Business Strategy Report: Virgin Telecom Strategy Evaluation

This report provides a comprehensive analysis of Virgin Telecom's business strategy, examining its operations within the telecommunications industry. It begins with an introduction to business strategy and focuses on Virgin Telecom, a major British telecommunications and internet service provider. The report delves into the impact of the macro environment on the company using the PESTLE model, evaluating political, economic, social, technological, legal, and environmental factors. It then explores strategic planning through Ansoff's growth vector matrix, and defines strategic capabilities, including VRIO/VRIN analysis of resources. Furthermore, the report assesses the competitiveness of the UK telecommunication sector using Porter's five forces model and analyzes strategic direction using Bowman's strategy clock. The report concludes with a summary of key findings and strategic recommendations for Virgin Telecom.

Business
Strategy

Table of Contents
INTRODUCTION ..........................................................................................................................3
TASK 1............................................................................................................................................3
P1 Analyse the Impact and influence macro environment of chosen companies..................3
(ii) Ansoff's growth vector matrix to analyses organisations strategic. ................................5
M1...........................................................................................................................................6
TASK 2............................................................................................................................................6
P2 Explain what strategic capabilities' means .......................................................................6
M2...........................................................................................................................................8
TASK 3............................................................................................................................................9
P3 Evaluate the competitiveness of UK telecommunication sector using Porters five forces
model .....................................................................................................................................9
M3.........................................................................................................................................11
TASK 4..........................................................................................................................................11
P4 Bowman's strategy clock model analyse the strategic direction and options available
organisations. .......................................................................................................................11
M4.........................................................................................................................................13
CONCLUSION .............................................................................................................................14
REFERENCES..............................................................................................................................15

INTRODUCTION
Business strategy is the technique or business idea through which big multinational
companies beat each other. This approach takes company from bottom to top. For that, it is very
important to target their market customers on the basis of which organisations set their business
strategy. Present report will be based on business strategy in telecommunication industry. For
that Virgin telecom group will be taken into action. It is the British telecommunication and
internet service provider operating which founded in 3rd March 2003. it provides 3G and 4G
services through its own network infrastructure Furthermore, report will elucidate the impact of
macro environment which explains the factors that effect on the telecommunication sector.
Likewise, it will also look upon strategic capabilities or internal environment through which
organisation coop up with threats and challenges. Moreover, it will also discuss five forces which
impact on telecommunication companies.
TASK 1
P1 Analyse the Impact and influence macro environment of chosen companies
Marketing strategies: Marketing strategies enhance the overall development of the
company which helps to influence the better opportunity and growth. Along with that, it will be
the more advancing process to promote the company services or products. It is the goal achieving
part through marketing manager achieve the target goals. Marketing activities of Virgin should
be capable and strong in order to get the best customer attraction.
Business strategies: business strategies are the very much essential and growth full
target market strategies. Besides, business opportunities are the major goal oriented target of
business strategy. Business strategies gives more power to understand the business requirement
to achieve overall objectives.
Characteristics of strategic decision:
 Strategic decision are likely to affect the long term direction of an organisation.
 Strategic decision helps to full fill the strategic planning.
 It helps to remove the unwanted activities.
 Strategic decision more likely to affect operational decisions.
External analysis by PESTLE Model
Political: Regulations imposed by the government and changes in policies may affect the
telecommunication industry (Armstrong, Kotler, Harker and Brennan, 2015). This affects the

