ASSIGNMENT 1: Essay

Critically discuss the internal sources of competitive advantage in Virgin.

Introduction:

At the beginning, in 1970 Virgin was mail order records, nowadays Virgin is a brand used by over 300 companies (Virgin, 2010) and lead by the charismatic tycoon Sir Richard Branson. He created first Virgin mail order record then, in 1971 he opened his first Virgin store and Virgin records. With opening of Virgin Atlantic Airways, Richard Bronson began to new market out of entertainment market. The following years, he went on the new market: food, drinks, entertainment, books, banks, airlines, tour operator, mobile phone, trains, balloons flights and space travel. Virgin employs more 50.000 people in 30 countries (Virgin, 2010) of the world and its incomes exceeded more 11.9 billions £ (Virgin, 2010). According to Richard Branson (1998, p6), Virgin firms strategy is “Short-terms taxable profits and seeking long-terms capital growth is the best approach to growing private companies”, Virgin seeks to enter in new markets for example with Virgin Galactic: Space tourism market or although enter in market which already exist but Virgin changes the market offer for example with Virgin Airways: Airline, integrate additional service on board (spa, hairdressing). So the way to compete is offer new and creative thing to the customer. But, not for earn short profit but let the firm grow. Some companies were dissolved as Virgin Charter, but most of Virgin’s firms survive or make profit as Virgin Mobile. So the aim and objectives of these assignments are to find the internal sources of competitive advantage of Virgin and the factors and brakes which may have an impact on the competitive advantage of Virgin. A competitive advantage appears when a company earns more profit than its competitors in same market. It can come from external or internal sources. We are going to deal with internal sources. To answer the topic, we use Grant’s framework of sources of