Virgin Group Company Essay Example | Topics and Well Written Essays - 2750 words

Virgin Group Company - Essay Example The Virgin Group is considered to be one of the world’s Superbrands, receiving regular industry-generated rewards and accolades for establishment of a successful business model built on effective marketing promotion. Maintaining presence in the United States, the United Kingdom and Australia, this multi-national organization maintains significant brand recall and recognition worldwide that gives it many new market entry advantages for foreign direct investment. A Virgin Group Company, Virgin Galactic, was founded in 2004 under the premise of providing space tourism to consumers whilst also advancing aerospace knowledge through a business model that supports space-based research. Virgin Galactic is currently working under a multitude of partnerships with reputable agencies such as NASA to develop space-faring tourism vehicles slotted for launch in 2013. The company’s founder, Sir Richard Branson, is currently doling out millions of Pounds to license Virgin Galactic produ cts and services, attempting market entry in the United States for this revolutionary and innovative brand supported by Virgin Group superbrand status. This report highlights the impact of globalisation in this new market, the competitive advantages gained through this new business model, and provides a critical evaluation of market entry strategy developed by Virgin Group and Richard Branson. 2. The dynamics of Virgin Galactic Virgin Galactic is still in the development and construction phases in the space tourism industry. In 2009, Virgin Group contracted with Aabar Investments PJSC in the United Arab Emirates in which the company agreed to invest $280 million USD to assist in developing the space tourism industry (Space News 2009). Aabar Investments took a 32 percent ownership in Virgin Galactic, making them one of the largest venture capitalists supporting the Virgin brand. NASA, an American space organisation, also invested over 1.5 billion dollars to rent lab space in suborbit al vessels and for contract to resupply the International Space Station upon launch of Virgin Galactic’s service (Del Castillo 2012). The space tourism industry is an untapped market, an innovation from conception to actual impending launch. To facilitate all of the operational components necessary to achieve a viable space tourism business model, Virgin Galactic must invest considerable capital resources. This involves establishing a cost effective and efficient supply chain consisting of multiple vendors in multiple industries (e.g. technology, metallurgy, software support systems, etc.). Virgin Galactic is currently developing an entire fleet of space tourism vehicles, each vessel maintaining its own focus for research and development as well as consumer-centric tourism services. The United States represented the most viable market for entry due to the ease of distribution supported by a vast and well-developed distribution infrastructure in the country and the consumer in terest in space tourism as a potential lifestyle enhancement. To achieve the return on investment required on preliminary capital expenditures in the billions of dollars, Virgin Galactic had to identify a target market that would provide the best opportunity for revenue production upon launch of the tourism model. Figure 1: Ghemawat + AAA strategic framework applicable to Virgin Galactic Source: Ning, L. (2012). The most important