Virgin Mobile UK: Business Strategy Analysis and Recommendations

This report provides a comprehensive analysis of Virgin Mobile UK's business strategy. It begins with an introduction to business strategy and its importance, followed by a PESTLE analysis to examine the political, economic, social, technological, environmental, and legal factors affecting the company. The Ansoff's growth vector matrix is then applied to analyze Virgin Mobile's strategic positioning, exploring market penetration, product development, market development, and diversification strategies. The VRIO model is employed to assess the company's strategic capabilities, focusing on value, rarity, imitability, and organization. The report further identifies Virgin Mobile's strengths and weaknesses, offering strategies to enhance its competitive edge in the market. Finally, it proposes a strategic management plan to provide clear direction and options for the company's future growth and success, concluding with a summary of key findings and recommendations.

BUSINESS STRATEGY

Table of Contents
INTRODUCTION ..........................................................................................................................1
TASK 1............................................................................................................................................1
1) PESTLE model for environmental analysis ...........................................................................1
2) Ansoff's growth vector matrix to strategic positioning ..........................................................2
TASK 2............................................................................................................................................4
1) Applying VRIO model for strategic capabilities ...................................................................4
2) Strengths and weaknesses of the company ............................................................................5
TASK 3 ...........................................................................................................................................7
1) Strategies for improving the competitive edge in the market ................................................7
TASK 4 ...........................................................................................................................................9
1) Produce strategic management plan for clear direction and options to the company ............9
CONCLUSION .............................................................................................................................12
REFERENCES..............................................................................................................................13

INTRODUCTION
Business strategy can be determined as course of activity or set of judgements that help
the entrepreneurs in accomplishing particular goals and objectives of organization. It is the long
term plan of activity designed to accomplish specific objectives or set of goals. It is the master
plan which the management utilise to secure competitive position in the market (Akter and et.al.,
2016). This study is based on Virgin Mobile UK. It is the wireless communications brand.
Report will explain the PESTLE model for environmental analysis and Ansoff's growth vector
matrix to analysis strategic positioning of organization. It will apply the VRIO model to analysis
to strategic capabilities possessed by selected company.
TASK 1
1) PESTLE model for environmental analysis
PESTLE analysis is strategic management technique which Virgin Mobile management
can be utilised to analysis internal and external factors that effect the conditions in company.
Political Factor:

 This factor are frequently related to the level and level of involvement of localised and
nationalized government in the business and economic environment. Due to political
stability in the existing market, Virgin Mobile UK operates in number of nations, so that
it has to create policies at each nation based on industry requirement (Higgins, Omer and
Phillips, 2015).
 Some times, Virgin group has to prepare for contingency as it can lead to change of
priorities for the sector, due to changing policies with new government. As per resource
allocation and time scale, it is the difficult to change in resource allocation by Virgin
Group.
Economic Factor
 The government has raised the investment in developing core infrastructure to facilitate
and improve business environment.
 Due to raising relaxation of trade policy, it can aid Virgin Mobile to invest advance into
locations which are so far off limits to the company.
 The evaporable exchange rate can influence investment plans of Virgin Mobile UK not
only in short term but also long term (Min and et.al., 2016.).
Social Factor:
 There is high education level in existing market of Virgin Mobile UK and also building
research and development centre in the localised market.
 Media outlets play important function in influencing in public thought in both way
tradition and social media which are fast growing. Selected company can advantage trend
to build efficient marketing network (Xiaohui and Bin, 2015.).
 The wider attitude towards movement is negative in the market where Virgin Mobile is
presented. This can effect on ability to bring global talent to manage functions or
activities in nation of selected company.
Technological Factor:
 Growth of mobile technology has changed expectation of consumer. Therefore, selected
company has to not only meet and handle these prospects but also have to invent to stay
ahead of the competition (Mathooko and Ogutu, 2015).
 The fast discontinuing of technological innovation in the supply model of Virgin Mobile
as it is giving greater access to info to channel which is leading to larger profit sharing.

