Market Extensions

That Virgin is the KING of "market extensions."

Record store. Recording studio. Record label.

I believe there is a Virgin Haulage - probably originally created for the distribution of the records and other Virgin related businesses - such as moving food to the Virgin aircraft, and moving Virgin cola around.

So Virgin's business approach could be... whatever our business spends money on is a business we would be well advised to own. Thus we get to keep more of our money PLUS have a business which can be profitable in its own right.

That would be similar to a cleaning business buying a cleaning supply business, and a cleaning equipment repair business, and a cleaning training business.

Or your vacation tour business owning a few buses, restaurants, motel/hotel, duty free store and other stuff holiday makers spend money on. So ultimately your businesses: book the tour (like a travel agent), conduct the tour in buses they own, and take the tourists to shops and sights they also own. The Japanese do this kind of market-extension all over the place.

Virgin in the FUTURE

Virgin Galactic - Virgin commercial space travel

Virgin Bank - Branson will take on the four big banks in Australia

Currently negotiating a deal with Arnold Schwarzenegger, the Californian Governor, to base his new Virgin USA airline in Los Angeles. The US domestic airline is expected to create up to 1500 new jobs.

A major film producer purchased Richard's autobiography. This means the big screen will in the near future project his life in movie theatres around the globe. Rumour has it that Russell Crowe is in the running for the lead role, along with Brad Pitt, Jude Law and Colin Farrell.

Sir Richard's Motivation

My biggest motivation is to keep on challenging myself.

I see life almost like one long University education that I never had - every day I'm learning something new.

When you talk about a company, it's a living, thriving thing and it keeps the world going around.

And for me to learn about everything there is to learn about life, whether its how the airline business works, how the music industry works, how artists tick - I just find it all absolutely fascinating.

I love people. I thrive on people and motivating them and then getting that motivation back from them. Its great fun.

My inspiration stems from entrepreneur Freddie Laker, who convinced me to embrace photo opportunities and take part in public relation events.

Virgin Facts

Richard has named many aircraft after his friends and family. 'Freddie' was named after Freddie Laker, in appreciation of the support he showed when Richard was starting Virgin Atlantic.

Another plane, 'Eve' is named after his entrepreneurial mother, whom he cites as a constant inspiration.

Dubbed by the media as the 'Barnum of Business', after the famous circus promoter PT Barnum.

Bransons Stunts

Stunts create an emotional connection with an audience that lasts forever.

"The stunts have had the effect of putting Virgin on the map worldwide and have help created our brand. The fact that we push things to a limit has given Virgin an edge that maybe we wouldnt have if I hadnt done them".

"But they're great personal challenges and they've made my life that much fooler as a result. And I'm lucky to have survived them".

Here are a few of Richard's stunts over the last 20 years:

1984

Richard and his crew took to the ocean on the Virgin Atlantic Challenger to promote Virgin Atlantic, his new airline. The boat sank and was rescued.

1986

Virgin Atlantic Challenger II crossed the Atlantic Ocean in the fastest recorded time ever, partly to promote the Virgin brand.

Virgin obtained UK$20 million (AU$48.2 million) worth of exposure from this endeavour, at a total cost of UK$500,000 (AU$1.2 million).

1991

Richard crossed the Pacific Ocean from Japan to Arctic Canada at speeds of up to 392km per hour in a balloon measuring 2.6 million cubic feet, again to promote the Virgin brand. He flew a distance of 4187km, breaking all existing records.

1994

He drove a WWII tank into Times Square, New York, and pretended to shoot a gun at the Coca Cola sign - all to launch his new beverage, Virgin Cola. This spawned widespread newspaper coverage and led to a five-minute segment on NBC's Today Show and a national audience of millions of Americans - at no cost to Virgin.

1996

Richard donned a wedding dress for the launch of Virgin Brides in Manchester, England. A former flight attendant, with the courage to tell Richard her business idea, had her dream come true when Richard agreed to start the bridal services company.

1997

Virgin Atlantic Flyer, the first hot air balloon ever to cross the Atlantic Ocean, blasted the Virgin brand across the globe. It reached speeds in excess of 208km per hour and was the the largest hot air balloon flown at 2.3 million cubic feet capacity.

2000

Richard rolled into Sydney's Pitt Street mall in a tank and flew into a press conference hanging from a helicopter - all in the name of spreading the word and raising the Virgin profile in a new market. He also led a procession of four jeeps across the Sydney Harbour Bridge and into the CBD. Aboard a light armoured vehicle and dressed in a red, branded commando outfit, he made sure he stopped on the way to storm the Optus and Telstra head offices.

