Introduction to Business Environment Report

This report analyzes the business environment of Virgin Media, a leading telecommunications company in the UK. It utilizes PESTLE analysis to assess the macro environment, Porter's Five Forces to examine the micro environment, and SWOT analysis to identify internal strengths, weaknesses, opportunities, and threats. The report provides insights into Virgin Media's competitive landscape, market position, and strategic considerations.

Introduction to Business
Environment

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK...............................................................................................................................................1
1. Analysis and commentary of wider macro UK environment..................................................1
2. Analysis and commentary of micro environment...................................................................3
3. Analysis of internal environment of Virgin Media ................................................................6
4. Identify the SWOT framework for commentary and analysis................................................8
CONCLUSION..............................................................................................................................11
REFERENCES..............................................................................................................................13

INTRODUCTION
Business environment includes internal and external factors which directly as well
indirectly affect organisation and its operations. Government, shareholders, employees,
suppliers, public and may other components are acknowledged by management. These are
various elements which are considered by administration to frame appropriate objectives and
make system function effectively. Thus, companies require to deliver adequate products and
services in market to fulfil demands and requirements of people, thereby maintain relations with
customers (Hilton and Platt, 2013). This benefits management to make success and expand
business to establish appropriate position and reputation in market. Present report is based on
Virgin Media which is popular firm in telecommunication sector in the UK. Company has
headquarter in UK and provides variety of products that are digital television, broadband, mobile
and other services to people. This assignment specifies analysis and commentary of macro and
micro factors on company. PESTLE and porter's five forces framework are techniques used by
superior to identify key stakeholders within telecom industry in UK. Along this, internal
environment is assess by management to identify strengths, weaknesses, opportunities and
threats. Thus, these are components which are acknowledged by executive to make appropriate
decision for firm.
TASK
1. Analysis and commentary of wider macro UK environment
Each and every organisation exist in environment which is dynamic and changes with
time. It is necessary that management have accurate and complete information about external
factors to make transformation in system and strategies to conduct operations in according to
conditions prevailing in market. Virgin Media is telecommunication firm which require to
organise activities and deliver quality and quick services to customers. PESTLE analysis is
appropriate technique used by management to acknowledge performance of Virgin Media. Thus,
these are factors which are identified by firm to assess market and trends are described beneath:
Political factor: This tactic defines that government formulate rules and laws to regulate
organisation and its functioning. It is important that administration make system function legally
so that firm is able to establish appropriate position and goodwill in market. Virgin Media is firm
which has partnership with Stagecoach and conducting business as single brand. Management of
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company frame policies in according to regulation of authorities and pay taxes timely which
helps them execute business properly. But, there are problems which are related with financial
matters of firm. Government didn't have clarification in respect to their partnership and financial
statements about flow of funds.
Economical factor: This is another aspect which defines that state of country have effect
on functioning and profitability of organisation. Interest rate, exchange rate, inflation, growth,
etc are various components which depend upon conditions of UK. These are tactics which
influence on sales of firm. As, Virgin Media is conducting business in partnership which help
management to have adequate amount of capital. Along this, executive is able to enlarge
business and expand outlets in different countries to increase customer base. But, recession is
tactic which impact on functioning of firm, as there were closing of many firms and people
loosing jobs. This affect on business strategies which require to be formulated in according to
international market and conditions of United Kingdom (Hair Jr and et. al., 2015).
Social factor: This component defines that companies require to deliver appropriate
items and services in market in respect to demands and requirements of people. Management
require to have complete information about attitude, belief, preferences of public. Along this,
they even require to acknowledge age distribution, knowledge and other attributes of customers
to influence their purchase decision. Virgin Media mission is to give good quality services to
people. Digital television, broadband, fixed line telephone and mobile are various services which
are provided by firm. It is management responsibility to provide adequate quality of connectivity
to customers to enhance sales and profitability of firm. As, Virgin is trusted company which
helps superior to grab attention of large number of people and construct good relations with
customers. But, punctuality of services is not adequate which affect on image and reputation of
firm in market.
