The Entrepreneur
Sir Richard Charles Nicholas Branson
Richard Charles Nicholas Branson was born on July 18, 1950 in Surrey, England. His father, Edward James Branson, worked as a barrister. His mother,Eve Branson, was employed as a flight attendant. Richard, who struggled with dyslexia, had a hard time with educational institutions. He nearly failed out of the all-boys Scaitcliffe School, which he attended until the age of 13. He then transferred to Stowe School, a boarding school in Stowe, Buckinghamshire, England. Still struggling, Branson dropped out at the age of 16 to start a youth-culture magazine called Student. The publication, run by students, for students, sold $8,000 worth of advertising in its first edition, which was launched in 1966. The first run of 50,000 copies was disseminated for free, after Branson covered the costs with advertising.
By 1969, Branson was living in a London commune, surrounded by the British music and drug scene. It was during this time that Branson had the idea to begin a mail-order record company called Virgin to help fund his magazine efforts. The company performed modestly, but made Branson enough that he was able to expand his business venture, adding a record shop in Oxford Street, London. With the success of the record shop, the high school drop-out was able to build a recording studio in 1972 in Oxfordshire, England.
His first artist on the Virgin Records label, Mike Oldfield, recorded his single "Tubular Bells" in 1973 with the help of Branson's team. The song was an instant smash, staying on the UK charts for 247 weeks. Using the momentum of Oldfield's success, Branson then signed other aspiring musical groups to label, including the Sex Pistols. Artists such as the Culture Club, the Rolling Stones, and Genesis would follow, helping to make Virgin Music one of the top six record companies in the world.
Branson's Virgin Group now holds more than 200 companies in over 30 countries including the United Kingdom, the U.S., Australia, Canada, Asia, Europe and South Africa. He has expanded his businesses to include a train company, a luxury game preserve, a mobile phone company, and a space tourism company, Virgin Galactic. Space flights will begin in 2009.
Branson is also known for his sporting achievements, notably the record-breaking Atlantic crossing in Virgin Atlantic Challenger II in 1986, and the first crossing by hot-air balloon of the Atlantic (1987) and Pacific (1991). He was knighted in 1999 for his contribution to entrepreneurship, and in 2009 he landed at No. 261 on Forbes' World Billionaires list with his $2.5 billion in self-made fortune, which includes two private islands.
Branson is married to his second wife, Joan Templeman, with whom he has two children: Holly and Sam. He currently lives in London.
Virgin Products
Virgin Atlantic
Virgin Galactic
Virgin Mobile
Virgin Megastore
Virgin Life Care
Virgin Books
Virgin Connect
Virgin Holidays
Virgin Games
The Beginning of Virgin Company
Key Dates:
1968: Richard Branson produces the first issue of Student magazine.
1970: Branson forms a firm called Virgin, which begins as a mail-order record company.
1973: Branson forms record label Virgin Records.
1977: Virgin Records signs the Sex Pistols to a recording contract.
1984: Virgin Atlantic Airways is founded; first hotel interest is acquired.
1985: Virgin Holidays, a tour operator, is formed; Virgin Group is created.
1986: Virgin Group PLC is taken public through a $56 million stock offering.
1988: Virgin Group is taken private again through a management buyout; first Virgin Megastore is opened in Sydney, Australia.
1991: Virgin Publishing is formed; Virgin Group generates estimated sales of more than $2 billion.
1992: Virgin Records is sold to Thorn EMI plc for £510 million (US$957 million).
1993: Virgin Radio, the first national commercial rock station in the United Kingdom, is launched; Virgin Atlantic wins libel settlement of £610,000 from British Airways relating to 'dirty tricks' campaign.
1994: Company enters the soda market with the formation of Virgin Cola Company Ltd.
1995: Virgin Direct is created, representing the group's entrance into financial services.
1996: Euro Belgian Airlines, a low-cost, short-haul airline, is acquired and renamed Virgin Express.
1997: Virgin Rail Group is formed, following the acquisition of two aging, poorly maintained rail lines.
