SupportingIdeas
SomeofVirgin'smistakesarelegendary:
■RichardBransongotcaughtin1969exploitingaloopholeingovernmentregulationsrelatingtosalestaxonrecords.Heillegallystatedrecordswereforexportandthereforenotsubjecttosalestaxwheninfactallthatwashappeningweretherecordswerebeingloadedintovans,takenacrosstheEnglishchannelandthendrivenbacktotheUK.Intheend,CustomsagreednottoprosecuteaslongasVirginRecordspaidbackthreetimesthetaxthathadnotbeenpaid.
■In2007,atrainoperatedbyVirginTrainsleftthetrackatmorethan100milesanhour,injuringtwenty-fourpeopleandkillingonepassenger.
■In2003,Virginspent$20milliondesigninganewMP3playerandbringingittomarketonlytofindthatApplewasdoingthesamewithitsnewiPod.Apple'siPodwascheaper,smallerandbetterthanVirgin'soffering,andtheproductbombedinthemarketplaceleavingVirgintowriteoff$20million.
■VirginAtlantictooksolongredesigningitsupper-classseatsin2000thatitsmainrivalBritishAirwaysgotwindofwhatVirginwasuptoandintroducedanevenbetterseat.VirginAtlanticwasforcedtodumpitsnewseatsafterspending100millionpounds.
■VirginenteredintoacolawarwithCoca-Colain1994.VirginColalostmorethan$25millionbeforetheplugwaspulled.
■WhenVirginlauncheditsU.S.basedmobilephonecompanyVirginMobileUSAin2002,thecompanydidwellatfirst.By2005,however,theprepaidmobilephonemarketintheUnitedStateswasadogfightwithbiggercompetitorshavingdeeperpocketsenteringthemarketplace.Atonestage,itlookedlikeVirginMobileUSAwouldhavetodefaultonaloanithadtakenoutearlierforoperatingcapital.ThecompanyalsohadapublicdisagreementwithNokia,itsmajorhandsetsupplier.Ratherthanstandingaroundandwaitingforthecompanytofallover,themanagementteamoverhauleditselfandmadethenecessarychanges.ByDecember2006,VirginMobileUSAhadgrownitscustomerbaseto4.6millioncustomerswhowereusing950millionminutesofmobilephonetimeamonth.VirginMobileUSAwentpubliconOctober11,2007,selling27.5millionsharesinanIPOat$15ashare.