Richard Branson and Virgin, Inc.
Finkle, Todd A.
CASE DESCRIPTION
This case focuses primarily on entrepreneurship and the problems
facing entrepreneurs in today's volatile economic environment. The
case is appropriate for courses in entrepreneurship, small business
management, and strategic management. The case examines the life of
Richard Branson and Virgin, Inc. and has a difficulty level two. It is
appropriate for freshmen and sophomores. It can be taught in a 75 minute
course period and the case preparation time is approximately two hours.
CASE SYNOPSIS
Richard Branson built a billion dollar company based on numerous
entrepreneurial endeavors, however he was facing one of the most
difficult times in his career. The global economic crisis had a
significant negative impact on his companies' revenues and
earnings. Virgin, Inc. was down 40%. The world was stuck in the worst
economic crisis since the 1930's. The Dow Jones Industrial Average
(DJIA) had collapsed 55% from 2007 to 2009 and the banking system was on
the verge of collapse. Yet, Branson was optimistic because he was
thinking about what opportunities lay ahead. He had five billion dollars
in cash and needed to determine what strategies he must utilize to
manage and grow his firm through this chaos.
INTRODUCTION
Sir Richard Branson was pontificating as he was flying in his hot
air balloon trip from England to the United States. He had built a
billion dollar company based on numerous entrepreneurial endeavors since
his youth. As he reminisced about his life, he thought diligently about
the dire economic situation the world was facing in March, 2009. The
global economic crisis had a significant negative impact on his
companies' revenues and earnings, they were down 40%. Furthermore,
a lack of consumer spending and a new all-time low in consumer
confidence were all having negative impacts on his businesses.
Virgin was trying to determine how they were going to navigate
during the worst recession the United States had seen since the Great
Depression. (1) The Dow Jones Industrial Average (DJIA) had collapsed
55% from 2007 to 2009 and the banking system was on the verge of
collapse. The stock market had not collapsed like this since the Great
Depression when the stock market fell by 89% from 1930 to 1932.
Yet, Branson was optimistic because he was thinking about what
opportunities lay ahead. He had five billion dollars in cash and needed
to determine what strategies he must utilize to manage and grow his firm
through this chaos.
RICHARD BRANSON
Born in England on July 18, 1950, Sir Richard Branson's mother
was a stewardess, father was a lawyer, and grandfather was a judge.
Branson remembers his childhood with his two younger sisters as happy.
His parents encouraged independence.
Branson's confidence in his ability to analyze a situation and
make it work was evident early. Although he was a mediocre student,
Branson insisted that he could run the school he attended more
effectively and efficiently than the headmaster. One aspect of the
school that Branson thought he could improve was the creation and
enactment of school rules. Branson insisted that one rule he could
improve was, "Allow all sixth-formers [final year students] to
drink two pints of beer a day." (2)
The lessons that Branson learned and his personality traits were
fundamental to his business success. Branson's mother, Eve, focused
on challenging her children so they could enhance their confidence,
growth, and development. According to Branson, "I remember that my
parents continually set challenges for us. My mother was determined to
make us independent." (3) Branson's mother was raised in a
family that encouraged women to strive to live more than just a domestic
existence. She had drive and determination and wanted to instill this in
her children. By the age of 27, Branson's mother was married to Ted
Branson (Richard's father), was a dancer, and was performing in
local London theaters. When Eve met Ted she was employed as a stewardess
for an airline that made trips to and from South America.
Branson attributed a lot of his creativity and initiative to his
parents' upbringing. When he was four years old, Branson's
mother demanded that he find his way back home after dropping him off in
a remote location a few miles away in a field. Branson also recalled
that his mother told him to ride his bike 50 miles to another town and
then find his way home. Her purpose was to increase Branson's
stamina and overall sense of direction. Eventually Branson began to
embrace challenges that were set out for him. He saw them as
opportunities to overcome weaknesses and conquer a small part of the
world.
Branson's parents also encouraged him to think freely and
voice his opinion. Branson was aware of his mother's passions;
generating work for her children and creating ways to make money.
Branson learned a great deal from his parents by watching them work
hard. Branson's parents instilled the values of putting people
first and the importance of teamwork. This fundamental value of
understanding the importance of teamwork influenced Branson's
appreciation and development of the culture at his future company,
Virgin.
