Impact of External Environmental Factors on Virgin Media's Strategy

This report provides a comprehensive analysis of Virgin Media's business strategy, focusing on the impact of external environmental factors. It begins with an introduction to Virgin Media, a leading British telecommunications company offering services like internet, television, and telephone. The main body of the report delves into Virgin Media's strategic marketing position, highlighting its competitive pricing and focus on customer needs. A PESTLE analysis is conducted to examine the political, economic, social, technological, legal, and environmental factors influencing the company. The report explores how these factors affect Virgin Media's operations, market position, and strategic decisions, including its responses to competition, technological advancements, and regulatory changes. The analysis includes the importance of internal factors like company mission, vision, organizational culture, and leadership styles. The report concludes by summarizing the key findings and implications of the external environment on Virgin Media's overall business strategy and its ability to maintain a competitive edge in the telecommunications market.

Strategy and the
Global
Competitive
Environment

Table of Contents
INTRODUCTION...........................................................................................................................1
MAIN BODY...................................................................................................................................1
CONCLUSION................................................................................................................................6
REFERENCES................................................................................................................................7

INTRODUCTION
In an economy several business organisations are established with a specific objective
that requires to attain at a particular time. These targets of organisation are affected through
business environmental factors such as internal and external. These both factors are different to
each others. Internal environmental factors are controllable that can be customers, employees,
management and shareholder (Johnson, 2016). External environmental factors are beyond the
control of an organisation so for this management of firm needs to make impactful strategy to
reduce its negative impact easily. This report is based on Virgin media which was established in
the year of 2006. This is a British company that provides telephones, internet and television
services to their customers. This report represent impact of external environmental factors on
business activities.
MAIN BODY
Virgin media is one of the leading British company that offers different services like
telephone, television and internet services. It was established in 2006 and is headquartered in
Hook, United Kingdom. They have different product line like digital television, broadband
internet, fixed line telephone, mobile telephony, etc. They have the ownership of fiber optical
cable network in United Kingdom. They have been serving majorly in UK and Republic of
Ireland. They are competing with Sky, BT Group and Talk Talk, EE, O2, Vodafone and Three in
mobile in the line of broadband. They have been earning annual revenue around 4 billion and
their net income is around 3 billion. They have approximately 4 million cable customers. Tele
west and Virgin. net brands were merged with Virgin Mobile under the name of “Virgin Media”.
There are majorly focused on two pillars that is Growing responsibly and sustainability and
doing more with digital. Their investment teams focus on core consumer sectors of travel and
leisure, telecoms and media, music and entertainments, financial services and health and
wellness. They deliver long term capitalization by investing in these sectors. They develop
innovative and creative investment strategies in order to increase the revenue for company
(Reuter and et. al., 2010) .
Strategic Marketing Position
Marketing position can be considered to as perception of consumers towards a brand in
comparison with rival organisation. The marketing positioning can be considered to an attempt
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by business in which it aims to form an image of the company in the market. It is one of the most
crucial factors in context of a brand as it determines sales of an organisation and can be managed
for over a lifetime of the product. The virgin media is focusing on to be a top position when it
comes to music enthusiasts. There marketers in this segment are making numerous efforts to
what people desire and to supply the same in an ideal manner and emerge as a leading brand.
The wider portfolio of the company makes sure that it emerges itself as a go to
destination when it comes to fulfilling diverse needs of consumers. The brand is taking help from
cost leadership approaches in which prices which are being charged are lesser than its rival
companies so that it is more accessible to people. The economies of scale helps this organisation
to make higher revenue and profits as services are being offered to the mass market. The
competitive pricing strategy assures that it emerges to be the primary choice of customers who
are looking to avail media services. The youth population of the company is more targeted
through undertaking numerous advertisement and promotional approaches on T.V. and mobiles.
This organisation is not lacking behind when it comes to using social media tools as a major
source for cost effective marketing (Rovai and Downey, 2010) . The presence of all major
