Virgin Lecture Flashcards
What are the potential benefits of diversification?
Economies of Scale
Economies of Scope
Economies form internalized transactions
Economies from Internal Labor or capital market
Resource synergies
What is Virgin?
A huge conclomerate of companies, some realted, others not, operating in many different industries and employing lots of people
What is the issue with Branson ans the face of Virgin?
In case he dies, the comapny might go into financial distrress since he is the poster chid of Virgin - hence he is trying to step back more and more.
What are some of the Virgin Businesses?
Virgin Rail
Virgin Commics
Virgin Games
Money
Virgin Galactic
Airport Bike etc. etc.
What is the main takeway?,
Virgin has an impressive portfolio of companies.
Some are related, others not.
Synergies are not always present.
Several Business models are in place.
Economies of Scale, Scope are not always present
What is the “Meta Business Model” of virgin?
Virgin Management
What Strategy does “Virgin Management” pursue?
Virgin reviews many business models and funds only the most promising ones.
No start ups, since it is too risky.
Is the Virgin model the only one to achieve growth?
Nope but it is quite popular and investors like it since it spread risk.
Also Virgin employs a technique called “corporate parenting, whereby they select promising ideas that have a string fir to the paretn(Virgin) and growth potential, with the aim pof craeteing synergetic effects through corporate parenting.
