Popular in Course
verified elite notetaker
Popular in Business
This 8 page Document was uploaded by an elite notetaker on Monday December 21, 2015. The Document belongs to a course at a university taught by a professor in Fall. Since its upload, it has received 7 views.
Reviews for Case-study-on-Virgin-Group
Report this Material
What is Karma?
Karma is the currency of StudySoup.
You can buy or earn more Karma at anytime and redeem it for class notes, study guides, flashcards, and more!
Date Created: 12/21/15
Case Study On Virgin Group Overview Of Virgin Group Type Private (Limited liability) Industry conglomerate Founded 1970 (Incorporation: 1989) Headquarters London Borough of Hammersmith and Fulham,United Kingdom Key people Sir Richard Branson,Chairman Stephen Murphy, CEO Susannah Parden, CFO Products Beverages Airlines Trains Games Consumer electronics Financial services Films Internet Cable TV Music Radio Books Cosmetics Jewellery Houseware Retail Mobile phones Revenue US$17 billion ▲ (2008) Employees 35,000 Website http://www.virgin.com 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. History Virgin Group Began its journey in 1968 with Richard Branson’s first venture The “Student” magazine went into print.As the subscriptions increased and the craze for music began Virgin Mail Order began its journey with delivering music with to its subscribers soon became a craze and led to opening to the very first Virgin Music store in 1970.The Virgin Music store became an instant hit with the youth due to its offering of bean bags and free vegetarian food for the benefit of customers listening to the music on offer.After making the shop into a success in 1973 the Virgin Music label was launched under the Virgin Music.It had Mike Oldfield as its First signed artist with the albums“Tubular Bells” One of the biggest selling albums of the decade.By 1977 Virgin Music was one of the biggest recording labels in Europe and continued its journey to become the lead competitor to Thorn EMI and ultimately to be bought out for $1billion dollars cash in June 1992.These money was used to fund the under legation and Financially strapped Virgin Atlantic founded in 1984.In the period of Next 20 yrs Virgin was on an Diversification spree with opening a plethora of ventures namely Virgin Books,Virgin Megastores,Virgin Radio,Virgin Retail,Virgin Direct,Virgin Cinemas,Virgin Net,Virgin Brides,Virgin Express Airline,Virgin Trains,Virgin Cosmetics,Virgin Hotels,Virgin Money,Virgin Travelstore,Virgin student,Virgin Energy,Virgin cars,Virgin Wines,Virgin Mobile,Virgin Blue. Virgin Atlantic Randolph Fields, an American-born lawyer, and Alan Hellary, a former chief pilot for Laker Airways, set up British Atlantic Airways as a successor to Laker Airways. Fields got the idea of an airline from London to the Falkland Islands in June 1982, when the Falklands War had just finished and there was need for a service. Fields needed expertise and contacted Alan Hellary, Laker Airways' former chief pilot, who had thought about establishing a regular, commercial service to the Falklands at the same time. Hellary was in contact with colleagues out of work following the collapse of Laker Airways and they worked on the idea. Airbus A340-600 However the short runway at Port Stanley Airport and the time to improve it made the scheme unviable, so the idea of the Falklands service was dropped. Instead, Hellary and Fields tried to secure a licence from Gatwick to John F. Kennedy International Airport in New York City. A three-day inquiry in May 1983 rejected it after British Airways, British Caledonian and BAA objected. Hellary and Fields then applied for a licence between Gatwick and Newark Liberty International Airport. It was planned that British Atlantic Airways would use a 380-seat DC-10 to fly to Newark. However, faced with the prospect of direct competition from People Express, a post-deregulation "no frills" discount airline at Newark, they decided to secure more funding before proceeding. Fields met Richard Branson at a party in Central London during which he proposed a business partnership. After protracted and testy negotiations, Fields agreed to a reduced stake of 25% in the airline (renamed Virgin Atlantic) and became first chairman. Following disagreements over operations, Fields agreed to be bought out for an initial sum of £1 million with further payment on Virgin's first dividend. As a result of a High Court action, this additional payment was received shortly before Fields' death from cancer in 1997. On 22 June 1984 Virgin Atlantic operated its inaugural scheduled service between Gatwick and Newark using a leased Boeing 747-200 (G-VIRG) formerly operated by Aerolineas Argentinas. The airline became profitable during its first year, aided by sister company Virgin Records' ability to finance the lease of a secondhand Boeing 747. The firm timed operations to take advantage of a full summer, which included June to September - the most profitable period. Formative years In 1986, the airline added another Boeing 747 and started a scheduled route from Gatwick to Miami. Additional aircraft were acquired and routes launched from Gatwick to New York-JFK (1988), Tokyo(1989), Los Angeles (1990), Boston (1991), and Orlando (1992). In 1987 a service was launched between Luton and Dublin using Viscount turbo-prop aircraft, but this was withdrawn around 1990. In 1988, Club Air operated two Boeing 727 aircraft on behalf of Virgin. They were leased from Eastern Airlines to also serve the Luton to Dublin route. These were withdrawn around 1990 too. Later years Boeing 747-400 landing In March 2000 Virgin Group sold 