There was no television in Branson's house while growing up.
His parents viewed watching television as a waste of time. The children
were encouraged to use their time productively to improve themselves and
their lives. Branson and his siblings were taught that shyness was
frowned upon and that they should learn to be able to converse
effectively in a social setting. Branson's business fever may have
been ignited by his mother's propensity to create ways to raise
money when family funds were running low.
Branson's father was an attorney and his grandfather, Sir
George Branson, was a highly respected and reputable court judge.
Branson's father was much less dominant in trying to mold his
children's future habits. His personality was more laid back.
Schoolwork presented a significant challenge for Branson. Branson
was dyslexic, nearsighted, and unable to read at age eight. His
undiagnosed sight problem hindered his school success. Branson attended
a boarding school, the Stowe School, as a teen. He was not a good
student and dropped out of school by the age of 16. Branson stated that
the headmaster told him that he would either be a millionaire or end up
in prison.
Branson struggled academically through his school years, yet
excelled in competitive sports, and was able to overcome most obstacles.
Overcoming dyslexia and learning how to cope with this condition had a
significant impact on Branson's approach from a business
perspective. According to Branson, "Perhaps my early problem with
dyslexia made me more intuitive: When someone sent me a written
proposal, rather than dwelling on detailed facts and figures, I found
that my imagination grasps and expands on what I read." (4)
Branson had the ability to see the broader vision; the bigger
picture beyond the specific details. This assisted him greatly when it
came to business creativity.
Branson was an entrepreneur from a very young age. He embarked upon
numerous business ventures, such as selling Christmas trees and breeding
budgerigars, a small breed of parakeet. Although he was not financially
successful, he discovered a love for doing business. This love would
never die.
Branson took an early departure from school and engaged in his
first successful business venture, Student magazine. The magazine was
geared towards 16-25 year olds; a category that Branson believed was
underserved in the marketplace. The magazine was successful and at its
high point had a circulation of up to one hundred thousand issues. By
age 20 he had been the subject of a television documentary highlighting
his Student magazine.
In 1970, Branson and his friend, Nick Powell, created a mail order
venture focusing on the record industry. After this, they opened their
first record store in London on Oxford Street. Branson started a
recording studio and record label called Virgin Records in 1972. His
first major signing was Mike Oldfield who wrote the soundtrack to
"The Exorcist" called Tubular Bells. The album was on the UK
music charts for almost five years. As Branson's reputation
increased so did the quality of the acts he worked with which included:
Genesis, Simple Minds, The Rolling Stones, Peter Gabriel, and The Sex
Pistols.
Branson also had his share of disappointments. One of the most
serious infractions was selling records illegally that were meant for
export. He did not pay taxes, which led him in jail. Branson's
parents came to his rescue by posting a pretty hefty bail by mortgaging
their home. Charges against Branson were eventually dropped after he
agreed to reimburse the state for the taxes that he should have paid.
The scrape with the law was one of many life lessons learned by
Branson on his way to the top. Many of these incidents would shape the
way he thought, felt and dealt with friends, foes, and the
establishment.
Branson was known as one who rose to the top and remained there by
being his own person. He instilled a belief in those around him that
would carry them wherever they went. Branson was anti-establishment,
light hearted, and creative. At times Branson was labeled as a hippie
entrepreneur for the way he lived his life and ran his businesses. Even
though Branson had made millions of dollars for himself and others,
material possessions did not drive him. Being successful and enjoying
what he did was much more important.
In 1999, Sir (a form of knighthood by British Royalty) was added to
the beginning of Branson's name to recognize his contribution to
service through entrepreneurship. His knighthood was another tribute to
all that Branson had accomplished and contributed to the United Kingdom
and the world.
Branson was also adventuresome. He was the first to attempt to
travel across the world in both hot air balloons and sail boats. Not
only was he the first to travel across the Atlantic and Pacific, but he
set a record pace in doing this. He also made attempts at speed records
in an amphibious vehicle. These activities were criticized by some as
being reckless and childish. Branson was putting his life in danger
along with the viability of the Virgin Group. With the criticism that
Branson received, he also received massive amounts of free publicity for
himself and Virgin.
