Business Strategy Report: Virgin Mobile's Competitive Analysis

This report provides a comprehensive analysis of Virgin Mobile's business strategy within the United Kingdom's telecommunications sector. It begins with an introduction to business strategy and its importance, focusing on Virgin Mobile as a case study. The report explores the impact of the macro environment on Virgin Mobile through a PESTLE analysis, examining political, economic, social, technological, legal, and environmental factors. It also applies Ansoff's growth vector matrix to assess Virgin Mobile's strategic options for market penetration, product development, market development, and diversification. The report further investigates Virgin Mobile's internal environment, emphasizing strategic capabilities and the VRIO/VRIN model to evaluate its resources and competitive advantages. The analysis includes an examination of strengths, weaknesses, and recommendations to enhance Virgin Mobile's market position and achieve its long-term objectives in a rapidly evolving technological and competitive landscape.

Business Strategy

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
P1 Impact and influence the macro environment........................................................................1
TASK 2............................................................................................................................................4
P2 Internal
environment and its capabilities of an organisation...................................................................4
TASK 3............................................................................................................................................6
P3 Competitiveness of UK’s telecommunications sector using Porter’s five
forces model...............................................................................................................................6
TASK 4............................................................................................................................................8
P4 Bowman’s strategy clock model............................................................................................8
CONCLUSION................................................................................................................................9
REFERENCES..............................................................................................................................11

INTRODUCTION
Business strategies refers to action course which is prepared to accomplish measurable as
well as particular goals. These types of strategies are developed through top management and
also executed through middle level employers under an observation of the top level management.
The main reason behind formulating strategies for accomplishing mission, goals and objectives
of an organisation through proper utilization of the strategic thinking (Ackermann and
Audretsch, 2013). Business strategy is long term planning through which an organisation can
achieve its long term objectives with in particular time period. This report is based on the Virgin
Mobile and it is mobile service provider and operate its business in United Kingdom country. It
is also subsidiary of the Virgin Media. In this given report mention about an impact as well as
influence of macro environment on Virgin Telecommunication company. In order to analyse
strategic positioning of company, Ansoff growth vector matrix also will be discussed under this
given report. Internal capabilities are necessary for achieving aims and objectives of firm with in
specific period of time.
TASK 1
P1 Impact and influence the macro environment
Strategy refers to action plan which is designed to accomplish the long term aim in an
effective manner. It is general direction which is set for an organisation and also its different
components in context to accomplish desired results. Business strategy is developed by top
management and also helpful in achieving the long term objectives with in fixed time period.
Macro environment are those factors which impact on business firm outside of an organisation
and company can not control all these factors (Alsoboa and Aldehayyat, 2013). In addition to
this, mobile telecommunication sector is fast developing sector in all over the world. In United
Kingdom, there are various telecom mobile organisations and they provide effective quality
services to all people. Virgin mobile organisation is a service provider and also operate its
business operations in United Kingdom. This firm was launched through the Virgin Group in
year 1999 and it is a first Mobile Virtual Network Operator in all over the world. Under this
company around 71000 staff members are working. At starting of this organisation, it was
private joint venture among the Virgin Group and One2One. This company provides its services
in many different countries and also make changes in its services on the basis of demands of
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people. This organisation conduct its business in many other countries so there will be more
affect of macro factors on its business operations and to know this factor.
1) PESTLE Analysis of Virgin
Political factors- Under this, policies are governed through the political groups or can say
government. The policies of each country are different so it is necessary for an organisation to
know about the rules, policies and regulations of that country in which firm is going to conduct
its business (Bentley, Omer and Sharp, 2013). In context to Virgin company, it is running in
single brand and has a partnership with the stagecoach. This company follows all regulations of
country, pay taxes and also develop policies on the basis of government rules. In Virgin group,
political interferences is related to financial matters as reports are not more clear because of its
partnership with more organisations.
Economic factors- An analysis of macro factors determines movements in market
conditions like inflation. Exchange rates, interest rates etc. which can develop main affect on an
organisation. Global recession has impact on Virgin firm such as losing jobs or closing down on
its business strategy. Fluctuations in an international or local market shows direct affect on
business policies of an organisation and it may be turn in to the losses.
