7/23/2019 Ch02 d( Vergin)
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Richard Lynch 2012
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
http://www.virgin.com/http://www.virgin.com/