VIRGIN
Branson's first profitable venture was called Student
magazine, which was launched on January 26, 1968. The magazine's
articles focused on "sex, rock music, interviews with terrorists,
and proposals for educational reform." (5) The magazine was started
as a hobby for Branson to dabble in during his down time. He solicited
the help of other students to make up his staff. Branson ran the
magazine without paying salaries to his aides. In exchange for their
services, he provided them with room and board.
Branson then diversified into the mail order record business after
four years of guiding his magazine. The mail order business was an
expansion of the magazine, but it focused as a musical distribution
outlet. Branson decided that the magazine had served its purpose and
that he needed to move on to bigger and better things. Branson used his
last print issue of Student to advertise his new venture of selling
records. His start began with seizing the opportunity of attaining a
stock of records from a discounter. With this purchase he was able to
fulfill the demand created by the magazine's advertisements.
Branson was also able to flip these records for a profit by selling them
to music retailers less expensively than most middlemen.
Branson soon realized that he needed someone to keep track of the
funds, regulations and other procedures necessary for smooth business
operations. To fulfill this need he recruited a longtime friend, Nik
Powell. In exchange for Powell's commitment to help grow Virgin and
keep it on the right track Branson offered him a 40% share of the
company. Powell brought the business expertise that was needed to run
the day-to-day activities. Branson was more of the creative, idealistic
part of the team. The two worked very well together.
Branson then opened a physical brick and mortar record store on
Oxford Street in London in 1971. The existence of the mail order
business was being threatened by a nationwide postal strike. Without
mail carriers to deliver records there was no means for customers to
acquire Virgin's product. So he opened a retail store.
Virgin then vertically integrated backwards by expanding into
record publishing establishing a recording studio and signed major bands
like the Sex Pistols. The first huge step for Virgin was signing Mike
Oldfield who went on to release of the classic album, Tubular Bells, the
Soundtrack to The Exorcist. Oldfield released this album in 1973 under
the Virgin Record label. Oldfield had been rejected by many other labels
only to fall into the lap of Virgin. Tubular Bells would sell over five
million albums worldwide and lift Virgin Records into a notable player
in the music industry.
Virgin also signed the Sex Pistols. Virgin's propensity to
walk landscapes that were too risque for other more conservative labels
was becoming legendary. The Sex Pistols were known drug users and lived
obscene lifestyles. Virgin Records then expanded internationally and
went on to sign Phil Collins, Simple Minds and Culture Club, which was
headlined by another very controversial character, Boy George.
VIRGIN ATLANTIC AIRWAYS
In 1984, Virgin began implementing an unrelated diversification
strategy with startups in the airline industry, Virgin Atlantic Airways
and Virgin Cargo. The airline business was very capital intensive,
competitive, and volatile. There was stiff competition, financial
demands, and uncertainty in the industry. Though many stop signs
presented themselves, Branson thoughts this was an opportunity. Branson
playfully joked about the extreme risk of investing in an airline by
saying "The quickest way to become a millionaire is to be a
billionaire and buy an airline'" (6)
Branson knew that there was a place for them in the airline
industry; they just had to find it. He witnessed poor customer service
and unpredictable, high pricing. He worked tirelessly to make his idea a
successful reality. He brought in experience and intuitiveness in order
to implement his vision. After getting through all the red tape,
brainstorming, and preparation it was finally time to start the engine.
In what would become known as typical Branson style, Branson dressed up
as a World War I airman during the official launch of Virgin Airlines.
Management
Branson poured his heart, energy, time and capital into his
airline. At this point Virgin Airlines was the only limb of the Virgin
enterprise to receive a significant piece of Branson's personal
attention. The day-to-day leadership responsibilities in the other
Virgin companies had been handed over to loyal Virgin executives that
Branson learned to trust. This was a common pattern for Branson; to
create and learn a new part of his conglomerate and then hand the reigns
over to a trusted member of the Virgin family to lead to the top.
Branson frequently gave the leaders of each division a share of the
company that they ran. This practice provided extra incentives for the
leaders to increase the bottom line. Branson often commented that he
enjoyed making millionaires out of the people that worked for Virgin
through this practice. After delegating the leadership roles to others
in the company Branson would then have time on his hand for seeking out
new ventures and planning publicity opportunities for Virgin.