Technological factor: This element specifies that administration require to use funds,
material and manpower efficiently. It is essential that appropriate tools and equipments are
implemented in system, so that adequate variety of products and services are delivered by
organisation (Savrul, Incekara and Sener, 2014). Virgin Media is telecommunication sector firm
which require to have good connectivity and network to provide adequate services to customers.
For this, management require to have good technical knowledge so that they are able to update
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software and deliver appropriate facilities to people. Thus, superior make changes and use
advanced technologies to provide quality and innovative items and facilities to clients.
Legal factor: This component defines that government constitute legislations to
safeguard protect rights of individuals. Health and safety, equality, discrimination are various
acts which are formulated by authorities to make firms work legally. Organisation which have
business globally faces difficulties and problems, as management require to follow rule and
regulations of country in which outlet is established. Management of Virgin Media frame
policies and strategies to direct and guide employees to conduct operations effectively. They
provide duties and tasks to employees in respect to their skills and capabilities. As, company
require people to have good technical knowledge to provide appropriate services to people.
Along this, Virgin has good market reputation and image which helps employer to attract
candidates and have adequate manpower. This help company to conduct operations effectively
and deliver quality services to customers (Ross, 2016).
Environmental factor: This element specifies that as there is shortage of raw material, so
it is essential that organisation uses things properly. Along this, management even require to use
appropriate tools and equipments which didn't emit harmful gases and pollutant in environment.
Virgin Media is telecommunication firm which has latest technologies implemented in system,
so appropriate services are delivered to customers. Broadband, mobile, digital television and
other services are provided by firm. For this, management require to networking with use of
tower and satellite to provide appropriate facilities to customers. But, as tower provide
connectivity and emit radiations which are harmful for health of people. Thus, it is necessary that
administration of Virgin uses adequate technologies to give adequate services to clients.
Therefore, PESTLE analysis helps management of Virgin media to handle difficulties
and problems by designing system and making changes in system and strategies to deliver
appropriate items and services to customers. Along this, government regulations and taxations
are paid timely by Virgin to make system function legally. Thus, good internet connection and
network of television and broadcasting is provided to clients. This helps Virgin maintain position
and reputation in telecom sector.
2. Analysis and commentary of micro environment
Management require to have complete information about market conditions and system
capabilities to conduct appropriate business operations, thereby achieve goals and objectives.
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Micro environment factors that is shareholders, employees, suppliers, public and competitors
have impact on business. These are components which are acknowledged by administration of
Virgin Media to execute operations effectively. Porter's five forces model is used by superior to
anticipate impact of micro environment on firm (Lee, Kao and Yang, 2014). This is appropriate
model which telecom industry uses to have appropriate information about micro environment
factors and their impact on business. Thus, these are factors which are described beneath:
Threat of new entrants: Every organisation has threat from the new entrants as they
enters into the same industry with lots of planning and strategies in to order to make their
business successful. New entrants also invests their time and money on research and
development team to know the actual position of the market and requirement of customers.
Telecom industry is most expensive industry for the new entrants as it demands huge investment
on fixed assets. In context to virgin media, this organisation has less threat from the new entrants
as they are less interested in investing large amount at the initial phase only. Virgin media has
already spent huge amount and is continuously spending billions of pounds for the spreading
networks of optic fibre cable as per the requirement of the organisation. This organisation has
acquired telecast authority of TV shows, sporting events etc. which has increased the
competition and raised prices of the rights. This became barrier for the new entrants with the
huge costing and safeguard existing companies to sustain its position in market (Harrison, 2013).
Threat of Substitutes: This factor defines products which provides same level of
satisfaction to people. For this, management require to deliver competitive things to position firm
higher than rival brands. It is essential that firms manufacture items and services which are
distinct and differentiated from competitors to grab attention of large number of people. Sky,
Vodafone, O2 and BT are rival companies of Virgin Media. These are enterprises which are
firms conducting business in telecommunication industry. These firms provide appropriate
services that is broadband, mobile, internet to customers and at competitive rates. This makes
problem for people to take services from adequate company.
