ri
CRITICAL ANALYSIS
Richard Branson succeeded as an entrepreneur using a theory because he believed that this was the best strategy to get the attention and confidence of the public consumers. Branson realized that the willingness of the employees to work for eight hours days has gone.. Today’s employees want to become as productive as possible while in their offices and interact with different individuals and groups in different settings. The technological advancement in wireless technologies has allowed workers and employees to access communication tools in new settings. Because of this rigorous and hectic schedule of employees, Branson theorized that it would be relaxing for these employees to indulge in airline trips to help them ease the pressure of after everyday’s work.
Fortunately for Richard Branson, his theory clicked and his ideas were accepted by the public consumers. The Virgin group’s dedication to quality for almost three decades now has led to the satisfaction of millions and millions of its customers worldwide. The Virgin group was created by Richard Branson who pursued the best quality and craftsmanship in terms of products and services.
The Virgin group bases its pricing strategies on several key trends that continuously shape the global marketplace. One particular trend developed by Branson himself is what he called “premium-tization”. This phenomenon causes the polarization of different markets. This would then trigger the consumers to demand and pay much higher prices for perceived quality. However, discounting in prices is also simultaneously taking place, therefore squeezing out the middle range. More often than not, businesses undergo internationalization which leads to a tighter squeeze for shelf space. So, Richard Branson thought that this will in turn leave the Virgin group as a winner. It is for this reason why Virgin group values the “premise sector” so much because this would allow consumers to try their brands at low risk and price.
Richard Branson also theorized that segmentation was a key factor especially in markets where a broad leadership position is not yet fully developed. So in these markets, Virgin group later on strived for strong positions especially in the premium and specialty segments. Good examples here include Virgin group’s leading position in the airline industry as well as in the recently established mobile stores in the United States as well as in Europe. Virgin group has been showing steady signs of growth and progress in the airline industry for a couple of years now. This consistent progress can be attributed to the change in strategic directions that was implemented several years ago and is still being further structured up to now. Basically, the critical element of the theory of Branson was to start looking at things from the perspectives of the consumers and the customers. In both examples, Richard Branson proved that his theory to establish autonomous growth through selling of more and more brands and expansion through the distribution networks as well as growth through acquisitions can be stunningly effective.
A major factor involved in the improvement of Virgin group involves the establishment and utilization of performance measures or indicators based upon the ideas of Richard Branson himself, that in turn measure their customer’s satisfaction. These measures or indicators are measurable characteristics of products and services that the company typically utilizes in order to study and improve their performance. The indicators that Richard Branson has chosen were able to represent the essential factors that are crucial to the improvement of operational and financial performance of the Virgin group. Through the analysis of accurate information brought about by the tracking processes, the measures or indicators themselves can possibly be analyzed and improved to support such goals.
The occurrence of consumer research within Virgin group was also based on the theories of Richard Branson. This reflected the growing difficulty in the management of Virgin group that required the effective use of valuable resources such as money, materials, equipments, and people. This was the reason why consumer research was initiated by Branson in order to determine the most effective ways to coordinate their resources through the application of analytical methods derived from fields of studies such as mathematics, science, and engineering. And true enough, Branson’s theory was correct again. Through this process, problems of Virgin group were solved in different ways and alternative solutions were then relayed to the management. The management then selected the appropriate course of action in line with the goals of Virgin group.
RECOMMENDATIONS
Deriving from the analysis between the industry, operations management and capabilities of Virgin Group, many strategic options would become imperative. It is therefore essential to evaluate these strategic options whether they are appropriate to the issues addressed, feasible enough to be implemented and their acceptability to key stakeholders.
There is definitely a need to reconcile both the inside-out and outside-in capabilities. While Virgin Group’s operations management involves focusing on its core competencies with market position following its resource base, Richard Branson and his company will be put into a disadvantageous position if they choose to neglect both the macro as well as the industry environment. Therefore, Virgin Group has to be aware of the latest operations, management changes, as well as changes in political, economic, legal and even demographic trends in order to develop the outside-in capabilities, such as market sensing, customer linking, channel bonding and technology monitoring.
The advantages enjoyed by Virgin Group may come in the form of increased revenues. Knowing what the market demands and the latest trends could help the company fully exploit its research and development capabilities to come out with services which are not only cost-effective but also with high quality. The strategic option can even be used as marketing tool where the focus is on staying close to their customers and listening to their feedbacks. On the flip side of the coin, there will be huge mobilization of resources involved, and the associated risks bestowed on Virgin group.
Nevertheless, the mentioned strategic option seems the most practical in the wake of globalization, since there is a sudden shift towards a more integrated and independent world economy. The key stakeholders too should not have any objections so long as Virgin group’s core business is not threatened. By virtue of Richard Branson’s centralized control of its business, it is being expected that major barriers should not exist in carrying out such option except additional time may be required given the scope and span of operations.
Understanding the strategic importance of operations management is something that Virgin Group has to be familiar with. Richard Branson normally practices a centralized and globally scaled configuration of operations and capabilities. This allows information dissemination to be retained.
CONCLUSION
The results of the analysis carried out on the operation management of Richard Branson and the Virgin Group indicated very significant effects, even amidst the threats of unrest. Therefore, we could conclude that the operations management of Virgin Group could still be expected to improve faster than average.
The review on Richard Branson’s operations management theories and resources revealed very little inconsistencies regarding the strategies of Virgin Group. This is coherent with their traditional inside-out approach. However, the need to reconcile both the inside-out and outside-in approaches becomes imperative now for the company.
The analysis among the Virgin Group environment as well as the operation management and capabilities of Richard Branson revealed certain gaps, most of which are biased towards the environment. However, these gaps paved the way towards determining a number of recommended strategic options to secure the competitiveness of Virgin Group.
Also, Richard Branson has to find a balance between adherence to internal forces within the management and to the changing forces of the environment in order to implement such strategic options.
REFERENCE
www.virgin.com. Retrieved May 5, 2006
0 comments:
Post a Comment