The airline was a bit different than the other parts of the
organization. Branson grew a personal tie to it partly because it was
such a challenging endeavor. Effort by Branson to accelerate the success
of the airline along with government regulations on airline pricing and
unfair competition thrust Virgin Airlines into a threat amongst UK
competitors.
Going Public
In 1985, privately owned Virgin Group went public. This gave
Branson an uncomfortable feeling. Branson did not like giving up the
control of his company. Though he was apprehensive about the move,
Branson knew the benefits of being able to raise a tremendous amount of
capital. The influx of investor money created many options for Virgin.
The public offering was successful but not as successful as expected.
After the company went public there was much discord between Virgin,
Branson, and market analysts. Branson did not possess the type of
leadership style that appealed to the conservative, traditional critics.
After only two years on the public market, Branson bought the
outstanding shares and brought Virgin Group back under private
ownership.
Strategic Maneuvers
Though Virgin Airlines had become relatively successful and was
pretty steady in the short term, Branson knew that in order to create
long term stability the airline needed new investment capital. This
situation caused Branson to make a decision that had no right solution.
In order to raise the capital needed to keep the airline competitive,
Branson had to sell his greatest asset, Virgin Records. Virgin Records
was the crown jewel of the Virgin family and it was what made Virgin a
household name. At that time (the early 1990's) Virgin was the
world's biggest independently owned record company.
After much thought and steady negotiation the deal finally was
made. Virgin Records was sold for $1 billion in 1992 to Bertelsmann and
Thorn EMI. To this day Branson talks of his disappointment of having to
make the decision to sell Virgin Records. He knew in his heart that it
was the right business move for what he wanted to accomplish, but it
still hurt him to let go of something that he had created and grown. In
a way it seemed like Branson was proud of himself for being able to
think with his head and not with his emotions. In his own words he has
said that "Too many entrepreneurs have gone down because they were
not prepared to cash in their chips at the right time." (7)
The cash raised through the sale of Virgin Records helped spawn new
Virgin entities along with the expansion of Virgin Airlines. New
innovations on the airline included: onboard masseurs, fashion shows,
and tailors.
Over time, Virgin Group continued to embark upon numerous
acquisitions and joint ventures which added more companies under the
Virgin umbrella still with a non-related diversification strategy.
Examples of this include the launching for Virgin Brides and Virgin
Trains in 1996 and more recently the launching of Virgin Galactic (2004)
and Virgin Fuel (2007). Additionally, the firm divested businesses such
as selling Virgin Music Group in 1992 to Thorn EMI and Virgin closing
its clothing company in 2000. For a list of Virgin's companies see
Exhibit 1.
Even though Virgin was operating as a conglomerate with businesses
in multiple industries with little in common except for the Virgin
Brand, it was apparent that some related diversification occurred within
subgroups, which are categorized in Exhibit 2.
While one can argue that these categories are indicative of
non-related diversification, it was evident that Virgin was already
recognizing particular industries/markets where it could expand and
leverage its success.
VIRGIN IN 2009
Virgin's strengths included the following: (1) Strong brand
equity: The Virgin brand name was not only associated with Richard
Branson, but also embodied a rebellious, anti-corporate image; (2)
Entrepreneurial leadership: Richard Branson was continuously looking to
engage in new opportunities and considering new ventures, (3)
Non-related companies: The Virgin Group consisted of over 200
individual, non-related companies. These companies operated on a
standalone basis which allowed the underperformance of one company not
to affect the collective group; (4) Strong Corporate Culture: The Virgin
Group had a competitive advantage that cannot be replicated, its
corporate culture. Virgin's employees were high performing, fun,
high energy people that were continually thinking outside the box and
looking to innovate; (5) Decentralized Organizational Structure: The
flat organizational structure allowed for the firm to be flexible and
responsive to market conditions.
