Does the Virgin Group, as a corporate parent add value to its business? If so how

The Virgin Company as a parent company does add to the businesses under its umbrella any advantages that accrue to the brand as a whole . The diverse aspect of the Virgin Group allows for more consumer and investor confidence , as the Group does not depend on just one area or industry for its profitability and economic health . In fact , investors are especially aware of the benefits of such a diverse portfolio . Each company shares in those benefits in more than one way . First of all from each of these many and various companies

that form a part of the group , the capital to be gained is more readily available to any one of the Virgin companies (than to an unaffiliated company ) in case financial problems should arise in the future

The Virgin companies that are similar in nature also benefit from economies of scale . When resources such as raw materials are being sought , purchasing can be done in large quantities that allow each company to increase revenue by reducing marginal cost . Further benefits that accrue to Virgin companies from being affiliated with the Virgin parent include close ties to other companies in a related industry . For example , Virgin Vacations has the ability to form partnerships with Virgin Atlantic and in so doing offer cheaper vacation packages to their customers (Virgin , 2007 . In that way , Virgin Atlantic is guaranteed more business while the tour company (Virgin Vacations ) can guarantee its customers flexible flights that allow them to take full advantages of the services (for example , by allowing them to extend their stays at the hotels without incurring extra airline fees

Another area in which a company can benefit from being affiliated with the Virgin Group is in its use of the Virgin brand name . If consumers already trust the brand , they are likely to automatically trust a new company that bears the Virgin name . This effect serves as a method of reducing the time it takes for new companies to establish their names and brands with the consuming public . Thus , the new Virgin-affiliated company starts out with a name that is already known to and trusted by consumers

Reference

Virgin (2007 . The whole story ' Virgin .com . Retrieved on January 21 , 2007 from

http /www .virgin .com /aboutvirgin /allaboutvirgin /thewholestory /default asp

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