Social factors- An analysis of cultural or macro factors determines trends in beliefs,
behaviour and social values. It is a social responsibility of Virgin company is to offer better
quality of services to consumers. It has a mission to offer outstanding services ton the basis of
consumer's economic conditions. Punctuality services of Virgin company has poor which should
be fulfil consumers needs through addressing on proper time.
Technological factors- Macro technological factors analysis seek changes in
technological application in an industry (Cadle, Paul and Turner, 2010). In order to Virgin, it
always update its technical knowledge or software to service consumers to more extent. This
company is always update in offering the technologies and also internet services in this as the
wireless technology.
Legal factors- This factor monitor and control legal environment under which an
organisation operates its business. This factor is concerned with the other factors which are
involved in PESTLE analysis. Government developed some legislations which need to follow by
firms. These factors directly impact on the customer legislations, employment laws, health and
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safety and also competition. Virgin company follows all legal system at the time of conducting
business.
Environmental factor- It is take in to a consideration of macro factors like for an
instance weather or climate changes. With change in climate because of global warming and
pollution, it is considered through company (D'Aveni, Dagnino and Smith, 2010). Virgin
company has sponsored many programmes and events in order to environment cause and usage
of inks, papers and many other resources.
2) Ansoff’s growth vector matrix of Virgin
Ansoff matrix is helpful in know about the growth of an organisation at the market place.
This matrix represents the four strategic choices, engaging from incremental strategy under
which the existing goods are to be sold to current consumers to revolutionary strategy under
which the new products are to be sold to new purchasers. The four different growth related
strategies are mention below as above:
Market penetration- Under this, firm provide its current goods to the present consumers.
It occurs when an organisation enters market with existing goods. It is an effective way to attract
large number of customers at market place. Growth strategy is inherent in an option of market
penetration is for company in context to enhance market share of current goods at market place.
As it provides its services in India then it will also provide more services in this country to
capture more market.
Product development- Under this, firm provides its new goods in existing market. Virgin
company produces new goods as well as services by adding some of the additional feature. In
this, company provide that new products in to its existing markets in which it already provide its
goods in an effective manner.
Market development- Under this, main motive of an organisation is to provide its
existing goods in to new market place (Curwen, 2011). In many other countries, Virgin mobile
does not provide its services or products, so it will offer its existing products in new countries
and capture the new market. With the help of this firm can attract the large number of consumers
and nanoscience its market share.
Diversification- It is used in strategic development and it is a business development by
new market or goods. It is regarded as an appropriate option when the existing markets are very
saturated. Under this strategy, risk is more involved. In United Kingdom country Virgin
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company associated with recordings, music and also ventured in new markets or goods involving
Virgin Megastores, telecommunications, Virgin Cola etc.
TASK 2
P2 Internal
environment and its capabilities of an organisation
An assessment of an internal environment of company consist determination of
weaknesses and strengths possessed through them (E. Dobbs, 2014). It is necessary for an
organization to include all necessary factors of internal environment and these are technological,
employees skills, management efficiency, working abilities of employees etc. Firm can control
all these given factors in a better manner. In an internal factors, developing the core
competencies increase business operations quality for attaining the more advantages through
firm such as high market share, profit, competitive advantage etc.
1) Strategic capabilities
It refers to an organisation ability in order to execute the competitive strategies which
contributes towards increasing organisational values as well as long term sustainability at the
market place. In order to make improvement in capabilities, it is necessary for company to give
an emphasis on proper utilisation of the necessary resources. In addition to this, there is a
requirement to offer intensity on several aspects such as market position, business assets,
resources for developing future related strategies, the main motive behind developing strategy is
to gain long term benefits as well as achieve organisational targets in an effective manner.
Through this firm can compete with its strong competitors at the market place and gain
competitive advantage. In context to Virgin company, strategies are helpful in satisfying
demands of consumers in the sector of telecommunication (Firnkorn and Müller, 2012). Changes
in technology happens rapidly, so it is necessary for this organisation to update its technology in
short period of time. It will bring competitiveness to business at market place. In addition to this,
there are various advantages which are related with developing of this type of strategies to
remain the financial viability and developing business regularly. It is helpful in providing better
opportunities to various stakeholders for gain the future development. It can be used through
various inventors in addition to make proper decision related to an investment, it also aids to
motivate the staff members and develop with them harmonious relationship at the market place.
