Business Strategy Assignment - VIRGIN MOBILE

BUSINESS
STRATEGY

Table of Contents
INTRODUCTION...........................................................................................................................3
TASK 1............................................................................................................................................3
P1.1 PESTEL model for environmental analysis...................................................................4
P1.2 Ansoff's growth Vector Matrix......................................................................................5
TASK 2............................................................................................................................................6
P2.1 Introduction to strategic capability.................................................................................6
P2.2 VRIO model to analyse the strategic capabilities of organisation.................................7
P2.3 SWOT analysis...............................................................................................................9
TASK 3.........................................................................................................................................10
P3.1 Porter's five force model on telecommunication sector...............................................10
P3.2 Porter's generic strategy to analyse the strategic direction for the organisation .........11
Strategic Management Plan..................................................................................................12
CONCLUSION..............................................................................................................................14
....................................................................................................................................14
REFERENCES..............................................................................................................................15
.......................................................................................................................................................16

INTRODUCTION
Business strategy is the grand plan which organisation made to manage their inside and
outside activities. This strategy helps organisations in securing their competitive position as
compare to others in the market(Business Strategy. 2018.). Company's also use it to serve
customers and to achieve the organisational goals. In an organisation, business strategy is a long
term plan created for desired result and direction. There is different level of business strategies
like corporate level, business level and functional level. To understand this concept, VIRGIN
MOBILE is taken as example which is a mobile service provider in UK. Company came into
existence in 1999 and products in which it is dealing is mobile telephony. In this report, impact
of macro environment will be discussed with different models and their internal environment
will also be explored. With the help of porter's five force model UK's telecommunication sector
will be analysed.
TASK 1
Mobile telecommunication sector is the telecom service provider like mobile service,
networks, broadband, other communication equipments etc(Scholes, 2015). this sector is
growing rapidly worldwide. This trend is also increasing in UK at the same rate as more than
53% of UK's people are using smartphones while walking.

P1.1 PESTEL model for environmental analysis
It is tool which organisations take in use to analyse the impact of external environment in
their business activities. This technique is majorly used at the time of expansion of framework
Demographically, Intercultural, Ethical and Ecological (Amran and et.v al., 2016).
 POLITICAL: This factor is related to impact of government's intervention on the
business activities. In case of Virgin mobile, it is working in many countries and from the
western hemisphere they are getting benefits in taxation policies made by government.
Company needs to pay lower tax in those countries as compare to other, which is
increasing their profits and as a result they are able to spend more on research and
development. For instance: there is change in political policies at UK such as increment
in tax rate, then it affects supply of internet services offered by Virgin Group to
consumers. So political parties also affects working of Virgin Group, hence they have to
work according to it.
 ECONOMICAL: These factors are related to impact of country's economy on
organisation's performance. In case of Virgin Mobile, when government has increased
their investment on development of core infrastructure it has impacted the company in a
positive ways and given them opportunity to penetrate in the market. Other than this if
exchange rate of an economy goes high it will impact the sale of the company because
customers will start saving more instead of spending. For instance: there is increment in
inflation rate of UK, then purchasing power of consumer affects and they do not prefer to
avail expense telecommunication service offered by Virgin Group.
 SOCIAL: This factor is related to society and culture and how does these all are
impacting business performance. Virgin mobile has its targeted people but these
customers expect very high experiential products and services from the company which is
increasing the cost of the organisation. This is because for meeting the expectation of
their customers company need to put more energy and money for making improvements.
There is difference in demand of consumers as per requirement of telecommunication
services such as corporate offices, personal use of consumers, so it is responsibility of
managers to understand demand and then provide internet services. This assist in
providing satisfaction to consumers and maintain brand image of Virgin Group in
industry.

 Technological: This factor is related to the technology and its impact on business
organisation like information, innovation etc(Evans and et. al., 2017). Technology is
growing very fast which is helping Virgin Mobile to innovate their services. It help them
in providing greater access to information and planning about the 5G & its potential. This
advancement by company completely change the user's experience and will result into
increase in profit. Virgin Group deals in telecommunication sector, so they have to accept
technological changes happening in society such as use of latest techniques for training of
workforce. This assist in improving working efficiency and maintain good brand image
in industry.
 ENVIRONMENTAL: this factor is critical for the organisation and its performance, it
include elements like climate change, safe waste disposal, sustainability, pollution
regulation laws, limiting carbon footprint, insurance policies safe water treatment etc. For
example if product innovation priorities get altered because of the environmental norms it
is affecting performance of Virgin Mobile as it has to plan their activities as per the
environmental expectations and standards(Eaton and Kilby, 2015). This will increase the
time and cost of the company because they have to re plan their activities.
 LEGAL: This factor include protection law, copyright law, intellectual property rights
protection etc. Virgin Mobile is working in different countries and they need to follow
the health and safety laws of each country for better performance of activities.
P1.2 Ansoff's growth Vector Matrix
Ansoff's matrix is a tool for strategic planning which organisations use for planning their
future growth. This framework provide help to senior managers and marketers devise(Wheelen
and et. al., 2017).
 Market penetration: In this strategy, firm expand their sales by using their existing
products and services in the market. If Virgin Mobile wants to opt for this strategy into
their organisation they need to reduce the prices of their services as well as they need to
increase their production. This can be done by the organisation if they put their energy
and resources in reducing the production costs. With the decrease in costs, company can
plan for expanding their services. Other than this for increasing their sales, company can
also improve their promotional methods which attract more customers for them. In order
to penetrate in market Virgin group has to market their existing product with new and

