Virgin Galactic: Global Business Management

Virgin Galactic: Global Business Management 1. Introduction Virgin Galactic is the space tourism company which was founded in 2004 by Sir Richard Branson. This is type of Limited Liability Company. This company has its different headquarters at different locations such as Las Cruces, New Mexico and USA. Now it is planning to expand its business at global level such as Dubai. This company is part of Virgin Group which is also known as its parent company. The CEO of this company is George Whitesides. They started to provide its services to customer such as spaceflights in 2008 and now they are offering lot of services to their customers such as Space Sub Orbital, Small Satellites and Orbital Human Space Flight. Although this company is on the way to success but still every company has some weak points which they can use to convert into opportunities to perform better. So the aim of this research is find problems of Virgin Galactic and eliminating those. 2. Richard Branson and Virgin Galactic In this section, there will be a discussion about the evaluation of Richard Branson track record and his strength of new venture team and also will be discussing about his creative opportunity. 2.1 What is the concept of Global Leadership and how its reflect in Sir Richard Branson Leadership style? Richard Branson undoubtedly is a global leader. It is also reflected in its leadership style. Global Leadership means, the person who can reach beyond the boundaries of their own country and continent to influence an end result. In addition to this, it is also the person who just not looking for his profit but also looks for the problems and challenges and successfully solves them. Richard Branson is the person who likes to accept challenges and make his all best affords to reach success. He believes in people and thats he behaves like family members with his employs. He encourages his employees to challenge changes and bring up with new ideas to him. This is the reason why Sir Richard Branson brands is the worlds most powerful and recognizable brand. He himself promotes his brand which no other leaders can do in world. (Sir Richard Branson | Global Zero, 2017) 2.2 Evaluation of Richard Branson Track Record Richard Branson, A successful business man, the founder and Chairman of Virgin Group was born on 18 July 1950 in UK. Like all other flourishing business tycoons, he was also a school dropout. In 1970, he started his record business in UK and very soon his business become success under the name of Virgin. (Richard Branson Biography Childhood, Life Achievements Timeline, 2017.) Later, in 1980 the Voyager Group was established as his own travel company. It is not that he had never face any problems, in the beginning of 1990s he faces financial problems and has to sell his one of the company. He had never given up in his life and thats the reason he won 400 companies in 30 countries at present. One of the famous quotes of Richard Branson is if somebody offers you an amazing opportunity but is not sure you can do it, say yes then learn how to do it later. This quote show that he always think about new business and he jump in to it and at later he succeed in that. Due to this we can see lots of diversification in his business, means there is not just music industries in which he operates his business but also have train company, a mobile company, a luxury game preserve and airline company and a space tourism company to name a few. (Michelle L.V, 2014.) 2.3 Richard Bransons Strength as a New Venture Team Lets discuss the strength of Sir Richard Branson leadership. He believes in people, who work for him, he thinks that hire best employees who have excellent ideas and then trust them and let them do their job on their own. Sir Richard Branson finds a right candidate for the particular position, who is better than him for the job, due to which his all business are achieving success. The next is Sir Richard Branson thinks that failure is a learning lesson. For that he gives an example of his own business of virgin cola and that was successfully operated but also attracts some giant revivals due to his business gone down and he has to think again about the new strategies. (Business Lessons From Mega-Entrepreneur Richard Branson, Kinney B.2013) Sir Richard Branson always follows his strength whenever he start new venture with his team. He says, challenge the status quot, by which he means that thinks like a consumers, and add values to the product. Next create value of the product in globe, means that consumers satisfaction should be in the core value of the any product. In addition to this, he believes that be confident and concrete about your business and self motivation is the main thing for any business. He says Dream Big and do big then any other in the world. The first year of any business is all about survival and dont just invest money, invest more than that. (How Richard Branson Works Magic, Glenn Rifkin, 1998) 2.4 Leadership Theory Leadership is a process which is running by people with common goal and values, several kinds of capital like economic and political, to achieve a common interest. (Leadership: Theory and practice p.425) Leadership motivates other people to achieve common goal. That means the leader and other followers have mutual purpose. So it means that followers have fate in leader and vice versa, due to this they achieve a desire goal (Rost, 1991). 