Virgin's Pursuit: Sir Richard Branson's Dilemmas in Creating a Presence in Retail Financial Services SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
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Case Study Description of Virgin's Pursuit: Sir Richard Branson's Dilemmas in Creating a Presence in Retail Financial Services
In the forty years to 2010, Virgin Group's Sir Richard Branson (b. 1950) turned from a 'high school dropout' to a billionaire and global legend. The creation of over 300 business interests in parts as far afield as the UK, South Africa, Australia and the USA resulted from a unique management style. Branson and the Virgin brand often associate with music (such as records and music stores) and travel (airlines, trains and booked holidays) but between August 2007 and February 2008 they were involved in a failed takeover of Northern Rock, a collapsed British bank. However, as this case study will detail, Virgin Group was keen on entering the finance industry. The Northern Rock affair was one of a long series of steps dating to the 1980s through which Branson and Virgin have been developing capabilities to enter the British retail banking sector.
Swot Analysis of "Virgin's Pursuit: Sir Richard Branson's Dilemmas in Creating a Presence in Retail Financial Services" written by Bernardo Batiz-Lazo, Kimio Kase includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Branson Virgin facing as an external strategic factors. Some of the topics covered in Virgin's Pursuit: Sir Richard Branson's Dilemmas in Creating a Presence in Retail Financial Services case study are - Strategic Management Strategies, and Strategy & Execution.
Some of the macro environment factors that can be used to understand the Virgin's Pursuit: Sir Richard Branson's Dilemmas in Creating a Presence in Retail Financial Services casestudy better are - – technology disruption, talent flight as more people leaving formal jobs, banking and financial system is disrupted by Bitcoin and other crypto currencies, customer relationship management is fast transforming because of increasing concerns over data privacy, there is backlash against globalization, digital marketing is dominated by two big players Facebook and Google, increasing commodity prices,
increasing energy prices, increasing government debt because of Covid-19 spendings, etc
Introduction to SWOT Analysis of Virgin's Pursuit: Sir Richard Branson's Dilemmas in Creating a Presence in Retail Financial Services
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Virgin's Pursuit: Sir Richard Branson's Dilemmas in Creating a Presence in Retail Financial Services case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Branson Virgin, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Branson Virgin operates in.
According to Harvard Business Review, 75% of the managers use SWOT analysis for various purposes such as – evaluating current scenario, strategic planning, new venture feasibility, personal growth goals, new market entry, Go To market strategies, portfolio management and strategic trade-off assessment, organizational restructuring, etc.
SWOT Objectives / Importance of SWOT Analysis and SWOT Matrix
SWOT analysis of Virgin's Pursuit: Sir Richard Branson's Dilemmas in Creating a Presence in Retail Financial Services can be done for the following purposes –
1. Strategic planning using facts provided in Virgin's Pursuit: Sir Richard Branson's Dilemmas in Creating a Presence in Retail Financial Services case study
2. Improving business portfolio management of Branson Virgin
3. Assessing feasibility of the new initiative in Strategy & Execution field.
4. Making a Strategy & Execution topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Branson Virgin
Strengths Virgin's Pursuit: Sir Richard Branson's Dilemmas in Creating a Presence in Retail Financial Services | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Branson Virgin in Virgin's Pursuit: Sir Richard Branson's Dilemmas in Creating a Presence in Retail Financial Services Harvard Business Review case study are -
Effective Research and Development (R&D)
– Branson Virgin has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in, as mentioned in case study Virgin's Pursuit: Sir Richard Branson's Dilemmas in Creating a Presence in Retail Financial Services - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Diverse revenue streams
– Branson Virgin is present in almost all the verticals within the industry. This has provided firm in Virgin's Pursuit: Sir Richard Branson's Dilemmas in Creating a Presence in Retail Financial Services case study a diverse revenue stream that has helped it to survive disruptions such as global pandemic in Covid-19, financial disruption of 2008, and supply chain disruption of 2021.
Training and development
– Branson Virgin has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Virgin's Pursuit: Sir Richard Branson's Dilemmas in Creating a Presence in Retail Financial Services Harvard Business Review case study by analyzing – employees retention, in-house promotion, loyalty, new venture initiation, lack of conflict, and high level of both employees and customer engagement.
High switching costs
– The high switching costs that Branson Virgin has built up over years in its products and services combo offer has resulted in high retention of customers, lower marketing costs, and greater ability of the firm to focus on its customers.