History:
Virgin Group is a diversified grouping of more than 200 privately held companies. The largest of these are Virgin Atlantic Airways, the number two airline in the United Kingdom; Virgin Holidays, a vacation tour operator; Virgin Rail, the second largest U.K. train operator; the Virgin Retail Group, which operates numerous Virgin Megastores, a retail concept featuring videos, music CDs, and computer games; and Virgin Direct, which offers financial services. Other Virgin businesses include beverage maker Virgin Cola, a record label, book and music publishing operations, hotels, an Internet service provider, movie theaters, a radio station, cosmetics and bridal retailing concepts, and a line of clothing. Holding this disparate group of companies together is the combination of Richard Branson and the Virgin brand name. British entrepreneur Branson dropped out of boarding school at the age of 17, in 1967, to start his own magazine. That venture was an immediate success, establishing the foundation for what would become a multibillion-dollar conglomerate during the 1990s. Along the way, Branson would attain cult status in his home country--the result of his business exploits, quests for adventure, and unique personal style. The Virgin brand had meantime become, according to the company, one of the top 50 brands in the world by the late 1990s; a poll of British consumers at that time showed that 96 percent had heard of Virgin.
Pre-Virgin Undertakings
Branson's entrepreneurial bent emerged during his childhood. 'The fact that we never had any money was a very good thing,' explained Branson's mother, Eve, in the November 1987 issue of Inc. Eve Branson went on to suggest that her son 'wanted to help the family.' A friend cited Branson's love for sports and competition as another major ingredient of his success; 'He likes playing the game for the sake of playing the game. He competes hard because he enjoys the competition,' noted Simon Draper in the Inc. article.
Although Branson loved sports as a youngster, he was forced to rechannel that energy following a serious knee injury. He decided, instead, to focus on establishing a business. Branson embarked on his first venture, in fact, when he was around 11 years old, planting 1,000 seedlings, which he hoped to eventually sell as Christmas trees. When rabbits ate the seedlings, Branson tried a different scheme a year later. His plan this time was to breed and sell a type of small, highly reproductive parrot. That effort fell through when, according to Branson, rats ate the parrots; Branson's mother, however, contended that she released the birds.
Branson was undaunted by early failures. With the same enthusiasm that would characterize his entry into new endeavors as an adult, he initiated his first major success at the age of 15 when he started a magazine called Student. His parents reportedly were under the impression that Branson had been working on a simple school newspaper, but they learned that he intended to launch a magazine for the general public after he traveled to London to sell advertising space. Branson's father, Edward, had his doubts, but he did not want to quash his son's excitement. Besides, Edward reasoned, Richard only had £100 (about US$150) to his name, and it would be good for him to learn a lesson about the difficulty of making it on his own.
From Record Seller to Record Label: 1970-83
To the surprise of his parents, Branson sold 50,000 copies of the first issue of Student, which was produced in January 1968. In fact, the venture was so successful that Branson dropped out of school when he was 17 to run his business full time. Soon thereafter, in 1970, he launched his second major undertaking, a company called Virgin. Virgin started out as a mail-order record company. A new law had just been passed that allowed people to sell records at discounted prices, and Branson was among the first to take advantage. Like his magazine, Branson's new company was an immediate success. Sales skyrocketed, and Branson scrambled to find workers to keep up with the tremendous order load. When a postal strike crushed the mail-order endeavor, the resilient Branson responded by changing his strategy. In 1971 he opened a small, discount record shop that was also a hit. A string of Virgin Record stores followed.
Early setbacks, such as the postal strike, were representative of the great obstacles that Branson would be forced to overcome in Britain's antibusiness climate of the 1970s and even 1980s. Indeed, during the 1970s the country was mired in economic malaise. Tax rates on unearned income were as high as 98 percent, and labor strikes such as the one that nearly destroyed Virgin were the norm. Furthermore, a general disdain for entrepreneurs and 'new money' permeated the business and social environment, making it more difficult for would-be capitalists to get their ideas off the ground. A mid-1980s survey, for example, showed that 29 percent of the executives in the United Kingdom viewed business owners as having the lowest status in the country, while only 13 percent thought they had the highest status.
Nevertheless, Britain's political, social, and economic environments were perfect for Branson; a rebel by nature, he loved a good challenge and enjoyed bucking convention. That characteristic was most conspicuously evidenced by the name that he chose for his company. He used Virgin to signify his lack of knowledge about the businesses into which he entered. While convention demanded that entrepreneurs have experience in the ventures they began, Branson elected to enter businesses that interested him, regardless of his background; he would ask questions and invent his own route to success. Having no preconceived ideas about an industry, he was able to identify unnecessary hurdles that his competitors took for granted, as well as to recognize hidden opportunities.