2.5 Leadership Style of Richard Branson Ability to think Differently Once in an interview with the Telegraph Sir Richard Branson said that Leadership doesnt have a secret formula; leaders go about things in their own way It is his leadership skill to think in a different way which makes him different from others. Richard Branson compares his collaborative and democratic leadership style to the late co-founder Steve jobs, was famous for his autocratic style. Both successful people have great achievement and come up with their own viewpoints, beliefs and approach. It is not important that which leadership skills are the best but its all about accepting the method which suits to the organization to utilize available resources. A Positive company culture He believes personality comes first then CV. The companys employees are always looking for a leader who makes fun passes that enthusiasm onto other members of the company. An eye for talent It is important to get as much as possible from the ability of the employees, Sir Branson believes in it. Also he said Believe in yourself, your method of work, and your ideas and in your employees It would not be possible to be a great leader without leading great people. He believed that people not only who have necessary experience and talent but also should fit for the business. (9 leadership skills from Sir Richard Branson | Robert Half UK, Jammi Freed, 2015.) Attention to detail Sir Richard Branson believes that successful and efficient leaders give more concentration in deep. In the Daily Telegraph he said that it can be made possible to get good fun with minor problem comparatively if this engages in dealing with customers issues personally and going to visit them surprisingly. Passion for job At last, the business leaders need to be aware about what they are doing to make effective planning, to build a team and inspiring the employees. He said that the people can get the best results. (Four leadership lessons from Virgin Groups Sir Richard Branson, Jammi Freed 2015.) Willingness to listen and learn According to Richard Branson, it is very important for the business leaders that they are quite capable to listen and learn from that and also he advised to note down those ideas to get best results. He said that the successes will happen when you are working and learn from the inspired person. 2.6 Background of Virgin Galactic Company Virgin Galactic is a profit-making space line service. It has several carrier craft which is Space-Ship Two, White-Knight Two, and an orbital launch vehicle for small satellites which is Launcher One. The Company was established in 2004 and a sister company of Virgin Group Ltd. Virgin Galactic and its partner companies: Virgin Galactic also have collaboration with NASA, they sign a memorandum of understanding in Feb 2007. In January 2015, Virgin Group announced an investment in to OneWeb Satellite constellation. This collaboration is for to provide world internet access service to WorldVu. To Create a New supersonic passenger transport Virgin Collaborate with Boom Technology. For this Virgin Galactic has optioned 10 units. Here we are going to discuss the Richard Branson team members who are working for Virgin Galactic and they are responsible for making this business successful. George Whiteside CEO of Virgin Galactic and the Spaceship Company. He has a long experience in this field and one of the best people for this job in these industries. Prior to this company he is working for NASA where he was designated as a Chief of Staff. He also awarded with the Distinguished Service Medal from NASA. Before that George served as Executive Director of the National Space Society (NSS). Michael p. Moses president of virgin galactic, the commercial human spaceflight program is managed by Mike. He leads his team in all aspects of successful operations including White Knight Two and Spaceship Two Vehicle processing, astronaut training and flight planning also which are connected with space line. He had more than 10 year of experience of working until 2005 as a flight controller in the Shuttle Propulsion and Electrical System Groups. Doug Shane, Chairman of The spaceship company, manage the design, manufacturing and test operations of the Virgin Galatis carrier aircraft through their sister company, The Spaceship Company (TCS). Along with serving as a Director of Flight Operations, for many years he served as Vice President of Business Development. Stephen Attenborough, commercial Director of Virgin Galactic, in 2004 he joined the company as its full time employee to handle the responsibility for commercial foundations and framework for the organization as well as business development, ongoing sales, public relations, partnerships and marketing. On behalf of Virgin Galactic, Stephen always works as speaker at many conferences, at numerous industries and at important events. Jonathan Firth, Executive Vice president of Spaceport and program Development, he joined Virgin Galactic as Project Director and then started to play the role of Director of Operations and projects in 2008 1 and moved to U.S to perform his current role in 2014 as Executive Vice President of Spaceport and Program Development. (Our Team Virgin Galactic, www.virgingalactic.com) Because of all these successful persons Virgin Galactic performing really well, also Richard Branson believes in Employees comes first then clients, if you look after your employees clients come automatically. He knows that happy staff member means the most successful company and product. Creative Opportunity for Virgin Galactic Only 558 people from all around the world have had an experience to travel to Space so Virgin Galactic is going to open the opportunity for the rest of the world because of their passion and good talents. Virgin Galactic have already trust brand name under the Virgin Group from many years so there will be easy for them to attract more customers toward their business and do expansion of it. Virgin Galactic have many businesses under the name like Virgin Hotel, telecommunication, virgin satellite and so on which are linked to the Virgin Galactic like they have come for induction, business meetings, they can request to the customers to go there so ultimately that will expand the virgin business. Virgin Galactic has very strong financial back up and their reputation as a brand. 