Pest Analysis On Virgin -
December 2nd, 2010
Virgin Group Limited is a British branded venture capital conglomerate organisation founded by business tycoon Richard Branson. The core business areas are travel, entertainment and lifestyle. Virgin Group's date of incorporation is listed as 1989 by Companies House, who class it as a holding company; however Virgin's business and trading activities date to the 1970s. The net worth of Virgin Group Ltd as of September 2008 is £5.01 billion. It consists of more than 400 companies around the world.
Virgin Group operates from its headquarters at The School House, 50 Brook Green in the London Borough of Hammersmith and Fulham.
Although Branson retains complete ownership and control of the Virgin Brand, the commercial set-up of companies using it is varied and complex. Each of the companies operating under the Virgin brand is a separate entity, with Branson completely owning some and holding minority or majority stakes in others. Occasionally, he simply licenses the brand to a company that has purchased a division from him, such as Virgin Mobile USA, Virgin Mobile Australia, Virgin Radio and Virgin Music (now part of EMI).
The brand name "Virgin" arose when Branson and a partner were starting their first business, a record shop. They considered themselves virgins in business. The current Virgin logo was originally sketched on a paper napkin and remains largely unchanged since 1979.
First is the Virgin Airlines’ Strengths, there is no doubt that influence, values and legacy of Mr. Bronson is one of their major strengths. Other advantage is that the business is privately owned which means they can manage the business well without the aid of following the government’s restrictions. The business also set the good image and good marketing strategy which reflects in promoting each other’s business as part of the alliance. Since it is the first company that offers low prices, they also get a chance to lease the aircrafts. Another factor is the strong leadership team of the seniors who are qualified enough in leading the entire organization toward the competency.
Second are the Weaknesses behind the Virgin Airlines. Because of the different business try-outs of MR. Branson, he is also part of his business’s weakness. All of his proposed projects or business’ strategies affect his other business although it is successful and stable. Another weakness is the low return of cash flow because they offer low prices for the passengers and there is a high expenditure for maintenance of the aircraft and sustaining the quality of their service. The direct route from London to New York is also considered as part of the weakness because it only promotes the limited destinations.
Third are the Opportunities for the Virgin Airlines. There are more cities open for another hospitality service and based on the smooth record of the airline, it is another success for them. Some of the large airline companies had experienced bankruptcy and it is a great opportunity and in addition, the European Union is on their side to support.
Threats are the fourth analysis on the airlines. The rapid growth and change in the world economy is a factor of threat because of the New Airline Restrictions. Another is the competition and high prices on the cost of fuels, threats on the terrorism, over flight restrictions, and the new airline companies are the other existing threats.
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