Business Strategy Analysis of Virgin Mobile UK

This report analyzes the business strategy of Virgin Mobile UK, focusing on macro environmental factors using PESTLE and Ansoff's Growth Vector Matrix. It evaluates the internal environment through VRIO analysis and identifies strengths and weaknesses. The report also examines the telecommunications sector using Porter's Five Forces model and discusses strategic decision-making frameworks like Bowman's Strategy Clock and Porter's generic strategies. The findings highlight the importance of strategic planning for organizational growth and competitive advantage.

BUSINESS STRATEGY

Table of Contents
INTRODUCTION...........................................................................................................................3
TASK 1............................................................................................................................................3
Macro environmental factors determining the decision making............................................3
PESTLE MODEL..............................................................................................................3
ANSOFF's GROWTH VECTOR MATRIX.....................................................................5
TASK 2............................................................................................................................................6
Internal environment and organization capabilities...............................................................6
VRIO analysis....................................................................................................................7
STRENGTHS AND WEAKNESSES...............................................................................8
TASK 3............................................................................................................................................9
Analyse the telecommunications sector.................................................................................9
PORTER FIVE FORCES MODEL.................................................................................10
TASK 4..........................................................................................................................................11
Understanding and Interpreting strategic decision...............................................................11
BOWMAN'S STRATEGY CLOCK MODEL ...............................................................12
PORTER'S STRATEGIC AND HYBRID STRATEGIES.............................................14
CONCLUSION .............................................................................................................................15
REFERENCES..............................................................................................................................16

INTRODUCTION
Today, telecommunications industry has taken over the world on a mass scale. Business
strategies are used by an organization in order to achieve desired growth in its operations and
maintaining organizational efficiency. The below report identifies the business strategy of United
Kingdom's one of the biggest telecommunication company Virgin Mobile UK. The company
was launched by Virgin Group in 1999 and its headquarters are situated in Swansea, United
Kingdom. The organization is having an employee base of 1700. The below report makes use of
a number of models such as PESTLE, Ansoff's growth vector matrix, VRIO model, etc to
identify the strategic decision making of the organization. Along with it, both internal and
external capabilities of the organization are identified in the report to understand the working of
the organization and its core functioning (Scholes, 2015).
TASK 1
Macro environmental factors determining the decision making
The macro environmental factors play a major role in an organization's growth and
development. Also, these factors influence the decisions making of overall organization's
management including its strategic decision making. Below explained are the PESTLE model
and Ansoff's growth vector matrix analyzing the macro environment of Virgin Mobiles:
PESTLE MODEL
Political Changing policies with new government is one of the core political factor that
impacts the decision making of Virgin Mobile UK. The organization has to
make its decisions carefully while there is a change in government and its
policies (Higgins, Omer, and Phillips). The management of the organization has
to carefully examine each and every policy and have to understand the needs
and demands of the changed government. As per these changes and
requirements the strategies are prepared and related decisions are made. For
example, the recent situation of the Brexit in the United Kingdom has made the
telecommunications company to stop their services in its neighboring countries.
This has made the large organizations to face terrible losses. This is one of the

major threats which is failing Virgin Mobiles to incorporate new strategies in
order to grow its market share.
Economical Inflation and exchange rates are one of the major economic factors impacting
the strategic decision making of the organization. For example, the price
inflation occurred due to the trade war happened between China and America
made it hard for the organization to keep the prices of its services same. Virgin
Mobiles has to change the prices of its services more often and it made the
organization face huge losses. In case, if the trade war appears again it can
make the organization stop its services for a long period and both its profits and
growth can suffer.
Social Factors such as access to essential services is one of the major social factors
that impacts the organizations decision making. Consumers of the Virgin
Mobile UK seeks change in services as per their personal needs and demands
and the organization has to take these things into consideration before making
any required decisions. Also, while deploying appropriate strategies the
organization needs to make sure that people's needs and demands are taken care
of. For example, the telecommunication's industry's horizontal growth is
limited. Its difficult and expensive for the companies to grow its products and
services in rural regions. These customers are left with handful of options while
buying mobile, internet and television packages. This is an opportunity for
Virgin Mobiles where it can grow its products and services to get a maximum
service advantage.
Technological Organizations management has to make its decisions as per the arrived updates
in the technology and new technological changes. These changes needs to be
considered while preparing any required strategy for the organization's growth
and development. For example, the arrival of Artificial Intelligence in the
telecommunication's industry has made the industry's services faster and
effective. Today, most of the industry's work is being done with the help of
robots. It is important for the organization to make sure that this opportunity
can be used to smooth its operations. Virgin mobiles can make use of