Buyer's power: This factor specifies that customers have strong value in each and every
firm. Management require to deliver appropriate products and services in market in according to
requirements and demands of people. Customers prefer to purchase things from company which
offer them quality items and at adequate prices. Buyers have power if there are in less number
and have large substitute products available in market. Besides this, they are weak when
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organisation have low level of competition (Leih, Linden and Teece, 2014). Virgin Media
provides telecommunication services and have rivals firms that are BT, Vodafone, Sky and O2.
Management have good network system and provide effective facilities at reasonable prices to
customers. This helps company to have strong market position and reputation to attract large
number of people and enhance sales and profitability.
Suppliers power: This factor defines that organisation require to have adequate amount
of material, tools and things to execute operations effectively. For this, administration need to
establish and maintain relations with suppliers to utilise funds and order products in according to
demands and requirements of people. This helps management to construct competitive advantage
over rival firms. Telecom industry has large number of companies which defines that suppliers
have power to charge higher prices for services. Sky has broadcasting rights, so management is
able to provide sports channel facility to customers at reasonable rates. But, Virgin Media and
BT doesn't have rights so they have to pay large money for sports channel which is great demand
in UK. Thus, high rates are fixed by Virgin Media which affect on customers and sales of firm
(Chinosi and Trombetta, 2012).
Competitive rivalry: This factor define that each and every industry have large number of
organisations. So, it is essential that management have adequate resources to conduct operations
effectively and deliver appropriate variety of products and services in market. Virgin Media is
key player in telecommunication sector. But, firm has competitors which are BT, Sky that have
good reputation in market. Along this, internet usage and reliance is increasing which also
impacted on expectation of buyer which enhances. For this, company require to lower down rates
to grab attention of large number of people and become dominant firm in market. This also
affects profitability and funds availability of Virgin.
Telecom sector has strong brands which defines that companies require to have adequate
connectivity and network to provide quality services to customers. This also state that
management responsibility is to strengthen system that clients don't switch to other brands. As,
Sky has broadcasting rights and offer premium television content to people. But, as Virgin Media
provides superior high speed internet network to people. This benefits company to compete with
competitors and sustain customers for longer duration. Along this, market share of Virgin in
increasing as there is high switching expenses (Sharda, Delen and Turban, 2014).
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Therefore, five force analysis is appropriate model used by management to acknowledge
components of micro environment and their impact on business. Public, suppliers, competitors
are aspects which comprises important and essential role in organisation. For this, administration
of Virgin Media require to construct competitive advantage and formulate strategies to grab
attention of large number of people. Along this, top personnel even need to differentiate their
services by enhancing connectivity and speed to provide quality facilities to customers. This
helps company to sustain its market goodwill and clients. Thus, telecom sector has good
profitability and potentialities which determine opportunities for new organisation. Firms can set
up their business in this sector and organise activities to generate adequate revenue from
business.
3. Analysis of internal environment of Virgin Media
Internal environment is tactic which comprises different components which exist within
firm and directly influence on working of organisation. Management, employees and corporate
culture are various elements which regulate functioning of system. It also affect behaviour and
performance of subordinates which depend upon working environment and facilities provided by
superior. Organisation require to have adequate amount of funds, material and manpower which
help management conduct appropriate business operations effectively. Administration frame
mission, vision, objectives and goals to direct members and make them conduct activities in
systematic manner (Brandimarte, 2012). Virgin Media is firm in telecom sector which require to
have good network and technologies implemented in system, so that appropriate services are
delivered to customers. Management duty is to frame strategies and use equipments which help
them provide good speed and connectivity to people. These are different factors which are
consistent of internal environment and are acknowledged by superior are stated beneath:
Value system: This aspect define that ethical beliefs that direct functioning of
organisation and helps management accomplish objectives and goals. It is necessary that
employer provide appropriate working environment and facilities to subordinates to retain skilled
and competent people for longer time. Along this, workers and customer's behaviour depend
upon organisation and its culture. This also helps administration to make success and growth
with time. Virgin Media is popular telecommunication firm in UK, as it provide high speed
connectivity services to customers. Besides this, company has good value system which help
management to sustain its position and reputation in market (Prajogo, 2016).