The company also had several weaknesses including: (1) It was
difficult for the market to identify core businesses/products of the
Virgin Group: The initial brand of the Virgin Group, served as an
antithesis to corporate bureaucracy; it was no longer consistent with
some of its businesses such as Virgin Credit Cards; (2) There was poor
financial performance of some of the individual businesses; (3) Some of
Virgin's unsuccessful business ventures affected the brand
negatively; (4) Brand recognition was most prominent in the United
Kingdom; (5) The Virgin brand is heavily dependent on Branson's
identity in the marketplace; (6) Virgin's businesses can be
considered market players, but not recognized market leaders
Virgin had several opportunities and threats. Opportunities were:
(1) The Virgin Group could leverage synergies between businesses; (2)
International expansion: The Virgin Group can identify companies that
can increase market potential through expansion into international
markets; (3) Identify core businesses and focus on market growth in
those particular sectors. Threats to the company included: (1) Brand
licensing creates the potential for negative impact to the brand; (2)
Maintaining the Virgin culture as Virgin acquires more companies; (3)
Brand dilution in the marketplace: With the Virgin brand attached to so
many companies, the potential exists for the brand to have less meaning
to consumers; (4) The retirement of Richard Branson: The concern was
whether or not the brand will maintain its market value without Branson
to personally launch new companies, and (5) The international economic
crisis will significantly impact the performance of numerous Virgin
companies as consumers pull back their discretionary spending in
categories such as electronics and travel.
In 2009, Virgin was reportedly still looking to expand to new
territories. Unnamed sources claimed that Virgin had placed a bid to
purchase a race car team (Honda Formula One). (8) No one associated with
Virgin would comment on these claims but in a related move Virgin
entered into a partnership to sponsor another race team in March of
2009.
With the world economy depleting in the last two years
Virgin's businesses have seen down times. In the second half of
2007, Virgin America, a U.S. version of Virgin Airlines, "lost $227
million in its first 12 months of operation, far more than
expected." (9) In April 2009 allegations were made that Virgin
America was breaking the law because the company was not at least 75%
American owned, which was a violation of U.S. regulations. (10) This
situation was created when Virgin America's American investors sold
off their share of the company to an unnamed party. The sale was
undoubtedly because of the poor financial performance of Virgin America.
Though Virgin American was not performing as Branson and Virgin hoped it
would Branson still believed that there was opportunity in the U.S.
Market.
Financial troubles are also hampering other parts of the Virgin
Group such as Virgin Blue (an airline that operates primarily in
Australia). The financial troubles for Virgin Blue have resulted in
salary and pay cuts along with hiring freezes. With such a large portion
of Virgin consisting of airline travel businesses, times were tough. All
airlines, not just Virgin, had been struggling for at least the previous
24 months.
Also relevant in 2009 was Virgin Mobile. Virgin Mobile was started
in 1999 and originated in the United Kingdom. The Company was primarily
known and had been successful promoting its prepaid cellular phone
services. Virgin Mobile also offered traditional services in the U.S. to
select customers. During 2009 Virgin Mobile operated in seven different
countries. Virgin Mobile had been especially successful in Canada for
the four years previous to 2009.
In 2009 Branson was also looking to continue to expand Virgin
Rails, Virgin's train service operation in the UK; begin an
e-banking venture to complement its financial services division; and had
collected "$40 million in deposits from would-be space
tourists" (11) from future Virgin Galactic customers.
BRANSON'S KEYS TO SUCCESS
"Life is short; one has to make the most of it. Thus, do
things that you like. If your work and your hobby are the same, you will
work long hours because you are motivated." (12) Branson enjoyed
doing many things which was one reason why he had been successful in so
many areas. In Britain, Branson was known by his countrymen to be either
one of two things: the country's best known businessman who walks
on water, or a ruthless, wily entrepreneur who was always trying to get
over on his rivals and skated on thin ice. Branson's real talent
was his ability to inspire loyalty from people. He was known as a global
entrepreneur who loved adventure. Branson had faith in his people and
respected their ideas. He was not afraid to give credit to someone else
even when it made that person look smarter than him. Branson realized
that multiple perspectives and sources are an asset to the leader of an
organization and not a threat.
Some of the success of Richard Branson and Virgin were related to
the personality of Branson. He never gave up and was willing to take on
hefty amounts of risk. Virgin had a strong brand recognition image and
was in almost every industry imaginable. Even though most of the Virgin
companies were not making huge profits, Virgin and Branson's keys
to success included global brand recognition, an entrepreneurial focus,
an adventurous leader, and the ability to take on challenges and risks.
Multiple factors influenced the combined success of Branson and The
Virgin Group. The most significant of those factors was Branson himself,
his willingness to take risks and embrace his entrepreneurial spirit.
