Business Strategy and Competitiveness: Virgin Group Telecommunication

This report provides a comprehensive analysis of the business strategy of the Virgin Group within the telecommunications sector. It begins with an introduction to business strategy and its importance, followed by an examination of the macro-environmental factors impacting Virgin, utilizing PESTLE and Ansoff matrix frameworks to assess political, economic, social, and technological influences. The report then delves into strategic capabilities, emphasizing how Virgin can leverage these to achieve a competitive advantage. The evaluation of competitiveness is conducted through Porter's five forces model. Finally, the report analyzes strategic directions and options for Virgin, concluding with recommendations for future strategic planning and implementation. The analysis covers market penetration, product development and diversification strategies for the company.

Business strategy:
Telecommunication sector

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
Impact of macro environment on Virgin and its business strategies .........................................1
PESTLE analysis.........................................................................................................................1
Ans off matrix ............................................................................................................................2
TASK 2...........................................................................................................................................3
Strategic capability......................................................................................................................3
TASK 3............................................................................................................................................5
Evaluating the competitiveness of the telecommunication sector..............................................5
TASK 4............................................................................................................................................7
Analyzing the strategic direction and options for Virgin............................................................7
CONCLUSION................................................................................................................................9
REFERENCES..............................................................................................................................10
Books and Journals...................................................................................................................10

INTRODUCTION
Business strategy is considered as a roper and structured plan that is being made by the
company in order to achieve all the objectives in a very efficient way. It involves various
different aspects that can be involved by the company (Pucciarelli and Kaplan, 2016,
Competition and strategy in higher education: Managing complexity and uncertainty). Also,
there has been a huge demand in the mobile telecommunication sector, so various new
techniques and strategies can be adopted for achieving the competitive advantage, thus focusing
on achieving all the objectives and targets. The report is about discussing about the various
internal as well as external factors throwing an impact on the objectives of the Virgin group.
Various conceptual frameworks can be used for making a better analysis of the factors affecting
the operations in the Virgin group.
TASK 1
Impact of macro environment on Virgin and its business strategies
There has been an enormous number of macro environmental factors that throws some
sort of impact on the operations and services of Virgin. Use of PESTLE analysis can actually
help in analysing its influence on the mobile network company. The framework and its analysis
is discussed as under :
PESTLE analysis
Political factors
Political factors refers to all the policies and procedures which Virgin has to follow as
well. It can b either the rate of intervention or its impact on the economy. There are various ways
that can be involved by Virgin in order to promote their network but the fact they should ensure
is that he policies have been made in a way that it is achieving and following all the terms and
conditions of the government because if it does not involve the governmental rules, then it can be
barred at the same time. A very common example of this can be considered as the pre paid
customers service by Virgin. The regulation was implemented by the Virgin group and it
remained successful enough in achieving a higher rate of popularity as well as productivity.
Economic factors
The macro environmental factors includes the existing condition of the market and some
very well known and common examples of it includes interest rate, exchange rate, income of the
customers and employees etc., Virgin group can focus on analysis each of these factors so that
1

they can be able to evaluate whether they are some factors in which they have to make the
specific improvements. Although the company involved a low tariff structure to its customers
and it went well enough to attract a huge number of customers.
Social factors
There is a small relationship between the macro environmental factors and the social
environmental and cultural factors. Some very popular examples of it includes ethics, beliefs,
behaviour etc. Virgin had an efficient decision making with all the other employee and some of
its customers and on the basis of that, they started the GSM mobile handsets. The sale of the
following went rapid enough as the customers seem to be very attracted towards it. It improved
the convergence of the technology (Omar, Leach and March, 2014, Collaboration between non
profit and business sectors). Also, the Virgin mobile operator joined with the niche markets so
that they can be able to analyse the requirements of the customers well, and thus can focus on the
same. This however helped the Virgin group to achieve higher popularity as well as productivity.
Technological factors
The technological factors are considered as those factors that helps in analysing various
different changes that have been made in the technical operations and requirements of the
service. So, for achieving this, Virgin mobile can focus on the present needs and other
technologies that have been used by the other mobile networks in order to attract the customers.
So, the same can be used by them as well so that they can be able enough to attract a higher rate
of customers thus providing them an efficient set of services that seem reliable and affordable
enough to have.
Ans off matrix
Also, Ans off matrix can be used as well for analysing the influence of different macro
environmental factors on the Virgin group. It is considered as one of the essential tools that can
help in providing a sort of direction to the authorities etc. in order to provide a balanced path for
managing the operations and functions in an efficient and appropriate way. Different aspects of
the model that can help in analysing the same are discussed as under :
Market development
Virgin group can target various other markets as well. It means that the company can
think of expanding its operations in other various countries as well. Also, it is considered as one
of the leading companies, so its reputation can help them in a better expansion.
2