resources of media along with brand name assures that new customers are not reluctant when it
comes to availing products and services of this corporation.
Virgin media is leading and only media firm of UK which is offering key media services
such as broadband, television, landlines and other packages of mobile that is customisable. They
are at the media forefront and are considered as second biggest media provider with innovative
brand recognition. In regard of external factors, this is significant for company to perform
PESTLE analysis which is mentioned as below:
Political Factor: Having a proper landlines at gone of even a commercial or business
line, this is rarely optimise in these days and the variances like the mobile phones and internet
are taking over in the market. Along with, the company Virgin Media means deliver a proper
mobile service for which very few consumer migrate to this. Despite of selecting more famous
provider of media like Orange and O2, the company has numerous consumer which have
switched from other companies. Also the political factors can directly influence the manner of
operating a business. In these factors, the government regulations and legislative problems
include that define numerous informal and formal rules. A successful information freedom
request to the state of UK educational division which broadband companies like Virgin Media
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and BT have emerged a technical, legal, political concerned with the toughen adult website
censorship. After the Post Brexit period, company might have faced numerous issues due to
distinct terms and policies enacted after the period. Also, after the change of media laws and
legislation, organisation need to cope with with distinct negative consequences as well.
Economic Factors: These factors are associated comprises inflation rates, foreign
currency rates, fluctuation in prices of goods and services, exchange rates and so on which has a
vast impact on whole economy of the company (Rugman and Verbeke, 2017) . In UK market
Virgin media is facing stiff competition from other competitors over the globe. For example –
due to high interest rates there is decreasing capital and investments as well as economic growth
and currency rates. Along with this, in 2008 economic crises has affected many industries in
respect of sales and profitability cause at this time customers were not able to spend high money
on luxurious things. Situation of employment and poverty also raised at this time. Virgin Media
is trying to apply digital media strategies into its functions cause of launching web based
services, i.e. Youtube. With this assistance of this device, people will watch video online as the
number is increasing by 1 million. Therefore, it can be said that turning out into new trends, i.e.
online gaming and video-on-demand can increase sales revenues of the company. In this present
scenario, liberalisation and globalization at international markets, there is inadequate and
unreliable supplies of organizational inputs which can reduce disposable income of people that
has diversely impact on business of Virgin Media.
Social Factor: This factor is essential for companies to evaluate the social responsibility
so that they can give excellent quality of goods and services can be provided to its customers at
first priority. In terms of Virgin Media, their prime mission is to provide outstanding services to
its consumers. Company to its customers are providing different offers that depends upon the
social conditions and nation's situations. Therefore, they are considering all the factors that are
present in the environment. This includes behaviour and nature of customers towards their
company so that they can manufacture goods and services according to the clients choices and
preferences. Henceforth, Virgin Media is making products for all age group so that they can give
deliver products to its end customers right on time and at reasonable cost as well (Barney and
Hesterly, 2010) .
Technological Factors: This analysis constitutes various factors which are related to
introduction of new technologies in business. It includes automation of manufacturing system,
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cost of introducing new technologies in operations, outsourcing processes of business and more.
In context with Virgin Media, this firm has gained various advantages due to technological
advancement. As in context with, telephone services, it has become more compact especially in
moving business of telecom into primarily wireless. It includes general needs in smartphones
which includes caller ID, security in data, voicemail and more. Customers want more data
facilities by telecom companies.
(Source:- Culture Of An Organisation: Strategic Management, 2017)
Environmental factor: Now a day's company is manufacturing goods by considering
environmental factor. For this, they are using raw material which are eco-friendly and doesn't
affect environment so much. Virgin media is also concentrating carbon foot-printing so that they
can produce goods without hampering environment. Further technology is assisting them in
limiting the use of papers by processing all things through online purpose. Internet is technique
which helps management to prevent from use of paper and to spread in various nations about
variety of services and items that are available with firm (Teece, 2010) .
Legal Factors: This factor entails a firm to obey rules made by regulatory bodies of a
nation. It includes various laws that are used to conduct operations of business in a smooth
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Illustration 1: Culture Of An Organisation: Strategic Management

