Academic journal article Journal of the International Academy for Case Studies

Richard Branson and Virgin, Inc

Academic journal article Journal of the International Academy for Case Studies

Richard Branson and Virgin, Inc

Article excerpt

CASE DESCRIPTION

This case focuses primarily on entrepreneurship and the problems facing entrepreneurs in today's volatile economic environment. The case is appropriate for courses in entrepreneurship, small business management, and strategic management. The case examines the life of Richard Branson and Virgin, Inc. and has a difficulty level two. It is appropriate for freshmen and sophomores. It can be taught in a 75 minute course period and the case preparation time is approximately two hours.

CASE SYNOPSIS

Richard Branson built a billion dollar company based on numerous entrepreneurial endeavors, however he was facing one of the most difficult times in his career. The global economic crisis had a significant negative impact on his companies' revenues and earnings. Virgin, Inc. was down 40%. The world was stuck in the worst economic crisis since the 1930's. The Dow Jones Industrial Average (DJIA) had collapsed 55% from 2007 to 2009 and the banking system was on the verge of collapse. Yet, Branson was optimistic because he was thinking about what opportunities lay ahead. He had five billion dollars in cash and needed to determine what strategies he must utilize to manage and grow his firm through this chaos.

INTRODUCTION

Sir Richard Branson was pontificating as he was flying in his hot air balloon trip from England to the United States. He had built a billion dollar company based on numerous entrepreneurial endeavors since his youth. As he reminisced about his life, he thought diligently about the dire economic situation the world was facing in March, 2009. The global economic crisis had a significant negative impact on his companies' revenues and earnings, they were down 40%. Furthermore, a lack of consumer spending and a new all-time low in consumer confidence were all having negative impacts on his businesses.

Virgin was trying to determine how they were going to navigate during the worst recession the United States had seen since the Great Depression. (1) The Dow Jones Industrial Average (DJIA) had collapsed 55% from 2007 to 2009 and the banking system was on the verge of collapse. The stock market had not collapsed like this since the Great Depression when the stock market fell by 89% from 1930 to 1932.

Yet, Branson was optimistic because he was thinking about what opportunities lay ahead. He had five billion dollars in cash and needed to determine what strategies he must utilize to manage and grow his firm through this chaos.

RICHARD BRANSON

Born in England on July 18, 1950, Sir Richard Branson's mother was a stewardess, father was a lawyer, and grandfather was a judge. Branson remembers his childhood with his two younger sisters as happy. His parents encouraged independence.

Branson's confidence in his ability to analyze a situation and make it work was evident early. Although he was a mediocre student, Branson insisted that he could run the school he attended more effectively and efficiently than the headmaster. One aspect of the school that Branson thought he could improve was the creation and enactment of school rules. Branson insisted that one rule he could improve was, "Allow all sixth-formers [final year students] to drink two pints of beer a day." (2)

The lessons that Branson learned and his personality traits were fundamental to his business success. Branson's mother, Eve, focused on challenging her children so they could enhance their confidence, growth, and development. According to Branson, "I remember that my parents continually set challenges for us. My mother was determined to make us independent." (3) Branson's mother was raised in a family that encouraged women to strive to live more than just a domestic existence. She had drive and determination and wanted to instill this in her children. By the age of 27, Branson's mother was married to Ted Branson (Richard's father), was a dancer, and was performing in local London theaters. …

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