Diversification
Although the strategy of diversification is quite risky, but if be considered in an efficient
way, then it can help the Virgin group to achieve all their objectives and targets in a much faster
rate. In this, the Virgin group can think of involving new products and services in the market.
Also, the company can involve various ways for promoting the same as people can take time to
understand the new concepts.
Market penetration
In this, the Virgin group can make involvement of a new and modified marketing strategy
by which they can promote their products and services in a more efficient way. It is considered
as a very effective method for penetrating the new items and services in the market place. Also,
by means of this, they can make involvement of some new loyalty schemes. These ways can
further help in maximizing the sales and marketing of the Virgin group. Also, making the
involvement of various new methods and strategies can help the Virgin group to successfully
achieve a huge number of customers, thus an increased rate of popularity as well as productivity.
Product development
In this, the Virgin group can increase the production of various different variants in order
to increase the overall popularity and productivity of the company. A better product developing
which involves the feedbacks and ideas of customers as well can help the Virgin group to
achieve their targets at a much faster rate. Therefore, it can further help them in gaining an
efficient number of customers and that too at a much faster rate.
TASK 2
Strategic capability
Strategic capability is considered as a process that means the ability of the Virgin group
that how strongly they can make use of the competitive strategies so that it can help in efficient
and appropriate results of the outcomes. Also, it is known for increasing the value of the
procedures as well. There are various ways by which the Virgin group can achieve the
competitive advantages but making use of the strategies very efficiently proves much beneficial
for the achievement of the competitive advantage at much efficient rates. It is very important to
analyze such factors at a very initial stage because if these are being evaluated initially only, then
3

it can actually help in improving the other functions of the company such as promotions about
their new offers and schemes, managing the expansion of the business and its various operations.
The fact Virgin group is to ensure here that these strategic capabilities are developed after
analyzing the different movement by various other competitors in the market place. It is very
essential to making an evaluation of the current market position because on the basis of that only,
the Virgin group can focus on the strategies and operations which should be involved so that it
can help in improving the operations and productivity of the company. There are various
dynamic capabilities as well that can be considered as well so that it can help at the time of some
unexpected changes in the market place. There are some times, when the situations or
requirements of the customer change and this change is sudden. So, at that time, it is very
important that the Virgin group should be having enormous back up’s available that they can
make use of to attract the customers. The Virgin group can also think of then implementing a
new and modified range of products and services. If the mobile operator seems to be effective
enough, then it can actually help in coping with the challenges and barriers. It is because there ar
enormous number of competitors in the market place who always try to make involvement of the
strategies and processes that can raise their popularity and position in the market place. So, if
Virgin group tries to ensure every single strategy and factors, then it can actually help them in
dealing with all the challenges and barriers of the market place.
Strategic capabilities are also considered as a proper and structured framework which can
help the Virgin group to include various new strategies to be developed and implemented. Also,
it will help the mobile network to gain a stronger vision than before. Having a strong and deep
vision can prove very beneficial for the company because if targets and goals are deep, it actually
helps the company to stay strong enough in the market for a longer term (Omar, Leach and
March, 2014, Collaboration between non profit and business sectors). This can thus help in
improving the overall productivity and popularity rate of the Virgin group. Along with this, there
are various factors as well that are included in the same such as assets of the Virgin group,
technology, the capital investment etc. the technology and assets that are being used by the
Virgin group also plays a very important role because if the assets will be strong enough then the
strategies used can help in achieving the results faster enough. So, it is very important to keep the
focus on all these factors so that it can help the Virgin group to achieve all their targets and
objectives and that too at much higher rates.
4