Branson demonstrated his unique style again when he entered the recording business in 1973. By then, the 23-year-old entrepreneur was becoming bored with his publishing and record store endeavors. Still, he was fascinated by the recording business and wanted to take a crack at running his own studio. Snubbed by the British financial establishment, Branson was able to get friends and relatives to contribute start-up capital for the project. The first act he signed was an unknown artist named Mike Oldfield. They cut a unique album, Virgin Record's first, titled Tubular Bells. The record sold five million copies, became one of the biggest selling albums of the decade, and was used as the soundtrack for the movie blockbuster The Exorcist.
While Branson enjoyed success with Virgin Records during the mid-1970s, by the end of the decade the company was trying to shake its image as an outmoded 'hippie' label. To that end, Branson signed a popular band known as the Sex Pistols. A crude, irreverent, hard-core punk band with a flair for the obscene, the Sex Pistols had become popular during the mid-1970s and were credited with spawning the entire hard-core punk movement. Branson had tried unsuccessfully to sign the band before. Then, in 1976, the Pistols were dumped by the company that held their recording contract, following a particularly offensive display by the band on national television.
Although another company was quick to sign the Pistols, within hours of signing that contract the band trashed that firm's offices and found themselves once again in need of a sponsor. Then, in 1977, Branson moved in to sign a band that would bring the youth market back to Virgin with a vengeance. Under Virgin, the Pistols continued to shock the world--some of their songs were even banned by the British Broadcasting Company (BBC)--and thereby helped Virgin achieve notoriety in the industry. More importantly, though, the Pistols attracted other major talent to Virgin's studios. Steve Winwood, Boy George, Phil Collins, Genesis, and the Rolling Stones all signed onto the Virgin roster.
Virgin Atlantic and Other Risky Endeavors: 1984-89
Branson's burgeoning operations prospered during the early 1980s. Still, the entrepreneur was restless and continued to seek new opportunities. In 1984 he came across another industry that interested him and about which he knew relatively little: the airline industry. Critics effectively laughed off Branson's proposal to begin providing long-haul air service between the United States and London. Nevertheless, he purchased a Boeing 747 and began flying people back and forth between London and New Jersey, offering improved service and unique features. Virgin Atlantic Airways wowed observers by posting a profit in its second year. 'It's not so divorced from the music business,' Branson pointed out in the November 14, 1988, Forbes, noting that 'if people are traveling for ten hours, they want to be entertained.'
Entertainment was, indeed, an important element of Virgin Atlantic's success during the 1980s and early 1990s. Passengers were entertained with videos and, in some cases, live performances from mimes or musicians such as cellist Julian Lloyd Webber. In addition, first-class travelers enjoyed such perks as roundtrip limousine service to and from the airport. Furthermore, Branson kept expenses low by growing his airline slowly and focusing on low costs and high profit margins. By 1988, the airline consisted of only two planes, but was boasting the highest occupancy rate and greatest profit margins in the industry. Virgin Atlantic expanded during the early 1990s to include routes to several U.S. cities as well as Tokyo, Hong Kong, and Greece.
By 1985, Branson's Virgin companies were generating a hefty $25 million in profits from more than $225 million in sales. His holdings included a string of 60 retail stores, a budding videocassette and television operation, the recording studio, and the airline. They also included a luxury hotel in Deya, Mallorca, which had been acquired in 1984 and was the forerunner of Virgin Hotels, which was formed in 1988 and consisted of hotels in the United Kingdom and the Caribbean. In 1985 Branson also formed Virgin Holidays, a tour operator specializing in the U.S. East and West Coasts. Hungry for expansion capital, Branson formed Virgin Group PLC in 1985, which consisted of all of his holdings except the airline company and some miscellaneous businesses. He put the airline and the other ventures, which included a night club business and airfreight operations, into a separate company called Voyager Ltd.
