Virgin Mobile Network Business Strategy Analysis: A Comprehensive Study

This report provides a comprehensive analysis of Virgin Mobile Network's business strategy, examining its external and internal environments. It utilizes various frameworks, including PESTLE, Ansoff's Growth Matrix, VRIO, Porter's Five Forces, and Bowman's Clock, to assess the company's competitive advantage and strategic positioning in the telecommunications sector. The report also explores the impact of macro-environmental factors, internal capabilities, and industry dynamics on Virgin Mobile's strategic decision-making process.

BUSINESS STRATEGY

TABLE OF CONTENTS
Introduction......................................................................................................................................1
Task 1...............................................................................................................................................2
P1, M1 Analyze the impact and influence the macro environment has on Virgin mobile
network and its business strategy................................................................................................2
Task 2...............................................................................................................................................6
P2, M2 Conduct and assessment for organization’s internal environment and its capabilities...6
Task 3.............................................................................................................................................10
P3, M3 Analyze the telecommunication sector.........................................................................10
Task 4.............................................................................................................................................13
P4, M4 Interpreting and understanding the strategic decision..................................................13
Conclusion.....................................................................................................................................16
References......................................................................................................................................17

LIST OF FIGURES
Figure 1: Virgin mobile network.....................................................................................................2
Figure 2: PESTLE analysis..............................................................................................................4
Figure 3: Ansoff's growth vector matrix..........................................................................................5
Figure 4: VRIO model analysis.......................................................................................................6
Figure 5: SWOT analysis.................................................................................................................9
Figure 6: Porter's five forces model...............................................................................................10
Figure 7: Bowman's strategy clock................................................................................................14

Introduction
Business strategy refers to the process of knowing the organization summary, which includes the
business objectives, sustainability in meeting the competitive benefits and customer expectations.
To understand the objective of Virgin mobile network business strategy the report has been
made. The report will discuss about the external environment of knowing the business strategies
of the Virgin mobile. This will show the various model to gather the business strategies of the
organization. The report will also study about the internal environment of the organization and
its capabilities. The report will also show the analyses on the telecommunication sector using the
Porter’s five forces model and applying strategies to bring improvement in competitive edge and
better positioning of the organization into the market. At last the report will interpret the strategic
direction using Bowman’s strategy clock model to calculate the strategic direction of the
organization.
1

Task 1
P1, M1 Analyze the impact and influence the macro environment has on Virgin mobile network
and its business strategy
Business strategy is organization’s operational plan for achieving its objectives, optimising the
financial performance and vision using its business model. There are many factors including
external factors which influence the financial position of the organization. For analyzing the
impact various matrix and model should be managed by the Virgin Network Operator. The
Virgin Network is the first mobile operator launched in 1999. It does not have its own network
but have the contract of using the network of EE (De Castro, et.al, 2014).
Figure 1: Virgin mobile network
(Source: Daniel Tyson, 2017)
Before using different models it is very essential to understand the proper meaning of macro and
micro environment which are regularly operating into the environment. Micro environment are
those factors which affect the position of the organization internally and can be controlled by
themselves. On other hand, macro environment are the factors which affect the firm externally
and cannot be controlled and managed by organization at full extent. For better functioning and
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performance, environmental analyze of each and every strategy must be done using PESTLE
model and Ansoff’s growth vector matrix.
PESTLE Model for Virgin Mobile Network
Political Factors – The political factors includes infrastructure and regulations elements. The
rules and regulations are very tight in case of developing mobile networks everywhere as it may
harm humans and children which cause direct impact on their health. For making proper
infrastructure for its organization the authorities have to take prior permission from the ruling
government to conduct their mobile network business (Hughes, et.al, 2016).
Economic Factors – The recession phase has reduced the cost of calls and messages for the
people so that large number of customers can be attracted toward the deals. The price war is on
as the purchasing of 3G network had incurred large amount of cost for purchasing the services.
This causes the economic factor of the organization at risk.
Social-Cultural Factors – Change in fashion and market trends has affected the Virgin mobile
network services. It is seen that The UK is using many kind of mobile phones but recently the
interest of the customers is leading to purchase them iPhones which is known as best seller in the
UK. The apple company is leading in UK country. The young generation have more interest in
the phones but the people of different age groups sometimes do not use these technology which
puts direct impact on the selling of Virgin mobile network.
Technological Factors – The launching of 4G networks has also attracted the customers because
the using of internet has become easy directly by the phone which is the positive part for
attracting the customers. This technology also make easier for the people to handle all tasks from
using the phone and internet services (Ho, 2014). The Virgin Group has also provided the GPS
facility which has given the customers basic facilities of knowing the location of themselves and
others too.
3

