EMERGENT STRATEGY AT THE VIRGIN GROUP: INDICATIVE

ANSWERS TO THE QUESTIONS AT THE END OF THE CASE

These answers only make sense in the context of Chapter 2 of the sixth edition.

1.

The Virgin emergent approach to strategy development has not always proved successful
Virgin Bride and Virgin Cola, for example, remain relatively small businesses. Does this
matter? Do all emergent strategies have to be successful?

The purpose of this question is to explore the meaning of the term emergent strategy. Thus the starting
point in exploring the answer must be a clear exploration of emergent strategy. Virgin provides a useful
example partially captured in the quote from Sir Richard: Business opportunities are like buses there is
always another coming along. Some students will detect a lack of respect for the resource-based view here
and a greater emphasis on market opportunities see my Strategic Management Society Annual
Conference Research Paper, Baltimore, October 2003.

If one of the key points about emergent strategic approaches is their experimental nature, then it follows that
some experiments are likely to fail. It is unlikely that they will all succeed. Importantly, this does not matter to
Virgin Group however, the payoffs from success must exceed the problems of losses. Otherwise, the group
would collapse. An exploration of this aspect of the question may prove useful.

2. Critically evaluate Virgin Groups strategies over the period of the case. Was the company
wise to spend so much time investing in so many new product areas? What would you have
done?

The strategies were clearly only partially successful. One of the key decisions was the development of Virgin
Atlantic in 1984. This secured the future of the group and allowed the company to explore other business
areas in subsequent years. It is worth going through each of the business areas in the Table to examine
whether they have been successful not every class member will know about them all but enough should
have some idea to form a judgement.

The issue of investing in so many new product areas is more problematic. There is no simple answer to this
question which depends on the strategists view of the importance of the resource-based view. If the RBV is
important and relevant, then it could clearly be argued that the spread of business opportunities was far too
wide even allowing for the common use of the Virgin brand name and logo. If the RBV is only one of many
theories, then arguably it was reasonable to experiment in many business areas. The Virgin website has its
own answer to this issue see www.virgin.com - with a response that suggests the Virgin Group only moves
into a new area if it is able to bring something different to a clear business opportunity. Some might comment

Richard Lynch 2012

that this is not consistent with some of its activities over the last few years for example, what was so new
about Virgin Bride and Virgin Cosmetics?

Richard Lynch 2012