. As the brand grew, the diversifying businesswas based on solid research and analysis to determine the necessityof joining a new field and the expected success rate.
RichardBranson is perceived as the fun type of manager, with a completedisregard for the traditional ways of dealing with business (Story,2015). This personality is manifested by the absence of a centraloffice for conducting his businesses.
Additionally,Branson involves his family and friends in his business operations.He even took an inter-corporation competition between VirginAtlanticand BritishAirwaysto social media by saying: “BritishAirways can’t get it up”(Greathouse, 2013). However, the success of his methods of managementis evident in the wealth acquired by his managers and the success ofthe company. However, an effort has been exerted to realign thecompany’s leadership with the set-up of VirginManagement Limited,which is given the mandate to give advisory and managerial support.They also provide administrative oversight to all the Virginbusinesses (Humphrey, 2013).
Reorganizationand Financial Performance of Virgin Group
In2011, the Virgin Group implemented a management overhaul, after whichJosh Bayliss and David Baxby were appointed as co-chief executiveofficers to head the Virgin Group Holdings Limited (Story, 2015).Apart from the restructured management, culture and personalrelations also formed a significant part of the business’ system.The fun and informal culture created by Richard Branson is basicallythe center of the conduct of the company. However, the real reasonbehind the extensive penetration of Branson’s business ideas in amyriad of business ventures is the personal touch that RichardBranson maintains with his friends, family, and partners. Some of hislong term associates have formed the senior management and keyexecutive positions in different Virgin Group companies (Humphrey,2013).
Dueto the interdependence of the Virgin Group Companies, the financialtransfers and the statements are hard to track. The companies arestructured as holding and inter-holding companies, creating one largecompany with assets in different fields. Due to the Virgin brand andRichard Branson’s status, the company was able to obtain morefinancial leverage than the equity capital it was contributing(Story, 2015). For instance, Richard Branson invested only twothousand euros for establishing VirginClothing,while Victory Corporation, an equal investing partner, brought intwenty million euros (Story, 2015). However, with the advent of thenew management system in the company in the year 2011, coordination,structure and clear financial records have been achieved gradually inthe Virgin Group of companies.
Thereare many challenges that Virgin Group has gone through. First, it isvery hard to recognize the company as an autonomous entity from theowner. Therefore, every business that carries the name Virgin istaken to have a hint of Richard Branson. He, therefore, has to ensurethat all his businesses carry his brand in the right way (Greathouse,2013). In the spirit of diversity, another risk Richard Branson isfacing is the “overextension” of his brand (Story, 2015). Hisparticipatory in the marketing of his brands may lead tooverextension in which he risks contamination of the other productbrands in case of underachievement of one.
Financially,Branson still maintains the biggest problem in accounting(Greathouse, 2013).The companies are conjoined as subsidiaries toeach other. Therefore, the question of the financial condition of thegroup has always been a conundrum to financial analysts, journalists,and the rest of the world. However, Branson maintains that he prefersto gear his businesses towards sacrificing short term profits forlong term goals. He prefers having a business that makes losses for along time and eventually grows to be worth the wait (Humphrey, 2013).
Thethird problem is the elaborative bureaucracy that was formed afterthe company’s initial public offering (IPO). Sir Branson took astep away from the problem by privatizing back the business, and nowhas a hands-off policy with his managers to encourage productivity(Story, 2015). With this, comes the sense of responsibility in themanagement. Branson only takes a more involved role in the marketingand promotion of the companies’ products, since he is respected,revered and identified with a ‘provide more for less’ brand.
Greathouse,J. (2013). Why Richard Branson started Virgin Airlines. RetrievedOctober 01, 2016, fromhttp://www.forbes.com/sites/johngreathouse/2013/09/03/why-richard-branson-started-virgin-airlines-the-girl-and-the-cancelled-flight/#4906c4b56db9
Humphrey,R. (2013). Sir Richard Branson: It Must Be Fun. Doi:10.4135/9781506324487
Story,J. (2015). Business and Energy- Virgin Atlantic. ThePurpose of Business,173-190. Doi: 10.1057/9781137503244_8