Business Strategy of Virgin Mobile: Macro and Micro Analysis

This report offers a comprehensive analysis of Virgin Mobile's business strategy, delving into the impact of the macro-environment through PESTLE and Ansoff matrix analyses. It examines the internal environment and organizational capacities, including strategic capabilities and the application of the VRIO model to determine strategic capacity. Furthermore, the report explores the telecommunication sector, providing a detailed understanding of Virgin Mobile's strategic direction. The analysis covers various aspects, from political and economic factors to social, technological, environmental, and legal influences, along with market penetration, product development, market development, and diversification strategies. The internal environment analysis focuses on strategic capabilities, resource management, and competitive advantages, providing insights into Virgin Mobile's market position and future prospects. The study concludes with an overview of the strategic direction, summarizing key findings and recommendations for the company's continued success in the telecommunications industry.

BUSINESS
STRATEGY OF
VIRGIN MOBILE
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Table of Contents
INTRODUCTION .................................................................................................................................................. 3
ANALYSING THE IMPACT AND INFLUENCE OF THE MACRO ENVIRONMENT......................4
i) Pestle analysis of Virgin mobile...........................................................................................................4
ii) Ansoff matrix of Virgin mobile........................................................................................................... 6
TASK 2...................................................................................................................................................................... 9
INTERNAL ENVIRONMENT AND ORGANISATION CAPACITIES....................................................9
i) Strategic capability.................................................................................................................................... 9
ii) Applying the VRIO model determining the strategic capacity of Virgin mobile...........9
iii) The organisations’ strength and weakness .............................................................................10
TASK 3................................................................................................................................................................... 12
Analysis of telecommunication sector....................................................................................................12
TASK 4................................................................................................................................................................... 16
UNDERSTAND AND INTERPRET STRATEGIC DIRECTION............................................................16
CONCLUSION...................................................................................................................................................... 19
REFERENCES...................................................................................................................................................... 20
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INTRODUCTION
The trend of globalisation has changed every growing industry in this current
scenario. The mobile telecommunication sector is one of the most rapidly growing industries,
which are being affected by the trends of globalisation. As the market is growing for
telecommunication sector, the competition in the market for acquiring more number of the
customer base is also growing faster. However, the competition is not only seen in the
national market but also when it comes to telecommunication the competition is being
International. In this situation, the different telecommunication organisation of all over the
world is implementing their different strategy for the growth and development of their
organisation. However, this strategy is referred to some unique tactical and strategic decisions
which are made by this organisation for developing competitive advantage in the targeted
market. In this study, the diversity of strategies which are implemented by Virgin mobile for
the development and improving the competitive advantage will be explained.
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ANALYSING THE IMPACT AND INFLUENCE OF THE MACRO
ENVIRONMENT
Sir Richard Branson is the founder of Virgin mobile which is part of the virgin group
Limited. However, this organization is considered under the first mobile network operator
which start working under a joint venture with T mobile in the year of 1999 in the United
Kingdom. Therefore it can be said that the organization did not use their network but using
long-term contract with T-Mobile for their existing mobile service (Johnson, 2016).
To understand the impact of the micro-environment in the organizational skills by which the
employee satisfaction is usually affected. For understanding the demand of the market from
this organization, the analysis of micro-environment and Ansoff matrix will be done
i) Pestle analysis of Virgin mobile
Political factors: the political elements of United Kingdom are imposed by the
government of this country which is associated with intervention in the organisational work.
The political factors of this country are affecting the services and products promotion of the
organisation with subsidies and also with traffic and tax policy environmental law and trade
restrictions create the stability of the organisational work. The organisation Virgin mobile is
being influenced by the political initiatives of the United Kingdom on the telecommunication
industry. The organisation has developed their 3G network with his associated with the
promotion of the government for using the technology of T-Mobile (Fletcher et al. 2017).
Economic factors: The inflation rate of the country and the income of the customer's
exchange rate at the environmental factors which are affecting the Virgin mobile. From 1999
to 2003 the organisation has developed a maximum number of subscribers. However by the
introduction of the prepaid segment the traffic structure of this organisation Virgin mobile
has changed. The use of prepaid segment has changed the entire structure and also result
which cause a loss of many valuable customers of Virgin mobile.
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Figure 1: Pestel analysis of Virgin Mobile
(Source: Ghezzi and Frank, 2015)
Social factors: The social factor of the business environment of Virgin mobile it has
been seen that the safety of the customers, increasing population and career attitude are
positively impacting the business. Virgin mobile has developed the outlook of their products
by understanding the social trend, colour pattern and the choice of the young generation. By
using this strategy, the organisation is focusing on the employee satisfaction factor for
achieving their organisation objective. By using this strategy, the organisation is focusing on
the employee satisfaction factor for achieving their organisation objective.
