WEEK 14

1. Difference Between Corporate Level Strategy and Business Unit Level Strategy

Corporate Level Strategy: It refers to the overall strategy that affects the firm as a whole. Making decisions on highest level falls under this strategy that have an affect on several business units. It helps to decide which markets to compete in and where, geographically, to operate. 

Business Unit Level Strategy: It is a low level strategy that competes in a particular sector. It is mainly deals with gaining a competitive advantage in the market.

Corporate level strategy	Business Unit Level Strategy
Focuses mainly on the issues that affect the firm as a whole	Focuses mainly on specific business unit
It is developed by board of directors	Formed by individual mid-level managers
It is long-term strategy and cannot be changed frequently	It can be changed regularly in order to respond to changes in the markets
Strategic issues include financial structure of the firm, mergers and acquisitions, and allocation of resources	Its strategic issues include the pricing and marketing strategies

2. Discuss the parenting style of Virgin group

Virgin group is a British multinational branded venture capital conglomerate company. The core business areas of the company are travel, entertainment and lifestyle and it has more than 400 companies worldwide.

Virgin believes in making a difference and believes that they are different from rest. The model of the organization is to develop each business separately with its own shareholders and management. Since the company comprises of large collection of businesses, it has low parental control over them. It has various strategic business units (SBU). “Companies within the Virgin group are part of a family rather that a hierarchy”, the SBUs in the virgin group are separate and independent. The decision-making is decentralized; each SBU is empowered to run their own affairs, yet another companies help one another. This states that it focuses on each business unit responsiveness to the centrally locates capital and monitors. The parent company mainly acts as a parental developer.

The success of the company is based on the corporate parenting strategy, i.e., every new business unit inherits company’s brand name, values, management styles, support and access to resources not expending resources to create them.  (examiner.com, 2013)

Richard Branson said in 2005, “ Our model is to develop each business separately with its own shareholder and management. In this way we can concentration the job in hand, rather than be a part of some enormous and faceless conglomerate.”

As McQuade said in his research “Virgin group has been described as a ‘keirestu’ organization-a structure of loosely linked autonomous units run by a self managed tams that use a common name.”

References:

Virgin Group. Virgin Corporate History. [Online] Available at: http://www.virgin.com [Accessed on 8 Oct, 2013]

A Company Profile: Virgin [Online] Available at: http://www.examiner.com/article/a-company-profile-virgin, [Accessed on 8 Oct, 2013]