49% of the airline's holding company to Singapore Airlines for £600.25 million. Virgin Group still owns the remaining 51%. In June 2002, Virgin Atlantic became the first airline to use the Airbus A340-600. In 2003 Virgin Atlantic carried 3.8 million passengers. This increased to 4.6 million in 2006, placing them seventh among UK airlines but second in passenger-miles because of the long-haul nature of operations. During the 2012 Summer Olympics bids, Virgin Atlantic attached "London 2012" to the rear of many of their Boeing 747-400 fleet. On 31 October 2005 Virgin Atlantic operated a humanitarian aid charter flight to the capital of Pakistan, Islamabad with 55 tonnes of aid for the affected by theearthquake in Pakistan. Virgin volunteered a Boeing 747 for a test of biofuels. In February 2008, it flew from Heathrow to Amsterdam, with no passengers, and 20% of power for one engine provided by plant-based biofuel. The airline said it expected to use biofuels based on algae. "Dirty tricks" controversy Virgin Atlantic Airbus A340-300 The decision to abolish the London Air Traffic Distribution Rules and to let Virgin Atlantic operate at Heathrow in competition with British Airways became the trigger for BA's so-called "dirty tricks" campaign against Virgin. In 1993 BA's PR director, David Burnside, published an article in "BA News", British Airways' internal magazine, which argued that Branson's protests against British Airways were a publicity stunt. Branson sued British Airways for libel, using the services of George Carman QC. BA settled out of court when its lawyers found the lengths to which the company went to try to kill off Virgin. BA had a legal bill of up to £3m, damages to Branson of £500,000 and a further £110,000 to his airline. In the 1990s, Virgin Atlantic jets were painted with "No-Way BA/AA" in opposition to the attempted merger between British Airways and American Airlines. In 1997, following British Airways' announcement that it was to remove the Union Flag from its tailfins in favour of world images, Virgin introduced a union flag design on the winglets of its aircraft and changed the red dress on the Scarlet Lady on the nose of aircraft to the union flag with the tag line "Britain's Flag Carrier". This was a tongue-in-cheek challenge to BA's traditional role as the UK's flag carrier. Despite this BA remains the UK's flag carrier. "Although I did not have any direct contact with BA in relation to passenger fuel surcharges, I regret that, on becoming aware of the discussions, I did not take steps to stop them." Steve Ridgway, CEO of Virgin Atlantic Relations with British Airways improved with the arrival of Rod Eddington as BA CEO though rivalry continued. Eddington replaced Robert Ayling, involved in the dirty tricks affair, who was dismissed by Lord Marshall, the long-serving BA chairman and Ayling's mentor, on behalf of BA's main institutional shareholders after BA had its first net loss since privatisation during Ayling's time during its 1999/2000 financial year. In June 2006, a tip-off from Virgin Atlantic led US and UK competition authorities to investigate alleged price-fixing between Virgin Atlantic and British Airways. In August 2007, BA was fined £271 million by the UK's Office of Fair Trading and the US Department of Justice though this was upheld on account of a guilty plea. Virgin Atlantic was not fined as it was given immunity for reporting the cartel to regulators. Slogans Over the years, Virgin has used many slogans, including: ● "Mine's Bigger Than Yours" Written on the back of the Airbus A340-600s because they are the longest passenger aircraft in the world (but the title of the longest passenger aircraft will be claimed by the Boeing 747-8 when it officially enters passenger service in 2011). ● "4 Engines 4 Longhaul" Originally an Airbus slogan when newer versions of the A340 were built until Virgin inherited the slogan. The slogan was written on the engines of the planes, because all Virgin's planes at the time had four engines as opposed to BA's long haul twin-jet Boeing 777s and Boeing 767s. The slogan was removed in 2006 because it "had run its course and it was time to move on"— Virgin would later orderBoeing 787 twin-jet aircraft in 2007, as well as the Airbus A330-300, another twinjet, in 2009. ● "No Way BA/AA" Used in the late 1990s on several 747-400s to express Branson's displeasure with the proposed British Airways/American Airlines partnership. BA/AA combined held 100% market share on several US-UK routes (e.g. Dallas- Fort Worth to London), and a market share of more than 50% in several more (e.g. Chicago to London, JFK to London). The slogan was brought back starting in September 2008 after merger talks between British Airways, Iberia Airlines and American Airlines began. ● "Still Red Hot For 25 Years" 25th anniversary slogan for 2009. Others Include: "More experience than the name suggests," "Virgin, seeks travel companion(s)," "Love at first flight," "You never forget your first time," "Extra inches where it counts," "Fly a younger fleet," "One call does it all," "Hello gorgeous", "We're better by four" and, in a campaign featuring Austin Powers, "There's only one Virgin on this T-shirt (or bus, etc.) baby," and "Twice a day to London" in which Austin Powers is seen riding on the fuselage of a Virgin Atlantic 747. During that time G-VTOP was temporarily named "Austin Powered".
Are you sure you want to buy this material for
You're already Subscribed!
Looks like you've already subscribed to StudySoup, you won't need to purchase another subscription to get this material. To access this material simply click 'View Full Document'