Business Strategy Report: Analysis of Virgin Mobile's Operations

This report presents a comprehensive business strategy analysis of Virgin Mobile, a telecommunications company. It begins with an introduction to business strategy and its application within Virgin Mobile, highlighting the importance of competitive advantages. The report then applies the PESTLE model to assess the external environment, examining political, economic, social, technological, legal, and environmental factors influencing the company. Following this, the Ansoff matrix is used to explore growth strategies, including market penetration, product development, market development, and diversification. The VRIO model is subsequently employed to evaluate the company's strategic capabilities, assessing their value, rarity, imitability, and organization. The report also conducts a SWOT analysis to identify the company's strengths and weaknesses. Furthermore, Porter's Five Forces are applied to analyze the competitive landscape, followed by an examination of Porter's generic strategies to determine the company's strategic direction. The report concludes with a summary of findings and recommendations for future strategic development. The report uses different models to analyze the internal and external environments of the business to identify its strengths, weaknesses, opportunities, and threats.

BUSINESS STRATEGY

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
1. PESTLE model for environment analysis...............................................................................1
2. Ansoff growth strategy............................................................................................................3
TASK 2............................................................................................................................................4
1. VRIO model to assess strategic capabilities...........................................................................4
2. Strength and weaknesses of the enterprise..............................................................................6
TASK 3............................................................................................................................................8
1. Porter five forces ....................................................................................................................8
TASK 4..........................................................................................................................................11
1. Porter generic strategy...........................................................................................................11
CONCLUSION..............................................................................................................................15
REFERENCES..............................................................................................................................17

INTRODUCTION
Business strategy can be defined as strategic statements in which summary includes to
accomplish goals and objectives. In order to meet with expectations, customers attracted at
workplace to sustain competitive advantages (Anaya, Dulaimi and Abdallah, 2015).
Furthermore, it acts as a planning and organisational tool that assists to develop long term growth
and development. In two primary aspect, it can be measure to attain overall goals.
In the present study, Virgin telecommunication organisation has been selected that
incorporated with different types of products and services. Generally it is wireless
communications brand which is used to deal with different aspects that are independently work
through create network.
For gaining insight information of the present study, it includes PESTLE model which
helps to conduct environment analysis. Furthermore, it demonstrates Ansoff matrix for growth
strategy in the business. Moreover, it determines VRIO model that helps to assess strategic
capabilities in the business. Along with this, it discusses about porter five forces that helps to
demonstrate competitive advantages in Virgin. At last, porter generic strategy has been followed
to show strategic direction and options available in front of the enterprise.
TASK 1
1. PESTLE model for environment analysis
PESTLE analysis is strategy which is used to conduct environment analysis and evaluate
different aspects of surrounding the enterprise. Therefore, business may affect activities and
operations in the Virgin Mobile. Following are different elements of PESTLE analysis that
influence to the organisation: Political factors: Political factors considered examination and influence of government
with its policies, rules and regulations in particular industry. In the business, different
political factors impact on Virgin Mobile such as labour laws, taxation policies, trade
restrictions, etc. There are different types of political changes occur which highly impact
on the chosen enterprise (Anaya, Dulaimi and Abdallah, 2015). Furthermore, political
stability also assists to deal with government transactions and employment laws. For
instance, it is complied with employment law such as non-discrimination of workers,
payment of minimum wages, etc.
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 Economic factors: Economic factors also deals with different elements that affect to
whole economy of the country. There are different types of economic factors elements
that create impact on the business such as inflation rates, price of goods and services,
interest rates, etc. (Chen and Yang, 2015). In addition to this, there are some other aspects
that impact on Virgin Mobile such as economic growth, capital & investment, etc. This
company face stiff competition due to existence of several businesses' existence in
telecommunication sector such as O2, British Communication, Vodafone, etc.
Furthermore, high rates of unemployment resulted into decreased purchasing power of
consumers so that it reduced sales volume of the company. Social factors: Telecommunication industry consist with horizontal growth which is
limited. Specifically, it is difficult to expand in rural regions. In this consideration,
different kinds of offers impact as social media challenges to Virgin Mobile. Customers
are generally focused on these packages to communicate with friends, influence of social
media, etc. As a result, it is important to deal with daily and vastly to grow rapidly. The
company aim at targeting on the basis of demographic characteristics which helps in
focusing on needs of different type of buyers. For example, Virgin mobile launches
schemes on the basis of youth expectation, elderly people, organisation communication,
etc. However, the focus of firm is on targeting individual demographics in order to
manage user satisfaction. Apart from this, focus of group is meeting lifestyle needs of
people which helps in managing satisfaction and changes in services as per changing
customer trends. The lifestyle changes occur due to global innovation, festivals, cu
different cultural groups, generation, etc. For example, initial use of flip phones led to
growth for Virgin mobile but with emergence of touch screens preferences of consumer
shifted drastically.
 Technological factors: Technological factors assess different factors that are related with
technological advancement. In this consideration, automation of manufacturing systems,
increased rate of technological change, R&D activities, cost acquiring for new
technologies, etc. included that helps to Virgin Mobile deal in qualitative products and
services. Improvement in infrastructure of information communication technology (ICT)
enabled Virgin Group to cut its communications costs which led to decrease in
operational expenses. Further, implication of advanced equipment scan helps virgin
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group in improving quality and competitive services to its customers (Shabbir, 2016). As
a result, it enabled with Virgin Mobile to cut its communication costs and decline
operational expenses. It is essential for the organisation to deal in advance activities so
that it assists to gain competitive advantages at workplace. Legal factors: In Virgin Mobile, legal factors are also influencing due to certain
legislation issues. Particularly issues are related with government, monopolies and
customers. Industry allowed importing and exporting of telecom products which impact
on international smartphones such as development of telecom tech devices. Furthermore,
the chosen business need to maintain legal safety through focusing on all regulations.
 Environmental factors: Climate changes and global warming can also affect to Virgin
Mobile. In terms of employment, advancing technology, employees need to adapt these
changes. Customers demand and telecom companies are expected to deliver. With needs
in telecom industry, changing often and it is guaranteed to stay advanced and discarded.
2. Ansoff growth strategy
Ansoff matrix used to considered successful planning initiatives which assists to
determine possible growth strategies in the organisation. It is simply determined selling of
products to existing customers in the country with using different strategies (Pearson, 2015). In
this regard, Virgin Mobile determine their significant participation towards accomplishment of
goals and objectives. As a result, it includes following elements: Market penetration: In this aspect, Virgin Mobile determined their work to increase sales
with existing products in existing market. For instance, the chosen company entered in
broadband and fixed phone line market. In case of wide competition, it is suitable
strategy that assists to grow and increase market share. It helps to cater the whole market
with using Product development: Furthermore, this strategy considered development of the
organisation with existing products in new market. As a result, Virgin Mobile entered in
new areas of UK where it is not dealing. It helps to capture larger market share from
different areas of the world. With the help of entering in international market, the selected
enterprise will easily get their product development (Chen and Yang, 2015). According to
good customer base, existing market is better approach which helps to attain overall goals
and objectives.
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 Market development: Market development strategy consist with product development
with existing market through introduce new product. Therefore, Virgin Mobile
determined their new products in different areas of London, UK. It helps to increase
product line of the company and regulate with different functions.
 Diversification: It is totally new concept which demonstrate new product in new market
with using different sources (Slusarczyk and Golnik, 2015). In this consideration, it can
be stated that Virgin Mobile increase products and services such as online delivery of
different aspects to increase business expansion in different areas.
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TASK 2
1. VRIO model to assess strategic capabilities
VRIO model consist resources that are improved to provide greater competitive
advantages. In this consideration, in Virgin Mobile following aspects determine:
Valuable
 Virgin Mobile show effective financial resources which is highly valuable and helps to
develop external opportunities that are arises in the business. It is combating with
external threats that are removed problems and issues.
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Illustration 1: Ansoff matrix
(Source: The Ansoff Model, 2019)

