VIRGIN ACQUISITION

Virgin Acquisition

Virgin Acquisition

Introduction

The main purpose of this paper is to make discussion on the case study of Virgin Money. The paper discusses the different strategic management techniques and describes the benefits gained by virgin from the acquisition of Northern Rock and the problems which it might face because of such acquisition. The paper also discusses the other options which virgin can adopt for joint relationship with Northern Rock. The paper also makes discussion on the processes through which Virgin can build the sustainable competitive advantage in UK banking market.

Case Study

The case study is about the Virgin's acquisition of Northern Rock. Virgin is making a decision about acquiring the Northern Rock and adding banking products in its ubiquitous brand. Virgin had its business's expansion in every brand like trains and planes, mobile phones and music festivals and holidays and gyms and got success in all these brands. The CEO of virgin also started his business in wedding dress, but this business could not get success. The customer service and consumer opinion about virgin are very good. The case discusses that is it a suitable option for a virgin to acquire Northern Rock.

Task 1:

The different strategic management tools like SWOT, PESTEL, Ansoff Matrix and Porter's Generic Strategy tools are best tools that can provide an overview about the benefits or weaknesses of acquisitions.

SWOT Analysis

Strengths

The strengths for Virgin in terms of acquiring Northern Rock could be the control over the company. Virgin can gain the strength of total control over the company, and acquire the stock for a minimal price also has the power to reduce the debts. There are also different factors that serve as strengths for Virgin (Finkelstein, 2002, p. 36). Virgin has the power to block the major competitors through this acquisition, and make the net project a higher one. This take over can be a winning solution for Virgin in such a way that it Virgin has a good reputation, and Northern Rock too has a good reputation; therefore, there is a great possibility that this acquisition can be successful for Virgin. Through acquiring the Northern Rock, Virgin has the great possibility to have dominance over the market share. The acquisition can result in positive cash flow, and decrease in the line of credit (Fried, 1996, p. 401). The acquisition can help in enhancing the capital of Virgin. It provides some extra support to the company and helps in bringing enhancement to the market shares of the company. Acquisition gives Virgin strength to have proper control over the assets for less money.

Weakness

Everything has both positive and negative aspects. Just like the different strengths, there are also some weaknesses which Virgin might face as a result of acquiring Northern West. The main weakness, which Virgin might face as a result of acquisition is the risk which it may derive from the Northern West (Greenwood, 2004, p. 239). Along with the assets and market share, the company also takes the risks which the other company is ...