7. Strategy of diversification « a strategythattakes the organisation awayfromboth itsexistingmarkets and itsexistingproducts » Reasons for diversification: - efficiency gain - increasecorporateparentingskills - increasingmarket power For Virgin: Branson’sideas, interests and engagement Results of diversification: - becarefulwithriskyunrelated diversification - one shortcomingcanbehidden by successes of other services, but canalso damage the whole image of Virgin Diversification
8. Value adding activities: - Envisioning - Coaching and facilitating - Intervening Value destroying activities: - Adding management costs - Adding bureaucratic complexity - Obscuring financial performance Value creation: key concept
10. What ? « a corporate parent seeking to employ its own competences as a parent to add value to is business » What is Virgin’s main asset? THE BRAND Managers have one major job: find & exploit parenting opportunities The parental developer
11. BCG matrix ENTERTAINMENT FINANCE SHOPPING SOCIAL & ENVIRONMENT MEDIA & TELECOMUNICATIONS RAILWAY FLIGHTS
12. McKinsey matrix FINANCE ENTERTAINMENT SHOPPING SOCIAL & ENVIRONMENT MEDIA & TELECOMUNICATIONS FLIGHTS RAILWAY
14. The Parentingmatrix Two key dimensions - Feel: understanding of the parented companies and of their market Greenfield start-ups- Benefit: fit between the opportunities and the capabilities Cosmetics Joint ventures: Virgin provides the brand, and partners are the main investors Virgin further values: public relations, experience with start-ups, understanding of the market
15.
16. Whatmaybe the future of the company? After Branson: link between Branson and Virgin brandistoo strong “Riskofcontamination”: the greatestthreatisthat Virgin brandmaybecomeassociatedwithfailure”
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