prices of the services and customer choices. Due to changes in rates or policies in government, it
will increase or decrease the prices of the services of Virgin. They all are competitors of each
other. On the basis of political environment, they need to implement their own prices and polices
in order to fascinate the customer attraction. Wi-Fi and internet are the essential part of the life
these days, without which people cannot survive. Today's internet and network services are gives
many benefits and advantages to people. Business strategies of all the companies must be
according to the needs of customers.
Economic: Interest rates, inflation as well as taxes affect the company business strategies
and they need to adopt all those changes. This gives heavy impact on the customer’s choices.
Expenses affect the prices of the telecommunication plans. It affects the customer demands and
preferences which impact negatively on the profit level of companies. Telecommunication needs
are very high especially in rural areas where network problem is the big issue. Virgin is the
world’s largest communication company whose operations are spread in more over 180 countries
(Buckley and Ghauri, eds., 2015). Fixed line, mobile. Broadband and mobile services. Through
which customer can easily attract towards those organisations which plans are low and network
is on high quality. Business strategies of Virgin is to adopt all strategic business and adopt
productive techniques to build telecommunication network and company image. Growing in
telecommunication industry, they also provide large part of new job openings and employment
opportunities which gives positive impact on economic developmental. In terms of company
environment, economic changes give positive as well as negative impact on the company
behaviour (Buckley, Burton and Mirza, eds., 2016).
Social: Social factor is another significant factor which effect on the company
atmosphere. This also influences the company policies and structure. In terms of
telecommunication company, horizontal growth is limited and restricted. However, in terms of
competition, they need to adopt all kinds of plans which are beneficial for the organisations. In
terms of Virgin they adopt strategy and target well educated people who understand plans and
policies. In terms of rapid changes in lifestyle and enhancement in people standards. This gives
positive growth to company. Social factors influence company to adopt new creative plans and
higher network services in order to sustain the customer expectations. In terms of developing
new techniques, these features also effect Virgin strategy and customer level.

Technological: Innovation and creativity influence telecommunication companies
strategies and planning (Cascio, 2018). Technology is going beyond control, it is up to
companies how they meet the point of satisfaction level of customers in terms of getting the best
technique products and services. For example, GPS which navigate people about the ways and
route of the place. Without having effective and fast network, customer could not get the better
services. New services or techniques influence company positioning and business planning. For
that, company needs to adopt some effective network services in order to sustain an effective
growth in the market.
Legal: Telecommunication sector is the highly influenced factor which affect
telecommunication product and services (Fontana, Sastre-Merino and Baca, 2017). Legal
factors are the most affecting changes in the organisation which impact organisations in many
ways. Due to monopolies structure and customers, they need to facing many challenges with the
government. Telecommunication can easily import and export the services due to monopoly. In
this, they need to follow the legal implications of the government policies. In order to exist in the
market in long term market Virgin company needs to adopt all legal implications to stable their
public image.
Environmental: Due to climate changes and global warming, it can affect the company
and telecommunication products reach customers. In order to make changes in the business
strategies, company needs to adopt instant changes in order to make innovative environment.
This environmental factor is an influential factor of the organisation which affects company
atmosphere (Grover, 2016). Along with that, company also needs to adopt effective working
environment in terms to reducing harmful effect on the organisation level. In terms of new
effective changes in Virgin group needs to follow the environmental factor in order to attract
customer attraction and profit revenue growth for the company strategies.
(ii) Ansoff's growth vector matrix to analyses organisations strategic.
Market development
it is the first Ansoff's approach which shows the importance of company growth, market
development growth of the company is to adopt effective techniques and ideas in order to
enhance the quality of network (Hammond and et.al., 2015). This is the effective process of
working. Virgin group has a huge market development as compare to other telecommunication
sources. On the other side, Virgin market strategy is to select the target market customers in

terms of getting effective development growth. In order to develop the growth company use
different channel of distribution like Telecommunication organisations adopts technologies and
attractive plans which helps to enhance the customer growth. Virgin group has a large amount of
effective position in the market.
Diversification
Diversification is the risky strategy which involves risk of investment and profit and
stability. It is very effective for the organization which stayed in long time in the market.
Diversification is must such as Telecommunication services also provides connection or network
of TV, Wi-Fi and mobile services. It makes good impact on the company in terms of long term
development (Huselid and Becker, 2017). This is the most effective approach and strategy in
terms of getting profitability in the market. Diversification gives new services or products which
helps to grab the attraction of customers towards the company. This strategy of Virgin must give
effective output to the company.
M1
Macro environment is the long lasting process which covers the long lasting process.
Company requires accomplishing the bes possible action plan. Apart from that, it will affect
company structure in order to full fill the better objective task making performance. Macro
factors directly impact on company strategic position in terms of making business plan, planning
organising etc.
TASK 2
P2 Explain what strategic capabilities' means
Strategic capabilities is the business ability to ensure the effective successfully employ
competitive strategies that allows company to survive in the market. It grows the compatibility
level of the organisation which enhance the performance productivity of the company. Virgin
group they all are the well establishes brands in telecommunication industry. The great strategic
compatibility of the organisations is high range network and quality performance of the company
(Johnson, 2016). Virgin is the worldwide network in the world which attract million of
customers towards the network. The maintain strategy of the company is to exist and maintain
the strong existence in the competitive market. Strategic capabilities of Virgin group is to adopt
dynamic environment challenges in terms of getting the best effective sources for the company
atmosphere. It is the kinds of new effective changes, it is the global competitor network company