Branson was successful in creating an identity with Virgin that appealed
to a specific target market and he has been able to build upon that
brand as he expanded Virgin.
Some of the key characteristics that described Branson included:
self- motivator, aggressive, risk-taker, financially organized,
excellent negotiator, creative, flexible, very competitive, proactive,
hardworking, and charismatic. Branson always networked with talented and
important people.
Branson attributed much of his success to the people around him.
Branson made it a priority to maintain a close, family-like
organization. He believed that if the company was run by quality people
who are treated well, then success was right around the corner. Every
year Branson celebrated his employees with a party at his home. The
employees were invited to celebrate the success that Branson attributed
to the team. Branson has been known to point out that the preferred
pecking order in terms of importance was employees or associates first;
customers were second; and shareholders were third. Branson created an
atmosphere in his business that promoted casualness and fun. He wanted
people to have a good time at work as if they were immersed in a hobby.
Branson was not known for paying large salaries and was not ashamed of
this. He felt that truly enjoying your work made up for a few extra
dollars.
Another business practice that Branson utilized was creating new
businesses as opposed to buying existing ones. By expanding in this
manner, it allowed employees to get in on the ground floor and learn
about the business more intimately. This manner also provided a sense of
ownership to employees knowing that they helped give birth, nurture, and
grow the new entity. By building on this idea, Branson felt that he
encouraged the production of quality products and/or services within the
company. He emphasized that quality over quantity was the goal.
Another one of Branson's personality traits was the art of
giving. His charitable ways created even more popularity amongst his
many fans. Branson gave multiple donations to such causes as AID
research, political publications to educate the masses, and rescue
efforts for those affected by the first Gulf War. Branson made a bid to
run the national lottery of Britain but was not successful. Part of his
plan was to donate all the profits derived from the lottery to charity.
THE FUTURE OF BRANSON & VIRGIN
The major issue confronting Virgin in 2009 was how to survive and
grow in the current economic crisis. The firm needed to identify its
core competencies and determine what direction it wanted to go. Another
problem confronting Virgin in 2009 was the impending retirement of
Branson, from both an external and internal perspective. Externally,
Branson and the Virgin brand are considered synonymous. However, what
will happen when Branson is no longer the leader? Internally, the
concern was who will be the leader and can they maintain the culture of
Virgin.
Branson touched down his hot air balloon in upstate New York. His
trip was finally over. He had enough time to ruminate about what his
next moves were going to be for his company. Branson's
entrepreneurial instincts had him excited about the future. He was
anxious to get back to England and talk about his next moves with his
top management team.
END NOTES
(1.) Willis, B. (2009). U.S. Recession Worst Since Great
Depression, Revised Data Show. Retrieved November 27, 2009 from,
http://www.bloomberg.com/apps/news?pid=20601087&sid=aNivTjr852TI
(2.) Ultimate Business Library (2003). Movers and Shakers:
Bloomsbury Publishing Plc. Page 134.
(3.) Branson, Richard (1998). Losing My Virginity. New York: Three
Rivers Press. Page 3.
(4.) Branson, Richard (1998). Losing My Virginity. New York: Three
Rivers Press. Page 25.
(5.) Grant, Robert M. (2004). "Case 15: Richard Branson and
the Virgin Group of Companies in 2004." Blackwell Publishing.com.
Retrieved: February 1, 2009
from.https://www.blackwellpublishing.com/grant/docs/15Virgin.pdf
(6.) De Vries, Kets (1999) The New Global Leaders. San Francisco;
Jossey-Bass Publishers. Page 29
(7.) De Vries, Kets (1999) The New Global Leaders. San Francisco;
Jossey-Bass Publishers. Page 26
(8.) http://investing.businessweek.com/research/stocks/private/
snapshot.asp?privcapId=36312 (May 19, 2009)
(9.) http://findarticles.com/p/articles/mi_6781/is_2009_March_2/ai_n31418860/ (May 19, 2009)
(10.) http://www.bizjournals.com/sanfrancisco/stories/2009/04/13/story8.html (May 19, 2009)
(11.) http://www.ibtimes.com/articles/20090509/virgin-sees-space-tourism-as-just- beginning.htm (May 20, 2009)
(12.) De Vries, Kets (1999) The New Global Leaders. San Francisco:
Jossey-Bass Publishers. Page 8
Todd A. Finkle, Gonzaga University
Exhibit 1: The History of Virgin
1968 First issue of Student magazine, January 26.
1970 Start of Virgin mail order operation.
1971 First Virgin record shop opens in Oxford Street, London.
1972 Virgin recording studio opens at The Manor near
Oxford, England.