Environmental Factor:
 Waste management for units close to urban area which has taken raising significance for
players such as Virgin Mobile.
 Due to customer activism, larger awareness between consumers have also put
environmental factor at the area of strategy of Virgin Mobile.
Legal Factor :
 The business regulations process which government follows for operating the business
smoothly in existing market (Bryson, 2018).
 Due to Data protection laws, selected company has to consider whether nation have
robust legal and technological performance to secure against data breaches or not.
2) Ansoff's growth vector matrix to strategic positioning
Ansoff's matrix
Ansoff's matrix model provides various growth strategies by which the company can
easily analyse their strategic position in the market. This model provides a framework to the
company which helps them in execution for the future growth (Murdock, 2017). It suggests that
there is mainly two approaches by which Virgin telecommunication company can develop a
growth strategy such as product growth and market growth as what is sold and who it is sold to.
It has strategies which are as follows:
Market penetration: Market penetration strategy means to achieve growth with their
existing services and products into new market segment. As compare to other strategies it is the
least risky because with this strategy, Virgin telecommunication company can use their existing
products with its capabilities and can maintain market shares. The main objective of this strategy
is to increase usage by its existing customers and for achieving this objective this company can
introduce and use loyalty scheme.
Product development: It is also a growth strategy which can be used by Virgin
telecommunication company in order to launch its new services and products in its existing
market (Dawes, 2018). For example Virgin company can use new schemes on its products like
unlimited STD & Local calls for its existing customers or users. The product and scheme need to
be differentiate for being in a competition. For developing and being successful in this strategy
this company can focus on development & research by which it can identify the new ways and
demands of customers and also can identify that what other companies in this sector are using.

Market development: This strategy is opposite from product development. In this
strategy Virgin telecommunication company attracts new potential customers with its existing
products. For getting successful in this strategy, it can focus on its new distribution channels. For
example it can use Mail, online and E-commerce orders. It uses and focuses on packaging. With
the help of new policies also it tries to attract its potential and new customers and create a new
market segment.
Diversification: In this strategy, Virgin telecommunication finds new ways and new
products for its new customers in new market. This strategy is comparatively risky strategy
because in this strategy the company have to take risk by introducing its new products in the new
market. For getting successful in this strategy, it is important for the manager of the company to
have a clear idea about its goals that what is exactly wants to achieve from the strategy. For
maintaining rewards and risks it should make a backup plan for this.
These strategies of this model can become an effective tool which can make able to the
company to analyse its possible growth strategies & to analyse it actual strategic position in the
market (Bang, Joshi and Singh, 2016). By analysing all the factors and its position it can make
changes in its existing strategy in order to satisfy its customers and also for being in the
competition.
TASK 2
1) Applying VRIO model for strategic capabilities
VRIO Model:
VRIO analysis is strategic analysis technique designed to aid uncover and protect the
resource and capabilities which provide them long term competitive advantage. VRIO stands for
valuable, rarity, inimitable and organized. This kind of model helps to identify and determine the
strategic capabilities which tend to develop or expand over time as company takes activities
which build on their strategic resources.
Valuable:
It is important thing is to determine possible resource actually which has any value to the
firm as entire when looking at the resource within the company. It is the resource valuable to
selected company in which involves financial, human resource, management expertise and
operations management (VRIO Analysis, 2018). All the resources are valuable for Virgin Mobile.

The understanding the value of resource and other things within the organization which is one of
key to experience success in the long terms.
Illustration 1: VRIO Analysis
Source: (VRIO Analysis, 2018)

Rarity:
It can be hard to come by in company, but it is exceeding valuable when it does exist
within firm. In this context, the resource which are valuable to the Virgin Mobile are rare or
costly to attain. If the resources of selected company are not rare, so that both present challengers
and new entrants will easily able to approach to them and enter the competitive landscape (Akter
and et.al., 2016). If the Virgin Mobile having the rare resources, so that it is only going to be
advantageous to bottom line. Therefore, they put them, to utilise effectively.
Imitability:
Every company looks that competing firm is having success with given goods, so that
another organizations will rarely quickly work towards to copy that goods as nearly in relation to
enter the market as direct challengers. Most of the industries are faced raising threats of
disturbance. In the Virgin Mobile, it seems that core differentiation is very difficult to copy.
There are two ways of imitating of goods of selected entity such as copying of goods and
substitute products by competitors.
Organization:
The firm is structured is effective ways which it is able to exploit all advantages that have
been find out within the valuable, rarity and imitability. The benefits are only useful when Virgin
Mobile are able to successfully leverage it into additional sales, market share and profitability.
The development level analysis for Virgin Mobile goods can be done from two views that is the
company able to wholly work the possible of the resource or it still has lots of upper side
(Higgins, Omer and Phillips, 2015).
In order to that, VRIO model is great mode to locate the benefits which Virgin Mobile
can possess over the competition. For that, companies are liable to find which they have some
weaknesses in addition to strengths. Therefore, company needs to explore strengths for reducing
the weakness of business. This can help to increase strategic capabilities and competitive
advantage in the upcoming time period.
2) Strengths and weaknesses of the company
It is the necessary to determine the strengths and weaknesses for analysing the internal
environment of firm which includes think, reputation, location etc. The analysis of strengths and
weakness help to identify the competition within the existing market whereas the company is
operated. Strength and weaknesses are internal to the firm. Virgin Mobile is the largest