innovative marketing strategies. This makes existing consumers to attract for availing
services from them. In currently process, Virgin is currently targeting their current
customer by lesser its prices along with focus on quality of their prospective products.
 Market development: This is the strategy which organisations chooses when they want
to expand their business in different areas with the existing services & products. If Virgin
Mobile wants to opt this strategy for their expansion they need to have a good research of
market requirement as well as the customers needs to know how much it can be
successful if they do it. For doing it organisation has to make a plan to execute it and
does they require any changes into the services or products. For instance: if in South
Africa, there is no 4G services, then managers of Virgin group can launch their service is
there. This is best example of market development in which existing services are
launched in new market.
 Product development: This is the strategy organisation chooses when they want to
increase their sales and customers by bringing something new into their product or
services. If Virgin mobile want to opt this strategy they are required to analyse its
requirement in the market and then plan what changes they can bring to their services.
This is so because Virgin Mobile is already a well known company and they have large
number of satisfied customers, taking such steps can affect organisation's customers base.
Under this strategy, managers of Virgin Group can launch 5G services in China because
this service in new for their market. This provides opportunities for Virgin Group to
develop their product in China telecom industry.
 Diversification: In this strategy organisations plan to expand their business by launching
new products into the market which can attract new customers for them. Virgin Mobile is
a well known brand of UK and if it decides to choose this strategy for their organisation
they can get success because of their existing brand image(Thompson, Strickland and
Gamble, 2015. For doing it, company need to target customers to whom they want to
serve and in which area they want to grow their business. As a result of this organisation
will be able to attract new customers as well as their existing one. Virgin Group can enter
in new sector such as retail, medication sector. This makes them enter in different new
market with new product or service.

Market penetration is best techniques out of all above discussed strategies. This assist
Virgin Group to improve marketing efficiency through which they can maintain their USP in
market. Virgin Mobile is a successful company in many countries with their trusted customers. It
can opt market diversification for expanding their business as it will increase their customer base
and profitability in the market.
TASK 2
P2.1 Introduction to strategic capability
Strategic capability is the ability of organisation to gain its competitive advantages in the
market and to increase its value over time with the help of people, resources, skills and
capacities.
Product portfolio and connection among different product line-
 value- Yes, it is valuable to the Virgin Mobile because synergy in various product line is
important for organisation in smooth running of business and increasing its profitability.
 Rare- No, it is not rare for the Virgin Mobile because there are many other organisations
working in the same industry and with the same synergy and portfolio.
 Imitable- Yes , it is imitable by the other organisations also because every company want
to reach that level of success(Akter aand et. al., 2016).
 Organisation- No, company does not have proper arrangement of maintaining this
situation.
It provide Virgin Mobile short term competitive advantages but they are require to bring
innovation for sustaining in the market.
P2.2 VRIO model to analyse the strategic capabilities of organisation
VRIO is model is used for analysing the organisation's inside situation like their
resources, competitive potential and possibility of improvement. It stands for valuable, rare,
imitable and organised(Pisano, 2015). Virgin mobile is using this tool to sustain a competitive
advantage in the market.
Resources Value Rare Imitation Organisation Advantage
Intellectual
property
rights,
Virgin Mobile
has its IPR,
copyright and
Yes it is rare
because it is
unique in
No, it can not
be imitable
because
Yes, company
has proper
resources and
It provides a
strong
competitive