3. Five Generic Competitive Strategies In this section, we are going to discuss about the Porters five generic competitive strategies of Virgin Galactic. Generic strategy means basic kind of competitive strategy which holds across a number of business situations. Whereas competitive strategy is related with how a strategic business unit obtains competitive advantages in domain of its activities (Porter M. E). FIVE GENERIC COMPETITIVE STRATEGIES 3.1 Low-Cost Provider Strategy: A low cost strategy is that in which a company offers their products to the customers relatively at a low price. This strategy is usually adopted by any corporation, where the product has few or no competitive advantage. Moreover, it attracts the broad range of purchaser. Some companies using this strategy in order to earn low profits but incur high sales volumes. For instance, the Kmart uses the low-price strategy because it provides the goods to customers at low price (Arbuckle D. 2017). This strategy is not using by the Virgin Galactic. 3.2 Focused Low-Cost Strategy: The focused strategy is based on low cost and concentrates on narrow customer segment. It serves the customers in the niche market at a lower cost and lower price than the opponents. Most of the companies using this strategy to enjoy the high degree of buyers loyalty. This strategy is usually suited to the small business where the resources are limited and they only focus on the narrow market segment. In this narrow segment market, the suppliers have the less power of bargaining. For instance, Gap is a good example of it. (Arbuckle D. 2017) This focused strategy is not employing by the Virgin Galactic. 3.3 Best Cost Provider Strategy: The best cost provider strategy aims to provide buyers more value for the money by offering them updated products at a lower price than competitors. Moreover, it gives more emphasis on a minimal quality, service, features and performance of the product to the customers. This strategy works best in the market where the customers diversity make the product different and also sensitive regarding the value and cost of the product. For example, Amazon uses the best cost provider strategy and also uses by Toyota Company. This strategy is also not adopted by Virgin Galactic. 3.4 Broad Differentiation Strategy: The broad differentiation strategy distinguishes the firms product from their competitors with the qualities, which attract their customers with uniqueness of the product. The value added by the product uniqueness allows the firm to charge a premium price for it. This strategy is not suitable for small business but it is more useful for big corporations. For instance, Netflix uses the differentiation strategy. This firm offer to customers greater variety of movies and charge less price than rental stores by conducting its business worldwide over the internet and Starbucks is also using it (Edwards J. 2017). The differentiation strategy is not using by Virgin Galactic. 3.5 Focused Differentiation Strategy: This focused differentiation strategy concentrates on a narrow purchaser section by fulfilling the particular tastes and needs of niche members. It refers to the situation where a corporation selects the strategically differentiate itself from their competitors in a narrow market. This Strategy is using by the companies to promote the product with multifarious features, innovation, brand name and customers service in order to attract more customers towards them. Likewise, Virgin Galactic using this strategy because the target market is narrow and they are trying to serve its services to the niche market. The main focus of Virgin Galactic is to be more innovative and unique in space travelling. (Porter M. E.) The main reason for selecting this strategy is that it provides the better-quality services and good value to their customers in different ways. Virgin Galactic looking to be unique in the niche market along with some changes which are broadly valued by customers. The main emphasis of Virgin Galactic is on the safety of passengers in every aspect and also provides training to passengers about one week prior the flight. Virgin Galactic taking $25000 from public in advance who wants to fly during the first years of flights and wants to turn their dreams into realities. In addition to it, the motive of Virgin Galactic is to provide sub-orbital spaceflights to space tourists. The spaceship2 has double the crew and capacity to carry triple the passengers. However, Virgin Galactic has competitors but he always wants to serve the market first. The focused differentiation strategy has following benefits for Virgin Galactic Premium price for its product: This strategy allows Virgin Galactic to command a premium price for its product. Increased unit sales: A virgin Galactic sale has increase due to this strategy because near about 550 ticket holders in line who wants to fly with it. Brand loyalty: By offering better in flight amenities at a lower cost as compared to many domestic carriers Virgin is