Branson took Virgin Group PLC public in a 1986 stock offering that generated more than $56 million. In typical Branson style, the offering was promoted through a media blitz that included a television commercial with a pinstriped executive dancing on his desk and the ad slogan: 'From the rock market to the stock market.' By 1987, Virgin Group PLC's sales had risen to more than $230 million; when combined with sales at Virgin Atlantic, Branson's companies were pulling in over $350 million annually. Interestingly, following the October 1987 stock market crash, Branson took the company private again in 1988 through a management buyout, restructured his companies, and sold 25 percent of his Virgin Music Group for $170 million. Also in 1988 the first Virgin Megastore was opened in Sydney, Australia, selling music CDs, videos, and computer games under one roof.
Virgin's success during the 1970s and 1980s was a tribute to Branson's unusual management style, which was a radical departure from corporate norms at the time. Branson abandoned the traditional suit and tie in favor of a sweater and slacks. In addition, he operated his unwieldy holding company from the bow of his private barge, relying on telephones, fax machines, and a personal secretary to keep him in touch with his managers. The barge, named Duende, was located in the industrial Regents Canal. Branson's logic behind his remote office was that it gave his subordinates, spread out in more than 25 London buildings, greater autonomy. 'People always want to deal with the top person in a building,' he explained in the November 1987Inc., 'so somebody besides me takes complete responsibility. He becomes chairman of that company ... and I can be left to push the group forward into new areas.'
Indeed, one of Branson's greatest virtues was his ability to delegate authority and allow managers to take control of the pet projects that he conceived and started. He relied heavily on a small group of hand-picked executives that he could trust. Allowing them to operate their divisions with minimal interference, Branson also offered them high-value incentives based on performance. For example, distant relative Simon Draper ran the profitable music division. He joined Virgin in 1971 after emigrating from South Africa, and had become a multimillionaire by the late 1980s.
Another of Branson's innovative techniques involved breaking his operations up into multiple units, rather than allowing them to grow into large, less personal organizations: he had broken his record enterprise into five separate companies by the late 1980s, each of which concentrated on different bands and artists. His collection of companies had swelled to an assemblage of more than 100 loosely connected enterprises by the late 1980s, each of which was run by a small, streamlined staff. Importantly, he encouraged his employees to innovate and take risks without the fear of failure. 'You fail if you don't try things,' Branson explained in the November 1991 Florida Trend. 'If you run a company based on fear, then you're not going to get the best out of people. They won't make bold decisions. They won't make any decisions,' he stated.
Another important, and perhaps the most intriguing, aspect of Branson's leadership was his penchant for peril. His wild, sometimes daredevil stunts earned him a reputation in Britain and the United States as an adventurer and risk-taker. His first publicized stunt was a speed boat crossing of the Atlantic Ocean. The previous speed record of 30 hours was held by an American boat, and when a sailor told Branson that the record could be beat, Branson became hooked on the idea. In 1985, Branson set out in a speedboat that struck submerged debris just three hours short of finishing. Predictably, Branson tried again in 1986 and succeeded in setting a new world record.
Branson's second major stunt was a 1987 attempt to cross the Atlantic in a hot air balloon. He combined the adventure with a public relations effort to market his airline, which included television documentaries that aired both before and after the flight. The project was riddled with mishaps: Branson spiraled out of control on his first parachute jump and was barely rescued, mid-air, by his instructor. The televised misadventure sent Virgin Group's stock price tumbling the day after it was broadcast. Although the harrowing balloon trip succeeded in getting Branson and his copilot across the Atlantic in less than two days, the passenger capsule failed to disengage from the balloon when it landed, and Branson nearly died in the Irish Sea.
Despite such brushes with death, Branson's exploits succeeded in boosting Virgin's image and improving the Virgin Group's bottom line. Branson even decided to start a new company that manufactured balloons, provided balloon flight training, and sold balloon vacations. Branson secured rights to fly over the Taj Mahal and the Pyramids. In addition, he wanted the venture to design and build small balloon airships that would carry observers up for traffic reports, or simply for entertainment, at a fraction of the price that a helicopter operator would charge.
At the same time that Branson was risking his life over the Atlantic, he continued to grow his Virgin Group at an astonishing rate. During the late 1980s, Virgin was reporting over $1 billion in annual sales and was comprised of more than 150 different companies operating in 20 countries. Going into the 1990s, Branson was overseeing holdings related to broadcasting, entertainment, air travel, real estate development, publishing, and other industries. His original Virgin Records enterprise alone had branched into 14 different companies.