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Resources: This tactic define that organisation require to have adequate amount of
resources so that business activities are conducted effectively. It is essential that management
have sufficient funds, material and manpower which are used efficiently. Along this, superior
even require to execute operations and deliver appropriate items and services in market in
according to needs and wants of people. Virgin Media provides variety of services that is mobile,
internet, television to customers. For this, management has good connectivity and network
system through satellite and their connection with towers. This help company to provide good
connectivity and
Capabilities: This is another component of internal environment which defines that
management and employees require to have skills and knowledge to conduct operations in
proficient manner. Virgin Media provides telecommunication services that is internet, television,
mobile services to customers. For providing these facilities firm has advanced technologies
implemented in system. With connection of satellite and towers, adequate services are provided
by Virgin to customers. Thus, employees require to have technical knowledge so that they are
able to work with equipments properly (Boons and Lüdeke-Freund, 2013).
Skills: This tactic defines that individuals skills and knowledge determine their work
pattern and activities they will be able to perform. Employer of each organisation require to have
adequate manpower which conduct operations effectively and help them achieve objectives and
goals within defined time. Management conduct recruitment process and select candidate which
have adequate abilities and skills in according to vacancies. Virgin Media provides services of
mobile, internet i.e. broadband and television to people. For this, firm has latest technologies and
equipments implemented in system to provide connectivity and network to people. Thus, it is
essential that Virgin have skilled and competent people which are able to deliver adequate
facilities and services to customers.
Core competencies: These are capabilities which constitute adequate position in firm and
help management to establish competitive advantage in respect to rival firms. Before analysing
core competencies, administration responsibility is to identify and recognise level of competition
in industry. It is essential that firm has competence to construct appropriate position and
reputation in market in according to other enterprises. For this, executive goal is anticipate
competencies that help them make products and services distinct from rival brands (Smith and
Wong, 2016).
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Virgin Media competitors are Sky and BT which have strong image in market. It is
necessary that management has good connectivity and network system. This help firm to provide
fast services in mobile, broadband, television with good support of satellite and tower
connection. As, Sky has broadcasting rights and is able to provide sports channel to people at
reasonable rates. Thus, Virgin need to provide high internet speed to customers to sustain its
position and reputation in market.
Therefore, these are various components of internal environment which management of
Virgin Media require to consider while designing system and conduct appropriate business
operations. It is management responsibility to provide appropriate working environment, culture,
and facilities to employees. Along this, they even require to have skilled and competent members
which are able to work with technologies and deliver fast connectivity to customers. Thus,
Virgin is able to maintain appropriate reputation and image in market in respect to rival firms in
telecom sector.
4. Identify the SWOT framework for commentary and analysis
As per analysis as well as commentary of internal, micro and macro environment of
Virgin Media they had to analyse the weaknesses, strength, threats and opportunity of these
factors which are useful for taking a effective decision making which are explained in detail are
as follows (Jeston, 2014):
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(Source: SWOT Analysis, 2018)
Strengths: These are different tactics which benefits and helps management to conduct
operations effectively and establish appropriate position in market are as follows: Brand name: Virgin Media is having a strong name of their brand within the nations such
as Australia, USA and United Kingdom. In this, brand name is enough for promoting
their any goods as well as make them grand success within the market place. Goods
which are provided by Virgin Media can survive easily within the market along with that
they will meet strong publicity and recognition without doing much advertisement
(Dumasand et. al., 2013). Various kinds of distribution: Virgin Media is having two different kinds of distribution
units. First, is to sell the goods within the retail stores and on other side is to sell the
goods by online method. Buyers can adopt any of these services as per their level of
comfort. Organisation take decisions to maintain both the approaches of distribution
efficiently and effectively. Several processes to export: Virgin Media is having various approaches of export
transportation facilities of their goods. It is having a international airports as well as it has
two largest seaports near it for exporting goods. Information technology professionals: Virgin Media is having a highly skilled
professionals of software who work along with their better commitments to provide them
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Illustration 1: SWOT Analysis, 2018

better quality of services to their buyers along with this also aid in taking a effective
decisions (Aral, Dellarocas and Godes, 2013). High budget: Virgin Media is having proper finance for investing them into any type f
enterprises as well as it is earning higher rate of profits each year for their goods along
with that it increases to various nation each year.