TASK 3
Evaluating the competitiveness of the telecommunication sector
The competitiveness of the Virgin group can easily be evaluated by making use of the
Porter’s five force model. There are various different aspects of the Porter’s framework and each
one is discussed as under :
Bargaining power of buyers
Bargaining power of buyers is considered as the fact that how much the customers can
bargain. It is classified as one of the essential concepts that can help the company to achieve
higher gains. It depends on the type of the buyer. There are enormous buyers, whether some of
them are strong but some of them are weak enough. When the customers are in a lesser
concentration, it is obvious that the buyers act more powerful at that time. So, Virgin group
should ensure to deal with them in an efficient and appropriate way so that they can be
successfully able to achieve all the targets and goals.
Supplier power
This factor also depends on a few processes. In some cases when there are enormous
number of customers, then it can actually help the suppliers to deal with them. Also, another
popular example of this is considered when there are less number of suppliers to the company
because when there will be more number of suppliers, the company can make the deal according
to its own because at that time, there are enormous number of options, but when there are a few
suppliers ready to take over. In that case, it might affect the supplier power of the Virgin group.
So, when the suppliers are in a lesser number, then it can affect the overall supply rate. Also,
when the sale is low, then also, the supplier rate gets affected. If there will be enormous number
of customers of the Virgin group, it is obvious that there might be a lesser possibility of making
any offers or discounts on the same. On the other hand, if there will be less number of customers
to the products and services of the Virgin group, it might result as the company will tend to offer
a great number of discounts and offers to the customers so that they can be able to attract a much
number of customers, thus it can further help them in gaining a higher rate of popularity as well
as productivity.
Threat of new entrants
It is obvious enough that the whole sector of telecommunication is growing and
spreading very wide because it helps in satisfying the basic communication requirements of the
5

people. Although Virgin group is one of the leading mobile network telecommunication
company but it s obvious that many other brands are trying to expand their business so that they
can also be able to have a great productivity (Kim, Lee and Benbasat, 2014, Understanding the
effect of knowledge management strategies on knowledge management performance). So, the
involvement of various new mobile network brands in the market place can somewhere act as a
threat to the existing ones. A very well known and basic example of this can be considered as the
Virgin group. There might be the possibility that the entry of new brands can affect on the
productivity rate of the Virgin group. It is because there is a possibility that when any new brand
will enter the market, the customers might try to experience their services as well as they are new
and must be attractive enough to gain the attention of the customers. So, then, it can make the
customer rate of the Virgin less enough. So, the Virgin group should ensure to have all the
strategies and ways effective an appropriate enough so that the involvement of new entrants
might not affect their services and operations, thus the company can successfully lead towards
the achievement of the targets and goals.
Threat of substitutes
Substitutes can also act as a much challenging factor for the Virgin group. As it is clear
enough that the company is a telecommunication network company which is being used by an
enormous number of customers. But, a fact that is to be ensured here is that there might be the
possibility that the competitors of the Virgin group try to make involvement of some products or
services that can act as a substitute for the products of the Virgin. The substitutes are created so
that it can also be used for the purpose of the same and can achieve the task. This can one of the
strategic act from the competitor side and they can also get successful in the same. So, it is better
if the Virgin group makes the involvement of some strategies and ways so that no other
competitor can be able to make use of their strategies in order to make further substitutes. By this
way, it can help the Virgin group to stay away from any sort of fraud etc. thus they can be able
enough to keep their focus on the operations and processes to achieve all their objectives and
targets.
Rivalry within the market
It is being said that if the competitiveness or the rivalry between any two organizations
increases to a huge extent, then the output can be the zero profit margins. So, it is better if the
Virgin group tries to avoid any such factors so that they can be efficient enough to achieve their
6

targets and goals. There are various number of other mobile networks also who are involving
various number of strategies to stay up in the market place (Storey, 2016, Understanding the
small business sector). The actual forte of each mobile network company is to achieve a great
number of customers, productivity as well as popularity. But when in the market place, there are
various companies who are opting for the same, then it causes some sort of rivalry between the
two or more. So, the Virgin group can keep their focus on a few factors such as quality, efficient
costs etc. so that the techniques of the other ones cannot throw a negative impact on the
operations of Virgin and they can focus on achieving the objectives.
TASK 4
Analyzing the strategic direction and options for Virgin
Although there are various models and procedures that can help in analyzing the strategic
direction and options that can be involved and used by the Virgin group so that it can seem easy
enough for them to achieve all their targets and objectives at a much faster rate. One of a well
known and popular method that can be used in order to analyze the strategic direction and other
factors is Bowman’s strategy clock. Bowman’s strategic clock is a widely used tool as it helps in
analyzing and evaluating the competitive status of the company. So, it can help in understanding
the factor that needs some sort of improvement or modification by the Virgin group so that they
can be able to gain a strong competitive advantage. Various different aspects of the same are
discussed as under :
 As per the Bowman’s strategy clock, the positioning of the product or service should be
done in two ways, either by the perceived price or value. These are considered as two
essential dimensions that can help in making a better positioning.
 Along with these two dimensions, there are eight aspects on an overall basis, which
includes lower price, monopoly pricing, focused and simple differentiation etc.
 All these factors have been positioned on different positions till the eighth position. Each
factors throws an influence on the operations of the Virgin group, thus can help in
making a better analysis that what factors should be added so that they can act beneficial
for the company.
 Low value added and price is considered as a bargain basement strategy that can help in
maintaining the competitiveness of the Virgin group, thus deal with various business
objectives.
7

