Virgin Megastore Company Business Model

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Table of Contents

Executive Summary
Introduction
Reframe the Problem
Collecting the Data
Looking for Patterns
Creating Key Insights
Coaching Plan
Reference List

Executive Summary

A trend in employment can be seen among several of the foreign brands that have entered into Dubai as of late, wherein younger employees have been chosen over their older counterparts. Stores such as Apple, Virgin, and Levi’s seem to hire individuals that are between 21 to 27 years of age.

This particular trend in employment is apparently due to the desire of the brands to better relate to their respective consumer niches by presenting a facade that is more relatable, namely individuals that have the same interests as them and are more physically familiar. However, it should be noted that there is a considerable level of employee dissatisfaction at work when it comes to the various workers found at the Virgin Megastore in Dubai.

Introduction

Virgin Megastores focus on a business model that utilizes a large store format to sell a variety of media-related items. It is similar to the concept utilized by RadioShack yet far more aesthetically pleasing. Despite the relatively pleasing work environments, it has been noted that the store had a relatively high level of employee “churn”.

Churn rates refer to the number of employees that leave a company as compared to the amount that are hired. An ideal scenario would be relatively few people leaving the company since this ensures that experienced workers are there to maintain the standard of operations that the company needs.

Reframe the Problem

Taking this into consideration, an examination needs to be conducted in order to determine why so many employees are leaving. This problem could be due to a variety of possible reasons ranging from the work environment, the peer pressure, low salaries or an assortment of other possible reasons that could be potentially analyzed through observation.

It is the assumption of this report that the age of the workers coupled with the way in which the store treats them creates a considerable degree of internal friction between the workers and managers which would cause the workers to leave.

Collecting the Data

Data collection for this report was done by visiting the Virgin Megastore and conducting a visual observation of the various habits and actions of the employees. Observations were done through infrequent visits to the store at no specific time with the researchers monitoring employees in different locations throughout the store. The following are the collection of insights that were gathered after the observations were conducted:

Managers reprimanding employees for using their phone while working: one of the most commonly observed occurrences was the case of managers telling employees to stop using their phones at work despite the fact that there was little in the way of significant foot traffic in the store.

It was observed that employees sometimes received a text message or an alert from Facebook or Twitter (could not tell the difference since the employee was too far away) and they tended to take their phone out of their pocket, write a quick message then placed the phone back into their pocket. The entire exchange did not take more than a minute and did not seem to hamper the capacity of the employees to assist customers.

However, despite the fact that they seemed to be doing a good job, it was noticed that the manager continued to reprimand the employees for their mobile phone usage. After each reprimand, it became immediately obvious that the employees resented the treatment that they were receiving.

Monotony when it came to the activities that were being done: when observing the various activities of the employees within an interval of 2 to 3 hours between observation sessions, it was noted that there was a considerable level of monotony in the activities that they were doing.

This was seen when an employee found standing in one section of the store doing absolutely nothing but waiting for the customers was seen two hours later doing the exact same thing. There was little in the way of sufficient variance in the type of activities that they were doing and this reflected in the generally bored and tired expressions that were on most of the faces of the employees there.

Another factor that should be taken into consideration was the observed actions of the manager who kept on going around making sure that the employees were in their assigned sections. Despite the fact that there were relatively few people in the store, the manager insisted that the employees continue to remain alert and that they should not be constantly talking to each other or looking at their phones.

While there was nothing in the way of overtly negative reactions seen to the statements of the store manager, it was observed that when the manager when to a different section of the store, the employees had a look of disdain on their face.

No employee engagement with their work environment: aside from the monotony of their work environment, another factor that was noted was the lack of engagement between the employees and the place where they work. While the Virgin Megastore was aesthetically pleasing, the employees there had no means of expressing any form of creativity or to alleviate the monotony of their tasks.

The products were wrapped in plastic, there was no way for them to access the internet on desktop computers, there were no large music players and the books were covered to ensure that they would not be read.

In short, while the environment was pleasing to the eye, there was nothing that could actually sustain the interest of employees over a prolonged period of time. Activities that they could have done in order to attract more customers to the store in the form of interactive dancing, gaming on a big screen or other interesting types of visual performance were simply not there.

Looking for Patterns

When examining the accumulated views, patterns began to emerge in relation to the behavior of employees and the way in which they interacted not only with the manager but with their physical environment. One immediate pattern of behavior that became apparent was that employees within the store simply repeated the same assigned tasks without deviation.

Three visits to the Virgin Megastore that was interspaced by one day revealed that the same employees were in the same departments within the store. They continued to doing the same activities as yesterday and the monotony in what they were doing became immediately apparent based on their general behavior and how they looked.

Another observed pattern of behavior was the interaction between the store manager and employees wherein despite the fact that the manager told the employees to stop checking on their phones during work, the employees continued to do so regardless of what the manager told them to do.

This slight “rebellion” as it can be described continued throughout most of the activities of the various employees wherein despite the best efforts of the manager to curtail activities such as employees talking to each other, leaning on the merchandise or other adverse actions, the employees continued to do them anyway. This is indicative of a pattern of disrespect on the part of the employees and could be due to a wide selection of possible reasons.

Another pattern that was noted was that the employees did not seem overly excited with their respective jobs and that there was a general sense of boredom.

This pattern of boredom became immediately evident upon closer examination of the collected data since it was revealed that in nearly all instances where observations were conducted, the employees seemed to lack any discernable interest in their jobs and appeared to simply be standing there for the sake of standing there.

From a certain perspective, it can be assumed that there is a generally pervasive sense of boredom among the various employees present wherein they simply lack any interest whatsoever in the type of job that they are doing.

The last pattern that was noticed was about the general movements and activities of the employees and its relation to their general environment. It was observed that there were a general “hands off” pattern among the employees when it came to interacting with the various goods and items within the store.

