Analyzing the business strategy, especially internal, of Virgin Group requires the understanding of the Barney's VRIN framework – Valuable, rare, imperfectly imitable, Non-substitutable (Barney, 1991). This is because Virgin Group large part of competitive advantage is based on its non-substitutable product. This makes use of VRIN important. Additionally, the approach is more suited for service product, a field that Virgin Group specialize in.
Valuable
According to Khanna and Yafeh (2005) , customer service is the most, has always been the most valuable resource for the Virgin group. From being the first to put screens on every seat to premium economy service, Virgin has always been at the forefront. According to the study conducted by Grant (2016) , the customer service offered by the Virgin Atlantic gives them an upper competitive advantage in the market, especially for the long haul clients. Additionally, Virgin airlines fly to even smaller destinations which are commonly on high traffic routes. This essentially means that the organization can offer a high-quality experience for its customers for lower prices.
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Rare
According to Branson (2014), Virgin Airline rarest resource is their cabin crew. This is because of the airlines' features; comfy seats, personal television screens, premium economies among many others. These have been difficult to be replicated by other firms. However, in the recent years, the features in the planes have been replicated by most airlines. However, Branson indicates that the people working in the Virgin Atlantic are people are proud of the work. In fact, 95% of the Virgin Atlantic cabin crew are individuals who have not worked in other planes before hence bringing new feeling.
Imperfectly Imitable
The other important resource that gives the Virgin Group upper competitive advantage is its brand name. The scale of the organization, history, unique leadership, and the brand name makes it difficult to copy by any other company across the globe. Some of the words associated with brand include fun, innovative, successful, and daring. This creates kinds of some emotional attachment with its customers and any other new clients. Also, this makes Virgin Atlantic utilize these emotions in creating service that is unique to only them – imperfectly imitable.
Non-Substitutable
Like mentioned earlier, Virgin Atlantic being non-substitutable is one of the most important resource for the organization. Normally, the other realistic approach way to reach major destinations across the globe is by use of commercial cruise ships. According to Grant (2016) , these take a minimum of a week for instance across the Atlantic Ocean. Practically, the use of airline is the only practical, reasonable, easy, fast, and comfortable way to travel. This makes virgin Atlantic non-substitutable.
Virgin Group Business model
Virgin Core business units and services
Virgin Group as an organization is comprised of the variously assorted mix of business units. According to the organization sayings, it has a finger on every pie. The organization has diversified into over 200 business since its formation by Sir Richard Branson. The following table indicates the various business units under the virgin group.
|
The Virgin Grou p |
|||||||
| Virgin Travel | Virgin Rail | Virgin cinemas | Virgin Media | Virgin Hotels | Virgin Group | Virgin Music | Virgin Trading |
| V. Atlantic |
Virgin Rail |
Virgin Cinemas |
Virgin publishing |
Virgin Hotels | Virgin direct | Virgin records | Virgin Megastores |
| V. Holidays | MKg | Virgin Net | Virgin radio | Virgin Enterprises | |||
| V. Aviation | Virgin Money | EMI Virgin Music | Virgin clubs | ||||
| V. Balloon | Virgin Mobile | Virgin Digital | Virgin cosmetics | ||||
| Telecoms | Virgin Studios | ||||||
How the Company makes Money.
The Virgin Group main emphasis was built on innovation. Its main aim was and still is to offer more for less. Each company, as previously mentioned, is a Virgin on its own. The company turnover has always been high given that it obtains revenues from the various services from all the business units indicated in the table above. The Business rationale of the organization is based on diversification and expanding the brand at a lower cost to its customers. It is also based on stature which reduces the barriers to market entry. As such the company increases its sources of revenue from various markets leading to greater profits. It sought to challenge in every venture.
Virgin Group Customer and Profit proposition
The organization adds value to its customers through understanding the institutionalized markets. This the team does by identifying complacency in the market hence choosing to fill the gap by satisfying the customers. Eventually increasing its revenue. Also, it seeks to reduce restricted management so as to encourage innovation. This eventually leads to better services that increase not only the profits but also improves the services offered to the customers.
References
Barney, J. (1991). Firm resources and sustained competitive advantage. Journal of management , 17 (1), 99-120.
Branson, R. (2014). Virgin Atlantic: 30 years of fun, flying, and competition . Telegraph.co.uk . Retrieved 1 April 2018, from https://www.telegraph.co.uk/finance/comment/10917094/Virgin-Atlantic-30-years-of-of-fun-flying-and-competition.html
De Wit, B., & Meyer, R. (2014). Strategy Synthesis: managing strategy paradoxes to create competitive advantage. Hampshire: Cengage Learning EMEA .
Gajanan, M. (2015). Virgin Galactic crash: co-pilot unlocked braking system too early, inquiry finds . the Guardian . Retrieved 1 April 2018, from https://www.theguardian.com/science/2015/jul/28/virgin-galactic-spaceshiptwo-crash-cause
Grant, R. M. (2016). Contemporary strategy analysis: Text and cases edition . John Wiley & Sons.
Khanna, T., & Yafeh, Y. (2005). Business groups and risk sharing around the world. The Journal of Business , 78 (1), 301-340.