1983 Virgin Vision (forerunner of Virgin Communications)
formed to distribute films and videos and to operate in
television and radio broadcasting.
Vanson Developments formed as real-estate development company.
Virgin Games (computer games software publisher) launched.
Virgin Group's combined pre-tax profit climbs to 2.0
million [pounds sterling] on turnover of just under
50 million [pounds sterling].
1984 Virgin Atlantic Airways and Virgin Cargo launched.
First hotel investment (Deya, Mallorca).
Virgin Vision launches The Music Channel, a 24-hour
satellite-delivered music station and releases its first
feature film 1984 with Richard Burton and John Hurt.
1985 Private placement of 7% Convertible Stock completed with
25 English and Scottish institutions.
Virgin wins Business Enterprise Award for company of the year.
Virgin Vision extends film and video distribution
internationally.
Virgin Holidays formed.
1986 Virgin Group, comprising the Music, Retail & Property,
and Communications divisions, floated on London Stock
Exchange. 35% of equity sold to 87,000 shareholders.
Airline, clubs, holidays, and aviation services remain
part of the privately owned Voyager Group.
1987 Virgin Records subsidiaries in US and Japan launched.
British Satellite Broadcasting (Virgin a minority partner)
awarded satellite broadcasting license. (Virgin sells its
shareholding in 1988.)
Virgin acquires Mastertronics Group, which distributed
Sega video games in Europe.
Virgin Airship & Balloon Company launched to provide
aerial marketing services.
1988 Recording studios opened in Barnes, London.
New international record label, Virgin, launched.
Virgin Broadcasting formed to further develop Virgin's
radio and TV interests.
Virgin Hotels formed.
Virgin Megastores opened in Sydney, Paris, and Glasgow.
Branson takes Virgin private with 248 million
[pounds sterling] bid
for outstanding shares.
1989 Virgin Music Group sells 25% stake to Fujisankei
Communications for $150 million.
Virgin Vision (video distribution) sold to MCEG of Los
Angeles for $83 million.
1990 Virgin Retail Group and Marui form joint venture company
to operate Megastores in Japan.
Virgin Lightships formed to develop helium airships
for advertising.
1991 W. H. Allen plc acquired. Merged with Virgin Books to
form Virgin Publishing.
Sale of Virgin Mastertronic to Sega. Remaining part
of the business becomes Virgin Games.
Virgin Retail Group forms 50:50 joint venture with W. H.
Smith to develop UK retail business.
1992 Sale of Virgin Music Group to Thorn EMI plc.
Joint venture with Blockbuster to own and develop Megastores
in Europe, Australia and US.
UK Radio Authority grants Virgin Communications and
TV-AM plc the license for Britain's first national
commercial rock station (Virgin 1215AM goes on the
air in April 1993).
Virgin acquires Euro-Magnetic Products, a specialist in
the personal computer consumable market.
Vintage Airtours established to fly Orlando-Florida Keys
in vintage DC-3s.
1993 Virgin Games floated as Virgin Interactive Entertainment
plc with Hasbro and
Blockbuster taking minority equity stakes.
Virgin Euromagnetics launches a range of personal computers.
1994 Virgin Cola Company formed as joint venture with Cott Corp.
Agreement with W. Grant to launch Virgin Vodka.
Virgin acquires Our Price retail music chain, owned 75%
by W. H. Smith, 25% by Virgin.
Virgin Retail Group forms joint ventures to develop
Megastores in Hong Kong and S. Korea.
Virgin City Jet service launched between Dublin and
London City Airport.
1995 Virgin Direct Personal Financial Service is launched as a
joint venture with Norwich Union (whose stake is later
acquired by Australian Mutual Provident).
Acquisition of MGM Cinemas, UK's biggest movie theater
chain, to create VirginCinemas.
1996 Virgin Travel Group acquires Euro-Belgian Airlines to
form Virgin Express.