The Ever-Expanding Virgin Brand: 1990s
The giant, privately held Virgin Group generated estimated sales of more than $2 billion in 1991, and the 41-year-old Branson continued to deal. He signed pop star Janet Jackson, for example, in a contract valued at $30 million, and was rapidly expanding his Virgin Atlantic airline operations. He also purchased an airline company in Florida. In fact, the buy reflected the company's increasing emphasis on the U.S. market, particularly in Florida, beginning in the early 1990s. Branson planned to build a 40,000-square-foot Virgin Megastore there, as he had at 20 other international locations, and was considering making Florida the home office for Virgin Records. In 1990 Virgin and Japanese retailer Marui created a 50-50 joint venture to operate Virgin Megastores in Japan. Back in Britain, Branson relocated his barge-based office to a three-story Victorian villa backing up to London's Holland Park; he also formed Virgin Publishing by merging WH Allen plc, Allison & Busby, and Virgin Books into a single U.K. book publishing firm.
Branson's office move reflected the immense growth and complexity of Virgin Group. Despite his monstrous financial gains, however, the entrepreneur was generally respected by his fellow capitalist-wary countrymen--he was even selected as the third most popular Brit in a late 1980s poll. 'People can recognize him in a very English sort of sense of fair play and decency and modesty and good manners,' explained Mick Brown in an Inc. article. 'He's that unusual combination, really, of all the things that people expect success and money to corrupt out of people,' Brown wrote. Backing that assertion was the fact that Branson drove a 1959 Bristol automobile, for which he paid $5,900, and continued to wear casual clothing.
Virgin Group expanded during the early 1990s, despite a global economic downturn that started in the United States and spread to Europe. Branson diminished his holdings significantly when he sold Virgin Records to Thorn EMI plc for £510 million (US$957 million) early in 1992, evidencing his intent to focus on his airline operations. He also further expanded his retail operations. Late in 1992, for example, Virgin announced a joint venture with Florida tycoon and entrepreneur H. Wayne Huizenga of Blockbuster Video. The two decided to combine their knowledge of record store and video store retailing to run Virgin Megastores in the United States, the first of which opened in December 1992 in Los Angeles.
Among other innovative ventures during the early 1990s, Branson fired up an airline charter service connecting Key West and Orlando, using refurbished DC-3 planes and requiring the flight attendants to wear 1940s attire. In 1993 Virgin launched an AM radio station aimed at music listeners in the 25- to 44-year-old group--the first national commercial rock station in the United Kingdom. That same year, Virgin Atlantic Airways won a libel settlement of £610,000 from British Airways Plc relating to an ongoing campaign of 'dirty tricks' perpetrated by BA against the upstart airline. Among the deeds BA was alleged to have undertaken were the interception of Virgin customers in airport terminals, the theft of Virgin customer lists from the company's computers, and the spreading of false rumors, such as ones claiming that Virgin was on the brink of bankruptcy. A related US$1 billion suit brought in the United States was dismissed for lack of evidence in late 1999, but Virgin Atlantic announced that it intended to appeal the ruling.
In addition to building new businesses, Branson continued to seek adventure. Noteworthy was his hair-raising attempt to cross the Pacific Ocean in a balloon. The craft floated into the jet stream and was blown into the Yukon territory in Canada. After crashing on a frozen lake, Branson was tracked by radar and rescued before he froze to death. Later in the 1990s, Branson failed in three attempts to make the first round-the-world flight in a balloon, a feat finally accomplished by others late in the decade.
During the mid-to-late 1990s, the Virgin Group was particularly active building up its travel-related businesses. In 1994 Virgin Atlantic commenced service from Heathrow to Hong Kong, then added Manchester-Orlando, Heathrow-Washington, D.C., and Heathrow-Johannesburg flights in 1996. That same year Virgin acquired Euro Belgian Airlines for £38 million. Renamed Virgin Express, the low-cost, short-haul airline offered flights from Brussels to Madrid, Barcelona, Rome, Milan, Vienna, and Nice. In 1997 the Virgin Rail Group was formed following the acquisition of two aging, poorly maintained rail lines as part of the privatization of British Rail. Within two years Branson had secured £4 billion in private sector financing in order to completely overhaul the lines by 2001-02, including the introduction of high-speed (140 m.p.h.) titling trains.
