Introduction
Virgin Money is a giant firm that offers various financial products on a platform of three distinct brands. Although its products were initially available in the United Kingdom in the mid 1990s, the management has focused on expanding the business into other nations. Due to the independence that typifies various entities of the organization in different countries, it is critical to underscore the entities also offer unique services. This paper aims at analyzing the issues identified in the case study and discussing whether the business establishment would succeed in Canada.
Analysis
In the context of the information provided, it would be stated that Virgin Money would succeed in Canada. One important thing to note is that Richard Branson, the founder of the Virgin Group, has always concentrated on providing affordable services to consumers across the world. In the case study, he says that innovative and creative ideas are key to the organization’s culture. Thus, he believes that the firm would be positioned strategically to take advantage of the huge opportunity that the Canadian market presents.
In view of the business tactics that the company utilized to enter the US, South Africa, and Australia, it is evident that it would expand into the new market and break even within a relatively short period. In the three markets, management teams have focused on learning the approaches to offer financial services that are adopted by traditional banks. Thereafter, they use models that are exemplified by more affordable charges and innovative products, which would meet customers’ dynamic needs. In fact, Virgin Money reduces its costs of doing business by emphasizing on low charges that correlate with improved customer service.
PEST framework could also be used to analyze the case study. Political factors in the nation are conducive. It is evident that the government is focused on implementing policies that attract and retain foreign investors. Economic factors include inflation rates, exchange rates, and economic growth trends, among others. In this context, the factors would positively impact the organization in relation to business decisions. For example, the relatively low inflation rates in the nation would enable the firm to make important short-term and long-term decisions.
Social factors in Canada would help the business establishment to operate successfully. Social factors would correlate with demand for unique products that would be offered by the subsidiary of the Virgin Group. For example, it would be expected that the company would recruit workers based on the prevailing demographics. Lastly, it is clear that technological factors in the country would support innovative financial products. This implies that Virgin Money would focus its services on a stable information technology platform, which would be essential to achieve exemplary results.
Based on the PEST analysis, it is clear that the macro-environment factors would support operations of the firm. When the factors are coupled with strategic approaches, it is no doubt that the company would produce excellent results. A business analyst in the case study was quoted saying that Virgin Money does not take risks directly, but it focuses on forming partnerships that reduce the level of negative impacts of risks in any market.
Recommendations
It would be recommended that the management should focus on the following:
- Identifying gaps in the financial sector in the country.
- Identifying the costs of doing business in the nation.
- Carrying out a CAGE analysis that would help to determine the best market niches.
- Determining the best approaches to offer financial services in Canada.
- Partnering with other businesses so that they would reduce risks.
Conclusion
The business model of Virgin Money is based on high levels of creativity and innovation. With regard to expanding into Canada, it is apparent that the firm would succeed. Thus, the management would be advised to take the broad step by adopting the recommendations in this paper.