manner. Equality, discrimination and minimum labour hours and duration are various act which
are formulated by government to safeguard rights of members. Management of Virgin Media
provide duties and tasks to members in respect to their skills and capabilities. Along this,
compensation is given to staff in according to their performance and outcomes. This helps
company to retain skilled and competent people for longer period. This enhance market image
and reputation which benefit firm to position higher than rival brands. Thus, human resource is
able to easily attract candidates and make them apply for post that are remaining vacant.
Therefore, management of Virgin Media frame strategies and policies to make system
function legally. Along this, modern tools and technologies are used which help seniors deliver
quality things and appropriate services to customers. This also helps position firm higher than
competitors and attract large number of people.
Internal environment – According to Grant, (2016) it can be define as that factor which
includes management, customers, and corporate cultural groups that can describe the workers
behaviour or attitude within an organisation. There are various components that are directly
impact on firm activities and functions effectively. The Virgin need to analyse whole internal
environment that will directly affect on their customers preferences and also assist in identifying
their behaviour or nature in proper manner. Along with this, there are various situations, events,
conditions, factors in an enterprise which affect business activities or functions, especially
employees behaviours or attitude. It can be determined as major part of internal environment that
includes company mission, vision, organisation culture and leadership styles. Virgin required to
analysing and examining whole internal surrounding through which they can easily identify their
desired customers needs and wants in the large market place.
On contrary to this, it is identified that Vogel, (2010) said that addition to this, they need
to analysing company internal environment that includes factors which directly affect on firm
functions and activities, its managers, leaders, owners, material resources, organisation culture
that require to determine abilities, capabilities, of company that can be adopted for combining
external environment factors in effective manner. Internal business environment combine with
various factors in an organisation that directly impact on growth and success.
External environment is changing day by day due to which company is getting maximum
opportunities of success as consumer choices or preferences are fluctuating in coming time
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frame. Virgin media is totally affected by modification which is done by political bodies in their
norms, rules and regulations because company is having their outlets across international
boundaries. As a result, their position is also enhancing day by day by gaining the trust or loyalty
of entire society. In this modern world number of companies are coming in this sector for
gaining trust or loyalty of maximum customers. Strategic positioning of an enterprise is
fluctuating in various ways because legal bodies are changing their norms, rules and regulations
and overall business is depend upon advisory bodies. Virgin media is seen as most leading and
successful name in communication or entertainment industry because company is engaging in
offering best opportunity of interaction as it helps entire society by offering qualitative services.
Mainly three major operating section of this association are- cable, mobile and content. All these
three elements are crucial for overall community as well as corporate world to perform their
assigned job in best manner (Chen and Chai, 2010) .
Apart from this, few authors are expressing their views that internal analysis is playing
important role in improving the current performance of an organization because it aids in
controlling probabilities of mistakes. Along with this, one thing is also determined that strategic
positioning of an association is always changes because of modification in political norms and
policies. Communication facilities is helping entire corporate world in various manner such as;
aids in maintaining the positive connection with long distance customers which resulted in
maximization of sales performance as well as establishing company image at marketplace. Thus,
virgin media is getting succeeded in gaining maximum benefits by satisfying clients
requirements and needs in a defined time frame (Culture Of An Organisation: Strategic
Management, 2017) .
CONCLUSION
As per the above report it has been summarised that business environmental factor has
direct impact on a business organisation. These factors can be internal and external but they has
different impact on organisational approaches. Internal environmental are manageable while
external factors are beyond the control of management. So for this it is require that manager
make a effective strategy that reduce negative impact of such factors in effective manner.
Through this, they can operate their business approaches easily. Throughout the study it has been
assessed that an organization needs to analyse the internal and external environment for
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enhancing their current positioning by grabbing opportunities identified at marketplace. Hence, it
has been analysed that virgin media is one of the most appropriate example of this policy.
REFERENCES
Books and Journals
Johnson, G., 2016. Exploring strategy: text and cases. Pearson Education.
Reuter, C and et. al., 2010. Sustainable global supplier management: the role of dynamic
capabilities in achieving competitive advantage. Journal of Supply Chain
Management, 46(2), pp.45-63.
Rovai, A.P. and Downey, J.R., 2010. Why some distance education programs fail while others
succeed in a global environment. The Internet and Higher Education, 13(3), pp.141-
147.
Rugman, A. and Verbeke, A., 2017. Global corporate strategy and trade policy. Routledge.
Barney, J.B. and Hesterly, W.S., 2010. Strategic management and competitive advantage:
Concepts. Englewood Cliffs, NJ: Prentice hall.
Teece, D.J., 2010. Business models, business strategy and innovation. Long range
planning, 43(2-3), pp.172-194.
Grant, R.M., 2016. Contemporary strategy analysis: Text and cases edition. John Wiley & Sons.
Vogel, D., 2010. The private regulation of global corporate conduct: Achievements and
limitations. Business & Society, 49(1), pp.68-87.
Chen, T.B. and Chai, L.T., 2010. Attitude towards the environment and green products:
consumers' perspective. Management science and engineering, 4(2), p.27.
Online
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