Has Virgin spread itself too thin?

[gary]

Virgin was on Watchdog again this week, this time for problems with their online car buying service. It seems the name everyone once trusted is not delivering the service people have come to expect, but is it surprising considering the range of different businesses Virgin is in now? You've got makeup, cola, cars, trains, planes, space travel, holidays, plus an endless list more. OK, I'm not one to tell Richard Branson what to do , but surely he should get his existing businesses right before expanding into new areas?

Gary

 

[Toon]

Well in effect he doesn't really own a business, he owns about 50. Each company has it's own directors and as far as I'm aware, Richard doesn't actually have much input into the businesses. He sees an idea, puts some money into it, employs some people to do the work and bobs your uncle. If something doesn't work out hen 9 times out of 10, it's nothing to do with Richard.

 

[gary]

If something doesn't work out hen 9 times out of 10, it's nothing to do with Richard.

Perhaps. But it's still his brand.

 

[MATT FINNIE]

I have recently ditched virgin as an isp due to their total lack of support. I wanted to create a couple of new e-mail addresses but their website page for this would not let me log-in. After numerous e-mails to their support I ended up with no answers at all to my problem. It seemed that all the answers they had were for simple things like forgotten passwords and that they couldnt handle anything technical.
I don't have time to waste with things like this so I have moved on. There are plenty of other companies willing to provide a better service for my money.

Matt

 

[SillyJokes]

It is a strange range of businesses. I went to a Virgin Vie party - it was the cosmetics sold like tupperware- absolutely ghastly stuff - I felt quite sick by the end of it and it was so over priced.

Do you think I could get him interested in the Party business?

 

[Ozzy]

The Virgin a lot of times is actually a franchise - for example WH Smith actually own the Virgin MegaStores but those chose to franchise it under the Virgin brand to attract the young market (the Virgin brand name sounds cooler to teenagers buying PC games and CDs than popping into WH Smith).

Unfortunately for Mr Branson when a franchise does fail to delivery it is his name that is dragged through it, even though he does have very little control over it. Its a bit like McDonalds which operates under a similar scheme if you read the small plaque outside each restaurant door - but McDonalds provide the franchisee with full training and operating manuals. Virgin licence the use of their brand for equity and/or finance.

 

[kyber]

I am currently working on my first project involving a franchise model. Over 3000 outlets! Driving me crazy as all the usual mechanisms for pushing change through and ensuring that benefits are achieved are turned on their head.

I am not sure though that most of the Virgin operations operate under a true franchise model. In the WHS example you gave, it is WHS indeed that owns the stores and not store owner/managers owning one or several stores.

He does tend to outsource just about everything though in most cases, including most of the risk. Virgin cola for example has a very very small core team.

Stuart

 

[10Yetis]

Virgin maybe spreading itself too thin, but it is only able to do so due to the success and strong values of its brand via good brand management.

I have first hand experience of one of its brands which was Virgin Electric (VE). I worked for in PR/Marketing for one of its rivals and can safely say that the VE carried out many underhand tactics to try and win new customers. To Virgins credit, as soon as they (the brand managers at Virgin) realised that the venture was causing damage to the Virgin name and what they stand for they withdrew the licence to actually trade as Virgin Electric leaving their partners to deal with the subsequent naming and shaming.

As a PR and Marketing interested observer I have to admire the way in which Richard Branson puts his image behind every venture and is willing to get involved in PR 'stunts*' as he knows his involvement is the best ways to generate headlines and thus sales....(Virgin Cola, Virgin Trains, Virgin Weddings, Virgin Make Up to name a few).
I wish all Cheif Execs were willing to go so far.


*the use of the word 'Stunts' can be replaced by those who can spell Guerrilla Marketing more acurately than I!!