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2) VRIO/VRIN model
It refers to an analytical technique for examination of resources of an organisation and
gain competitive benefits. It is an effective tool used through management of Virgin organisation
which is use through human resource department related to accomplishing the sustainable
competitive benefit in the market of United Kingdom. Its provisions are helpful for human
resource manager to identify various features which firm can be used to achieve the high market
positions and gain competitive advantage (Grover and Kohli, 2013). VRIO tool aids to make
improvement in its internal strengths of the Virgin company and also capabilities to achieve its
goals in specific period of time. It consists four various aspects like value, rare, limitability and
organisation. All these aspects are given below:
Valuable- It is helpful in providing success to company. Various available sources are
helpful for company to collect the future related opportunities at market place through
eliminating all threats. In addition to this, resources are important part of company and also aids
in achieving long term sustainability in operations.
Rare- Resources which can only acquired through one or some firms are regarded as rare.
Valuable as well as rare both resources provide temporary competitive benefits to company. In
telecommunication sector, competition is more, so there is a need to Virgin company to increase
its working efficiency in an effective manner. In context to this, management of Virgin company
should give training to its staff remembers for developing their skills so that they can give their
better performance.
Imitability- It gives effective resources which are available with company are very
expensive in the nature. It will be helpful in developing positive affect on functions of business
firm and also give effective quality of telecom services to consumers for increasing its brand
value at market place (Johnson, 2016). Through this, Virgin company can increase its market
share and profit level.
Organisation- Virgin company conducts its business in many countries and also a good
brand image. Its consumer base is strong and also have better relation with them. It is necessary
to Virgin company to make continuous change sin its technology or upgrade them in an effective
manner. Structure if an organisation should be systematic and helpful for company to exploit its
resources in a better manner to eliminate all cultural related differences and achieve goals if
business.
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3) Strengths and weaknesses of Virgin company
Strengths are like capabilities of an organisation and weaknesses are limitations. SWOT
analysis is a necessary tool to determine weaknesses as well as strengths of firm. It is used
through Virgin organisation to develop various strategies to gives an opportunities related to
achieving objectives of company (Klettner, Clarke and Boersma, 2014). It consist critical
assessment of strengths and also weaknesses of company in context to markets. Strengths and
weaknesses of Virgin organisation given below as above:
Strengths
 The customer base of Virgin company is strong and it experience in two various types of
distribution such as mail ordering and stationery trade.
 It has strong brand name at market place and also introducing new goods in competitive
environment.
 Virgin organisation has various transportation facilities methods in order to export goods.
This company has more skilled, capable software professionals.
 It has more money to invest in any type of business and also generate more profit at every
year. It also expand its business operations in many countries in each year.
Weaknesses
 This organisation provides bad transportation related facilities and no punctuality in
trains which negatively affect on progress of Virgin business firm.
 Virgin is group of various organisation and in every fields it has its own managers, but
supervision of this firm is hard and also control goes out from management hands (Porter,
2011).
 Some products of Virgin are outdated and cause main problems to staff members as well
as customers.
 In every firm of Virgin, there is a communication gap. Only approach of website to an
organisation is similar but communication among various sector of business is weak.
 More risks can damage image of Virgin Group organisation.
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TASK 3
P3 Competitiveness of UK’s telecommunications sector using Porter’s five
forces model
It is an effective tool which Virgin firm is used to understand regarding competitiveness
of its business. It will offer many opportunities related to identify all competitive forces which
are available at market place in context to increase its profit with the help of developing better
strategies. It is helpful in increasing power of decision making of Virgin Group management
which contribute towards understanding an facility of current strategies to determine growth of
business. In context to Virgin company, it identifies competition level at the market place and
also develop better strategies (Sumer and Bayraktar, 2012). Porters-five-forces model is helpful
in determine competitive intensity between an existing organizations in sector of
telecommunication in present conditions. Strengths of Virgin company are beneficial or effective
for business and also helpful in providing competitive advantages. In addition to this, it has five
main forces which help in magnetising marketplace areas and also examine some strongest
points which are used for enhance profit level. With the help of this, Virgin company can
compete with its strongest competitors in a better manner. Under this, Five forces of Porter's
model given below as above:
Competitive rivalry- At market place, competition among two business firms enhances
then it will result of zero outcomes. Firms tries to overcome from this and also take the
competitive advantages over its competitors. It consist identification process of capabilities of
competitors which are conducting its business in the sector of telecommunication. At market
place, there are more rivals such as BT, EE, Vodafone and many others. The market share of
Virgin Group organisation is around 22%. Competition among all firms because of some reasons
such as more fixed costs, market development, more companies etc.
