Business Strategy Analysis of Virgin
Added on 2020-10-05
18 Pages4135 Words230 Views
BUSINESS STRATEGY
Table of ContentsINTRODUCTION...........................................................................................................................3TASK1.............................................................................................................................................3P1. ..........................................................................................................................................3TASK2.............................................................................................................................................8P2. The internal environment and capabilities of Virgin.......................................................8TASK3...........................................................................................................................................12P3. Analysing the telecommunications sector of UK...........................................................12TASK4...........................................................................................................................................14P4. Understanding and interpreting strategic direction. ......................................................14CONCLUSION..............................................................................................................................15REFRENCE...................................................................................................................................16
INTRODUCTIONBusiness strategies are the means by which organisations set out to achieve its desiredends. It can also be defined as a long term business planning. These organization strategies playa major role in planning, analysing strength and weakness, conducting environmental scanning,gaining competitive advantage, etc. An effective business strategy will clearly identify where thebusiness is and creates cohesion within an organisation to accomplish business goals.Organisation undertaken in this report is Virgin which was founded in 1970 in London UK anddeals in telecommunication sector (Amran , 2016). This report will analyse the impact andinfluence of business strategy on the organisation. It will also analyse the organisations internalenvironment and its capabilities. This report will also depict the competitiveness of UKtelecommunication sector. Then the last part of the report will use appropriate theories, conceptsand models to analyse strategic direction. TASK1P1. Macro surroundings of the organisation is concerned with the external businessenvironment which is uncontrollable and company has to respond with efficient care. For thispurpose, environmental scanning is to be done which helps in analysing the impact and influenceon Virgin by conducting PESTLE analyses.PESTLE analyses of VirginThis is the tool or framework which is used to interpret and study the macro factorswhich can have a intense outcome on an organisations performance. It involves study ofinformation about external factor and their respective implication on the business.(Buckley andGhauri, 2015). The primary purpose of this is to find out about the present external factors whichare affecting the organisation. This is also done in order to asses the opportunities in the market.This is a very energizing tool because it facilitates easy inclusion of fresh constituents that canfocus on one or another critical force affecting the company. It is a simple technique whichpertains to the cross functional skills and expertise. It helps to minimise the impacts andinfluence of upcoming or expected threat to the organisation. This further helps in encouragingthe employees to involve strategic thinking mind set and renders a mechanism which allows anorganisation to identify and exploit the new opportunities.
Political factor : This factor is concerned with how and to what extent the governmentintervenes in the economy or industry. It relates to the pressure and opportunitiesbrought by political institutions (Cavusgil, 2014). It includes factors like governmentpolicy, stability, overseas market, foreign trade policies, terrorism, corruption, etc.Therefore organisations will have be prepared to respond to the current and futureunanticipated future legislation and will have to adjust with their merchandising policiesaccordingly. In Virgin UK, the ministry of telecom industry has raised FDI limits whichenables the promoters to activate competition and consolidation that can be done byselling current stake to foreign consolidation. Also due to increase in foreign directinvestment in this industry enabled Virgin to inflect the foreign stakes in their companies.Economic factor : These factors have a significant impact on organisations business andprofitability. It is related to the economies policies, structure and to what extent theeconomy affects the company. This includes various factors like growth rate, inflationrate, interest rate, stages of business cycle, credibility, fiscal policies, etc. These factorswill have direct or indirect impact on organisations as it affects the buying behaviour ofthe customers and this could change the demand and supply models in the economy. Asthere is exemption from excise duty on primal mater for the production of the specifichardware items has been availed than this has led to decrease in the network equipmentcosts which will be beneficial to Virgin as this enabled them to increase their network toreach out to rural areas as well at a lower cost(Chang, 2016). Apart from this, during therecession period, the policy of government for minimising the custom duty onconvergence has helped in developing parity devices which are used in communicationwhich also helped Virgin in minimising the DTH expansion (PESTEL Analysis,2018).Social factor : These factors looks at the social environment of the market. This helps themarket to understand the customer needs and preferences. It includes factors likedemographics, media, work ethics, consumer role models, ethical issues, lifestyles,purchasing behaviour, social classes, etc. In Virgin, by raising the FDI limits which hasled to better infrastructure has improved telecommunication infrastructure and serviceswhich will minimise the separation, maximise business viability, farming productivityand accession to learning and medical services. Virgin is one of the qualified bidder inthe auction of 3G and BWA spectrum. which will be conducted by government and it has
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