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Virgin America Essay With the foundation of Virgin Records in 1970, The Virgin Group is one of world’s largest business entities, which in 2009 comprised 300 companies under its structure, in businesses as diverse as space travel, mobile telephony, transportation, travel, financial services, media, music and fitness. The image and culture of the Virgin Group is tied to the image and personality of its founder Sir Richard Branson. The company’s fundamental values foster many of the dimensions of culture, which are highly internalized within the organization. Mr.  Branson realizes the potential and importance of those who work for him and therefore creates a structure, which is decentralized, through empowering his employees and providing them with autonomy. This paper aims at providing a critical view over the Virgin Group’s corporate strategy, in terms of strategic thinking and diversification, as well as a closer look at the business strategy of one of the Group’s businesses, the Virgin America. The Virgin Group is a company that encourages employees to use their awareness to make decisions rather than the standard quo. Because of the company’s corporate culture and structure, Virgin has successfully forecasted possible issues and has dealt with them in a timely manner. Many other organizations have a formalized structure and the Virgin Group is anything but formal and other companies may look at this as an area of concern but not for Sir Richard Branson, the ways he communicates and the way he leads is testament to why he and his companies are very successful and Virgin America will follow suit. Virgin America One of the most recognized name in the world, Virgin, created in 1970 by Sir Richard Branson a leading venture capital organization, is one of the worlds most recognized and respected organizations in the business enterprise. The Virgin Group is a diversified grouping of more than 300 privately held companies, employing approximately 50,000 people, in 30 countries. Revenues around the world in 2009 exceeded 18 billion (http://www. virgin. com/about-us/). The Virgin Group has become one of the most successful businesses in industries ranging from mobile telephony, transportation, travel, financial services, media, music and fitness. Of Virgin’s 300-plus companies, the majority are operating companies that own assets, employ people, and offer goods and services. These operating companies are owned and controlled by some 20 holding companies; most of these own several operating companies within the same line of business. For example, Virgin Travel Limited owns Virgin Group’s investments in Virgin Atlantic, Virgin Blue, Virgin America, and SN Air holdings. Overall ownership of most of the Virgin Group lies in the hands of Virgin Group Investments Limited a private company registered in the British Virgin Islands. The corporate strategy of the Virgin Group is to operate like a venture capital firm based on the Virgin brand. This strategy involves diversification at the individual business unit level and meanwhile, collaborations 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 a reputation in the customer minds of the unique Virgin culture and also allows Virgin to break into new markets and execute its ventures very effectively. Virgin Atlantic Airways is the largest of the Virgin companies and the number two airline in the United Kingdom, with this said Mr. Branson wanted to branch out of the UK to build his airline image to the United States. In 2007, San Francisco became the headquarters for Virgin America. Virgin America which has flown mostly trans-continental routes in the U. S. since its launch in 2007, has expanded to Canada with flights to Toronto and plans to begin service to Mexico. Sir Richard Branson vision was to have a â€Å"topnotch service† (http://www. irgin. com/company/virgin-america/), for the U. S travelers, with the exceptional service that is known on Virgin Atlantic flights. It has not been an easy road to get into the airline industry in the United States. Because of The Federal Aviation Act of 1938, which restricts foreign ownership of domestic airlines, Mr. Branson would had to partner with another American carrier, example Southwest Airlines and would have to turn over the business to the American carrier. Due to this, he eventually waited until the laws could change into his favor which it did not and decided to follow another avenue. He viewed some finance options that would be enough to satisfy the laws about foreign ownership restrictions. There were other American domestic airlines that viewed Virgin as a threat and tried to block the certification. This lasted for a year and half with Virgin America planes parked and not being flown. It was time and money being wasted because of the fear from the domestic carriers that Virgin may take some of their travel customers. Sir Richard Branson had some laws and political warfare going against him and his Virgin Group because of fear of being challenged and to enter a market dominated by U. S carriers. The Virgin Group sent many of millions of dollars in lawsuits, time and man power to establish a foothold into the U. S territory. Sir Richard Branson has a charismatic style and talent which is a strength that other companies are unable to reproduce, and which describes the Virgin label. The Virgin culture is what Sir Richard Branson has built over decades and that distinguishes the work environment within Virgin Group from other companies. It is a culture that is ‘not looking for clones,’ that is ‘like a family’ and is one that requires employees to have the ‘Virgin Flair. ’ (Branson, 2010) Because of these qualities which have created a corporate culture that is unlike in any organization and has become the way at The Virgin Group. Sir Richard Branson’s personality is the culture at Virgin and like he mentions and has been heard before from other leaders yet he is the only one that adheres to this motto that a companys employees are its greatest asset, particularly in service-based operations where your people are your product. You here this all the time in many organizations and yet you have cultures that are in flux with management, you hear many complaints from the front line to mid-level managers that do not trust or believe the upper management. But you can also say the same from the Executive level that the employees are not listening, what this is, is poor communication, the leader has to establish the culture for the company and Sir Richard Branson has done this time and time again, with over 300 companies. With Virgin America coming to the U.  S, the culture is going to be one that will challenge the likes of Southwest Airlines where the culture of this airline is fun and exciting. Sir Richard Branson talks about the Virgin culture and provides an example that when building a new cabin for one of their aircraft that he invites certain departments from inception so they work together so they all can be responsible for the failure or success of the new project. This also invites all to ask questions as a team so everyone input is valid and that which makes the endeavor more enjoyable and the work fun. It’s all about communication, no matter what the culture is and in the Virgin companies it’s all about customer service, and in the U. S, Mr. Branson will know that Americans are a low context culture that communication is important and is precise. The culture barriers will be minimal for Virgin America since California has a diverse cultural background. Why did Sir Richard Branson want to enter in the United States especially the low cost airline industry? Virgin Atlantic is an international company that has flights all around the world but not based in the U.  S. and with the heavy hitters of the airline industry, example, Delta, United, and Continental, Sir Richard wanted to get into the business that he sees that could be successful like Southwest Airlines. But like this paper mentions, this has been fraught with challenging issues and times (current economic conditions) and the time and money of negotiating with lawyers and political upheaval from other airlines. The goal of Virgin America is to provide the exceptional customer service and the brand of the Virgin name to the United States. In 2010, Virgin America had yet another setback, trying to get a gate at one of the busiest airports in the country, Chicago O’hare. Now the new low cost airline will be looking towards to Dallas, this is a blow to the many Americans looking for another option to flying in and out of Chicago and all because of the two major airlines United and American who control more than 90% of the gates. (Low-cost airlines would land for city-owned gates. 2010). I believe it’s a waiting game, another carrier, JetBlue had to wait of over year to get a gate at the O’Hare airport, patience will be the key to Virgin America and that does not bode well with Sir Richards standards even though he has played this game for some time. What Virgin America can do is work with other cities that are willing to work and make the financial numbers feasible for both parties and in time gate availability for Chicago O’Hare will eventually be available. The Virgin Group organizational structure is quite complex, with over 300 companies that operate in all unique industries. But all of these companies fall under the Virgin brand. The brand is similar or identical within each separate operation. This image is one of quality and innovation and by creating an exceptional brand; the company is able to create a high level of loyalty within its customer base. The diversity of businesses operated by Virgin Group helps the company maintain a high level of loyalty in many different industries. With the Virgin America company, this would fall under the Virgin Travel umbrella, (see chart) and would have a separate management hierarchal structure, almost like a franchise organization. References http://www.virgin.com/about-us/ http://blogs.wsj.com/middleseat/2010/08/11/sir-richard-is-finally-linking-together-the-virgin-airlines/