development where artificial intelligence is a core part of the organizations
service provision. Virgin mobile can increase its customer efforts and launch
better systems in order to provide best services to its customers. This can ensure
proper growth and development for the organisation.
Legal Heavy taxation and strict laws of telecommunication authorities needs to be
considered while making any required decisions. The managers have to
carefully examine the laws and have to take required directions from
telecommunications industry to make strategic decisions. For example, the
recent issue of Brexit in United Kingdom has made the country imply strict
laws on its telecommunications organizations because of major security
concerns including loss of the strict information. These laws are making the
company to produce its services with very limited freedom. Hence, it is one of
the larger threats that the Virgin Mobiles is facing in provision of better
services and better customer orientation.
Environmental Factors such as global warming and high temperatures impact the organizations
decision making (Pisano, 2015). For example, high temperatures makes it
difficult for Virgin Mobile UK to set up its networks and mobile towers in
different places of UK. For Example, climate change and global warming are
impacting telecommunication products and services reach customers. The
telecommunication industry has to suffer huge losses when its comes to
provision of services to its customers and there is no way to tackle these
environmental changes. This is a threat for the Virgin mobile to ensure proper
market advantage.

ANSOFF's GROWTH VECTOR MATRIX
The Ansoff's Growth Vector Matrix is tool used for strategic planning. It provides a
framework to help executives, senior managers, and marketers of Virgin Mobile UK to devise
strategies for future growth (Kourdi, 2015). It includes four quadrants which includes Market
Penetration, Product development, Market development, Diversification.
Market Penetration: The market penetration happens when the organization markets its
existing products. Virgin Mobile UK tends to market its current offered services to old consumer
markets and current consumers. Using market penetration strategy, the organization has to make
its decisions as per the market needs and trends. The current trends need to be observed and
carefully examined by the organization management and the strategies needs to be prepared as
per the trends and settings. The decisions by the organization in order to prepare required
strategies are influenced by the these factors. This strategy is used by the organisation promote
its products and services in the old market. Also, this can be used by the organisation to promote
its products and services in the current market and allow consumers to flourish. For example, the
organisation can promote its already placed products and services in the market of United
Illustration 1: Ansoff's growth vector matrix
(Source: The Ansoff Matrix, Strategic skill training for Mind-tools, 2018)

Kingdom. This can make it gain new customers and old customer aware about the services
provided.
Market Development: Market development occurs when the organization seeks to
expand its products and services in the new market. In this context, Virgin Mobiles UK's
management has to make its strategic decisions as per the market requirements. The organization
understands the consumers requirements, their judgements while choosing services and the
choices they make. These factors impact the management's decision making as the deployed
strategies needs to be suitable as per these consumer markets and choices. For example, Virgin
Mobiles can expand its products and services in the markets of India and China where its
products and services are still missing. This can make the organisation serve new markets and
gain a better consumer advantage. Also, this will add up new profitability to the organisation.
Product development: In this case, the organization develops its services to gain new
consumers and increase its market availability in the existing market. For example, To develop a
new product (services such as free international roaming and cheap data packs are provided by
the organisation in the market of United Kingdom) the organization's management has to
understand the demand of the market and what products and services the market needs. The
strategic decisions are made as per these needs and requirements.
Diversification: Diversification happens when the company launches new products in
new markets. For example, companies such as Vodafone and O2 have launched services such as
provision of cheap data packs for a limited amount of time to its consumer to gain market
advantage and attract new customers. Virgin Mobiles can do the same in which it can launch
services such as cheap calls between the same telecom operators. This can make the organisation
achieve growth and develop its products into new markets.
The above explored PESTLE and Ansoff's Growth Matrix explores the macro
environmental factors determining the strategic decision making of Virgin Mobile UK.
From the above mentioned analysis, it can be seen as Virgin Mobiles UK needs to make
use of Market Penetration strategy in order to develop its products and services. Market
penetration would allow the organisation to promote its services in the current market of UK.
The political situations have made it difficult for the organisation to promote its products and
services. The recent situation of the Brexit in the United Kingdom has made the
telecommunications company to stop their services in its neighbouring countries. This has made

large organizations to face terrible losses. This is one of the major threats which is failing Virgin
Mobiles to incorporate new strategies in order to grow its market share. It is important that the
company considers Market penetration to deal with the situation.
TASK 2
Internal environment and organization capabilities
Internal environment of an organization showcases its core strengths and capabilities.
Below explored are VRIO analysis and Strengths and Weaknesses of Virgin Mobile UK:
VRIO analysis
VRIO analysis is an internal analysis that is used to identify and evaluate the resources of
the company:
Resources Value Rare Imitation Organization Competitive
Advantage
Strategies of
Marketing
Yes No Strategies
related to
pricing are
regularly
imitated in the
industry
Yes, the
organization is
having a
pricing
analytic
engine
Competitive
Advantage is
temporary
Local and
Global
Presence
Yes, the
organization
has to
diversify the
revenue
streams and
isolate
company's
balance sheet
from the
cycles of
Yes It is possible
to imitate this
by the
competition
Yes, Virgin
mobiles is one
of the most
diversified
companies in
the country
Strong
Competitive
Advantage

