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strategic reasons for this success. Theoretically, this success should lie in strategic relationships (synergies and similar), which the student should explain. Where bidders' share-prices fall particularly far, they should look for reasons for scepticism about the strategic rationale; typically, the press coverage will provide ample guidance here.
Johnson, Whittington and Scholes, Exploring Strategy, 9th Edition, Instructor's Manual
distinct types, or more as different degrees of relatedness along continua. potential relatedness in terms of 'dominant logic' (Section 7.3) could be raised. question 2: How does Virgin add value as a corporate parent? should do to add value? Virgin's parenting added-value activities include the possible provision of a ready-made brand the opening up of more channels to finance with better terms the use of experienced start-up mangers to increase the chance of success public relations and marketing skills
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the ability to take a longer term perspective than would be afforded by such a group were it operating as a PLC .
Students might be asked what type of parenting role Virgin typically plays - mostly the parental developer (Section 7.6.1). Students should then look at different types of start-up (e.g. Virgin India) and consider whether they would benefit from any of the above, and, at the same time, this may highlight other aspects that Virgin may be able to improve onto add value (even elements of 're-structuring' at Virgin Rail). Question 3: Assessment of whether moving further into the banking industry is the right strategic option for Virgin. Does the continued pursuit of this industry suggest a more careful hidden strategic plan that is not revealed to outsiders? Students should look through the case material and form an opinion whether there are distinct strategic patterns as the organisation has grown. Some of the issues that might be raised include the likelihood of an organisation of this size not having some formal strategic plan. whether Virgin has been gaining sufficient experience in financial offerings what condition an industry has to be in for the Group to venture into (use Porter's 5 forces). Does the banking sector meet this criterion? does a possibility exist to restructure this market and gain competitive advantage? does financial services constitute an 'institutionalised' industry that is ripe for 'shaking up'?
Question 4: What would be the challenges faced by a successor to Sir Richard Branson, and what might he or she do? Some of the issues students might consider include all aspects of his ability and personality need to be evaluated and then the question is which-of these -will need to. be replicated in a new-I~~der-2.-Sollle-m~yno!-b~ fO_!.lnd~asily; __:_--: ..::....:=-._ some may not be necessary! Some discussion of where the company is, in terms of growth and financial condition, necessary and this needs then to be integrated into the type of leader required, depending
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on the opinion formed. This should lead the discussion to do. Change of brand image?
Create additional brands to suit changing consumer preferences? Less diversification in the future?
Rationalisation of the existing business, including divestments? How will the Group maintain its unique 'fun but competent' image in the future?
This is a very large organisation which has been in the public arena for decades, so most of the students will have views on this organisation and its founder prior to considering the case. They should be encouraged to try to find a reasoned view, based on the case material and any further research, rather than just sticking to some initial judgment or bias.
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