creating strong brand loyalty for itself and dollar value for its customers New plans: Therefore, due to strong bonding with customers Virgin Galactic plans to deliver payload low earth orbit of 100 kg to market under US$ 10,000,000 per mission. Research and Development: Virgin Galactic has strong capability in research and development. They use the modern technology for the development of their products. Creates value: Virgin Galactic uses this strategy but their main focuses on the cost value of the product versus other similar products in the market, thus it creates a perceived value among its potential customers (Kelchner L. 2017). BCG MATRIX OF VIRGIN GALACTIC High Price Low Quality High The above figure demonstrates the BCG Matrix of Virgin Galactic. In this matrix, X-axis represents the quality of products and Y-axis reveals the price of the products. Following table is comparing price and quality of different space companies. Virgin Galactic competitors Price Quality XCOR Benson Space company Space-X Virgin Galactic Blue origin Low Low High High Low High High Low 4. SWOT Analysis of Virgin Galactic SWOT: This is type of strategic tool like PESTLE and PORTER which can be used to determine the long term performance of company to make good strategic plan to overcome its weakness and to utilize opportunities in better way. As name of this tool reveals meaning of itself such as S is for strength and so on. S W International Brand Progressing in Research and development Emphasis on Safety parameters Employee Strength Brand Image Strong Planning by using reusable craft Less risky and More trustworthy Skilled workforce High industry growth rate Reasonable Price Costly Failing to protecting RFP for satellite business Overtaking by competitors Time consuming to accomplish their mission Brand portfolio Competitive market Bad craft structure Sustaining brand image Employing new and innovative ways of doing business First to market Growth rate and profitability Technology advancement Expanding global markets Lacking interest of people due to crash Government regulations Accessible to middle class people Lot of investment required O T 4.1 Strength Based on article, it is evident that company is on its success as slowly-2 it is progressing. Some of following are strength of company. International Brand: This Company have reputed image over the whole globe as this is operating different branches at different locations such as New Mexico, USA, Las Cruces. In the beginning they just have only one spaceport which is in Mexico but now they have made 2 or 3 other spaceports to other locations to make it convenient for their customers to enjoy service of them. Virgin Group which is parent company of it which has brand image from last number of years. As Virgin Group has different Product line, it offers variety of services to their customers such as virgin hotels, virgin media, virgin passenger flights under name of virgin Atlantic, virgin money and many more. So their parent company helps them to perpetuate their brand image at global level (essays writers, 2017). Progressing in Research and Development: This Company is going through research and development mode and getting progress. As initially they have made first space ship flight (SS1) which could accommodate only 3 person all together (1 pilot and 2 passenger). Now recently they have made another spaceship flight (SS2) which can accommodate 8 people all together (2 pilots and 6 passengers) (the verge, 2016). Emphasis on Safety Parameters: Safety is the main concern of their organization. They bother equally for the safety of both passenger as well as employees. They give one week training to passenger in advance and give training to employees as well (wixsite, 2017). Employee Strength: As employees are the key part of every business so their security is important concern for an industry which is well done by virgin galactic. Due to this employees are interested to work with this group. As without employees there is no business, so virgin galactic is lucky to have good employees (advisor gate, 2016). Brand Image: As Virgin Group is offering good and wide variety of services to their users so it has already branded and reputed image in market and people are used to their services and can rely on them (essays writers, 2017). Strong planning for saving money by using reusable craft: They have good strategic planning to build strong and compatible passenger craft which can be reused again to send them in space which can help them to save money that they can used to improve their services better. Less risky and Trustworthy: As it is already mentioned that safety is main concern of their company so less risk is involved. Their services are so trustworthy thats why notable celebrities (Angelina Jolie, Stephen Hawking, Tom Hanks and Prince Zulf Ali) have already booked with them to travel in space (review essays, 2017). Skilled workforce: As this industry requires more creativity which cannot be possible without the help of employees so it means that employees should be equipped with good skills and it has employed skilled person in their company which further helps them in gaining success (swotanalysis24, 2017). High Industry Growth Rate: This Company is growing at very fast pace as recently its growth rate jumps from 27% to 47% (advisor gate, 2016). Reasonable Prices: The Company should charge reasonable prices for their services over their competitors. Because this is the good way to attract more passenger and to maintain their interest. 