PORTFOLIO MANAGEMENT

Portfolio and Corporate Strategy- The Virgin Group Case Study

Portfolio and Corporate Strategy- The Virgin Group Case Study

Question 1 Develop a method to map the organization business portfolio

The virgin group is one of the leading business groups worldwide it has many businesses around the world working in a different field. The map of the virgin group business portfolio is linked with its business units maintaining the strategic relationships. With the help of these strategic relationships virgin mobile have achieve some of the advantages, it includes the economies of scale, especially this collaboration among the business department have helped the virgin company to maintain the consistency in buying suppliers and improved their logistics system. It has given them more control over the market. (Vasudevan 1989 pp. 523-551)Not only this with the help of organizational business portfolio map have assisted virgin company for increasing their accessibility to the customer information as compare to the other companies working in the same industry. The business portfolio can also help the corporate parent company for understanding and managing every strategic business unit (SBU's) in a similar context. On the other Virgin follows a diversification strategy which is not related. This helps us in giving an idea that the virgin group is a corporation which comes out from its own market and create new opportunities wherever it is possible. It helps the virgin groups to set up their present competencies and identify the diversified ways which can be useful in different situation.

Virgin group maintain a balance in their corporate business portfolio in a way which helps them in generating BCG matrix or Growth Share matrix. (Prahalad C.K 1990 pp.79-91)Under this matrix Virgin divides the company into four different categories; it includes stars, question marks, cash cows or dogs. It varies with respect to the market growth and market share of each component. It is very important to split the company within all four diagonal matrixes so that virgin can identify and manage the high risk companies with the less risky businesses. However virgin group focuses on high diversification and always tries to invest in their different companies. In my view Mr. Richard Branson the founder of Virgin Corporation always focuses on the stars performers and question mark category, and tries to capture the high market growth. I think the core reason that virgin group have such a great diversification is that the founder of the virgin has maintained some his personal objectives and spirit of entrepreneurship. This business leader is well known for his risk taking ability. (Goold, M 1993, pp. 7-25) Fortunately Mr. Branson have got great financial support for taking the risks but still there are some uncertainty which may result in business failure. The position of this business leader is very desirable and his actions are acknowledged due to his intelligent decisions.

The virgin group operates on the basis of two approaches for processing information one is described as the bilateral inter organizational information system. (S. Chatterjee, 1992 ...