Under a steadfast and effective leadership of its CEO Sir Richard Branson, the Virgin group has adopted a viable strategy to build its organization with approximated annual sales of around ten billion dollars in 2007. Starting from scratch in the year 1968, the virgin group organization embarked on a variety of strategies over next thirty years. Its chief objective was to come up with viable opportunities to propagate its business activities based besides building its strong reputation. In this light, its strategically trial and error processes were basically emergent as opposed to normative.
Question One
The Virgin emergent approach to strategy development has not always proved successful – Virgin Bride and Virgin Cola, for example, remain relatively small businesses. Does this matter? Do all emergent strategies have to be successful?
As a matter of fact, this question is tailored to espouse on the meaning of the emergent strategy. In this case, it becomes very necessary to first have a deep exploration of emergent strategy. An emergent strategy is an orchestrated pattern of activities that are developed over a period of time in a corporation. In this respect, there exist no stipulated missions, objectives or plans. This tells why it is also regarded as a realized strategy which immensely differ with intended strategy which is in this case is a scheme which is adopted by an organization but in concordance with its set missions and objectives.
Mintzberg posits that the alleged strategy is established overtime as intentions that collide and absorb the ever-changing reality. An emergent strategy matures when the organization takes a number of particular actions that gradually turns into an accepted and consistent pattern of activity whereof they bring about purposeful direction. In the long run the organization learns what works for it by weighing the benefits coupled with the plan and the disadvantages that beset it. This calls for an assessment and review of the aforementioned processes by situational analysis techniques such as SWOT analysis. Oftentimes, this kind of strategy is established as result of positive responses of the market forces by the individuals in particular organizations. Their strategies adopt the consumer’s tastes, their order sizes as well as their competitors’ practices. This gives the alleged organization a competitive advantage in the sense that the business end up providing what the market demands, rather than what the business owners thinks or perceives the market demands. This tells why an efficient emergent strategy demands that an organization maintains a steadfast flexibility, specifically at the level of the executive so as to fully embrace the new strategy. Naturally, the emergent strategy happens as result of ongoing organization transactions. Particularly, while an organization such as Virginia group can forgo a deliberate strategy and adopt emergent strategy, the odds coupled with such a plan manifesting itself from pure and structured activities still remains slim. Actually, emergent strategy does not fully give a true alternative to the deliberate strategy, especially for Virginia group which in this case operates on narrow margins. At best, it appears to be complementing and serving as the best corrective measure to the deliberative strategy. The increased changes in the businesses landscapes which are propagated by the increased cycling of consumer interests as well as the technological innovations suggest that there may arise a need to put up with the emergent strategies.
It now becomes very necessary to grapple with the question whether all the emergent strategies ought to be successful in the light that Virgin Bride and Virgin Cola have not accrued any benefit from it whatsoever.
As outlined in the discourse, it is very clear that the strategies are as result of trial and error version which brings forth the fact that the strategies are not worked out based on any economic consideration apart from the market forces. Therefore, since the major key objectives about the emergent strategies are experimental, then it becomes very clear that some of its objectives are likely to fail. It would be very prudent to assume that everything will succeed. However, this ought not to matter for the Virgin group but its payoffs from its success ought to exceed the problems coupled with its losses. Otherwise, the group would end up collapsing. This is captured by the Virgin Group’s CEO that business opportunities are like buses, there is still another that will come along.
Question 2
Critically evaluate Virgin Group’s strategies over the period of the case study. Was the company decision wise to spend so much time investing in so many new product areas? What would you decide to do if you were in charge?
Essentially, the emergent strategy was experimental and it could not end up being one hundred percent successful. This apparently posits that they could end up being partially successful. One of the chief decisions that were tailored by Virginia group emergent strategy was to develop the Virgin Atlantic by the year 1984.
This would end up securing the future for the Virgin Group and allow the organization to espouse on the other viable business areas in the following years. Therefore, the whole issue about investment on various product areas is quite problematic. There exist no outright answers to this question on account that it heavily relies on the strategist’s perception of the importance of the resource based perception.
