Virgin Media: Strategy and the Global Environment Report

This report provides a strategic analysis of Virgin Media within the global competitive environment. It begins with a company background, outlining Virgin Media's services, structure, and key personnel. The report then delves into strategic analysis, covering marketing orientation, strategic priorities, and competitive advantages. External analysis is performed using PESTLE analysis to identify political, economic, social, technological, legal, and environmental factors impacting the business. Porter's Five Forces framework is also applied to assess the competitive dynamics within the telecommunications and media industry, including the threats of new entrants, rivalry among existing competitors, and the power of suppliers. The analysis aims to understand Virgin Media's position and strategies in the global market, considering both internal strengths and external factors.

Strategy and the Global
Competitive Environment

Table of Contents
INTRODUCTION...........................................................................................................................1
Company background .....................................................................................................................1
Strategic analysis ............................................................................................................................2
Marketing orientation .................................................................................................................2
Strategic priorities ......................................................................................................................3
Competitive advantages .............................................................................................................3
External analysis .............................................................................................................................3
PESTLE Analysis:......................................................................................................................3
Porter's five forces for Virgin Media .........................................................................................5
Conclusion.......................................................................................................................................7

INTRODUCTION
The organisations willing to increase their market share, sales and profit shows their
interest in expanding the business in various countries or global market. The global market is
highly competitive as a huge number of organisation or business are competing with each other
in order to gain leading position in the market. The present report will identify various factors
within external environment that affect and influence business functions. The report will also
include analysis of strategic marketing position of the cited organisation. In this context Virgin
media company is taken into consideration that operates its business activities in various
countries all around the world. In order to analyse current market situation and environment of
the company as well as industry in which it operates its business.
Company background
Virgin media is one of the most successful company in entertainment and communication
sector offering a quad play of services including television, broadband, mobile, television and
fixed line telephone. The organisation was established by Mr. Richard Branson, the chairperson
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Illustration 1: Virgin Media
(Source : Marketing Report Virgin Media, 2017)