Threats of Substitutes- It is related to manufacturing similar goods through other
organisations and also making competition (Williams and Figueiredo, 2011). If substitute of
products will be available at market place then consumers will easily switch their goods to
another. In Virgin company, there is less substitute and also provides more services as
comparison to the telecommunication organisation. If in case Virgin company will provide bad
quality, poor satisfaction, so there will be more chance that consumers will switch to other firms.
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Bargaining power of suppliers- Supply of the raw materials can impact on business but
this organisation is strong and better relationship with suppliers. This firm has various suppliers
and also provide similar categories of goods. When at market place there will be large number of
consumers then power of consumers increased. If in case consumers will not purchase goods of
this organisation, then in this case bargaining power of suppliers will be weak at market place.
Bargaining power of consumers- At market place, there are large number of consumers
of Virgin organisation and among them some are loyal towards it (Tavitiyaman, Qu and Zhang,
2011). There is a power to purchasers to bargain regarding things and also compare cost of
service of one organisation to another. As comparison to other competitors, this organisation
provides strong services which can satisfy demands of consumers in a better manner.
Threats of new entrants- In United Kingdom, market share of Virgin company is 22%
as comparison to the other telecommunication organisations. Exit as well as entry barriers for
telecommunication sector is high and many of organisation entry in this sector so from this
competition is also high. In order to generate more profit level, at market place there is big
communication pool. But some of the other firms do not have particular plan in order to attract
the more consumers at market place.
TASK 4
P4 Bowman’s strategy clock model
This model is used in the marketing in measure competition position of firm as
comparison to products or services to competitors. It aids in exploring various options related to
the strategic positioning of services or goods which gives better opportunities in order to achieve
competitive advantages. On the basis of this model, company can identify various effective
options regarding products. This model helps to Virgin organisation to know about its existing
position at the market place. Various positions of this model given below as above:
Position 1 Low price and value added: This position provides that the organisation does not
have competitive position in market due to providence of the similar services in comparison to
their competitors in-spite of charging low prices (Ackermann and Audretsch, 2013). The only
tactic which helps in achievement of the desired targets is to provide their products and services
cheap as much they can. For ex., Virgin is need to provide their telecommunication services at
cheap rates.
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Position 2 low price: This will provides that businesses is required to become the low cost
leader in market. Here, virgin is need to adopt the strategy of cost minimisation which
contributes in attainment of the results of economies of scale. The margin of profit which is
associated with their services is low but but its providence in more amount helps generation of
large number of profits.
Position 3 Hybrid: It is the combination of two strategy where low prices are adopted with the
product differentiation. It helps in attraction of large number of customer as they get higher value
in low prices and simultaneously diversified services are provided. It is more valuable if it is
provided consistently.
Position 4 Differentiation: One of the effective strategy which provides the organisation is to
attain the objective of diversity inn their services for providing highest level of value to their
existing and potential customers. Here, best quality services is provided in comparison to
competitors which helps to attain the trust and loyalty of customers. Brand image is plays an
important role to attain higher position within the organisation and to create the long term bond
with customers. This will provides the opportunity to the management of Virgin to retain their
customers for longer period of time.
Position 5 Focused differentiation: This will includes about fixing up of the high price of their
products. This will attracts customers because they get high value in return. This kind of strategy
is used regarding positioning of the luxury brands, high target segmentation and promotion and
distribution (Bentley, Omer and Sharp, 2013). There are high profit margins are associated with
the products and they sustain in the market for the longer period of time.
Position 6 Risky high margins: Behind the implementation of this strategy high risk is
associated with them simultaneously. This will includes the pricing of their products and services
at high price without offering something valuable to customers. This may have negative impact
upon profitability of organisation like Virgin.
Position 7 Monopoly pricing: This can be used when there is only one seller in market. In this
case they are free to adopt any prices as the buyer have no other choice. But in the present report,
this option is not available with Virgin as there are many big competitors are prevail in market
and providing same telecommunication services like Vodafone and BT.
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