Technological factors: the total change of the organisation product and services of
Virgin mobile is related to the technological advancement. The organisation is providing new
attractive offers for the customers by using technological advancement in this organisational
service Virgin mobile able to provide the reduction in the cost and also Quality Services
organised (Cubas‐Díaz and Martínez Sedano, 2018). The collaboration with the T-Mobile has
upgraded their service from 3G network to 4G networks. This new protocol of this
technological advancement is known as the virgin by which is comparatively satisfactory for
the customers than the competitions in the market.
Environmental factors: The organisation Virgin mobile is associated with different
programs and events related to the environmental development process and adopting
environmentally friendly approaches. In addition to that, the communication and marketing
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are essential for the development of the environment. The organisation is also trying to
decrease the marketing activities and their impact on the environment.
Legal factors: There are various rules and regulations which are affecting the
organisational environment externally. For improving the preferred airline bundles, free
Voicemail process is the part of the organisational development. In addition to that, the use of
safety and health laws are also forcefully implemented in 2004. These regulations are helpful
for increasing the sales of Bluetooth headset. However, it has been seen that the Virgin
mobile has used the joint venture which has collaborated with T-Mobile for getting a better
advantage in the commercial market of the Telecommunication sector (Brewster, 2017).
ii) Ansoff matrix of Virgin mobile
The Russian American and shop have developed the Ansoff matrix in the year of
1957. This matrix is used for developing strategic planning, and by using this metric the UK
based organization, Virgin mobile can develop their strategic planning which is being
executed by the marketing department and senior managers for their future development
process.
Market penetration:
The Virgin organisation mobile uses this market penetration process to understand the market
share and also for launching new variety of their existing products. By developing market
penetration, the organisation can easily develop promotional and advertising strategy. By
using this strategy, the organisation was able to capture market share from the Rival BT in
the broadband services (Bakshi, 2014).
Product development: For this strategy, the organisation has launched the new product for
their existing customers. For improving the earning of the organisation or for the current
portfolio the organisation has developed more than 100 Mbps services of broadband.
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Figure 2: Ansoff Matrix
(Source: Woerner and Wixom, 2015)
Market development: the market development strategy is unique because the expansion of
the organisation in the new market for their existing product is the process. In addition to that,
the organisation Virgin mobile has launched their broadband services for especially the
existing network of Virgin mobile are being used for they are operational services for
capturing the market share of BT (Scholes, 2015).
Diversification: The use of differentiation strategy is one of the best approach used by Virgin
mobile for increasing the intensity of the competitive market the organisation has used the
differentiation strategy which is also helpful for reducing different organisational risk.
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Figure 3: Strategic management decision about the Macro environment.
(Source: Saebi and Foss, 2015)
From the analysis of microenvironment, it can be said that the work of supplier and customer
are being affected by the political factors. The organisation Virgin mobile has introduced new
Strategies for satisfying their customers and enhancing their revenue. The greener policy has
also affected the services of this organisation. The inflation rate, unemployment rate and
exchange rate are narrow down the organisational structure. The impact of technological and
social factors are also affecting the revenue of the organisation and shifting the organisational
services by using technological advancement like online transactions. In addition to that, the
environmental analysis has shown that the contribution of this organisation in the
environment is changing depending on the situations (Olsonv et al. 2018). Finally, it can be
said that the legal factors of this country are insulting the liability compensation related to the
services and products of the organisation and therefore the organisation can provide a better
quality of services like free talk time and cheaper rate.
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TASK 2
INTERNAL ENVIRONMENT AND ORGANISATION CAPACITIES
i) Strategic capability
Every organisation has its strategic capability. By understanding the strategic
capacity, the organisation Virgin mobile can easily appreciate their internal size and also the
customer demand from the organisation. The strategic capacity planning process is associated
with internal organisational capacity. However, the internal capacity includes human
resource, production lines and different constant, which are mainly measured. Depending on
this continuous the organisation can easily develop their objective by measuring this constant
(O'Brien and Welford, 2018).
For understanding the organisational capacity the first step which is used by the
organisation Virgin mobile properly measures the organisational size which is essential for
reaching the organisational goal. The internal capacity and market shares of the organisation
is used for the objective meeting process of Virgin mobile on a regular basis and the
evaluation of this process. By understanding the strategic capability, Virgin mobile can also
develop their future process because it helps the organisation in the forecasting by measuring
the current constant of the organisation (Mosnaim et al. 2015). Achievement of different
organisational goal will be possible for the organisation by understanding the market situation
and strategic capability.
ii) Applying the VRIO model determining the strategic capacity of Virgin mobile
For understanding the Strategy capacity of Virgin mobile, the use of VRIO model is
very useful. For the customer-oriented business of international market, the organisations like
Virgin mobile are using smart and practical marketing strategies which will be helpful to the
success of the organisation (Massa and Afuah, 2017). By managing the resource of the
organisation, the marketing process of the organisation has been developed by the business
for them for the future. However, the Virgin mobile has also developed infinite ways of
creating brand value in this market which is quite admirable in this current
telecommunication industry. By developing an effective marketing strategy and promotional
strategy, the organisation has adequately utilised their organisational resources. However
managing resources are vital for the organisational growth of any organisation, but the
significant features which have been added by Virgin mobile are team up with different
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telecommunication organisations, like T-mobile, which help the organisation in purchasing
your time and also increasing the popularity of the brand Virgin mobile.
