ASSIGNMENT OF WEEK 14

1.      In your own words and using referenced quotes describe the difference between ‘business unit level’ strategy and ‘corporate level’ strategy?

Business Unit Level Strategy:

The way business seeks to compete successfully in the market is called business unit level strategy. It is the decision a company takes on its way to maintain, create and use its competitive advantage. A strategic business unit is a semi-autonomous unit for an organization. This unit is responsible for its own price setting, budgeting and new product decision. The corporate headquarter consider Strategic Business Unit as an internal profit Center.

Bases of Competition Price Differentiation Hybrid Focus		Achieving Competitive Advantage Sustainability Hypercompetition Collaboration Game Theory
	SBU Strategies
	Detailed Choices Directions Methods

Figure: Business Level Strategies

Corporate level strategy:

Corporate level strategy is all strategic decision that affects the firm as a whole. It is concerned with overall purpose and scope of an organization. Adding value to its business unit is the main objective of corporate level strategy. The Corporate level strategies affect the matters such as deciding the size and composition of business portfolio of the overall firm.

Differences between Business Unit Level Strategy and Corporate Level Strategy:

Both business unit level strategy and corporate level strategy are important to a firm. They should be employed efficiently and effectively by any firm. However, they need to be used differently. A business level strategies needs to be used to solve specific problems whereas corporate level strategy needs to be used when the matter is about broader issues.

Further, business level strategy can be changed regularly depending upon the time and changes in the markets. While corporate strategies on the other hand should not be changed frequently as they deal with long term planning.

Business level strategies are very much focused, however corporate strategy always deal with broad issue.

The issue of corporate strategy is very much complex and have higher impact on the firm as compared to business level strategy.

Corporate level strategy requires more resources as well as consideration.

2.      Discuss the corporate parenting style of Virgin group.

Source: http://www.robabdul.com/the-virgin-group-case-study.asp

 The Virgin group is one of the one of the UK’s largest private company. According to 1996 survey, 96% of UK consumers were aware of the brand Virgin.

Virgin has been described as a “keiretsu” organization. Further, the Virgin Group had controlled by Mr. Richard Branson. His approach to management style was one that decentralized decision making and responsibility of the own development. Branson ruled by delegating power to managers, however when it came to marketing and promotion, he would take more involved role.

The name Virgin was chosen so that the brand can be remained virgin in every business it enters. Virgin’s expansion into new markets had been through a series of joint venture whereby Virgin provided the brand name and the partner provided the majority capital. It is involved in mobile telephony, travel, financial services, leisure, music, holidays and health and wellness. It partners with others and transfers and combines skills, knowledge and operational expertise from a wide range of industries. Also, Virgin Group Company is able to run their business by their self. Further the company actively helps each other to solve problems.

Virgin is involved in not only commercial activities but it is involved in finding solutions to world major issues or problem. With the help of Virgin Unite, a nonprofit foundation, it is organizing campaign like health, economic empowerment, conservation and climate change.

By observing the ownership, the corporate structure and the management style of Virgin Group, we can say that Virgin is following the Synergy manager corporate parenting style. The synergy manager is a corporate parenting style looking to enhance value across business units by managing synergies across business units. We can easily say that Virgin is following synergy manager corporate parenting style because of the following reasons:

Resources and activities are shared:

Virgin group use common distribution system across its business. It uses the same from brand name for each of its products and services. In many of the countries its offices are shared by its smaller business units depending upon the geographical diversity.

Skills are transferable:

Virgin Group also actively transfers their skills to the required industry. For example Virgin Music can transfer its skill to Virgin Cinema and vice-versa to improve its technology. Further, Virgin Group has its own value adding capabilities by which one business unit help each other in sharing technologies, skills and knowledge. The accumulated knowledge and skills learned in one business is utilized in another business unit in the Virgin Group. This has helped Virgin Group to increase its performance. In addition, marketing and R&D are the expertise skills which are used by Virgin Group to improve the performance of the newly launched products.

Source: http://earthandindustry.com/2010/04/7-international-companies-with-a-strong-green-gene/virgin-group-green-business/

Source: http://www.cascadiaprospectus.org/2010/11/bransons_virgin_group_step_int.php

Source: http://centreforaviation.com/analysis/industry-watchers-are-now-focused-on-the-fate-of-virgin-atlantic-46229

Source: http://www.justwirelesscoupons.com/category/wireless-coupons/virgin-mobile-promo-code/

Source: http://blogs.ubc.ca/cindywenyicui/2010/11/15/an-entrepreneurial-company-virgin/

Source: http://www.businessinsider.com/richard-branson-fails-virgin-companies-that-went-bust-2012-4?op=1

References:

• Johnson, Whittington and Scholes (2011) Exploring Strategy, 9th Edition, Pearson Education, Chapter 1 

• Johnson, Whittington and Scholes (2011) Exploring Strategy, 9th Edition, Pearson Education, Chapter 7 

• De Wit, B and Meyer, R (editors) (2010). 4th Edition Strategy: Process, Content, Context, Thomson International Business Press: London. Chapter 6 

• The Economist, ‘Cross his heart’, 5 October (2002) 

• ‘Virgin on the ridiculous’, 29 May (2003)

• P. McCosker, ‘Stretching the brand: a review of the Virgin Group’, European Case Clearing House, 2000.

• Strategic Direction, ‘Virgin Flies High with Brand Extensions’, vol. 18, no. 10, (October 2002).

• R. Hawkins, ‘Executive of Virgin Group outlines corporate strategy’ Knight Ridder/Tribune Business News, July 29 (2001a).

• R. Hawkins, ‘Branson in new dash for cash’, Sunday Business, 29 July (2001b)

• C. Vignali, ‘Virgin Cola’, British Food Journal, vol. 103, no. 2 (2001), pp. 131–139.

• M. Wells, ‘Red Baron’, Forbes Magazine, vol. 166, no. 1, 7 March (2000).