 Virgin Mobile strategy built successful innovation for localisation of the products and
services. Therefore, it helps to competing with different competitors those are existed in
market.
 Significant portion of the workforce is highly trained so that it leads with more
productive output for the organisation. Employees are also loyal and retention level of the
business is very high.
 Strong relationships with retailers and wholesalers also assists to take positioning in UK.
It assists to deal with new concept that lead to gain more success and profitability as well.
 Supply chain network flexibility is also important that assists to focus on dealing with
competitiveness in creative manner (Shabbir, 2016). As a result, it helps to regulate
positive distribution and logistic costs to gain productive results in Virgin Mobile.
 Virgin Mobile also diversify revenue stream and isolate company's balance sheet from
economic cycles.
 In the chosen business, e-commerce space is rapidly growing and firm can leverage
several opportunities in positive consideration.
Rare
 Talent is critical to firm's growth so that in Virgin Mobile there is lack of ability to attract
talent in local and global marketplace.
 Most of the competitors are trying yo enter in lucrative segments.
 It has also dedicated channel partners so that positioning among retailers and wholesalers
determined in positive aspects.
 Supply chain network flexibility is rare so that it is rare to determine effective results in
the business.
Imitable
 It is very difficult to imitate in Virgin Mobile.
 Most of the competitors exists in the market so that the chosen business can easily imitate
to them.
 It is very difficult to imitate though not impossible.
 Near competitors, Virgin Mobile also have flexible supply chain and share some
suppliers.
 The selected business can be imitated by competitors but it is more difficult.
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 Furthermore, pricing strategies are regularly imitated in the industry (Lafuente, Vaillant
and Vendrell-Herrero, 2017).
Organisation
 Financial resources of Virgin Mobile are organised to capture value as it is identified in
the business. These resources are generally used strategically to invest it in right places.
These resources source with sustained competitive advantages
 Pattern of Virgin Mobile it not well organised as it is identified to ascertained full
potential outcomes. Unused competitive advantages exists that can be successfully
changed for selling of patented products before its expire.
 Distribution network of Virgin Mobile organised and identified with uses of the network
to reach all customers by ensure products are available on its different outlets. As a result,
competitive advantages successfully gained in the organisation.
2. Strength and weaknesses of the enterprise
Virgin Mobile has several strengths and weaknesses that are explained under here:
Strength Strong brand with top of the mind recall: Virgin Mobile has strong brand so that they
enjoy global presence in different areas of the UK. In this regard, it can be stated that
they are successfully dealing to prefer effective services in cost effective procedure.
Therefore, it helps to increase satisfaction level of customers through create successful
network.
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Illustration 2: VRIO framework
(Source: VRIO: From Firm Resources to
Competitive Advantage, 2019)

