As it is
mentioned before he is well known for his stylish but competitive leadership
skills. Many analysts attribute the success of Virgin Group to the creative
leadership skills of Branson.
process of expansion, he took over several risky ventures in a more to
diversify and improve his business. In most of his business plans, he focused
on minute segment of a specific market and provided quality products or
services. One major contributor to Branson’s success story is
his ability to lead people in exploring innovative and profitable ventures.
Branson’s leadership style falls in the category of transformational. Transformational leadership is a style of leadership where a leader
works with subordinates to identify needed change, creating a vision to guide
the change through inspiration, and encourage employees to sacrifice for a
better result. There is no doubt about the fact that
Branson’s success is dependent on his team and the way he manages them. In his
approach, the barrier existing between the employees and management is broken.
Sir Branson’s approach does not mean that the employees are entirely dependent
on the chairperson’s thoughts. They also have right to participate or to bring
up new ideas in production process of services and goods. Especially Human
Resource department encourage and reward employees for better contribution.
Leadership is one of the
difficult and also vital aspects to any business, specifically organizations
with such a global and diverse reach. As mentioned before, Virgin has a huge
standing throughout major tech & business oriented countries and
industries, which also proves to be one of their main strengths.
Diversity in a business with
such size could be both a huge opportunity, as well as an even bigger threat if
it is not carefully maintained and developed throughout the reach of the firm.
Most leaders in such cases usually have strength in developing their ideas into
reality; whilst also conveying and teaching those ideas to executives and
managers, which in turn portray said ideas to everyday employees. In order to
maintain core ideologies and strategies in global brands, leadership and
management must be able to implement these aspects into everyday processes of
the business, from small buying processes all the way to executive decisions
and public appearances.
businesses need diverse workforces. Meaning that in order to serve the customer
the best way possible, the business must be able to understand the different
customers in different countries and continents in order to provide the best
possible service. This happens to be one of the main issues for diverse
organizations. In a sense, this is almost impossible to achieve, since each
employee and/or customer is a unique individual; however, this is also the part
where if the firm is successful, then becoming a global sort of entity could be
a phenomenal advantage compared to other organizations in any respective industry.
It becomes more about how the different stakeholders have a unique mindset,
meanwhile having those same interests in the brand which integrate together to
form a firm such as Virgin.
The main issue with
diversification is the consideration of all different aspects and strategies of
the business and relocating/copying that into another industry or moving it
into another area. Many business have tried to do so with multiple goals in
mind, however, it is not easily done. A relatable example would be “National
Semiconductor corporation”. This firm was mainly specialized in manufacturing
the semiconductors which used to be inserted into electronic devices such as
machinery, televisions etc… The firm then thought about diversifying and
growing the manufacturing to also produce the electronic devices/machinery
themselves. However, they were not able to maintain neither the manufacturing
process of such complex machinery (moving from parts of machines, into whole
machines) or the retailing process that goes with such a complex process and
Even firms such as Virgin
have failed in the past trying to diversify. A few years back, Branson saw a
space in the beverage market, which would allow him to compete with the
legendary Coca-Cola and Pepsi brands. To start with, thinking of the potential
of a new entrant in that market, with a lower price than what customers intend
to pay is substantially profitable. The main thought behind that was in order
to beat them, he would have to first find a way to develop such a similar
product, whilst decreasing the price by about 15-20%. He also thought that one
of the main aspects that needed to be perfected was the marketing strategy.
Using revenues from other areas of his business, Branson launched a huge
marketing campaign in the UK and in the US (NY times square) in order to reach
a global audience for his global brand. However, Coke and Pepsi never allowed
Virgin Cola to expand, maximizing their advertising budgets and strengthening
their positions at the same time. Virgin Cola was never able to expand and failed
to reach a minimum market share in its own UK of 2.8%
These are just a few examples
of failure to diversify, showing how difficult it is for an organization to go
out of its own and develop new strategies for new industries. Looking at Virgin
Group and its presence in more than 5 different industries nowadays proves to
be one of the strongest global brands around; and that is mainly because of the
leadership of Richard Branson. Branson applies the ideology of how the
organization is simply a group of people with an integrated mindset and interest
put together to produce the best service/product for the customer. His way of
communicating with his employees and executives allows them to be more
comfortable and confident in their day to day activities, which in turn
produces a more productive and efficient operational level of business.