in British. Besides, Virgin Group is the another competitor in telecommunication industry.
Strategic capabilities of the company helps to viable the financial stability. Through which
company can easily grow their business functions.
ii. VRIO/VRIN
Value: this element of value give importance to resources that How company obtain on
the market?
Rareness: Rareness refers How difficult or scare resources are? In telecommunication
network Virgin get partnered with other group companies also through which they collect
information and resources (Klettner, Clarke and Boersma, 2014). It is known as delivering best
services to the customers. Over 20,000 base station sites for the transmission of wireless signals.
Peak download speed is 28.8 Mbps. Company invest huge amount of funds on the services to get
the best effective sources. It gives great opportunity to company in terms of getting effective
sources.
Imitability: How important is to imitate the resources?
Organisations: Can organisation uses properly or not?
VRIN
Non Substitutional: Other different types of resources cannot be functional substitute.
Organisations Strength and weaknesses
Strength
Massive market coverage: it is the first and foremost significant strength of the Virgin
company through which they earn effective profit revenue. Virgin company ranked it is the most
challenging for the company to compete with other competitors. It is knows for its wide range of
services. Along with that, Virgin group is the another competitive organisation in British. It is the
leading broadband internet provider and fixed line telecommunication operator. They provides
170 Countries worldwide network. It is known as strong broadband network in the organisations.
It is the another chance of the organisations. Which influence customer services. Virgin group
telecommunication is the another operator which connects people to people with wide range of
telecommunication network (Leonidou and et.al., 2017). This is the strength which helps
company to adopt large opportunities. Telecommunication is the effective company which
influence company objectives and functions. Telecommunication is the wide organisations which

attract customers by offering new prices and packs in terms of high range of services. It is the
most communicated and effective source of income.
Marketing: it is the another strength of the company which enhance the services or
products of the organisations. Virgin generates marketing activity with the help of Pug it is the
most attracting and productive marketing strategy which adopted by the company. Virgin
company also adopts ,marketing strategy with the helps of different marketing tools. It is the
most affecting and leading company which having effective source of income. Virgin group has
a strong base in UK with large number of customers (Martinez-Simarro, Devece and Llopis-
Albert, 2015).
Premium cost: telecom operator penetrating the market. Along with that, Virgin
provides high range of services and effective challenges for the company atmosphere. On the
other side, Virgin group delivering strong customer experience through great products and
services.
Brand recall and Brand valuation: brand value of Virgin is 28 billion dollars as of
2016. brand recall and brand valuation of Virgin is always high. Telecommunication company
also evaluate new services and effective growth to the customers.
Weaknesses
Dropping subscriber base: in terms of customer attraction towards company services
has been down from last 4 years. This is the major issue with the company which facing by the
organisations. Company needs to adopt effective core strategies to gain profit revenue for the
company. In terms of Virgin group organisations major weakness of the company is
underdeveloped of mobile business in the market (Mellat-Parast, Golmohammadi, McFadden
and Miller, 2015).
Loosing market share in USA: USA is a country where Virgin could have demanded
the premium in terms of getting services from the market. It loosing the value and brand image
in the telecommunication in the market.
Poor performance in Europe: Virgin company facing major complication in Europe
market which affect company functions profit revenue. It gives opportunity to other firms to take
advantage and grab the customer attraction (Olson and et.al., 2018).
M2
Strength

