Sir Richard Branson has exhibited many different aspects of entrepreneurship in the development and growth of the Virgin Group of companies. He and his company have continually started new entrepreneurial ventures and disposed of the financially successful ones to help finance new ones. His first venture was selling records and magazines by mail order, while still at school; this became Virgin in 1970. He then developed a record label and record shops, which the company no longer owns. Currently, the company consists of 200 separate businesses and is best known for its airline, mobile phone, rail and financial services. He also operates joint ventures. Virgin Atlantic is 51% owned by Singapore Airlines and Virgin Railways is 49% owned by Stagecoach. The company changes its shape constantly, as new activities are started and old ones sold. In 1999 the company employed 25,000 staff and had a turnover of more than £3bn.
Branson is usually described as flamboyant and unconventional and not afraid to take risks. He has also been described as an agent of change, having challenged the conventional business model in the many markets he has entered; this has been rationalized as entering markets where the existing dominant firm is resting on its laurels, where competition barely exists and the consumer is not well served. In other words, he finds gaps in the market and produces things people need.
Virgin styles itself as a small company that takes on big businesses. Companies challenged by his strategy include British Airways, Coca-Cola, mobile phone operators, banks and financial service companies.
The group operates a flat organizational structure, with each operating unit kept small. For example, he does not operate a single, large airline but three smaller privately managed ones (at present) - Virgin Atlantic, Virgin Express and Virgin Blue; this not only makes the disposal of units and the start-up of new ones possible it also avoids disrupting the limited organizational structures of the group.
Virgin delivers its existing products and services in innovative ways and therefore, Sir Richard can be described as an entrepreneur because he is:
■ Alert to new opportunities to make profits.
■ Able to imagine profitable outcomes in an uncertain world.
■ Introduce new methods of production.
■ Create new markets and extend others by bringing in new consumers.
■ Willing to bear risk and uncertainty.
This chapter examined the concept of entrepreneurship. In doing this we analysed:
■ The main characteristics of entrepreneurial activity; these include a willingness to take decisions in conditions of uncertainty and to start new ventures based on imagined future outcomes.
■ A behavioural model of entrepreneurship showing both the sequential nature of the development of an idea into a successful product and, similarly, for the development of a new enterprise.
■ Entrepreneurial activity that is found inside existing firms and the key entrepreneurial activity in starting up new firms. The number of people becoming entrepreneurs and willing to start new firms are influenced by what are termed ''push'' and ''pull'' factors.
■ Some empirical evidence on the supply of entrepreneurs and the birth of new firms.
The chapter demonstrated the multifaceted nature of entrepreneurship and the role of entrepreneurs in starting up new firms. Entrepreneurs are also active in existing firms by changing the range of products produced and the boundaries of the firm. These aspects will be examined in the Chapter Summaries of subsequent chapters.
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