copyrights and
trademark.
trademark
valuable
because it is
something
which only
Virgin Mobile
can have and
every
company have
their own
trademarks
and
copyrights.
nature and
other
competitors
can not copy
it.
replication of
copyright or
trade mark is
against the
law.
arrangements
for
maintaining
their IPR,
copyright and
trademarks.
advantage to
the Virgin
mobile
Brand
positioning in
comparison to
competitors
Yes, it is
valuable to the
Virgin Mobile
because it
make them
different from
other brands
and also help
in attracting
customers(Yul
iansyah,
Rammal and
Rose, 2016).
No, it is not
rare because
others are also
making efforts
to reach that
level of
position.
Yes it is
imitable by the
other
companies
also to reach
that position.
But for this,
competitors
will require a
huge
marketing
budget for
achieving it.
Yes, Virgin
mobile has
those
arrangements
to position its
brand in
comparison to
competitors
based on
consumer
behaviour.
It provides a
temporary
competitive
advantage to
the Virgin
Mobile.
Pricing
strategy
Yes, it is
valuable to the
Virgin Mobile
because it is
No, it is not
rare because
there are other
companies
Yes, it is
easily imitable
because
competitors
Yes, company
have pricing
analyst with
them to
It provide
temporary
competitive
advantage to

helping
organisation in
attracting &
retaining their
customers.
also which is
working in the
same field.
They also
have such type
of prising
strategy for
increasing the
competition.
can copy the
pricing
strategy of
Virgin Mobile
to reach at its
level and to
snatch their
customers.
analyse the
pricers and
keeping their
strategy
different from
others.
the Virgin
Mobile.
From the above discussion, it is clear that Virgin Group has different resources which are
different from competitors. They have strong brand image as their logo and tag line which is
registered under patent right. Workers which are working at Virgin Group are skilled and have
current knowledge which is relevant in market.
P2.3 SWOT analysis
It is a tool which companies uses for analysing their internal strength and weakness of the
organisation. SWOT stand for strength, weakness, opportunity and threats.
 Strength: Virgin Mobile has big brand name in some countries i.e. UK, USA and
Australia which is one of their major strength for the organisation. It help them in
promoting their product in the market easily and also give them success. Having a good
brand image also help company in surviving in such a competitive market. Not only
strong brand but Virgin has a very skilled IT professional working for them. They are
helping the company in providing best quality of services to their customers(Grant,
2016).
 Weaknesses: Every organisation has some weaknesses in it, which they need to improve
for making them successful and for survival in the market with such a tough competition.
Virgin mobile have problem of communication gap in their different branch of different
countries. Which is creating a lot of confusion and misunderstanding I their work. Other
than this, company is still using traditional methods of machinery for running their
business activities which is also a major weakness of the Virgin Mobile (Higgins, Omer

and Phillips, 2015). As a result it is decreasing the sales of the organisation and creating
trouble for customers and employees.
 Opportunities: Virgin mobile has opportunities like, they can expand their business
overseas which will increase their sales and they will be able to reach more customers.
Other than this, company can provide training programmes for the freshers which also act
as the opportunity for the organisation in getting skilled labour.
 Threats: Increasing competition is the major threat for the Virgin mobile and for
eliminating it, they need to keep themselves updated.
TASK 3
P3.1 Porter's five force model on telecommunication sector
It is a tool which organisation chooses to discuss the five factors of the industry. It
include five forces that affect the performance of the company . Three of them are horizontal
forces (threat of new entrants, threat of substitution and existing rivalry) two of them are vertical
forces (bargaining power of buyers and bargaining power of suppliers).
 Threat of new entrants: Telecommunication industry have high entry barriers because
of the huge cost of production and distributions. It is stopping the competition from
rising in the market for Virgin Mobile. Entry of a new company in telecom industry is a
threat for the organisation which is already working in it because of the switching cost
and attractive price by the new entries. This industry has low exit cost but high entry
costs which make it difficult for new comers to enter in the market. Because of this
competition for Virgin Mobile is not increasing and will not affect its sales(Mellat-Parast
and et. al., 2015).
 Threat of substitutes: This force of porter's model have high threat on companies
working under the telecom sector because there are number of alternative products
available in market for the mobile phones. This haunt the Virgin Mobile most because it
can reduce their customers which will direct affect the company's revenue. Low
Switching cost is another reason why availability of substitutes are threat for the industry.
Not only this but easy reach to informations are another reason which is increasing Virgin
mobile's competition very much.