Weaknesses: These are various points which affect on functioning of organisation are
stated beneath: Loose supervision: Virgin Media is having its groups of various organisations as well as
every field is having its own supervisors. Organisation supervision is becoming so
difficult for everyone along with that control is not in the hands of companies sometimes. Communication gap: Virgin Media is having a lots of interaction gap within every
organisation. Only the method of websites of the firms is similar but the interaction
within various sectors of enterprise is so weak. Bad transportation: In the company, there is a very bad facility of transportation as well
as there is not having any punctuality within trains along with that other public facilities
of transport gave impact on the progress of organisation. Outdated machinery: Some of goods of Virgin goods are adopting outdated machines as
well as it provides difficulty to buyers along with workers in it. e.g. Virgin Media have to
take decision of updating their machines and make it as faster as they can.
Opportunities: These are various opportunity that Virgin Media have to increase their
market share and profitability are stated beneath (Sena Ferreira and et. al., 2012): Expand to overseas: Virgin Media is having an opportunity to increase their overseas as
well as make their market to reach higher numbers of buyers as it is familiar goods in
various nations. Goods such as media, airlines and mobiles can be extended to any nation
easily. Virgin can get effective deals: Virgin Media is having much deals from more nations as
they are always ready to increase their enterprise along with this it is ready to make
partnership with other organisation for their progress. Training opportunity: In this, company is having various training opportunity for
retraining as well as fresher to other particulars within the organisation. So, managers are
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having opportunities to know much about the firms as well as on which project they are
exactly working on. Adopting high technology products: They also take decision for grabbing decision
opportunity to improve their usage as well as technology in various sectors and make
buyers easy to understand their provided services properly.
Threats: These are various threats which management of Virgin Media require to
overcome and protect for smooth functioning of system are as follows: Corporate parenting technique: Success of Virgin Media is mainly depend on companies
parenting strategy which lead to Richard Branson. It is sustain by its techniques if it is
going well within the market as well as provide competition to other organisation
(Wetherly, 2014). Succession of strategy & ideas: For a long time Branson has to give their succession
strategies as well as ideas for operating business in upcoming future along with that they
need to apply them effectively to reach the organisation targets.
 Strong leadership: Virgin Media have to take care about its better leadership for future
as well as applying them on enterprise strategies and policies for a long time of the
organisation by managing all the firms effectively.
SWOT analysis will help in taking a effective decision of Virgin Media it also
help in analysing in the context of internal, micro and macro environment. In this, they analyse
all the factors properly so that they can carefully take a proper decision of business activities
after analysing environment of market efficiently and effectively. After analysing all these
factors it will aid in taking a proper decision making of operating business for running functions
and activities smoothly within the marketplace.
CONCLUSION
As per above report it has been concluded that they will analysed all the factors
effectively for management of business effectively. In this, they evaluate the internal and
external environment by using SWOT as well as PESTEL of Virgin Media. They also analyse
the structure by looking internal factors like as capabilities, resources, core competencies and
skills. In this, they also apply the porters five forces of model for assess as well as analysing the
industry attractiveness. In this assignment, they understand the entire environment of business in
an efficient and effective manner. In SWOT they see the strength, weakness, threats and
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opportunity of organisation for their betterment. Along with that they also analyse PESTEL in
with all the external environment is evaluated in which they analyse such as political,
environment, social, technology, economic and legal factors are all analysed for sustaining
within market for a long time.
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