economy
Track Record
of Leadership
Team at
company
name
Yes Yes Cannot be
imitated by
competitors
Yes Provision of
Strong
Competitive
Advantage
Customer
Network and
Loyalty
Yes, 23% of
its consumers
contribute to
more than
84% of the
Virgin Mobile
sales revenue
Yes, firm has
invested to
build a strong
customer
loyalty
Has been tried
by competitors
but none of
them are as
successful
Company is
leveraging the
customer
loyalty to
good effect
Provide
medium term
competitive
advantage
Supply Chain
Network
Flexibility
Yes Yes Near
competitors
also have
flexible supply
chain and
share some
suppliers
Fully utilized Keeps the
business
running
Opportunities
in the E-
Commerce
Space using
Present IT
Capabilities
Yes, the e-
commerce
space is
rapidly
growing and
firm can
leverage the
opportunities
No, most of
the
competitors
are investing
in IT to enter
the space
The AI and in-
house analytic
can be
difficult to
imitate
It is just the
start for the
organization
In the long run
it can provide
sustainable
competitive
advantage

Intellectual
Property
Rights,
Copyrights,
and
Trademarks
Yes, they are
extremely
valuable
especially to
thwart
competition
Yes, the
organization's
IPR and other
rights are rare
and
competition
can't copy
Risk of
imitation is
low but given
the margins in
the industry
disruption
chances are
high
The firm has
not yet utilized
the full extent
of its IPR &
other
properties
Providing
Strong
Competitive
Advantage
Opportunities
in the
Adjacent
Industries &
New
Resources
Required to
Enter those
Industries
It can be
valuable as
they will
create new
revenue
streams
No (Kourdi,
2015)
Yes, it is
possible to
imitate the
products by
the
competitors.
All the
capabilities of
the
organization
are not fully
utilized yet
Yes, it is
having
potential
STRENGTHS AND WEAKNESSES
Below analysed are the Strengths and Weaknesses of Virgin Group UK:
Strengths Weaknesses
Virgin Mobile UK is one of the leading global
mobile companies. The company owns one of
the largest market share in provision of
telecommunication services. This allows the
organization to develop such strategies that can
improve its growth and development and
ensure profitability.
Although, the organization is having a global
reach yet its brand awareness and availability is
limited as compared to the other competitors. It
makes it difficult for the organization to
develop such strategies which can ensure its
growth and development.

It cheap data and call rates attracts consumers
towards the brand from countries such as USA,
UK, India, South Africa, France etc. Also it
makes the organization achieve success. Here,
Virgin Mobiles develops such strategies which
are appropriate for its growth and development
and also can gain competitive advantage.
The company is facing operational issues in
countries such as Singapore, India, Qatar etc. It
is making the organization face issues and
hurting the brands image. The organization
finds it difficult to achieve required set of
growth and development and prepare such
strategies that can promote its growth in these
countries.
The organization is having partnerships with
leading telecommunication companies such as
Sprint (USA) and Tata Teleservices (India) etc.
These partnerships allow the organization to
prepare advance strategies that can foster its
growth and development (Shuen, 2018).
Brexit is another dis-advantage which the
company is facing. It has made company to
face terrible issues and stop its operations in
major European countries. The organization
found it difficult to implement required
strategies and ensuring growth and
development due to the issue of Brexit.
The company is having a strong backing of
Virgin Group and its founder Richard Branson.
This allows the company to have strong
economic growth and advantage. Also, it
makes it possible for the organization to
achieve desired growth as well.
Lack of resources such as not having desired
market which can make use of the services by
the telecommunication partners makes difficult
for the organization to deploy it services in the
market and achieve required success.
TASK 3
Analyse the telecommunications sector
Below analyzed is the telecommunication's sector of United Kingdom with the usage of
Porter's five forces model:

(Source: CIMA E2: Porters Five Forces, 2016)
PORTER FIVE FORCES MODEL
Bargaining power of suppliers: As being a telecom company there are no major
suppliers that the industry requires. The main suppliers include the manufactures of its
Broadband gadgets, cable providers etc. These suppliers creates large demands for the
organisation and makes it difficult for it to thrive during the times when the organisation is
suffering form lack of profitability (Chen, Eshleman and Soileau, 2016). To deal with this the
organisation needs to make use of strategies such as shuffling from one supplier to another,
understanding supplier advantage, bettering market reputation etc. These can improve the
organisation's capability of providing better services and leading towards growth and advantage.
Illustration 2: Porter's Five Forces Model