The companies have also got enough investments and working capital. Richard Branson ensures that all the companies are well funded and the proceeds from one company may be used to invest in another company. This was the case in 1992 when a Virgin record was sold to EMI and the funds realized was used in Virgin Atlantic. This helps to ensure that all the companies are running and thus offering the best opportunities for growth (Plunkett, 2009b:34)Virgin Companies in its growth strategy have diversified into several business enterprises. This includes Virgin Cola, Virgin Rail, and Virgin Record, Virgin Retail, Virgin Records and Virgin Atlantics. Some of the ventures are related while others are not related (Plunkett, 2009a:45). For example, Virgin Rail and Virgin Atlantic are both travel business while the Virgin Retail and Virgin Records are in the music industry. Virgin Cola and Virgin Record are not related at all.The main reason why the Virgin Group expands is to maximize its profits by capturing a bigger market share. This ensures that the groups’ profits have increased. The group also diversifies so as to mitigate the risks in the business, that is, if the travel industry is not doing well the music industry will be doing well and thus maintain high profits. The other reason for the diversification is the existence of a market opportunity (Morschett, Klein and Zentes, 2010:68).In every business that is well diversified, some diversifications are more related than others (Daft, 2010:373), like the Virgin Retail and Virgin Records. This is because the two shops sometimes stocks the same music records and thus are very similar.Moving to the banking industry for the Virgin Records will depend on the analysis of the industry. This can be done by looking at porters five forces model and his three test experiments. Porter indicates that for organizations to compete, they must apply cost leadership and focus on achieving market dominance (Orcullo, 2008:48). This is driven by five forces that are the bargaining power of buyers, bargaining powers of suppliers, the threat of new market entrants, the threat of similar products and the level of existing competition (Schermerhorn, 2010:146). These are the factors that the Virgin Companies need to critically analyze so as to maintain a competitive edge in the market (Henry, 2011:66).The attractiveness tests where high return on investment, high entry barriers, few substitutes, few
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