Virgin Group

Introduction

There are very few true conglomerations left that meet as broad a definition as most people would utilize when defining such a word. Many conglomerations center around one particular industry, perhaps attempting to control the method of production, supplies, distribution, and retail. Virgin Group Limited is one of the best-known conglomerations in the entire world. This British conglomeration is among the most varied and compelling companies on earth, and provides a dizzying array of products and services among its business units.

From somewhat humble beginnings as a mail-order business, Branson and his partners gradually expanded the reach and scope of the Virgin Group's business. Today, Virgin Group is a player in a wide variety of industries from as a record label, to a series of nightclubs, railway, food and drink, to mobile phone service (as an MVNO provider), to health care, to aeronautics and commercial air transportation, to space travel, and everything else in-between.

Within a business like Virgin Group, planning is quite possibly the single most important thing that each individual business unit could do. Though each business unit unites under the Virgin Group banner, the reality is that each unit is a separate entity, with different owners and different objectives. An interesting approach to the philosophy of both starting a business unit and managing existing ones is what has propelled Virgin Group's overall success in the industries that they compete in. There are many different aspects to planning, and they are handled in a very unorthodox manner within the Virgin Group business units.

A Brief History of Virgin Group

The Virgin Group was founded in 1970 by Richard Branson in London, United Kingdom. Originally, Virgin was founded as an audio-record mail order business, however this quickly expanded and in 1972, a chain of record stores known as Virgin Records emerged. Virgin Records expanded to actually becoming a full-on record label when Branson purchased a country estate with a partner, and leased out a recording studio there. (Grant 310-311) This would be the genesis of Branson's, and subsequently, Virgin Group's strategy of diversification in a vast array of industries, as well as opening up all-new ones.

The first major expansion of the Virgin Group's scope came in the way of Virgin Atlantic Airways, the group's first foray into aeronautics and space travel. It was formed in 1984 when Branson negotiated a deal with the owners of British Atlantic Airways to take control of that

Company Analysis: Virgin Group

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company. (Grant 311) Despite some financial difficulty in this particular industry, Branson continues to remain heavily invested in air travel, operating airline companies across the globe.

Virgin Group's first entrant into the mobile phone service market came in 1999 when Virgin Mobile UK formed, by becoming the world's first mobile virtual network operator - a concept where the company does not own or maintain its own network and instead utilizes a deal with an existing mobile phone service provider to use their network. Virgin Mobile continues to operate in many countries around the world utilizing this strategy, with varying degrees of success.

In 1986, the Virgin Group was listed on the stock exchange to raise capital for more business ventures and expansion. The group raised £250 million in capital during that year. Though the group was overall a successful venture, Branson disliked the responsibilities and pressures required of him under life as chairman of a publicly-traded company. The compliance with rules that govern public, limited company and reporting to shareholders was expensive and time- consuming. Additionally, the presentations Branson was required to make to shareholders who he believed did not understand the business and the subsequent drop in share price encouraged Branson to buy back the shares at the original offer price in 1987 after the stock market crash. (Grant 308, 311-312) This makes Virgin Group one of the largest companies to have ever started as a private company, expanded into a public company, and then made again into a private company.

Virgin Group Today

The Virgin Group maintains an incredibly active portfolio of businesses and enterprises even today. Virgin Group has more than 300 "Virgin"-branded companies in existence today, with more companies that are owned by the group, but retain an individual name. In 2009, the Virgin Group's revenues exceeded £11.5 billion, and the group employed approximately 50,000 people in 30 different countries. ("Virgin")

The historically important business units of Virgin Group are still in existence today, albeit some of them exist in a different manner or capacity. ("Virgin") Though Virgin Records was sold to EMI to keep Virgin Atlantic Airways in business, Virgin maintains a record label business in the way of many different record labels and being an operating partner with EMI. ("BBC") Despite the Virgin Group's predisposition to holding many, many different business units and entities, they are not opposed to consolidating different business groups where it makes sense. For example, Virgin Media Inc. is a company that consolidates much of the Virgin Group's mobile telephone, television, and broadband internet services in the UK. (Fryer)

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The legacy achieved by the Virgin Group serves as a historical anecdote in comparison to where the group's efforts interests are increasingly being focused. In 2004, Branson announced the first space tourism company, named Virgin Galactic. Virgin Galactic has yet to take flight commercially, but has established the goal of issuing tickets to the public for space flights in the near future. Branson continues to push for air travel success by purchasing stakes in smaller airlines throughout the world.

Increasingly, the Virgin Group is turning their collective efforts towards environmental and humanitarian causes. Established in 2010, the Virgin Green Fund is an investment firm that owns several different companies across a wide variety of environmental concerns and alternative fuel sources. The next venture for Branson and the Virgin Group will be Virgin Fuels, a company under the Virgin Green Fund set to respond to global warming by offering a cleaner, more efficient fuel for automobiles and aircraft. In 2007, Richard Branson launched the Virgin Health Bank in the United Kingdom as a project whereby expecting parents were offered the opportunity to store their