Figure 2: PESTLE analysis
(Source: Abdul Amin, 2017)
Legal Factors – The starting up of any business is majorly depends on some laws like the Sale of
Goods Act 1974 which states the whatever the product made by organization must be used in
correct form and should have some specific use. Certain laws also states that using of mobile
phones are strictly prohibited at the time of driving.
Environmental Factors – It relates to the factors of climate and weather changes. Virgin Group
has organized many events which are taking steps the reviewing the usage of paper, inks and
various resources to adopt environment friendly approach.
Ansoff’s Growth Vector Matrix
For Virgin mobile networks, various methods can be used for growth opportunities and they are
as follows:
Market Penetration Strategy – It is the strategy which is used to launch its own version of the
existing product. Virgin media has utilized this strategy to take market share from the BT when
the broadband services are been launched by him. It majorly puts all emphasize on cheap
packages and advertisement campaigns (Kiani, 2017).
4

Development of Product Strategy – It states the launching of the new product. Virgin media has
planned to launch 100mbps service of broadband as an updated product.
Figure 3: Ansoff's growth vector matrix
(Source: Alan Kalpan, 2018)
Diversification Strategy – It states launching of new product into new market. There is no
strategy or product which is currently used by Virgin Group to give justification to this approach.
Development of Marketing Strategy – It helps in targeting the new market. Virgin media has
launched its broadband products for home customers which is the basic strategy to reach the
growth (Wuebker and Klein, 2017).
Various factors mentioned above have major impact on decision making process. The factors
which creates barrier in decision making are change in the rates of inflation, political factors
which affect the business, the change in terms and conditions of external environment will create
barrier in decision making strategy.
5

Task 2
P2, M2 Conduct and assessment for organization’s internal environment and its capabilities
Strategic capability refers to the ability of employing the competitive strategies into the business
which allows increasing its value and makes its survival easy. In this context the Virgin mobile
network should apply the VRIO model to identify the organizations capabilities which are listed
below:
VRIO Model
This model helps in analysing the organization’s resources and the competitive advantage. It is
an acronym which indicates – Value, Rareness, Imitability and Organization. The Virgin mobile
network can use this model to achieve environment analysis, strategic choices and execution.
Using this framework the Virgin mobile network will able to meet its competitive advantage in
the industry of telecommunication (Nguyen, et.al, 2015).
Figure 4: VRIO model analysis
6

(Source: Marlena Zakrzewska, 2017)
Value – This question states about the resource valuable to the organization or not. Valuable
capabilities will support the Virgin network to gain more opportunities and minimize all the
threats. All the values of business can complete by getting the chances of technological change,
demographic change and legal and political conditions.
Rarity – If the Virgin contains rarity than it can get more competitive advantages. It has all the
resources and various capabilities which are unique from all the resources (Sackett, et.al, 2016).
By this the Virgin Group will be able to give high quality services and uniqueness in their
products which will be much better from other competitors.
Imitability – In this the Virgin network can increase the chances which are present externally or
can minimize the threats present externally by using precious and rare resources. Sustainable
competitive benefit can only be achieved when it has culture to be the market leader and should
take every opportunity whenever it comes.
Organization – After identifying all of the above three sources the next step to be followed is the
need to exploit and manage all the resources available with the organization. As the Virgin
network is following all the steps properly and successfully it has enjoyed the phase of
sustainable competitive environment (Chatzoglou, et.al, 2017).
SWOT Analysis of Virgin Mobile Network
The study of SWOT is undertaken to identify the strengths and weaknesses of the Virgin mobile
network. The analysis is as follows:
Strengths of Virgin Mobile Network
 Virgin mobile is the leading mobile service provider.
 It has its various operations which are spread all over the world like India, UK, USA,
France, UAE etc.
 Rates of calls and internet services which attracts customers.
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 Best service centres, and websites which help customers in payment of bills, recharges
etc (Grant, 2016).
 It has strong backing of the Virgin Group of the Richard Branson.
 It has best partnerships with the leading telecom organizations like Tata Teleservices
(India), Sprint (USA) etc.
Weaknesses of Virgin Mobile Network
 Limited awareness and visibility of brand which are very less in comparison of leading
telecom brands.
 The brand is affected by the operational issues in some segments like Qatar, India
Singapore etc.
Opportunities of Virgin Mobile Network
 Latest and lower costing technologies to increasing the services.
 The branding and visibility is high in market with the JVs for entering into new markets.
 Fastest expansion of cellular market with collaboration will increase the image of brand
of Virgin mobile
Threats of Virgin Mobile Network
 The market share of Virgin mobile can be affected by the competitor’s low pricing
services for the customers.
 Portability of mobile number can weak the market base of organization.
 The business profitability can be affected by tie-ups and JVs.
8