 Company having strong market image in British
 Provides wide range of product and services.
Weaknesses:
 Having high competition market.
 Changes according to the needs and wants of the organisation.
 Low Market expansion strategies and growth
TASK 3
P3 Evaluate the competitiveness of UK telecommunication sector using Porters five forces
model
In order to grab competitive advantages after analysing the effective working
environment. In order to grab the attention of customers company needs to adopt porter's five
forces model in order to analyse the power of competitors. In order to analyse the external
factors and effective forces company needs to make changes on the basis of competitors pricing
and strategies (Scholes, 2015). There are five forces factors which affect company structure and
polices.
Threat of new Entrants: this is the big threat for the company which impact on the
organisation behaviour. New entrants in an industry enhance the fear for existing companies.
Existing companies needs to adopt effective planning and technical tools in order to enhance the
effective approach to beat the needs of markets. New competitors may tend to attract customers
towards the services. It is important for exist ting companies to adopt diversification and new
product plans to retain the existing customers and users (Sia, Soh and Weill, 2016).
Telecommunication is the highly monopoly market which less affected by other company.
Virgin group and British telecommunication companies are the major growing company in
telecommunication industry. General, in this sector customer needs high quality services. In
order to get over from the all rival firms strategies. Virgin needs to offer new services of telecom
to grab the customer attraction.
Threat of substitutes: it is the another threat for the company which affects company
structure and policies. In case of penetration in pricing or additional services provides by the
company. In that case customer switch to another company. In telecommunication industry
major leading companies are Virgin group, Virgin, EE, Giff-Giff, O2 etc. which compete with

each others. In terms of substitute products which may impact on the organisations such as
Online chat, Email, Satellite phones. These are the alternatives of phones which reduce the use of
telecommunication network (Johnson, 2016). Company needs to adopt new technologies to make
changes in the existing strategies in order to retain the customers attraction. Substitute products
are the major factor which affect existing product and services. Additional producer and services
of non-telecommunication industries such as cable TV and other satellite operators. These are the
substitute attract buyers towards that and reducing the sales of telecommunication companies.
For overcoming from these changes, existing organisation needs to adopt service expansion
strategy in terms of stable effective growth. Through which company also make effective
changes.
Bargaining power of suppliers: The major suppliers of the telecommunication company
is network infrastructure provider, information infrastructure support, passive infrastructure
providers and telecom equipments manufacturers including handset manufacturers (Huselid and
Becker, 2017). Suppliers powers affect company when suppliers are less and demand is more in
terms of quality and preference. It very necessary for the organization to maintain good relation
which suppliers in order to get the quality of services specially when competition is high.
Besides, when number of company is low and suppliers are high. In case of telecommunication
market. This is the effective factor which affect company in long terms market. Telecom
companies are take advantage of bargaining power of suppliers and get quality of services for
their plans. This makes effective sources which gives positive impact on the growth of company
performance. The number of suppliers are few, substitutes are rare and quality of services are
huge effective and promising.
Bargaining power of buyers: buyers threats are backward integration and industry
threat of forward integration. Due to some impacts bargaining power of buyers is moderate. It
gives negative impact on the customer services. Switching costs in which there are to types of
customers are includes household and industrial consumers. Some customers prefer post paid or
rest of the customers prefer prepaid services. It gives higher opportunity to the company to
determine the needs of customers (Olson and et.al., 2018). In order to growing urban market
there is more needs of services which connects person to person. The main major requirement of
the customer is to take high quality services through which they easily communicate with other
person. Due to lack of accuracy and power they don't need that connection more longer and the

situation of switching has arisen. Company needs to grab high quality of services in order to grab
the customer satisfaction approach. It makes new changes which helps to enhance the growth of
the company.
Competitive rivalry: This is the another factor which impact on the organisation. Rival
firms are always gives high and low performances. Through which other company take
advantages of that. The major factors which gives competition with each other such as price war,
fixed cost, strategic stakes (Johnson, 2016). It is very necessary for the competitor firms to
analyse the other company performance and strategies on that basis they will generate their own
business plans. This makes changes in the industry and gives new products and services. It is the
another effectual factors which fluctuate market conditions. High competition level reduce the
scope of profitability but in terms of telecom services company takes productive profit revenue
from the market on the basis of their quality services. In order to stable the market and customer
focus company needs to adopt new innovative and creative changes to retain the customer
satisfaction.
M3
Company needs to adopt the best productive network quality and better relation with the
company strategies. Virgin group having more opportunities to compete with the competitors.
Besides, they also need to adopt better environmental growth and better team performance in
order to gain better environmental growth.
TASK 4
P4 Bowman's strategy clock model analyse the strategic direction and options available
organisations.
It is the model which helps to designing company marketing strategy in order to
competitive position in comparison to the offering of competitors. It is the leading and
competitive model which helps company to make productive marketing strategy in order to grab
the attraction of customers. It also presents the relationship between customers value and prices.

