Virgin brands aren’t in a pickle

Let’s not join the thronging masses who are only too quick to throw cynicism at entrepreneurial success (Is Branson about to burst the Virgin brand bubble? (MW August 2).

The Branson empire is a multi-industry, multinational brand – the likes of which has never been seen before. He continually promotes the concept of product and value innovation across the Virgin brand and has successfully challenged and recreated a whole range of industry norms.

He is promoting a concept, thus does not need to keep each venture that is started up. The value innovation that has been created is worth more if sold quickly, before others follow suit. Once others have replicated his strategies the idea is no longer unique and is devalued. Selling early enables Branson to invest the extra money into the next venture.

It would be incredibly difficult for any company to be so diverse and survive, therefore Virgin has to consolidate. Trading assets to make more money is part of a strategy so that Branson can move into another market, moving quickly and staying out of trouble, yet still spreading the Virgin brand. Some ventures are purely to improve cash flow such as cinemas. However, value is still added making them successful.

Alan Mitchell describes Virgin’s many joint ventures as “commercial veneers”, but realistically they are the only way into some new markets, for instance mobile phones. It simply wouldn’t make commercial sense to create a whole new network, so why not add value to an existing one at minimal cost, but maximum value to the customer? On entering the sector, he reversed what other operators were doing by introducing paid-for handsets (which is the expensive item) and low-cost calls, rather than vice versa.

It may very well just be repackaging existing products, but that’s what Branson’s good at and why he’s a successful entrepreneur – he adds value. As long as the Virgin brand can remain true to its core values (and it hasn’t failed yet) and continues to deliver a promise, does it really matter who provides it?

Brian Austin

Media buyer

AWA Media

London SW6

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