4.2 Weaknesses Apart from having good points, this company has some negative points which hinder them from achieving success. Some of them are given below: Costly: No doubt this company is offering good services to their users but services are very costly as compare to its competitor. As XCOR Aerospace which is in great competition to it is offering high quality services at low price. As Virgin Galactic is taking $250,000 per person whereas XCOR is taking $95000 per person (advisor gate, 2017). Failing to protecting RFP for satellite business:- one of the weak point of their company is that they are not good at planning and do not have strong vision as recently they were fail to set up RFP for Satellite Business. They planned in 2010 to initiate this proposal but till 2012, they were not able materialize the flights. Overtaking by competitors: As it is already mentioned, their competitors are stronger than them as their competitors are working in this industry from long time so they more knowledge and experience than them. For Example, SPACEX which is another Competitor of Virgin Galactic who was first to start to create reusable craft before Virgin Galactic. So in this matter, that company overtook Virgin Galactic (quartz, 2017). Time consuming to accomplish their mission: Although their industry growth is at high pace but still they are taking lot of time to provide services to their customers. For example, till now they have just made 2 spaceships named SS1 and SS2. So their processing time period is very long (geocities, 2016). Brand Portfolio: As it is already mentioned they have good brand image due to offering of wide variety of services. But this is not proved fruitful to them because this has made them less capable to focus on any particular service by which they are losing control on improving their services rather making these worse (swotanalysis24, 2017). Competitive market: As Space industry is highly risky and competitive so to compete with their competitors, they should have strong vision and long term strategies to hit them. But this is the negative point of Virgin Galactic; they are not competing well to their competitors. Bad Craft Structure: Although they are trying to provide better, improved and reliable services to their passenger but still they suffering from some problems. For example, the recent crash which was due to catastrophic failure happened because of poor structure of craft (advisor gate, 2016). 4.3 Opportunities Apart from considering strength and weakness of internal environment of company, company can grab opportunities of external environment to improve their performance. Following are list of areas where they can improve: Sustaining Brand Image: This Company can perpetuate brand image of their parent company by maintaining good competition with their competitors because this is the main area where they are lacking. So they should focus on this (cayenne, 2016). Employing New and Innovative Ways of doing Business: Although this company is on path of success but still they are slow in Research department. So till now they have just made 2 spaceships. So this is good opportunity for them to improve their performance by bringing more innovative ways of operating business (wixsite, 2017). First to market: As this company was first in market as comparison to its competitor. So it is great opportunity for them to make good reputation in market to attract customers. Growth Rate and Profitability: Although they are growing well with accordance to time, but they can utilize their opportunities to improve more as they can expand their product line. For example, apart from providing space sub orbital, small satellites and orbital human space flight, they can offer more services to their users to increase their growth level (swotanalysis24, 2017). Technology Advancement: As modern era is totally based on technology and this company is lacking in technology so they should new techniques in industry to make it more competitive (swotanalysis24, 2017). Expanding Global Markets: No Doubt, they started to operate at an international level and they should continue with this because this is an effective opportunity for them to maintain their image. On the other hand, they can also expand business through advertising in schools, universities which can enhance knowledge of students as well about orbit (advisorgate, 2016). 4.4 Threats In addition to grabbing opportunities of external environment, there can be some threats in every organization which can hinders them to get progress. Some of these are given below which can create problem for virgin galactic. So they should know these things in advance. Lacking interest of people due to crash:- Due to recent happened crash, company is losing interest of people as they are not trusting anymore on them and wanted to take back their money which they deposited while registering with them (the verge, 2017). Government Regulation: As space business requires lots of knowledge of government concerns so virgin galactic should be aware of these concerns to avoid any types of governmental issues (advisor gate, 2016). Accessible to upper class people: one threat to company performance is that this is only accessible to upper class people who mean middle class and any other category people cannot have access to this (guardian, 2013). Lot of Investment Required: As this business requires availability of great amount of funds which is not possible without strong market position and they should be financially sound. And what is happening in virgin galactic as they are using revenues earned from other product lines and if they will not earn anything from other product lines then i