Meanwhile, a host of deals were struck and new ventures launched in other areas. Most of the new initiatives were attempts to leverage the increasingly recognized Virgin brand into new areas; they also typically involved partners outside of Virgin putting up most of the equity, while Branson contributed the Virgin brand and agreed to manage the venture in return for a controlling stake. In late 1994 the Virgin Group joined with Canadian private label soda maker Cott Corp. to form the Virgin Cola Company Ltd. and attempt to go head-to-head with two of the world's top brands: Coke and Pepsi. Virgin in January 1998 bought out Cott's interest in the venture, which had gained only a negligible share of the market. In March 1995 Virgin entered the personal financial services arena through the formation of Virgin Direct, which began offering investors shares in a new U.K. mutual fund and initiated sales of life insurance through telemarketing. Virgin Direct saw Branson teaming with Australian Mutual Provident and the Royal Bank of Scotland. Also in 1995 Virgin acquired MGM Cinemas, the largest movie theater operator in the United Kingdom; it soon sold a number of the chain's smaller cinemas to concentrate on multiplexes. In late 1999, however, Virgin announced that it would sell its cinema interests in Britain and Ireland to Vivendi of France. The group continued to operate a Virgin Cinemas Japan unit, and announced, also in late 1999, that it would spend up to US$200 million to develop 20 multiplexes in Japan by the early 21st century; a number of Virgin multiplexes in the United States were also under consideration.
Other late 1990s ventures were the 1996 launchings of a new record label called V2 Music, an Internet service provider called Virgin Net, and a chain of bridal retail stores dubbed Virgin Bride. The following year came the debut of Virgin Vie, a cosmetics retail store. In 1998 the Virgin Clothing Collection--a line of men's and women's wear, footwear, and accessories aimed at 18- to 35-year-olds--made its debut in U.K. retailers and department stores. Virgin Sun was also launched in 1998 and marked Virgin Holidays' first foray into short-haul vacation tours. Endeavors planned for the early 21st century included a major Australian airline, the marketing of mobile telephone products, the selling of music over the Internet, and even commercial space travel under the name Virgin Galactic Airways (the last planned for 2007). With the ever expanding roster of Virgin-branded endeavors, it was clear that Branson was serious when he told Business Week in late 1998, 'I want Virgin to be as well-known around the world as Coca-Cola.'
How virgin got its name?
Original Company Name: Virgin Records
Story Behind the Name: Virgin Records founder Richard Branson originally started a magazine called Student while still at school. He later founded Virgin (or Virgin Records), which was launched to sell records by mail order. He has been quoted as stating the company name came about by one of the girls from the magazine staff… “one of the girls suggested: ‘What about Virgin? We’re complete virgins at business‘”
Business Philosophy & Business Strategies
The corporate strategy of the Virgin Group is to operate like ‘a venture capital firm based on the Virgin brand.’ This strategy involves non-related diversification at the individual business unit level. Meanwhile, synergies are created from hierarchical relationships and the interaction of the corporate head office with individual business units. By leveraging the Virgin Brand which has established prominence in the minds of consumers, Virgin is able to enter new business areas with a bang and shake up existing orders. The unique Virgin culture also allows Virgin to break into new markets and execute its ventures very effectively.
Virgin’s corporate strategy is best described in the Virgin Charter – the individual businesses are focused and develop as autonomous enterprises under a single unified brand name. This decentralization of organizational structure and decision making allows an entrepreneurial environment for managers to pursue their businesses effectively, while avoiding the bureaucracy associated with large centralised corporations. At the same time, the individual businesses benefit from the world-wide, inter-industrial reputation of the parent corporation’s Virgin brand and are able utilize this brand recognition in their marketing efforts. This benefit of corporate parenting would not be available to them if they were operating under their own subsidiary brands, and is perhaps the greatest source of synergy within the Virgin Group. In this manner, Virgin is able to enjoy the benefits of both smaller entrepreneurial organisations and large conglomerates without the associated problems of bureaucracy and brand conflict that can often feature in diversified corporations.