In case RBV is vital and appears relevant to him or her, then it follows that the relative spread of the business opportunities was quite wide. This allowed for unregulated or very common use of its brand name as well as its emblem. On the other hand, if RBV was only one of the many theories, then it follows that it was a kind of a reasonable idea to experiment in such many business ventures. It is imperative to examine the different lines of businesses and product areas that the group ventured into. Richard Branson started with the first issue of Student Magazine in the year 1968, which was subsequently closed. The year 1970 saw the founding of the Virgin Mail Order operation which enabled the sending of mails at a cheaper price compared to the record stores. In the following year, the first record store was opened in Oxford Street, London in the United Kingdom and a recording studio was opened in the year 1972. What followed in the following year was the launch of a Records Label and a Music Publishing. The most potent of its businesses was launched in the year 1984 when the Virgin Atlantic started with limited flights between the United Kingdom and the United States. The Group then went on to found Virgin Holidays, a travel agency and then Virgin Hotels. The Group also launched Virgin Vodka and Virgin Cola with much publicity as well as Virgin Cars which was a car purchasing website. The Group also launched Virgin Mobile in the year 1999 which concerned itself with the selling of mobile telephone services in the United Kingdom by renting space on the network of a competitor.
I find that the business opportunities that it sought to maximize were too diverse and wide. Further, the strategy by the Group to use the common brand and logo of Virgin in all these lines of businesses was misguided. Looking at the Virgin website, the Group states that it does not venture into a new product area until and after it is able to find that it can bring something different to a clear business opportunity. I disagree with this philosophy since I do not find the Virgin Bride and Virgin Cosmetics being new business opportunities. If I were in charge of the Virgin Group, I would have ventured only to a limited scope of product areas which are interrelated so as to carve a market niche in these areas.
Question 3
Basically, a parent company has a significant control of the management as well as the operations of its subsidiary company. In this light, it is also referred to as the holding company. A parenting company have relatively large amount of stocks that can impact the subsidiary company’s board of directors and thereof gains almost a full control of it’s the management and the operations. A parent company is essentially involved in the ownership as well as control of the subsidiary organization for various reasons.
For instance, the parent company can be involved in ownership as well as control of the subsidiary organization for particular reasons. These would include: reduction of the operation and the overhead costs. Alternatively, a company can result to buying shares and controlling the subsidiary company so as to facilitate it to integrate and regulate its activities with other subsidiary corporations that are under control of the alleged parent company. On the other hand, a parent company can establish its subsidiaries for the purposes of taxes and liabilities. This makes them separate entities with legal as well as separate financial shields that cushion them from the liability or the recourses of the parent company.
Burger King Holdings is an example of a parent company of Burger King which was referred to as the Burger King Corporation. Basically, it was a Delaware organization that was established on July/23/2002. It is a public company that accrues its revenue from property, rental as well as its sales via its restaurants. Nonetheless, the biggest portion of its income immensely depends on the franchisee funds. The aforementioned company operates around its forty subsidiaries globally that superintend their franchisee activities, their acquisitions as well as its financial obligations like the pensions. One of its major subsidiaries is Buger King Brand’s organization which is mainly responsible for coordination of the intellectual properties of the parent company. The Burger King Brands possesses and regulates its entire trademark, copyrights as well as the brand names that are used by the restaurants that are situated in U.S. The Burger King Holdings is conferred with various responsibilities such as: it designs and deploys its organization’s training systems while it superintends the brand standards such as its appearance. Moreover, it creates new products and deploys them just after their presentation so as to seek the approval of their franchises.
Question 4
Explain the role of leadership in improving the countries national competitiveness
Actually, many companies concentrate on national competitiveness which ultimately results to global competitiveness ranking. In this light, the investors pay a very close attention to the viable signs of productivity in particular countries so as to examine the nation’s standings in several of their metrics. One of the main drivers that can increase a nation is its leadership efficiency. In this vein, it is the leadership that determines whether the complementary businesses that are integrated with other essential services coupled with the product production.
In previous years, the whole concept about national competitiveness has been molded into a new paradigm in respect to the economic advancements. Competitiveness triggers individuals to become cognizant of the limitations as well as the difficulties that rock the country’s global competitiveness. This oftentimes occurs when a national government action is cumbered by the budgetary limitations and the private sector constraints. All these factors are as result of ineffective leadership which ultimately becomes a party towards loss of competitive advantage of the country.
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