However, by using the value analysis, the internal aspects of the organisation can we
understand which is associated with the competitive implication in the market (Johnson,
2016). In addition to that this analysis will also help in understanding the potential
improvement which is possible in the future and to understand the strategic capability of the
telecommunication organisation Virgin mobile.
Value: The recent report shows that the Virgin mobile is one of the major
telecommunication Organisation in the United Kingdom because they provide internet
service up to 50 MB which is ultra fast internet service in this country. More than half of the
population of this country is benefited by this strategy taken by Virgin mobile by adding
value to the organisational product and services for developing the competitive advantage.
Rare: Creating rareness in organisational product includes a different adaptation of
resources like experience employees who can directly contribute to the success of the
organisation. However, for creating rareness Virgin mobile, has already developed rare
quality which is also premium by providing the best quality of raw materials to the services
and products for the customer's convenience (Fletcher et al. 2017).
Imitability: The resources used by telecommunication industry are imitable. Instead
of the original resources, alternative resources are being used. But the organisation Virgin
mobile is associated with providing their customers with the best quality of services and
products with a proper reasonable procurement and pricing. The organisation has focused on
Ultra Quality sources for their process of production.
Organization: For any organisation, a organised the internal structure is essential
because it directly enhances the effective management of resources and helps in achieving the
organisational goals (Ghezzi and Frank, 2015). Therefore the organisation Virgin mobile has
used the collaboration strategy with T mobile for their products which is part of their
marketing strategy.
iii) The organizations’ strength and weakness
Strength:Virgin mobile is one of the popular names of Telecommunication industry in the
United Kingdom which are known for their premium quality products. The different strengths
of Virgin mobile:
1. The organisation of customer convenience services for being a famous brand in the
United Kingdom telecommunication market. These convenient services for customers
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include smart features India premium quality mobile phones and ultra-fast internet
speed.
2. The organisation is associated with collaborating their products with the T-Mobile
3. The raw material which is being used by this organisation is original and premium in
quality
4. The internal structure of Virgin mobile is associated with appropriate marketing
strategy and planning which is much organised (Cubas‐Díaz and Martínez Sedano,
2018).
Weakness:
The different weaknesses of Virgin mobile are:
The strong competition in the telecommunication market has provided this organisation is
travelling situation at any time which is directly affecting the marketing opportunities of this
organisation
1. For providing Ultra quality and premium raw material half the organisational services
and products, the organisation has to enhance the cost of the production
2. Therefore, it can be said that the organisation is struggling in this United Kingdom
market of Telecommunication because of numerous competitors and new entrances
which is directly affecting the capability of this organisational products and providing
the organisation many challenges.
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TASK 3
Analysis of telecommunication sector
Michael Porter is establishing the model of Porter five forces in the year of 1979. This model
is useful for understanding the competitiveness of any organisation in the market and also
highlights the area of enhancing the profitability. For adopting the five different external
forces of the competitive market, the organisation Virgin mobile has properly done the
market research (Brewster, 2017). For increasing the profitability and enhancing the
competitiveness of the market the adaptation of porters five Force model at the following:
Bargaining power of buyers:
In the telecommunication industry minimising the service rate of the organisation is
very useful. However, for retaining the customers, the Virgin organisation mobile are adopted
different strategies like providing lower prices than the other organisations are offering free
discounts for the customers which directly contribute to not leaving the network by the
customers. For minimising the risk of the organisation providing renegotiated details about
the organisation to the customer is part of the process. In addition to that, the organisation has
already tried to develop their competitive advantage by introducing more value for the
customers (Bakshi, 2014). Therefore for this crucial area of gaining a competitive edge, the
organisation has established adequate organisational policies which can help the organisation
in increasing their value on the market.
Bargaining power of suppliers:
The organisation uses the bargaining powers of the supplies directly related to the raw
material with for developing their products. The supplier and its effect directly associated
with natural materials and the producer of finished goods. The supplier can provide sale high-
quality raw materials easily at the lower price to the organisation. However, the
telecommunication industry of the United Kingdom already has a backward integration, and
the suppliers can start or develop new business by collaborating with the operators. There is
also access to the suppliers in dealing with sim card and mobile phones and even with the
networking industry (Woerner and Wixom, 2015). Therefore, there is a huge possibility that
easily get maximum part of the profit. Consequently, it can understand that the low
bargaining power of suppliers is not appropriate for the telecommunication industry because
the relationship with the supplier need to be strong in this industry.
Threats of new entrants:
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