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Are Virgin Really Successful?

Submitted by Kimmy25 on February 21, 2008

Category: Miscellaneous
Words: 556 | Pages: 3
Views: 136
Popularity Rank: 93,759
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This presentation looked at the problems Northern Rock bank faced and how Virgin intended on saving the bank.

In September 2007 the Bank of England had given emergency financial support to the UK's fifth-largest mortgage lender, the Northern Rock. This had made the Newcastle-based firm the highest-profile UK victim of the global credit crunch, triggered by the sub-prime mortgage crisis in the US. Essentially, the firm needed to secure access to a greater flow of cash so that it can continue its business.

Virgin's intention to takeover Northern Rock is a simple attempt to capitalise and externally grow the company/ brand. This takeover however, is highly unusual as it proposes to protect the interest of all those involved in the crises. This includes the existing shareholders and customers, and tax payers. Branson published the proposal in the Metro newspaper to reassure Northern Rock customers of his personal commitment to finding a solution.

Ansoff's product/ market growth matrix was used to expose Virgin's use of Northern Rock as an attempt to penetrate the financial market. Through market penetration Virgin seeks to achieve four main objectives, which are to increase its share of the mortgage market, re-secure its dominance of growth markets, restructure a mature market by driving out competitors, and increase usage of existing customers.

Pearson's uncertainty map addressed the nature of the uncertainty regarding the takeover. Quadrant four (combining market opportunities with technical capabilities) of the framework describes activities that are dominated by improving existing product. This quadrant illustrates innovative activities where there is most certainty. This means that Virgin is certain about their eventual target and means of achieving this target. Ultimately Virgin's output will be to rebrand and re-launch the Rock as Virgin Money and reclaim it dominance in the financial market. The...

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