of the company is James Mooney and Neil Berkett is chief executive office of the business. The
company has developed a top position in the industry as a successful media and communication
service provider. The company has used various techniques such as innovation, diversification
and competitive design their products as well as services. The Virgin media has three major
operating segments -
1. Mobile
2. Cable
3. Content
 Cable – This segment offers services such as television network, internet and fixed line
telephone services under the brand Virgin mobile to customers in United Kingdom.
 Mobile – Within the mobile segment Virgin mobile has collaborated with T-mobile by
buying airtime from T-mobile and it was promoted under the Virgin mobile brand name.
 Content – The last segment consist eight genre based entertainment channels such as
Living, Virgin1, Trouble, Challenge Jackpot, Bravo etc. It has a joint venture with BBC
worldwide and this segment also oversees the company's interest in UK television
channels (Shobaki and Naser, 2017).
Strategic analysis
Marketing orientation
The main goal of a market oriented company is to fulfil the demands and needs of their
customers. The company developed a typical marketing orientation model as described below -
A market oriented organisation tries to improve customer satisfaction continuously, improve
customer satisfaction. In order to deliver high customer value the company focus on paying close
attention to their services before and after sales. The concept of Virgin Media's marketing
orientation is built on three main pillars -
1. Coordinated marketing
2. Customer focus
3. Profitability
A company's ability to create an orientation towards any one of these pillars depends
upon the internal culture and structure. Virgin media follows a marketing orientation strategy in
which the organisation is highly concerned abut the needs and wants of the customers. It focuses
on satisfying needs of the customers by delivering effective services according to their needs.
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Doe to high level of competition in the industry the company also uses sales orientation to
support the enhancement of sales as well.
Strategic priorities
 Growing business
 Engaging people
 Fixing the fundamentals
Virgin media has developed and designed a broad portfolio that can be tailored that helps and
assist its marketers in meeting customer's demands and needs in the market. Product
diversification in a single business that allows the company to gain competitive advantages
among the competitors. Virgin media focus on effective interaction with the customers, either on
the daily basis or within their stores at the time of a home installation or on the phone with one of
the agents of virgin mobile.
Competitive advantages
Competitive advantage refers to the attainment of high performance through
differentiation to offer high value to their customers or by managing to gain the lowest cost of
delivery. The global market has become highly competitive for the telecom and entertainment
industry, as the government and customers demand of improved services such as broadband
services, communication services etc. The major competitors in this industry such as British
telecommunication, Sky etc focuses in providing similar services to the customers which leads to
development of intense competition in the market (Mena, Van and Christopher, 2018).
External analysis
PESTLE Analysis:
This is considered to be an effective tool that is helpful enough to analyse the external
factors that has negative impact over the business. With this respect, below given are the
PESTLE analysis done for Virgin Media:
 Political factor: This is the extent to which government influence industry or economy.
The type of laws formed in different countries differs. More specifically, it includes
impose of new tax that affects the prices for the products and services that are provided
by the organization. In situations when there are increase in monitory or fiscal policies,
then firm like Virgin Media needs to make changes in their prices. This has negative
impact over the business as management of the firm fails to set up an effective price that
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will help them to attain their set of goals and objectives. Countries in which regular
changes in rates of taxes or interest take place creates issues for the business to operate in
appropriate manner (Lewis and et.al., 2017)
 Economic factor: This determines the economic performance which has direct impact on
the business. Apart from this, it also has long termed impact over the company. In
countries in which inflation and recession rate are high, then total amount that are spent
by customers will be low. At the time of recession or inflation organizations like Virgin
Media need to reduce the price of products and services. There is a negative impact over
the business as they fail to recover the total expense that they have make for making the
products into finished one. On the other hand, in the countries were there are no
conditions for recession or inflation, people are able to spend effectively towards the
products and services that are delivered by the firm.
 Social factors: There are different type of changes that has taken place in relation with the
taste and preferences of customers. It is important for the Virgin Media to make sure that
they have proper understanding regarding requirement of customers. In this context,
proper research and survey should be conducted so that they are able to identify the
opportunities that prevail in the market. The rate of competition is high and when time to
changes are not made, then Virgin Media faces condition of losses. Business need to
invest effectively towards research and developed and this is an effective way that makes
the business to identify the wants. All these support the business to grow and in achieving
the business to reach their goals and objectives (Wu, 2017).
 Technological factor: With time, there are many changes that has taken place in relation
with technology that is used by Virgin Media. It is important for the business to make
sure that they use updated or new technology. This way, it becomes favourable enough
for the business to deliver high quality services to customers. Virgin Media need to have
proper analysis made for finance so that total cost that are incurred for implementation of
new or updated technology can be used. In condition when proper planning is not done,
then it can affect the business in negative manner and this can also make the firm to face
losses.
 Legal factor: At different countries, there are various type of laws that are followed. It is
important to make sure that all the laws are followed by the companies. In conditions
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when business does not follow then, they develop negative perception within the mind of
customers. In order to sustain in the competitive environment it is essential for the
management of Virgin media to follow certain rules and regulations such as Employment
rights act, national minimum wages act, data protection act, consumer health and safety,
environmental protection etc.
 Environmental factors: Environmental factors relates to the ecological and environmental
aspects that will affect the demand for a company's products and how that business
operates. These factors include environmental regulations, ecological regulation's
reduction of carbon footprints, sustainability and impact of adverse weather. In order to