Figure 5: SWOT analysis
(Source: Marcus Miller, 2017)
The strength and weaknesses are two factors which need to be considered for working
capabilities for Virgin (Bohari, et.al 2017). The skills of employees and capabilities can be used
to support the business. On other side weaknesses bring setbacks and hurdles in achieving the
objectives of the business.
For example – the Virgin Group have highly qualified and skilful workers which bring many
opportunities to the organization by declining all the threats. Another internal capability is the
use hierarchy structure so that collaboration with other business partners makes easy operations
of activities. Therefore the strengths and weaknesses will also identify the competitive advantage
so that the problems which are coming internally can be easily resolved and the activities of the
business should be expanded.
9

Task 3
P3, M3 Analyze the telecommunication sector
The Porter’s Five Forces model is developed to analyze the competitive environment in which
the organization can work. In this theory, five factors are present and they are – rivalry within the
market, bargaining power of buyers, bargaining power of suppliers, threats of new entrants and
threats of substitutes. The model for Virgin mobile network is as follows:
Porter’s Five Forces Model
Figure 6: Porter's five forces model
(Sources: Ovidijus Jurevicius, 2013)
Rivalry within the Market – The profit margins becomes zero if two companies in the market
have the business rivalries. Organizations try to overcome from them using competitive attitude
towards their rivals (E. Dobbs, 2014). Rivalries caused with the competitors have various reasons
with them but to face that the companies have to start special deals for the customers for facing
the challenges. A rivalry between the two companies is due to following reasons:
10

 Large number of firms of the same Group creates barrier for the competitors as the
customers cannot be attracted towards the other services due to large number of firms
with organization.
 If the products cost are high than the customer automatically shifts to another services
provider who are charging less prices.
 All companies try to increase the market size for customer attraction and the organization
who has best policies for customers takes off the market which causes rivalries.
Bargaining Power of Buyers – It mainly refers to the customers. There are two factors in it – if
buyers are powerful and secondly, if buyers are weak (Hampton and Stratopoulos, 2015).
 Buyers are powerful in that condition in which less concentration is compared to the
market share and the customer can buy a fair share of the output.
 Buyers are weak in that condition where the companies take the charge of distributing the
products or the producers supplies the input purchases.
Bargaining Power of Supplier – Suppliers feel powerful if there is more number of customers to
purchase their services or when there are fewer suppliers in the market for the company.
Suppliers feel weak when there are many number of market suppliers for supplying of goods and
when the purchasers are very less in the market to purchase the products (Fabbri and Klapper,
2016).
Threats of New Entrants – If any organization enters into the market the competition level with
others is very high and top of that if entrant is new to the market then they try various strategies
to attract more number of customers by giving them lots of offers which is the major danger to
compete into the market. The entering in the market becomes easy when there are lot of
distribution channels and more demand of any product. There is easy way to exit if there are low
cost of exits and the independent businesses.
Threats of Substitutes – In this model the substitutes refers to the production of same products
and services by another company which creates huge competition. In this case the customer
attracts themselves to another product. This causes losses to the businesses so for controlling that
11