telecommunication company within the industry in the UK. Company has lots of strengths and
weaknesses such as: '
Strengths:
 Selected company is leading international mobile services providers world-wide which is
the strengths of firm.
 Company and its operations distributed across the nations like UK, South Africa, India
etc. that is also strength of business.
 Selected entity has powerful approval of Virgin Group of Richard Branson which is very
effective for the competitive edge within the telecommunication sector.
 The product services centres and websites having all the characteristics for paying bill,
recharge etc (Akter and et.al., 2016). which is also helpful to attract the consumers
towards the products and services as well as organization.
 There is powerful brand is experienced in introducing new goods in the competitive
marketing atmosphere.
 The strength of selected brand comes from the relationship which consumers have with
the thoughts of Virgin as irreverent by which firm built on young and entrepreneurs
values.
Weaknesses:
 As compared to other leading brand, Virgin Mobile has limited visibility and awareness
that is big weakness of selected entity.
 There are high level of issues in operations in different nations like Qatar, India etc. It is
the very hurt brand (Higgins, Omer and Phillips, 2015).
 This kind of weakness is highly effected on the consumer expectation and their
experience towards the brand as well as Virgin Mobile.
 Due to competitors offer low prices, the market share of selected organization can be
effected in relation to decline.
 Virgin group can try to joint venture, but they are failed that can influence profitability of
business. It is also high weakness of firm.

TASK 3
1) Strategies for improving the competitive edge in the market
It is the necessary to improve strategies, techniques and methods for developing the
competitive advantage in the market. Therefore, Virgin Mobile needs to improve strategies and
methods of business which help to increase competitive edge in the UK where they are currently
operated (Mathooko and Ogutu, 2015). Thus, company is utilised the Porter's five force model
for improving the competitive edge in the market. It has developed unique position in the UK
market. Through unique position and fit the powerful business system which create an
innovative virtual mobile service providers. In this model, five forces are involved such as
follows:
Rivalry within market:
It is the first force of model by which company can be determined main drivers that is
number and capabilities of challengers in the market (Min and et.al., 2016). The reason of
reducing the market attractiveness, many of rivals offering differentiate goods and facilities in
the market. If the competition is concentrated, so that it becomes complex for existence players
like Virgin mobile to earn sustainable profits. This can be highly influenced on competitive edge
in the marketplace.
Threats of New entrants:
It is second forces of model by which organization can be determine profitable market
that attract new entrants and erodes profitability (Porter’s Five Forces of Competitive Position
Analysis, 2013). If there is powerful threat of new entrants, so that existing players like Virgin
Mobile will be willing to earn fewer profits which is to reduce the threats. improving the
competitive edge in the market.

Bargaining power of suppliers:
It is the necessary to assessment of supplier to drive up prices which is easy for firm. It is
driven by number of suppliers of each important inputs like uniqueness of their goods and
services, size and strength of suppliers, switching costs from one supplier to another (Higgins,
Omer and Phillips, 2015). If the supplier have high bargaining power, so that they will selection
higher prices from the Virgin Mobile. This can be highly influenced on competitive edge in the
marketplace.
Threats of Substitutes:
It is needed to determine threats of substitute goods and services in the marketplace
where close substitute goods existing. It raises the probability of consumers switching to
alternatives in response to enhance prices. In this context, Virgin Mobile has to either constantly
invest into research and development or its risks losing out to interrupt in the telecommunication
industry.
Bargaining power of buyers:
It is easy to assessment of buyer's power to drive down prices. Due to lack of brand
equity, the bargaining power is very low in the Virgin Mobile. Therefore, buyers have deeply
known about the availability of goods in the market (Akter and et.al., 2016). If buyer have strong
bargaining power, so that they normally tend to drive prices down. Therefore, restricting the
possible to earn of sustainable profits of the selected telecommunication company.
Illustration 2: Porter’s Five Forces of Competitive Position Analysis
Source: (Porter’s Five Forces of Competitive Position Analysis, 2013)

TASK 4
1) Produce strategic management plan for clear direction and options to the company
It is necessary to determine strategic direction by company, thus they adopt the Porter's
Generic strategy which help to create strategic management plan (Bryson, 2018).
Porter's Generic Strategy:
It is the attractiveness of the industry in which they operate. It is an essential crucial is its
position within the industry. An industry can have below-average profitability, company
positioned can generate superior returns. There are mainly three generic strategies like cost
leadership, differentiation and focus strategy.
Cost leadership:
It is the first generic strategy can be determined for being low cost producer for given
level of quality in an industry. Virgin Mobile sells their products either at average industry prices
to earn larger profits than of rivals or below the average industry prices to gain market share.
Company can maintain some profitability while competition suffers losses in event of prices war
(Mathooko and Ogutu, 2015). The telecom industry matures and price decline, company can
offer inexpensively will remain profitable for longer time period. Cost leadership strategy
normally targets wider market.