Furthermore, Virgin has been able to deal with the potential downsides of autonomy and decentralization. To prevent the breakdown of communication links and individual business units pursuing their own strategies in an uncoordinated fashion (that could potentially be detrimental to the umbrella Virgin brand), the Virgin Charter sets out a management system and internet business strategy that takes advantage of information technology and the digital age to further establish the Virgin brand. A single web address, Virgin.com, is where consumers can go to have access to all the Virgin services under a single portal. This strategy helps to reinforce the corporate parenting strategy and enhance the synergies already derived from the corporate branding of the Virgin Group. By aggregating all the services into a single Virgin portal, the customer is able to access multiple services through a single distribution channel, and is enticed to turn into a ‘Virgin Customer’ where he comes to Virgin for his telecommunications, banking, terrestrial and extra-terrestrial transportation (Virgin Galactic), entertainment and internet service needs. In this way, the disparate Virgin businesses are able to gain from the successes from their corporate siblings – Virgin Rail gains customers referred from Virgin Mobile visiting the Virgin.com portal, while Virgin Money gains customers referred from Virgin Records, and so on. In comparison, competitor banking companies would hardly dream of marketing their services to a music crowd, while competitor
railway companies would be hard pressed to market to mobile customers of an unrelated company. Even though the individual business units are in unrelated fields, the unified corporate strategy allows them to contribute to each other in a synergistic manner.
How Branson Achieved Success
From a dyslexic high school dropout to a thriving billionaire and adventure capitalist knighted by the Queen of England, Branson carved a unique path to success using his personality as his greatest leverage. His career has spanned over thirty years and his brand has become one of the most recognized globally. How did he do it?
Leadership: Branson once joked, “I believe in benevolent dictatorship provided I am the dictator.” Despite this, Branson’s success has come about in large part due to his leadership skills and the respect, care and autonomy he gives to his employees. He understood that without a solid team behind him, he would not be able to make his dreams come true.
Branding: "I want Virgin to be as well-known around the world as Coca-Cola,” Branson said. With over 250 companies bearing the Virgin name, Branson has come close to achieving his goal. With no university degree or formal education, Branson has managed to create a unique business strategy using unorthodox methods of licensing out his brand and promoting his products to no end. Despite claims of selling out, Branson has steadily grown his brand over the past thirty years and increased its presence worldwide.
Resilience: After a failed around-the-world balloon trip, Branson said of his experience, “It has been like hitting up against a solid brick wall. All day and all night long, we battled to get through it.” This battle is a familiar one to Branson, who has seen his share of failed business ventures. But, in typical Branson fashion, he rebounds from his failures with the same youthful energy he had the very first day he created Virgin Records. His passion to create cannot be quelled by any obstacle no matter how large.
Ambition: “We'd love to be involved with the creation of something very special, something quite large and something quite exciting,” says Branson. Never one to dream small, Branson always tried to be the best of the best. Whether it was breaking world speed records or providing impeccable airline service, Branson wanted his name to be at the top of whatever list he was dealing with. By dreaming big, Branson would leave his mark not only in the business world but also on the world as a whole.
Fun: “Fortunately we're not a public company - we're a private group of companies, and I can do what I want,” says Branson. He doesn’t care about accountants and doesn’t place much value in the advice of consultants. Instead, Branson flies by the seat of his pants and follows his instincts, often willing to take risks for the pure enjoyment of seeing if they will work out or not. He doesn’t partake in the formalities of the business world and as a result, has managed to take it by storm.
“Because I don’t see Virgin as a company but as a way of life and I fully enjoy it, I don’t think I’ll ever retire,” says Branson. As Chairman of the Virgin Group, he has revolutionized the business world and has had a blast doing it.
Key Factors Contributing to The Success of Virgin
As one of the richest men in the world, Richard Branson is also one of the most fascinating. A man of many facets, his public persona as a warm, friendly, idealistic, family man seems in sharp contrast to the highly competitive, workaholic who considers himself a tough negotiator in business dealings. While many entrepreneurs make their fortunes by focusing on doing one thing extremely well, Branson has taken his own brand of basic business model, recreating it again and again, to manufacture a series of highly successful business ventures.