V2 record label and music publishing company formed.
London & Continental Railways (in which Virgin is a major
shareholder) wins a 3bn [pounds sterling]
contract to build the Channel
Tunnel Rail Link and operate Eurostar rail services.
1997 Virgin Rail wins bid to operate the InterCity West Coast
and is awarded the 15-year rail franchise.
Virgin Net, an Internet Service Provider, formed with NTL.
Branson acquires a 15% stake in the London Broncos
rugby league team.
Victory Corporation, a joint venture with Rory McCarthy,
launches the Virgin Clothing and Virgin Vie toiletry
products.
Majority share in Virgin Radio sold to Chris Evans'
Ginger Media Group.
Virgin Bride, a chain of wedding retailers, formed.
Virgin One telephone bank account and "one-stop integrated
financial service" launched in collaboration with
Royal Bank of Scotland.
1998 Virgin Entertainment acquires W. H. Smith's 75% stake
in Virgin/Our Price.
Virgin Cola launches in the US.
1999 Virgin sells its UK cinema chain to UGC for
215 million [pounds sterling].
Virgin launches mobile phone service in joint venture
with Deutsche Telecom's Oneto-One (November).
49% of Virgin Atlantic sold to Singapore Airlines
for 600 million [pounds sterling].
Restructuring and re-launch of loss-making Our
Price record stores.
2000 Virgin Mobile launches US wireless phone service in joint
venture with Sprint and announces plan to expand into
Europe, Africa and South-East Asia. Virgin Mobile Australia
(a joint venture with Cable & Wireless) begins
service in October.
Virgin Net, Virgin's portal and ISP venture, closes
its content division.
Virgin announces the closing of its clothing
company (February).
Virgin Cars, online sales of new cars, launched.
Virgin and Bear Stearns set up Lynx New Media, a $130
million Internet-focused venture capital fund.
Inaugural flight of Virgin Blue, Virgin's low-cost
Australian airline (August).
Branson knighted by the Queen.
Virgin fails to win franchise to run Britain's
government-owned National Lottery.
2001 50% of Virgin Blue sold to Patrick Corporation for A$138.
Virgin expands into Singapore and SE Asia with joint
ventures with local companies in radio stations, cosmetic
retailing, and wireless phone services.
Virgin.net merges its ISP and portal businesses.
16 French Virgin Megastores sold to Lagardere Media
for 150 million Euros.
2002 Virgin Bikes (UK) launched. Offers direct sale of
new motorcycles at discount prices.
Virgin Mobile offers wireless telecom services in the US.
2003 Virgin Blue initial public offering; Virgin retains
25% of equity.
2004 50% stake of Virgin Money repurchased from AMP
for 90 million [pounds sterling].
Virgin Digital launched. Offers online music store
and digital music download capabilities.
Virgin launches Virgin Galactic
2005 Virgin Active UK acquires Holmes Place
2006 Virgin Fuel is launched
2007 Virgin Health Bank is introduced
Virgin Media is launched
Virgin America is launched
2008 Virgin Holidays + Hip Hotels created to provide style
conscious travelers the best in travel.
Virgin Healthcare opens their first centers.
Source: http://www.virgin.com/Companies.aspx# accessed
December 26, 2009.
Exhibit 2:
Travel & Tourism
Virgin Holidays Virgin Trains
Virgin Vacations Virgin Charter
Virgin Holiday Cruises Virgin Blue
Virgin Limousines Virgin Atlantic
Virgin Balloon Flights Virgin America
Virgin Limited Edition Virgin Galactic
Blue Holidays Virgin Nigeria
Virgin Limobike
Finance & Money
Virgin Money
Health
Virgin Spa Virgin Life Care
Virgin Active Virgin Healthcare
Virgin Health Bank
Leisure & Pleasure
Virgin Games The Virgin Voucher
V Festival Virgin Comics
Virgin Experience Days
Social & Environment
Virgin Green Fund Virgin Earth
Virgin Unite
Media & Telecommunications
Virgin Media Virgin Broadband
Virgin 1 Virgin Mobile
Virgin Radio
Shopping
Virgin Books Virgin Digital
Virgin Vie at Home Virgin Wines
Virgin Megastore Virgin Drinks
Source: Source: www.virgin.com accessed October 13, 2009.
