Virgin Group
Cool brand or smart one?

Edoardo Pisciotta London 27/06/2018

Founded by Sir Richard Branson and Nik Powell, Virgin Group is one of the most famous British companies. Its headquarters in London, has a value of over £6 Billion and consumers are used to seeing its products almost everywhere. Virgin Group is involved in various sectors such as telecommunication, travel, leisure and entertainment, health and wellness, and financial services. Due to Western companies’ increasing interest in the specialisation of businesses and shift away from the conglomerate model —which is successful in other parts of the world — Virgin Group represents a particularly unique case that deserves more attention from CEO.
 
The name of the company was first suggested by Tessa Watts, a colleague of Sir Branson, during a brainstorming session and it signifies the fact that all the founders were new to the business world, when starting the company. The origins of Virgin Group come from the establishment of Virgin Records in 1984. In the same year, Sir Branson decided to venture into the airline business and leased two planes to begin the operations of Virgin Atlantic. This extreme diversification between ventures is one of the main characteristics of Virgin Group since its inception. 
 
To this date, the Virgin brand is associated with several different business such as Virgin media, Virgin Trains, Virgin Active, Virgin Money, Virgin Atlantic and Virgin Holidays, just to name a few. Not all the companies are fully owned and managed by Virgin (i.e. Virgin Atlantic and Virgin Trains) but they all have something in common —each company of the group acts independently while relying on centralised communication and a single IT platform. 
 
It would take several years with a high risk of failure for a subsidiary to establish a strong independent brand. The Virgin brand is built around offering value for money (premium model), superior customer service, innovation, and a fun and hip image. Usually, brand dilution, a phenomenon by which a brand loses its value the more it is used, is a risk that all companies try to avoid. Instead, the Virgin Group defies this rule and relies on its brand to fuel its expansion.
 
The ability to leverage on a powerful brand and extreme diversification both in terms of geography and sector, are the main strengths of the Virgin Group. This business model is therefore undoubtedly unique and incredibly successful. It certainly owes a lot to the genius of Sir Branson and its ability to market new ventures and create an appealing image for the group. Nevertheless, the success also depends on companies of the group that participate in the success of the others by cross selling, cooperating and leveraging on the Virgin brand — Much like in CEO, where members can insure their businesses by participating in the success of other members!