Low Price/Low added value: this model companies usually does not use. This is the
bargain basement, company do not adopt this strategy because of low growth (Bowman's
strategy model & Eight competitive directions for edge, 2014). They don't want be be in that
position. This position company taken at the time when they facing lack of differentiation in its
values. This proves effective in terms of cost effective selling volume. In order to attract
customer focus. This is the position which gives company stability in the market only. Under this
situation of market company cannot earn productive profitability and fails to growth the
company services (Hammond and et.al., 2015). Telecom services adopt this strategy art the time
of heavy competition or threats in new entrants. It is the effective way to grab customer focus.
Low Price: this low price strategy adopted by the firms in the situation of low cost
leader. It becomes company low market share and low profit margin company. It is the best
marketing approach which attract customer and enhance the sales of the company.
Telecommunication sector is not low price industry
Hybrid (Hybrid price& moderate differentiation): some competitors or companies are
offers product and services at low prices but gaining higher perceived values (Bowman's strategy
Illustration 1: Bowman's Strategy clock
Sources: Bowman's strategy model & Eight competitive
directions for edge, 2014

model & Eight competitive directions for edge, 2014). Such as Discount stores which gives high
discount to their customers to enhance the market popularity. It helps to provide brand image and
services. This strategy is perfect or more suitable for the company structure apart from that. This
strategy will given more strength and opportunity in company growth.
Differentiations: it is the another strategy which company may adopt to increasing their
users and customers towards the organisation growth. It makes company unique and differentiate
with other competitors (Grover, 2016). It is the another attractive and impactful strategy which
make new innovative and creative product and services for the customers. Like Virgin launch
new attractive offer and plans for their users which attract new users towards company. It is one
of the significant strategy makes company different and attractive. This strategy will be become
more powerful and effective process of given better opportunity and growth.
Focused differentiations: it is the high perceived value products which gives high
prices at high effective productive products. They target high premium customers in terms of
offering premium network and services to users. It is one of the most productive and best
company market strategy which grows comp[any profit in productive manner. Like Virgin attract
customers at reasonable proof and also provides high range products in order to give high range
of network and speed. Focused strategy will become more effective and influencing for business
growth. It helps to attract more customer attraction and growth.
Increased price and standard products: in order to stable the quality and services
company needs to adopt high range product of offer high network speed to customers.
Organisations takes chance to enhance the prices instead of value (Bowman's strategy model &
Eight competitive directions for edge, 2014). If prices adopted by the customers, company enjoy
their profitability ratio. It is all about the changes which made by the company.
Low Value/Standard prices: It is the last process or stage of market strategies which
refers that company reduce the low value and enhance the standards prices. This is the risky
strategy which gives negative impression to the company. Also company loose their customers in
terms of getting profit revenue (Olson and et.al., 2018). Telecom companies also needs to make
effective changes which needs to give high price or value services which helps to retain the
productive customers. Telecom services are never adopt this strategy. They always adopt those
services or network which gives positive impact on the organization behaviour. This strategy is

more productive for low based organisation which customers are not very much high and
effective.
M4
Strategic management plan is the document under which company identified their
planning and growth for the product and service development. It helps company to build better
relation with the companies and easily set their goals and priorities, focus energy, strengthen
operations.
CONCLUSION
From the above section it can concluded that, telecom sector is the high profitable
industry in terms of gaining strategic position in the market. Present report based on business
strategies of telecom services of Virgin group. It discussed about the macro environment of the
organisations which affect company functions and strategies. Moreover, it also discussed about
the organisations' strength and weaknesses in order to evaluate internal environment. Telecom is
the high profitable in suppliers power which get productive services from the organisation.
Along with that, report also summarized about the porter's five forces model through which
company easily get competitive advantages in order to met the customer needs and wants.
Moreover, telecom sector is the growing sector which will going to give new more services or
advantages to the customers.

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