Strong track record of project management
– Branson Virgin is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Innovation driven organization
– Branson Virgin is one of the most innovative firm in sector. Manager in Virgin's Pursuit: Sir Richard Branson's Dilemmas in Creating a Presence in Retail Financial Services Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Highly skilled collaborators
– Branson Virgin has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive segment. Secondly the value chain collaborators of the firm in Virgin's Pursuit: Sir Richard Branson's Dilemmas in Creating a Presence in Retail Financial Services HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Digital Transformation in Strategy & Execution segment
- digital transformation varies from industry to industry. For Branson Virgin digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Branson Virgin has successfully integrated the four key components of digital transformation – digital integration in processes, digital integration in marketing and customer relationship management, digital integration into the value chain, and using technology to explore new products and market opportunities.
Operational resilience
– The operational resilience strategy in the Virgin's Pursuit: Sir Richard Branson's Dilemmas in Creating a Presence in Retail Financial Services Harvard Business Review case study comprises – understanding the underlying the factors in the industry, building diversified operations across different geographies so that disruption in one part of the world doesn’t impact the overall performance of the firm, and integrating the various business operations and processes through its digital transformation drive.
Analytics focus
– Branson Virgin is putting a lot of focus on utilizing the power of analytics in business decision making. This has put it among the leading players in the industry. The technology infrastructure suggested by Bernardo Batiz-Lazo, Kimio Kase can also help it to harness the power of analytics for – marketing optimization, demand forecasting, customer relationship management, inventory management, information sharing across the value chain etc.
Organizational Resilience of Branson Virgin
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Branson Virgin does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Cross disciplinary teams
– Horizontal connected teams at the Branson Virgin are driving operational speed, building greater agility, and keeping the organization nimble to compete with new competitors. It helps are organization to ideate new ideas, and execute them swiftly in the marketplace.
Weaknesses Virgin's Pursuit: Sir Richard Branson's Dilemmas in Creating a Presence in Retail Financial Services | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Virgin's Pursuit: Sir Richard Branson's Dilemmas in Creating a Presence in Retail Financial Services are -
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Virgin's Pursuit: Sir Richard Branson's Dilemmas in Creating a Presence in Retail Financial Services, in the dynamic environment Branson Virgin has struggled to respond to the nimble upstart competition. Branson Virgin has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
No frontier risks strategy
– After analyzing the HBR case study Virgin's Pursuit: Sir Richard Branson's Dilemmas in Creating a Presence in Retail Financial Services, it seems that company is thinking about the frontier risks that can impact Strategy & Execution strategy. But it has very little resources allocation to manage the risks emerging from events such as natural disasters, climate change, melting of permafrost, tacking the rise of artificial intelligence, opportunities and threats emerging from commercialization of space etc.
Workers concerns about automation
– As automation is fast increasing in the segment, Branson Virgin needs to come up with a strategy to reduce the workers concern regarding automation. Without a clear strategy, it could lead to disruption and uncertainty within the organization.
Slow decision making process
– As mentioned earlier in the report, Branson Virgin has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the industry over the last five years. Branson Virgin even though has strong showing on digital transformation primary two stages, it has struggled to capitalize the power of digital transformation in marketing efforts and new venture efforts.
Skills based hiring
– The stress on hiring functional specialists at Branson Virgin has created an environment where the organization is dominated by functional specialists rather than management generalist. This has resulted into product oriented approach rather than marketing oriented approach or consumers oriented approach.
Increasing silos among functional specialists
– The organizational structure of Branson Virgin is dominated by functional specialists. It is not different from other players in the Strategy & Execution segment. Branson Virgin needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Branson Virgin to focus more on services rather than just following the product oriented approach.
Need for greater diversity
– Branson Virgin has taken concrete steps on diversity, equity, and inclusion. But the efforts so far has resulted in limited success. It needs to expand the recruitment and selection process to hire more people from the minorities and underprivileged background.
