Analyse de la chaîne mondiale de commercialisation de biens culturels Virgin Megastore (document en anglais)

I. Analyses of the macro and micro environment of Virgin Megastore 3

A. The method PESTEL of analysis of the macro-environment 3

1) POLITICAL 3

2) ECONOMICAL 3

3) SOCIAL 4

4) TECHNOLOGICAL 4

5) ENVIRONMENTAL 4

6) LEGAL 5

B. Internal analysis 5

1). THE POTENTIAL INCOMERS 5

2) THE COMPETITORS OF THE SECTOR 6

3) THE CUSTOMERS 6

4) THE SUPPLIERS 7

5) THE SUBSTITUTES 7

II. Global Analysis with the model SWOT and the explanation of the failure of the strategy of Virgin Megastore 8

A ) SWOT analysis 8

1) THE STRENGHTS 9

2) THE WEAKNESSES 10

3) THE OPPORTUNITIES 10

4) THE THREATS 11

B) The explanations of the failure of the strategy led by Virgin Megastore 12

Virgin is a family group with very diverse activities headed by an atypical and charismatic boss Sir Richard Branson. The latter is at the head of a holding of over 200 companies in 34 countries and operate on five continents, mainly in the UK, USA, Canada, Africa, Australia, Asia and several European countries. The head office is based in London and employs about 50,000 people. Virgin is characterized by a rather successful in sectors considered difficult diversification. The group is present in 7 different market segments:

¤ The shopping segment

¤ The health segment

¤ The financial segment

¤ The media and telecommunications segment

¤ The environment and social segment

¤ The leisure and entertainment segment

¤ The travel and tourism segment

The VIRGIN group is very diversified but here in this analysis we going to consacrate more particulary to the media segment with the virgin megastore.

Virgin Megastore is a chain of commercialization of cultural properties, created by the British Richard BRANSON, whose first brand was opened in London in 1971. The chain had more than 200 signs situated in more than 20 countries of the world before the closure of a large number of them. However, today, the network extends to more than 35 stores in all France, and to 20 Megastore under license abroad.

In spite of the undeniable success of the diversification strategy of Virgin, some of failures can be pointed, in particular Virgin Megastore. Our analysis is going to show in which environment evolves Virgin Megastore, thanks to internal, external and competitive analyses of the company. Then, we will explain why the strategy organized in the branch of Virgin Megastore doesn’t work. Our analysis will concern exclusively the Virgin Megastore in France which are recently in voluntary liquidation. It is going to allow us to highlight the problem of an obsolete strategy.

I. Analyses of the macro and micro environment of Virgin Megastore

Analyses du macro et micro environnement de virgin megastore

La méthode PESTEL d’analyse du macro-environnement

A. The method PESTEL of analysis of the macro-environment

The method PESTEL is a tool of diagnosis which analyzes the environment by distributing its influences in six big categories: political, economic, sociocultural, technological, ecological, legal. Its goal is to establish a check list which allows to identify the environment’s elements susceptible to affect in a long-lasting way the activity of the company.

1) POLITICAL

Taxation of Cultural Property in France is High. However, of draft laws are underway to reduce that weight is the taxation on the sale of cultural property in France for companies established in France. IF this bill passes it will allow Fnac and brands such as virgin to be more competitive especially with respect to Amazon. (projet de loi N° 535 rectifié, http://www.senat.fr/leg/ppl11-535.html)

2) ECONOMICAL

The physical distribution of cultural property entered a phase of crisis characterized by a decrease in the physical sales. This one is pulled by the market transformation of cultural property on the Internet, characterized by a continuous progress of the e-commerce which leads to a progressive tipping of the market towards the digital contents, favored by the multiplication of the offers, the diversity of access modes and the models of pricing.

The digital revolution gives birth to a new distribution circuit - The e-commerce. It made possible the dematerialization of the cultural contents, which become direct competitors of the physical media that are the CD, the DVD, the book,…

3) SOCIAL

We notice an evolution of the consumption practices of cultural property which turn more and more to the e-commerce, answering a need of mobility and a search of practicality. We see the appearance of new practices of purchase concerning the cultural property and an evolution of the consumer behaviour in the use and the consumption.

Furthermore, we notice practices which harm the physical business of cultural property, such as the illegal download which doesn’t stop growing.

4) TECHNOLOGICAL

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The physical business of cultural property (music, book, game and video movie) returned into the context of digital revolution, characterized by an important technological evolution and the development of Internet.

5) ENVIRONMENTAL

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Companies have important incidences on the environment; they have to respect the environmental standards

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