 Exiting rivalry: Telecom sector or industry have high force of existing rivalry because
there are huge number of similar firms working in this industry(Higgins, Omer and
Phillips, 2015). This is a threat for Virgin Mobile because they all are selling almost
same services which is increasing the cut throat competition for the company This results
into zero profit margins. One company can influence the prices of other companies
because of the low switching cost.
 Bargaining power of buyers: In this force, bargaining power of buyers are low because
there are not much companies working in telecommunication industry. Organisations
which are working already has a brand equity with fixed customers, who have in depth
trust and know how about the products and services of the company. But on the other
hand switching cost is also low for the customers, they can easily shift from company to
other without loosing anything.
 Bargaining power of suppliers: In telecommunication sector, suppliers are more
powerful as compare to buyers because they are few in numbers and can easily influence
the price of products. Just like every other company, Virgin mobile also has their fixed
suppliers. If buyers try to bargain the prices, suppliers have option to switch to other
buyer without loosing anything.
From the above discussion, it is clear that there are different organisation dealing in
telecommunication sector, so threat of competitors is more. If Virgin Group is not providing
satisfactory services to consumers, then they have options to switch. Hence it is analysed that in
order to maintain good and attractive profits, Virgin group has to make something different from
others. This makes long term relations with workers and sustainability with competitive
advantage can be achieved by Virgin Group.
P3.2 Porter's generic strategy to analyse the strategic direction for the organisation
This strategy is used by the Virgin Mobile for analysing its profitability and
competitiveness in the industry in which It is working. Its main purpose is to determine the
position of the firm among the others in telecom industry. Porter had introduced cost leadership,
differentiation and focus which are known as generic strategy.
 Cost leadership: According to porter's generic strategy, cost leadership is a method for
the Virgin Mobile for increasing its competitiveness in the market. There are two
different methods available for the company to achieve the sale, first is if Virgin Mobile

reduces their production costs and start charging average price from their customers.
This will increases the profit of the company. Another method of doing it is, to reduce the
price of their products and increase their market shares. It will also help organisation in
getting reasonable profit because it has reduced their cost price and increased its market
share. It says that organisation need to be the leader of cost and focus on it for increasing
market share.
 Differentiation strategy: As per this strategy, Virgin Mobile has to produce different
products as compare to their competitors which attract the customers. For doing it,
organisation need to focus on features, functionality, durability and support. Doing this
will increase the market share of the company because people get attracted to new things.
This will also increase the competition in the market (Thompson, Strickland and Gamble,
2015). Currently, Virgin group is providing differentiated product at an unique pricing to
led perfect proceedings of the business or revenue to the Virgin firm in a productive
manner. For making it successful, organisation need to follow some steps like first they
have to do a good research of market and availability of similar products. This help
Virgin mobile in developing their product and bringing innovation in it. After that,
company need to shift their focus on delivering good quality services to their customers
like if they are providing mobile network to people, they need to make sure that network
is available 24/7 and is not slow or creating trouble of users. After all that they need to
plan an effective marketing of their services so that they can convey their benefits to the
users properly.
 Focus strategy: This strategy says that, Virgin Mobile need to target a particular market
and understand their need and requirement for serving them with well specified products .
By doing this organisation will be able to create a strong brand image in the market and a
good relation with the customers. This also reduces the competition with their
competitors. Companies can use this strategy in their business because it is the
combination of cost leadership and differentiation strategy(Scholes, 2015). With the elp
of focus strategy, company can add something unique in the market.
Above discussed three forces under porter generic strategy, there are two more strategies
which has to be considered for improving brand image of Virgin Group in industry.

 Low market share- As per this strategy, Virgin Group is providing lower quality services
and charging standard amount as fees. It is situation become adverse for Virgin Group if
they do not provide proper telecommunication assistance.
 Risky high margin- In this Virgin group is not providing new and innovative services to
consumers and still their price are overcharge. This is short term advantage to improve
profits but with decrement in brand image consumer dissatisfaction will arise.
Strategic Management Plan
 Aim: To become most popular brand in industry,and to taker decisions for long term
existence.
 Organisational Structure: virgin Group has hierarchical organisational structure
through which they operates in 300 odd companies as independent units.
 Vision: To plan business activities for making global presence in travel, communication,
retaining and music.
 Mission: To become shopper victor and delivering best services to consumers for making
pioneer in industry.
 Values: They want to keep their business, product and services, partners for changing
business for good.
 Goals: The goal of the company is to maintain quality of services for selecting best and
relevant sources at cheaper rate.
 Strategies and Tactics: Virgin Group will use of product penetration and sell existing
services to consumers and maintain USP in industry. They will focus of quality of
telecommunication services with minimal cost of service.

CONCLUSION
From the above report it has been concluded that business strategy is very much
important for an organisation as it helps in its systematic and smooth running. It is the major
reason in competitive advantage of a company. This reports has helped in understanding how the
macro environment influence the performance of the business organisation and strategic
positioning of organisation is also analysed with the help of Ansoff's matrix. Other than this
application of VIRO is also learned while making this assignment, that how it applied to the
company. For getting success in long run company need to have a good strategic capabilities and
frequently they need to judge their own strength and weaknesses so that they can improve &
overcome with it.

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Business Strategy. 2018. [Online]. Available through: <https://businessjargons.com/business-
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