 Another aspect, lower price rates are being evaluated after the low values. For this,
minimization of the cost is very important as it can help in attracting an efficient number
of customers. It is important as it will help them in maintaining the profit margins of the
Virgin group.
 Hybrid is considered as the third aspect that seems essential equal enough for the Virgin
group. It makes involvement of a differentiation strategy that helps in providing the
customers a perceived added value to the customers of the Virgin group.
 Differentiation and focused differentiation deals with the positioning of the product at
higher values. Usually this strategy is being used by various leading brands because here
the customers buy the products and services because of a high perceived value. This
strategy can be involved by the Virgin group as it can actually help them to gain higher
profit margins (Brewster, 2017, The integration of human resource management and
corporate strategy).
 Another aspect is considered as risky high margins. Although it is classified as an
uncompetitive strategy because as per this, the customers can even buy the products of
the Virgin at higher prices or if they want can shift to some other brand depending on
their perceived value added. So, it can be termed as a quite risky step to accomplish the
objectives and targets.
 Monopoly pricing is also considered as another essential aspect. It means a situation
when only a few businesses are offering the product or service to the customers. So, there
is no choice or alternative. In such cases the person leading the monopoly can set any
price depending as they are aware that people have no other alternatives, so they can buy
in the same, thus, the Virgin group can also try to involve any such product or service
that is not being provided by any other mobile operator because it can actually help them
to have at a special position in the market place. Thus, they can be able to gain better
competitive advantage as compared to the others.
 Loss of the market shares is considered as the final and an another essential aspect of the
Bowman’s strategy clock that can help in making better analysis. It can help a company
in most of the worst situations. As if the Virgin group makes involvement of the cost that
is nether too less nor high, then it can help the mobile network to attract various number
8

of customers. Also, it will help them to stay prevented from any such further
complication such as less market shares etc. in the market place.
CONCLUSION
It can be concluded from the report that as there are various mobile telecommunication
operators are involving various ways to achieve their targets, so the Virgin group as well. There
are various conceptual frameworks that can help in analyzing the external as well as internal
factors of the Virgin group. Making an analysis of all the factors influencing on the operations
can help in evaluating the factors that needs to be involved by the Virgin group so that it can help
the company to achieve all their targets and goals at much faster rates.
9

REFERENCES
Books and Journals
Brewster, C., 2017. The integration of human resource management and corporate strategy.
In Policy and practice in European human resource management (pp. 22-35). Routledge.
Charter, M. ed., 2017. Greener marketing: A responsible approach to business. Routledge.
Dodgson, M., 2018. Technological collaboration in industry: strategy, policy and
internationalization in innovation (Vol. 11). Routledge.
Dunning, J. H., 2014. The Globalization of Business (Routledge Revivals): The Challenge of the
1990s. Routledge.
Kim, T. H., Lee, J. N. and Benbasat, I., 2014. Understanding the effect of knowledge
management strategies on knowledge management performance: A contingency
perspective. Information & management. 51(4). pp.398-416.
Klettner, A., Clarke, T. and Boersma, M., 2014. The governance of corporate sustainability:
Empirical insights into the development, leadership and implementation of responsible
business strategy. Journal of Business Ethics. 122(1),. pp.145-165.
Omar, A.T., Leach, D. and March, J., 2014. Collaboration between nonprofit and business
sectors: A framework to guide strategy development for nonprofit
organizations. VOLUNTAS: International Journal of Voluntary and Nonprofit
Organizations. 25(3). pp.657-678.
Pucciarelli, F. and Kaplan, A., 2016. Competition and strategy in higher education: Managing
complexity and uncertainty. Business Horizons. 59(3). pp.311-320.
Ryan, D., 2016. Understanding digital marketing: marketing strategies for engaging the digital
generation. Kogan Page Publishers.
Storey, D.J., 2016. Understanding the small business sector. Routledge.
Welford, R., 2016. Corporate environmental management 1: Systems and strategies. Routledge.
10