It is hard to imagine how an establishment-born individual could have such unconventional views and libertarian causes; the founder of a mega-music company have such little knowledge of music; the quiet man who shies away from public speaking could be such a supreme promoter and media master; or, how a man so deeply committed to fair play would fiercely negotiate for the last benefit in a business deal? Certainly, Branson is the supreme enigma.
The eldest and only boy of three children, much of his core beliefs probably originate from growing up in what appears to have been a socially advanced family, way ahead of its time. Although father, Ted, followed in his father's, high court judge, footsteps assuming the career of a barrister, Branson's mother, Eve, was a wildly independent woman who broke all the rules.
Eve pursued her love of theatre at an early age, eventually dancing in a stage production, well known for extremely gorgeous showgirls. When wartime came and work was scarce, she finagled her way into the Royal Air Force training as a glider pilot, then instructor, where she had to secretly pretended to be a boy by lowering her voice, and wearing a leather jacket and helmet to cover her hair. Later, as a flight attendant for British South American Airways, Eve was one of the first to fly the arduous marathon flights over the Andes in the days when cabins were not pressurized and oxygen masks were required.
The Branson family was a close-knit team where everyone was treated as equals. Today, one of Richard's key ingredients to success is his commitment to his people. He believes in promoting from within, thereby providing career opportunities to his staff that might not otherwise be available to them. Even in tough economic times, layoffs are unheard of at Virgin despite employing over twenty thousand people. Everyone from aunts, uncles, cousins, childhood friends, immediate family, even former girlfriends and wives has all been brought into the company's business activities.
Branson has gone to great lengths to create a fun working atmosphere that people would enjoy being a part of rather than simply a place to earn a paycheck. He is a staunch believer in open communication being the key to a stronger infrastructure where everyone is devoted to the overall excellence of the company. This is evidenced by a monthly letter to employees in which he provides much of the details of Virgin's future plans, along with his home address and telephone number for any ideas, suggestions or problems that might arise. He also prefers to make his managers minority stockholders in Virgin's new ventures as they unfold, trusting them with full authority, and is proud to have created new multimillionaires from within his own organization.
One important element in Branson's success is his belief in delegation. His Virgin record company, now divested, was a perfect example of how he organizes his many ventures. Although Virgin Records may have been a collection of many smaller entities, cumulatively, it was the largest independent record company in the world. When any one entity got too big, Branson would take some of the middle management, create a new affiliate company, promoting them to senior management, allowing them remain in close proximity to clients, suppliers, distributors and support staff while giving them greater incentive to perform.
Another important aspect of his success is diversification. Branson doesn't believe in acquisitions. He does believe in building new companies from the ground up, giving 100% involvement during the startup phase, then delegating the ongoing operations to the new management. The Virgin conglomerate now encompasses balloon flights, motorcycles, airlines, trains, books, a bridal emporium, cars, cinemas, cosmetics, credit cards, drinks, gas and electricity, limousines, mega-retail stores, finance, Internet service provider and digital radio broadcasting. And Branson's not afraid of a good fight. He has successfully taken on giants like British Airways and Coca Cola looking to reduce their monopoly and capture just a portion of their market. It seems that it's the challenge that keeps Branson alive and on his toes — the thrill of the hunt, so to speak.
He ardently disavows having a death wish, but freely admits to having looked death in the eye on more than a few occasions. There have been close calls during his ballooning adventures, accidentally taking off in a plane he did not know how to fly, and mistakenly ejecting a parachute rather than pulling the rip cord — all nightmarish moments he would rather not repeat. But has it cooled his spirit of adventure — absolutely not!
Voted the most popular businessman in the United Kingdom, Branson's commitment to altruistic causes is as great as his commitment to his business ventures. He is involved in a multitude of charitable and humanitarian foundations including AIDS research, help for unemployed teenagers, Parents Against Tobacco and he even used his own aircraft to rescue people trapped by the Gulf War.The personal challenges he sets for himself keep him actively engaged in a number of record-breaking land and air, speed and distance attempts — crossing the Atlantic Ocean in the fastest recorded time ever; as the first hot air balloon to ever to cross the Atlantic Ocean and the largest ever flown at 2.3 million cubic feet capacity, reaching speeds in excess of 130 mpg; crossing the Pacific Ocean from Japan to Arctic Canada, the furthest distance of 6,700 miles, once again breaking all existing records with speeds of up to 245 mph.
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