 Very innovative and unique branding with advertisement: Virgin Mobile generally
focusing on development of the business with its promotion. Promotion is generally
based on innovative and unique branding with advertisement. As a result, it draws digital
marketing success which helps to develop advertisement of different products and
services (Ismagilova, Gileva and Glukhov, 2017). Digital marketing success continuously
increasing which helps to increase advertisement to grow successfully. Strong network: Annual revenue of the company is also increasing continuously due to
its strong network. In this regard, it can be stated that recent expansion assists to deal in
the largest market share to focus on optimising market demand (Ismagilova, Gileva and
Glukhov, 2017). Another competitors of Virgin Mobile recent expand their network so
that the chosen business focus on increasing their operations and functions to maintain
coordination in the enterprise. Improved IT and support system: Virgin Mobile also successfully expanded their
operations and functions with improved IT and support system. Their strong network also
deal with effective IT operations and functions so that it assists to include technological
advancement in the business (Amin, Anwar and Huang, 2017). Deals in global areas: Virgin Mobile deals in different areas of the world so that it can be
stated that it determined operations and functions in global areas. As a result, it helps to
promote significant advantages to provide different kinds of services in the market.
 Strong backing in Virgin group: Virgin deals in large group in which different kinds of
products and services generally sold by the organisation such as telecommunication,
health care, etc. As a result, it helps to increase business productivity and profitability
from different areas of operations and functions.
Weaknesses Limited brand visibility and awareness: However, there are several weaknesses exists
regarding Virgin Mobile in UK. In this way, it can be depict that the selected enterprise
has limited brand visibility and awareness as compare to some leading global telecom
brands. It increases issues and problems to the enterprise to deal in telecommunication
industry.
 Increasing operational issues: Moreover, another weakness in front of Virgin Mobile is
that there are several operational issues exists which impact of brand performances of the
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selected business. For instance, in different countries such as India, Singapore, etc. brand
of Virgin Mobile get negative impact.
TASK 3
1. Porter five forces
Porter five forces
Porter five forces consist different kinds of elements that helps to attain competitive
advantages in the business. Different elements of this strategy has been explained under here: Bargaining power of buyers (High): Buyers of UK market have strong bargaining power
because they are usually tended to drive price down. In the country, there are several
telecommunication businesses exists those provide different kinds of products and
services at low cost. Therefore, it is highly impact on Virgin Mobile. As a result, it can be
depict that the chosen business need to focus on providing their products and services
with more competitive advantages (Amin, Anwar and Huang, 2017). Furthermore, there
are several customers have different choice so that it can be stated that it impact
negatively on the selected enterprise. Bargaining power of suppliers (High): Suppliers of the country have high bargaining
power because in the country there are limited buyer existence. Therefore, it can be stated
that Virgin Mobile need to focus on other countries suppliers so that they can get material
at limited cost. Furthermore, suppliers possess high bargaining power so that the chosen
business need to increase their products and services prices because it leads with extract
higher price to the company (Roberts, 2018). Threat of substitute (Moderate): In the country, there are several competitors exists who
deals in telecommunication industry so that it can be stated that Virgin Mobile has threat
of substitute to deal in the country. However, quality of products and services is different
which provide by Virgin Mobile and other businesses so that customer loyalty gain in the
business with considering effective products and services in the business. In this regard, it
can be stated that the chosen business need to concentrate on quality products and
services which helps to gain more profits at workplace (Rehman, Asghar and Ahmad,
2015).
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 Rivalry among existing players (High): Virgin Mobile face issue of rivalry in UK
because there are several businesses exists that deals in telecommunication industry. In
this regard, it can be stated that the chosen business need to implement competitive
advantages with more effective products and services. With this regard, it can be said that
O2, Vodafone, British telecommunication, etc. compete with the selected business
(Ismagilova, Gileva and Glukhov, 2017).
 Threat of new entrants (Low): In the telecommunication industry more investment is
required to deal with products and services. Therefore, they need to concentrate on
development of business to communicate overall goals and objectives in large
marketplace. After this, it is not sure that profitability will be gain or not. Hence, existing
businesses have advantages to deal with new entrants significantly. Virgin Mobile has
advantage to focus on operations and functions which helps to promote their products in
different areas of the world (Amin, Anwar and Huang, 2017).
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