Interest costs
– Compare to the competition, Branson Virgin has borrowed money from the capital market at higher rates. It needs to restructure the interest payment and costs so that it can compete better and improve profitability.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Virgin's Pursuit: Sir Richard Branson's Dilemmas in Creating a Presence in Retail Financial Services, it seems that the employees of Branson Virgin don’t have comprehensive understanding of the firm’s strategy. This is reflected in number of promotional campaigns over the last few years that had mixed messaging and competing priorities. Some of the strategic activities and services promoted in the promotional campaigns were not consistent with the organization’s strategy.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Virgin's Pursuit: Sir Richard Branson's Dilemmas in Creating a Presence in Retail Financial Services, is just above the industry average. Branson Virgin needs to redesign the compensation structure and incentives to increase the revenue per employees. Some of the steps that it can take are – hiring more specialists on project basis, etc.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Branson Virgin is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Virgin's Pursuit: Sir Richard Branson's Dilemmas in Creating a Presence in Retail Financial Services can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Opportunities Virgin's Pursuit: Sir Richard Branson's Dilemmas in Creating a Presence in Retail Financial Services | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities highlighted in the Harvard Business Review case study Virgin's Pursuit: Sir Richard Branson's Dilemmas in Creating a Presence in Retail Financial Services are -
Developing new processes and practices
– Branson Virgin can develop new processes and procedures in Strategy & Execution industry using technology such as automation using artificial intelligence, real time transportation and products tracking, 3D modeling for concept development and new products pilot testing etc.
Creating value in data economy
– The success of analytics program of Branson Virgin has opened avenues for new revenue streams for the organization in the industry. This can help Branson Virgin to build a more holistic ecosystem as suggested in the Virgin's Pursuit: Sir Richard Branson's Dilemmas in Creating a Presence in Retail Financial Services case study. Branson Virgin can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Manufacturing automation
– Branson Virgin can use the latest technology developments to improve its manufacturing and designing process in Strategy & Execution segment. It can use CAD and 3D printing to build a quick prototype and pilot testing products. It can leverage automation using machine learning and artificial intelligence to do faster production at lowers costs, and it can leverage the growth in satellite and tracking technologies to improve inventory management, transportation, and shipping.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Branson Virgin to expand its talent hiring zone. According to McKinsey Global Institute, 20% of the high end workforce in fields such as finance, information technology, can continously work from remote local post Covid-19. This presents a really great opportunity for Branson Virgin to hire the very best people irrespective of their geographical location.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Strategy & Execution industry, but it has also influenced the consumer preferences. Branson Virgin can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Branson Virgin can build a diversified supply chain model across various countries in - South East Asia, India, and other parts of the world. This reconfiguration of global supply chain can help, as suggested in case study, Virgin's Pursuit: Sir Richard Branson's Dilemmas in Creating a Presence in Retail Financial Services, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Leveraging digital technologies
– Branson Virgin can leverage digital technologies such as artificial intelligence and machine learning to automate the production process, customer analytics to get better insights into consumer behavior, realtime digital dashboards to get better sales tracking, logistics and transportation, product tracking, etc.
Better consumer reach
– The expansion of the 5G network will help Branson Virgin to increase its market reach. Branson Virgin will be able to reach out to new customers. Secondly 5G will also provide technology framework to build new tools and products that can help more immersive consumer experience and faster consumer journey.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Branson Virgin in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Strategy & Execution segment, and it will provide faster access to the consumers.
Low interest rates
– Even though inflation is raising its head in most developed economies, Branson Virgin can still utilize the low interest rates to borrow money for capital investment. Secondly it can also use the increase of government spending in infrastructure projects to get new business.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Strategy & Execution industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Branson Virgin can take advantage of these changes in consumer behavior to build a far more efficient business model. For example consumer regular ordering of products can reduce both last mile delivery costs and market penetration costs. Branson Virgin can further use this consumer data to build better customer loyalty, provide better products and service collection, and improve the value proposition in inflationary times.
Reconfiguring business model
– The expansion of digital payment system, the bringing down of international transactions costs using Bitcoin and other blockchain based currencies, etc can help Branson Virgin to reconfigure its entire business model. For example it can used blockchain based technologies to reduce piracy of its products in the big markets such as China. Secondly it can use the popularity of e-commerce in various developing markets to build a Direct to Customer business model rather than the current Channel Heavy distribution network.
Use of Bitcoin and other crypto currencies for transactions
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Branson Virgin in the consumer business. Now Branson Virgin can target international markets with far fewer capital restrictions requirements than the existing system.
Threats Virgin's Pursuit: Sir Richard Branson's Dilemmas in Creating a Presence in Retail Financial Services External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Virgin's Pursuit: Sir Richard Branson's Dilemmas in Creating a Presence in Retail Financial Services are -
Capital market disruption
– During the Covid-19, Dow Jones has touched record high. The valuations of a number of companies are way beyond their existing business model potential. This can lead to capital market correction which can put a number of suppliers, collaborators, value chain partners in great financial difficulty. It will directly impact the business of Branson Virgin.