2001

At an Australian press conference, Richard tore up a cheque he said was from Ansett Airlines, declaring that Virgin Blue was not for sale. This stunt and several others performed in Australia reminded his Australian target market that Virgin wasnt going anywhere, and that Sir Richard Branson would never abandon his efforts to create a lasting low-cost alternative airline.

2003

He issued a cheeky challenge to Geoff Dixon, the Qantas boss, the day before the Virgin Blue float was confirmed. Richard said he'd don a Qantas hostie's uniform if his Virgin Atlantic brand didnt commence cross-Atlantic flights to Sydney within 18 months. And he dared Geoff Dixon to don a dress if it did. The blunt message was sent to his competitors and made a clear point that virgin would not be threatened by Qantas.

Over the years:

- Posed naked for the cover of his autobiography
- Held Ivana Trump upside down at a party
- Dressed as a pirate, a Zulu warrior and a Chinese warrior to celebrate Virgin's inaugural flights to new destinations, such as Hong Kong and Africa.

Branson - Philanthropy

Health Care Foundation - England

Condom company - England

2003 Branson held a concert with Nelson Mandela in Cape Town called 46664 (Mandela's prison number).

More than 60,000 people attended the event and proceeds went towards setting up a foundation to tackle the AIDS problem in Africa.

"The area we are looking at is health prevention, trying to help prevent people getting ill before they actually get ill, whether it's AIDs, Malaria or cigarettes".

Virgin Strategy: System and Methodology

Gut Feeling

"I never get the accountants in before I start up a business"

Its done based on gut feeling. Reasons behind starting a new division are rarely financially driven.

Its about doing things differently and doing right for the consumer.

"If we make money out of the business, it's a bonus"


Targeting Lazy Industries

Entering markets controlled by monopolies and duopolies.

He loves nothing more than taking on large companies especially if they are taking advantage of their customers with their market dominance.

"It's simply looking at big, fat complacent industries and seeing whether we can get in their underbelly and tear it out"


Culture

All ventures has the ethos of 'fun' instilled in them.

"Apart from the passion of the business, we make sure that any business we go into, we do it with style, panache, great value for money, and that we have a lot of fun doing it"

"I like to employ the kind of managers that are willing to go out partying with their staff until the early hours of the morning then get up early and keep going"


Staff Morale

"Its important that staff really believe that they're working for the best company that they can possibly work for"

They have to be proud to say they work for Virgin.


Staff Incentives

Richard is a big believer in profit or equity sharing.

"We give the staff stakes in the company, and the key people quite big stakes in the company"

"Many of the original staff who started with Virgin Blue became millionaires from the float"


Customer Focus

Virgin has a strong customer policy.

"We want to be able to show that when the consumer comes into contact with us, they have a great experience"

"Our aim in life is to create the most respected brand in the world - not necessarily the biggest, but the best, and that's what were striving to do"


Doing Things Differently

Innovative and different

"We, have a lot of fun trying to rewrite business history and completely change sectors so they're never the same again"


Value For Money

"The credit card is going very well because its unbelievable to think that there's a country that still charges a monthly fee for the privilege of giving you a credit card"

Nobody else in the world does that.

The Australian public has had to put up with some abysmal, monopolistic behaviour by some big companies, which leaves those companies ripe for the taking"

Branson Profile

Profile:

Age: 54
Est. Net Worth: US$2.6 billion (AU$3.2 billion)

Businesses Established:

Virgin Blue ($2.3 billion)
Virgin Credit Card
Virgin Mobile (UK - AU$2.37 billion)

Business Practices:

Continuously writing notes, ideas and plans in exercise books.

Often speaks one to one with his staff, regardless of their role or position within the Virgin Group.

Virgin - A Global Brand Name

Every new Virgin business venture has what 99% of other businesses dont have - a globally recognised brand name.

Creating brand value is like creating a personality.

The Virgin brand name has been around for over three decades.

Consistency is the key with branding.

A 'Way of Life' brand.

Virgin Company Policies

1. All staff have Richard's address, so they can mail him any ideas they have for improvements.

2. For the people who work for you or with you, you must lavish praise on them at all times.

3. The key to encouraging innovation within the Virgin ranks is to listen to any and all ideas and to offer feedback.

4. Richard writes his staff letters to tell them everything that is going on and to encourage them to write him with any ideas or suggestions. Sometimes people come to him with personal problems, while others have suggestions for improvements in their companies.