situation the organizations try to deal with prices wars and manages the low profit margin to
attract the new and existing customers (Greenspan, 2015).
Several strategies have been integrated for enjoying the competitive advantage and better
positioning in market is as follows:
 The Virgin mobile network has major focus on building the brand.
 The another strategy which is followed by this Group is making of new and best smart
phones instead of inexpensive handsets.
 Providing many services with the mobile networks like internet, music download,
applications, games which attract the customers at large scale.
 The Virgin mobile network is maintaining the strong relationships with the distributors
and the suppliers.
 The change in the price of the services is the major strategy as the customers should not
listen to another service provider for giving low price products.
 The organization is trying to take all the efforts for reaching to every customer and builds
strong relationship with them.
 The new products and services are also being made to give tough competition to the
competitors (Anton, 2015)
 For avoiding the unnecessary competition, the best services and resources must be used
in making of new products so that they can achieve the market position.
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Task 4
P4, M4 Interpreting and understanding the strategic decision
It is very much necessary for any organization to use Bowman’s Strategic Clock method. This
method puts focus on the positioning of all products and services to make competitive benefits.
The product positioning is based in two factors that are value of the new product and the
estimated price of that product. It consists of almost eight components and they are as follows:
Low Price & Low Added Value – The organization is making new electric products in which
they are trying to put the quality low and even the prices are too low so that customers can try it.
But many times this becomes the drawback due to the poor quality of the product (Grant, 2016).
For
Low Price – The price should be kept low by the organization for the product so that it can get
easy entry into the market for better performance.
Hybrid – The organization should follow the proper norms so that they can make balance
between the price and quality of the product for making long term goodwill into the market.
Differentiation – The strategy should be very different in advertising the new product of the
virgin mobile so that people can attract towards the product irrespective of the high prices.
Increased Price – This strategy is used for short term purpose only as the products prices are kept
high so that they can sell their products very soon and earn large number of profits in short span
of time (Prentice, et.al, 2017).
Focus Differentiation – In this strategy the prices can be set too high with low level of value for
the strategic option.
High Price and Low Value – The Virgin mobile try to make higher level of profits by keeping
low value of the new products with high selling price from which the organization can achieve
higher profits.
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Low Value and Standard Price – This is the drawback point the Virgin mobile network as it
provides low quality of product at standard value which causes least interest of customers in
these kinds of offers.
Figure 7: Bowman's strategy clock
(Source: Abey Francis, 2018)
Strategic management plan refer as the actions and strategies that can be made for Virgin to meet
the benefits by following the objectives (Shakhshir, 2014). The organization majorly focuses on
the tactical panning for making strategic management.
Objectives of Virgin
 By introducing the new product for laptops of Virgin.
 To increase the awareness of the brand to achieve the market share.
 Ensures customer satisfaction by providing them development in products.
 To foster the growth of sales.
14

Tactical Strategy – It refers to the short term strategies to meet and implement the objectives of
the organization to achieve its competitive advantage. The planning will majorly puts all focus
on marketing activities, operational management and the policies of HR department.
Operational Planning – It creates the link between the strategic objectives and goals with the
goals of the management (Ind, 2017).
Marketing Plan – to provide the best quality and durable laptops to the consumers with greener
technology in laptops which will decrease the price of the product and every type of customer
can afford that laptop.
Marketing Strategy – The marketing strategy refers to that direction of getting all the products
and services to customers which is maintained by the set of various responsibilities and duties.
For marketing of laptops, the pre-emptive strategy must be used so that the customer feels the
brand as superior which will also increase the market at high level.
Distribution Strategy – This refers to the channels that are being utilized by the organization so
that the customers can get their all products and services at their doorstep. The direct distribution
channels for Virgin mobile network will be its website and mobile at the customer service, the
toll free customer care, and the third party distribution channels that are retail stores or target
stores which will help in distribution of customer products in easy manner (Ghezzi, et.al, 2015).
Thus to meet the strategic priorities and objectives the above plan must be followed step by step
to achieve the positioning of the organization.
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Conclusion
In the current study, the report has given the clear understanding of business strategy by
analyzing the external and internal business environment which has a great impact on the
operations of business of the Virgin mobile network. In this context various models have been
used to understand the business strategy like PESTLE’s models, Ansoff’s growth matrix, VRIO
model, Porter’s five forces model and Bowman’s clock model which are used to prove the
strategic plan on the mobile network service provider of Virgin Group. The UK is the largest
telecommunication centre for the Virgin mobile network where many of the people are using this
services provider. The report has briefly concluded about the strategies and models which can be
used to increase the organization’s brand positioning and awareness into the market which has
helped the Virgin to perform much better in tough conditions with much number of competitors.
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