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In: Business and Management

Submitted By jacknds
Words 352
Pages 2
1) What is the corporate rationale of the Virgin Group?
Corporate rational is the way in which a corporate parent envisages the way that it can add value to its strategic business units. The Virgin Group sees itself as a restructurer; this means that it has low central costs due to relatively small corporate center, with fairly minimal involvement at business level. However they vary from the portfolio managers because they also set about trying to identify restructuring opportunities within their businesses and have the skills and expertise in order to intervene and introduce these changes where necessary. The Virgin Group have a huge range of about two hundred strategic business units ranging from airways to cola, and makeup to publishing. Part of Virgin's corporate rationale is that it tries to invade ‘static' markets in which there are few competitors and where consumers don't get value for money because of this. The Virgin Group enters these markets to try and

Is this Essay helpful? Join OPPapers to read more and access more than 350,000 just like it! get better grades shake them up, for example they did this with Virgin Airways and Virgin Cola. By doing this if they manage to produce the product or service for a slightly lower price than all other competitors within the market then they should, along with their strong Virgin brand name, gain a big market share fairly quickly because they have undercut everyone else. This is a good way in which to enter a market because it uses the shock tactic to the other competitors who may have become too comfortable in this monopolistic market, and has potentially huge initial gains. By using this shock tactic, the other market leaders won't have anticipated it and will be slower to respond, for example when Virgin entered the airways market, British Airways hadn't anticipated them as competition and so were not...

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