5. Go out with your staff members and drink and socialise. They dont lose respect for you because they see your human side. They actually gain more respect for you.

Virgin Group - As one entity

Employs around 36,000 people worldwide

Combined revenue of approx. US$10 billion (AU$15 billion).

Virgin Mobile

Virgin Mobile UK

Fastest growing mobile phone company in history.

Launched in 1999.

Signed up more than 15,000 new customers each week since launch.

Today, 3.14 million customers.

3000 staff.

Annual turnover of UK400 million (AU$947 million)

Virgin Public Companies

Virgin Blue

Virgin Blue

The company was launched in August 1999

- 12 employees
- $10 million capital from Richard
- 2 aircraft
- Determined CEO by the name of Brett Godfrey

Today Virgin Blue is valued at $2.3 billion. Godfrey's slice of the company exceeds $80 million. (within 5 years)

Figures:

Within four years - revenue has grown to more than $1.2 billion per annum - profit of $130 million.

Fleet of 40 jets and transports almost one million people each month. (more than 30% of the domestic market against Qantas)

To help stop the market share Qantas has only now launched Jetstar.

2800 Virgin staff.

Commenced flights to New Zealand.

Recipe For Success

1. Combine a passionate and skilful managing director with the right mix of employees
2. Add a staff incentive scheme involving profit and/or equity sharing
3. Affix the Virgin brand
4. Let the business cook for three to five years

The results are impressive!

1. Time Management Skills
2. Delegation Skills

Sir Richard Branson Quotes

These are some of Richard's famous quotes:

"The most respected brand in the world"

"You cant be a good leader unless you generally like people. That is how you bring out the best in them"

"Look for the best and you'll get the best"

Firing is seldom an option

"Every day I meet new people, challenging them and being challenged. Virgin is poised to make a real difference"

Branson: The Millionaire Maker

Richard turns his employees into millionaires.

It's just not one or two; there are hundreds of Virgin millionaire employees working for more than 200 Virgin businesses worldwide.

Welcome to the Richard Branson and the Virgin Group Weblog

This is the exciting and new blog on Sir Richard Branson and his Virgin empire. Information and details collated from numerous publications and articles about Mr Branson will be added here. Virgins business structure, how Virgin came about, Bransons tips, advice and many secrets.

So for all you Virgin fans, here is the one stop blog for all you need to know about the billionaire entrepreneur Sir Richard Branson.

Enjoy, Learn and Grow!

Desmond R. Daye

Business of Asset Building

Branson is in the business of asset building. He takes a long term view of each business and focuses on growing the company's overall worth as opposed to quarterly and annual profits. He sees the goal as being able to sell part or all of a company in 5-10 years for a lot more then he invested in it, then using those funds to build bigger business and expand the Virgin Group.

Seven Keys To Virgins Success

1. Trial and Error

"If you arent willing to try everything and make a mistake, then you'll never make anything of yourself"

2. Branding and Brand Awareness

"Of course, there is a method to my madness. When you are entering into a new industry, for example, it helps to do something to get your name on the front pages."

When businesses are sold or the brand leased, annual royalty fees are charged and, as part of the agreement, a right to cancel at short notice if the other party misuses or decreases any value in the brand.

3. Barriers to Entry

"We need to find new ways to stay ahead of the pack because the best will never go bust."

By strengthening the brand and breaking new markets, Virgin is creating a barrier for others to follow. When they enter an industry or market, 33 years of brand values and credibility follow them, something its competitors dont have.

4. Protect the Downside

"When taking a risk, make sure to protect the downside."

Having built a reputable brand that worked, he started using his own brand to attract investment partners who could inject cash.

There are occasions when Virgin puts in all the cash at the start then attracts investors later.

5. Self Belief and Gratitude

"Its just a matter of scale, but first you have to believe you can make it happen."

"My interest in life comes from setting myself huge, apparently unachievable challenges and trying to rise above them."

Life is short and its necessary to become 'fearless'.

The drive is from focusing on the reward as opposed to the risk.

Find good people and let them get on with it.

6. Compulsive About Expansion

"Business is a fluid, changing substance, and, as far as I'm concerned, the Virgin group will never stand still."

Diversification

7. Patience

"Remember, there is always another deal. Deals are like London buses, there is always one coming."

Virgin Businesses Setup Process

The process of setting up some Virgin Businesses came:

#1. Market research to establish if there is a sustainable business and what is its competitive advantage.

#2. Find a strategic investment partner.

#3. Set up the company, retaining controlling share and hiring industry experienced staff.

#4. Launch the company with a publicity stunt and media coverage.