They simply stood there and guided customers to the appropriate sections within the store with little in the way of sufficient immersion when it comes to the merchandise that they were assisting customers with.

The fact that they are seemingly fixtures to the environment instead of actively engaging in it could be construed as one of the reasons behind the high employee churn rates within the Virgin Megastore wherein in combination with the apparent boredom of the employees, this lack of interaction can be considered as the “final nail in the coffin” so to speak when it comes to the overall impression that the employees in the store have towards their job.

Creating Key Insights

After going over the data that has been presented thus far, the key insights that can be drawn are the following:

The employees are bored
There needs to be a far greater degree of interaction between the employees and their current environment
The manager of the store needs to help employees in developing their skills so that they will not think working at the store is a waste of time
The manager should let the employees utilize social media or texting during store hours
There need to be better relations between the management division of the store and the employees

Based on an evaluation of the patterns identified, the aforementioned insights have revealed the key changes that need to be implemented within the Virgin Megastore.

Coaching Plan

Based on an examination of the various observations that were made above, the following is the recommended coaching plan that can be implemented to reverse the current negative employee churn rates that have been affecting the Virgin Megastore

Establish a performance driven method of quick advancement within the company

As mentioned earlier, the problem with the current setup for employees within the company is the sheer level of monotony within the workplace. There is nothing in the way of sufficiently interesting activities to convince employees to stay within the company.

People from the current generation of employees are initiative and performance driven and, as such, they most likely view the monotony that they find themselves in as detrimental towards their future career prospects. An employee that finds himself/herself in a job that they have no interest in doing is more likely to leave for a job that is more interesting and has better career prospects.

One of the reasons why the current rate of employees leaving the Virgin Megastore store is so high is due to the fact that many young employees are more likely to shift to new opportunities when they are presented and, as such, it is necessary to develop such opportunities within the store itself.

One way in which this could possibly be done would be to help train the various employees in the various aspects related to managerial activities with the potential for them to be transferred to other store branches as future manager trainees (Virgin Megastores, 2006).

Aspects of the current store’s operations can be arranged so that advancement for individual employees is dictated by their level of performance when it comes to the various types of different managerial training sessions they are given. By creating a system where employees feel that what they are doing is actually leading up to something and that they are receiving training for free, it is more likely that they will stay with the store instead of leaving.

The reason why such a strategy would be effective is due to the fact that it conforms with the search for newer and better opportunities which is ingrained in the current generation of workers.

People need to feel that they are important and that what they do has some form of significance and, as such, by complying with such a need this enables the store to retain workers It must also be noted that performance-based initiatives would also help the store in the long run due to increased employee productivity and initiative. Simply put, an employee that is happy and satisfied with their job is more likely to work harder for the store.

By creating a means for employee advancement and training, the current employees at the store will begin to understand that their current jobs have merit and will adjust their priorities in order to match the type of performance needed to advance.

It should also be noted that this particular type of activity would also help to reduce the managerial burden on the store manager since they would have various assistants that would help them with the various activities that they are in charge of at the store.

Create a workplace environment that is flexible to the needs and attitudes of workers

Another aspect to take into consideration when it comes to the observed issues is to develop internal policies that allow flexibility when it comes to the needs of the workers. The various workers at the Virgin Megastore looked incredibly bored at their job despite the attempts they tried in smiling when it came to the various customers that came into the store.

What must be understood is that workers from the current generation of workers are not as satisfied when it comes to their job as compared to previous generations. Idle time with absolutely nothing to do may have been appreciated by the previous generation of employees, however, when it comes to the current generation it is viewed as “draining” in the sense that they find what they are doing to be incredibly useless.

Their workplace environment needs to reflect a certain degree of interactivity, creativity and allows the workers to express themselves more fully. This, above all else, is one of the benefits they greatly desire, yet is not provided to them. From a certain perspective, it can be assumed that this is one of the reasons behind their resentment towards their current jobs which causes them to find a job with better opportunities and a better working environment.

One way this can be done would be in the form of developing more interactive displays and events within the Virgin Megastore that the employees can actively utilize. This can come in the form of various video game consoles, games hosted by the store or a variety of other activities that would focus on allowing employees to have fun.

Not only would such events draw more customers to the store, but it would also help immensely in creating a better workplace environment. By implementing such a method within the Virgin Megastore, this ensures that the current employees of the company will be encouraged to stay longer since they would be getting the work environment interaction that they crave from their jobs.

Allowing some Degree of Social Networking

Another aspect that should be taken into consideration that is unique to the current generation of employees is their desire to remain constantly connected to various methods of social media. What you have to understand is that individuals from the current generation of employees grew up in an era of technological immersion and the development of online methods of social communication.

As a result of this, people within this generation prefer to be constantly connected to their peers. As observed by the interaction between the managers and the employees within the store, the company does not like it when their employee’s text or communicate with other people while they are working at the store.

Based on the observed behavior of the employees, it can be safely said that such an attempt at curtailing the actions of the employees is pretty much impossible given their predilection to communicate via texting or social networks.

Not only that, the constant “harassment” from the manager of the store in preventing them from texting seems to create a considerable level of resentment which may be a contributing factor towards the high employee churn rates associated with the Virgin Megastore. Suffice it to say; it seems necessary to allow employees to text and communicate with their friends while they are working within the store.

This would create a more positive work environment for the employees and would be a relatively minor change in the current operational guidelines that have been set by the store. By allowing the use of social networking with a certain set of established boundaries, this would encourage more people from the current generation of employees to apply with the company since their need to be constantly connected will be fulfilled.

Reference List

Virgin Megastores. (2006). Analysis of Virgin Stores. Virgin Megastores SWOT Analysis, 1, 1.

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