Environmental challenges
– Branson Virgin needs to have a robust strategy against the disruptions arising from climate change and energy requirements. EU has identified it as key priority area and spending 30% of its 880 billion Euros European post Covid-19 recovery funds on green technology. Branson Virgin can take advantage of this fund but it will also bring new competitors in the Strategy & Execution industry.
Aging population
– As the populations of most advanced economies are aging, it will lead to high social security costs, higher savings among population, and lower demand for goods and services in the economy. The household savings in US, France, UK, Germany, and Japan are growing faster than predicted because of uncertainty caused by pandemic.
Technology disruption because of hacks, piracy etc
– The colonial pipeline illustrated, how vulnerable modern organization are to international hackers, miscreants, and disruptors. The cyber security interruption, data leaks, etc can seriously jeopardize the future growth of the organization.
Increasing wage structure of Branson Virgin
– Post Covid-19 there is a sharp increase in the wages especially in the jobs that require interaction with people. The increasing wages can put downward pressure on the margins of Branson Virgin.
High dependence on third party suppliers
– Branson Virgin high dependence on third party suppliers can disrupt its processes and delivery mechanism. For example -the current troubles of car makers because of chip shortage is because the chip companies started producing chips for electronic companies rather than car manufacturers.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Branson Virgin with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Instability in the European markets
– European Union markets are facing three big challenges post Covid – expanded balance sheets, Brexit related business disruption, and aggressive Russia looking to distract the existing security mechanism. Branson Virgin will face different problems in different parts of Europe. For example it will face inflationary pressures in UK, France, and Germany, balance sheet expansion and demand challenges in Southern European countries, and geopolitical instability in the Eastern Europe.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Branson Virgin in the Strategy & Execution industry. The Strategy & Execution industry is already at various protected from local competition in China, with the rise of trade war the protection levels may go up. This presents a clear threat of current business model in Chinese market.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Virgin's Pursuit: Sir Richard Branson's Dilemmas in Creating a Presence in Retail Financial Services, Branson Virgin may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Strategy & Execution .
Easy access to finance
– Easy access to finance in Strategy & Execution field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Branson Virgin can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
High level of anxiety and lack of motivation
– the Great Resignation in United States is the sign of broader dissatisfaction among the workforce in United States. Branson Virgin needs to understand the core reasons impacting the Strategy & Execution industry. This will help it in building a better workplace.
New competition
– After the dotcom bust of 2001, financial crisis of 2008-09, the business formation in US economy had declined. But in 2020 alone, there are more than 1.5 million new business applications in United States. This can lead to greater competition for Branson Virgin in the Strategy & Execution sector and impact the bottomline of the organization.
Weighted SWOT Analysis of Virgin's Pursuit: Sir Richard Branson's Dilemmas in Creating a Presence in Retail Financial Services Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers in the HBR case study Virgin's Pursuit: Sir Richard Branson's Dilemmas in Creating a Presence in Retail Financial Services needs to zero down on the relative importance of each factor mentioned in the Strengths, Weakness, Opportunities, and Threats quadrants.
We can provide the relative importance to each factor by assigning relative weights. Weighted SWOT analysis process is a three stage process –
First stage for doing weighted SWOT analysis of the case study Virgin's Pursuit: Sir Richard Branson's Dilemmas in Creating a Presence in Retail Financial Services is to rank the strengths and weaknesses of the organization. This will help you to assess the most important strengths and weaknesses of the firm and which one of the strengths and weaknesses mentioned in the initial lists are marginal and can be left out.
Second stage for conducting weighted SWOT analysis of the Harvard case study Virgin's Pursuit: Sir Richard Branson's Dilemmas in Creating a Presence in Retail Financial Services is to give probabilities to the external strategic factors thus better understanding the opportunities and threats arising out of macro environment changes and developments.
Third stage of constructing weighted SWOT analysis of Virgin's Pursuit: Sir Richard Branson's Dilemmas in Creating a Presence in Retail Financial Services is to provide strategic recommendations includes – joining likelihood of external strategic factors such as opportunities and threats to the internal strategic factors – strengths and weaknesses. You should start with external factors as they will provide the direction of the overall industry. Secondly by joining probabilities with internal strategic factors can help the company not only strategic fit but also the most probably strategic trade-off that Branson Virgin needs to make to build a sustainable competitive advantage.
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