I like how Richard Bransons thought process behind running a global brand like, Virgin, is to run it as a series of small businesses bearing the same overarching brand.
By running each area of the Virgin brand as its own business entity (Virgin’s airline, trains, financial businesses, etc. all running as separate businesses under one brand) Branson ensures enough revenue diversification to see through any one entity’s failure as the others pick up the slack.
Perhaps, it’s a concept he learned in his early days running Virgin Records. The basic concept is, a record label has several artists on its roster, some of those artists will sell well and others may not, but by having multiple streams of income spread across separate entities (in this case artists/albums) if all sell well things are really good, if one or two do not sell well it won’t sink the whole operation. The trick is to have the majority of artists sell well. Also, if the diversity of artists is enough to overlap audiences into new areas and vice versa it can create a great cross-pollination that can build brand loyalty, and certainly more profits. Branson understands this on a global scale with various business ideas and industries.
I like how Branson talks about adapting his businesses as their model evolves or is no longer viable. The example he gave was how Virgin’s music retail stores began to add films and video games to it retail product offerings because music CD sales were declining. Because of the audience the Virgin music retail stores served, I believe, was Branson’s catalyst for coming up with Virgin mobile (pay as you go mobile phones and plans that appeal to young tweens and teens). Essentially, if Branson can justify his interest in moving into a new market or industry with the Virgin brand he’ll adapt what he’s doing to move in that direction, and because Virgin is actually made up of a bunch of smaller business entities Branson keeps Virgin nimble enough to make such moves happen.
The Virgin brand itself is one of innovation and outstanding customer service/experience. I think that’s Branson’s general litmus test – any Virgin endeavor needs to meet that criteria.
Posted by: Nick Venturella