enhance the environmental protection, the management of Virgin Media has devised
plans and strategies so that the protection of natural environment and habitat can be made
in effective and efficient manner. This helps the organisation in enhancing the reputation
and brand image and thus helps in protecting the environment (Christian and et.al., 2018).
Porter's five forces for Virgin Media
In the global competitive market there are various forces or elements which are
influencing the performance each and every organisation or business. These factors are affecting
business functions and strategies at a high rate, according to gain competitive advantages in the
market it is important for any business to manage and control these forces for
 Threat of entrants – Entry into the media or telecommunication industry is majorly
determined by the high cost of fixed assets. There are important costs which are included
such as the cost of developing the network, infrastructural cost, operating costs etc.
Virgin media spends millions of pounds just for laying the optic fiber cable network
needed. The telecommunication industry is highly competitive globally in which the
major companies focus on making profit through sales volumes rather than price.
Therefore, for an entrant with a market the initial return on investment is very low and
the market expectation to generate profit is also low. There are various new companies
who try to enter into the market by offering similar services to customers, the
telecommunication industry is growing with a high rate due to increase in the service uses
all over the world. Therefore, Virgin Media focus on providing effective services to their
existing as well as new customers. The company is expanding its business into new
market for increasing its sales and profit as well as to sustain its market position within
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the global market. This is one of the most important part to improve overall development
of the market. In market environment telecommunication industry new for future
development in market network. In telecommute industry is highly competitor planetary
in which the major institution focus on making net income through sales volumes instead
than terms. Some changes are made and improve more marketing to for increase market
sector (Laszlo and Cescau, 2017).
 Rivals – Due to the increase number of competitors in global market such as British
telecommunication, Sky etc. The people worldwide are highly dependent on
communication and media services such as internet, telecommunication etc. In order to
attract more and more customers the companies are offering services at low prices. The
major brands have unique strengths which make it hard for the services users to switch to
any other brand in the market. The key players have strong brand names and brand
loyalty, competing brands such as Sky network offers premium TV content and retains its
customers. The Virgin media has a high speed internet network, customers are attracted
towards services which are offering bundled services to them. Rivals highly influence
business strategies and performance as it is essential to create effective plans in order to
achieve competitive advantages and sustain market position.
 Power of supplier – In order to develop cost leadership advantage a company requires
controlling the power of supplier, It is one of the main determinants of economies of
scale. There are huge number of competitors within the telecommunication industry, The
suppliers tends to demand increased prices for the products or services. This greatly
affect an organization to change the price of the services they offer to their customers in
the market. Organization such as Virgin media focus on developing effective chain of
suppliers in the global business environment. Wide range of suppliers supports the
company to gain flexibility in switching their supplier in a situation where a supplier
demand high price for the products or services. Therefore, in order to gain competitive
advantages in a global market it is essential for Virgin media to connect with various
suppliers globally. To be focus on leadership style to improve market share and increase
future conditions. This is help to improve current market or there are some changes in
future conditions. There are huge figures of challenger within telecommute industry, The
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indefinite quantity tends to demand accumulated damage for the products or services.
This outstanding affect a social group.
 Threats of substitutes – There are many big competitors in the global market
environment that affect the working or functions of an organisation in each and every
industry. Virgin media is an organisation that operates its business in various countries all
around the world, the common services offered by them are internet, telecommunication
and other communication services. There are many companies which are offering same
services globally, therefore it is a threat for Virgin Media (Liu and Atuahene, 2018).
 Power of Buyer – Every telecommunication service provider focus on decreasing the
churn rate which means the rate at which customers leaves the services or a service
provider. The service providers tend to offer discounts and services at cheaper rates to
attract more and more customers. The Virgin media may be forced to offer various deals
and discounts to their customers for increasing their sales and profitability in the global
market.
Conclusion
The above report concluded that Virgin media is a leading telecommunication company
within the global market. The report also included strategic analysis of cited organisation that
includes market orientation, competitive advantages, etc. Furthermore, the report also included
Pestle analysis to identify various factors within external environment, the report also included
Porter's analysis to determine various forces influencing company's functions or activities.
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REFERENCES
Books and Journals.
Liu, W. and Atuahene-Gima, K., 2018. Enhancing product innovation performance in a
dysfunctional competitive environment: The roles of competitive strategies and market-
based assets. Industrial Marketing Management.
Laszlo, C. and Cescau, P., 2017. Sustainable value: How the world's leading companies are
doing well by doing good. Routledge.
Christian, H., Gamayanto, I., Wibowo, S. and Astuti, Y.P., 2018. The Impact & Innovation of
E= K. MC2 in Singapore Botanic Garden (SBG): The Business Strategy to Gain
Competitive Advantage. Journal of Economics and Management Sciences, 1(1), pp.p166-
p166.
Wu, R., 2017. Game theoretical approaches for pricing of non-life insurance policies into a
competitive market environment(Doctoral dissertation, University of Liverpool).
Lewis, H., Gertsakis, J., Grant, T., Morelli, N. and Sweatman, A., 2017. Design+ environment: a
global guide to designing greener goods. Routledge.
Mena, C., Van Hoek, R. and Christopher, M., 2018. Leading procurement strategy: driving
value through the supply chain. Kogan Page Publishers.
Al Shobaki, M.J. and Naser, S.S.A., 2017. The Role of the Practice of Excellence Strategies in
Education to Achieve Sustainable Competitive Advantage to Institutions of Higher
Education-Faculty of Engineering and Information Technology at Al-Azhar University in
Gaza a Model.
Online
Marketing Report Virgin Media, 2017 [Online]. Available
through:<http://www.pushsquare.com/news/2017/09/virgin_media_users_suffer_with_ps
n_sign-in_problems>
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