Strategic Analysis of Virgin Mobile UAE: Environmental Factors Report

This report provides a comprehensive strategic analysis of Virgin Mobile UAE. It begins with an executive summary and an introduction to Virgin Mobile's business operations within the UAE. The report then delves into an external environmental analysis, utilizing PESTEL and Porter's Five Forces frameworks to assess the political, economic, social, technological, environmental, and legal factors, as well as the competitive forces shaping the telecom industry in the UAE. An internal analysis is conducted using VRIO and value chain analysis to evaluate the company's resources, capabilities, and value-creating activities. The report identifies key issues and challenges faced by Virgin Mobile UAE, followed by specific recommendations to address these challenges and enhance its strategic position. The conclusion summarizes the key findings and emphasizes the importance of strategic decision-making in achieving sustainable growth and profitability within the dynamic UAE telecom market. References are included to support the analysis and recommendations provided throughout the report.

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Executive Summary
It is important for every organization present in the environment to appropriately evaluate its
internal as well as external environment to grow and increase its profitability. Based on that, the
below mentioned paper analyse the macro as well as micro environmental analysis of the
company Virgin Mobile UAE that explains the threat, opportunities along with strengths and
weaknesses of the company Virgin in target environment. The paper evaluates market and
industry capabilities of UAE telecom sector to capture the value chain and VRIO analysis of the
company. Lastly, issues are evaluated and recommendations are provided to the company so as
to resolve them and grow successfully.

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Contents
Introduction......................................................................................................................................2
Business and Operations of Virgin Mobile UAE............................................................................2
External Environmental Analysis....................................................................................................3
PESTEL.......................................................................................................................................3
Porter Five Forces........................................................................................................................4
Internal Analysis..............................................................................................................................6
VRIO............................................................................................................................................6
Value Chain Analysis..................................................................................................................8
Issues and Challenges....................................................................................................................10
Recommendation...........................................................................................................................11
Conclusion.....................................................................................................................................12
References......................................................................................................................................13

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Introduction
The purpose of this report is to enlighten the reader about the company Virgin Mobile, UAE.
Virgin Mobile is a subsidiary of a Virgin Group which is a private company present in the
environment. The Virgin group is headquartered in UK and operates its business functions in the
worldwide market. Further, the below mentioned report provides details about the business
operation and strategic activities of Virgin mobile segment of the group. The report evaluates
external as well as internal environmental analysis of the company so as to attain information
about the opportunities and threats along with strengths and weakness that the business holds.
Based on the environmental analysis, issues and challenges faced by the company are collected.
The fact should be noted that Virgin Mobile in UAE is a large scale organization working
efficiently in the market to provide satisfaction to the customers (Ameen, and Willis 2016).
Further, more details about the paper are discussed below:
Business and Operations of Virgin Mobile UAE
Virgin Mobile is a wireless communication brand that is used by eight different independent
brand licensees worldwide. The mobile brand is available in UAE, Australia, Chile, Colombia,
US, UK, France, South Africa, Ireland, Canada, Saudi Arabia, Poland and Russia. The company
has also started organizing its functions in Qatar, Singapore and India. Every brand entity of the
company works differently in the market based on the external capabilities and specifications
they are facing in the environment (Oommen 2018). Resulting in which, handset, service plans
and network radio interfaces also differs of every unit based on the conditions of the country.
The Virgin mobile is a segment of the Virgin Group that is a British multinational venture capital
conglomerate that was founded by Sir Richard Branson and Nik Powell. Along with Virgin
Mobile, the Virgin Group serves various products and services in the market books, films,
healthcare, jewellery, retail, radio, internet, aviation etc. The Virgin Group has 100% ownership
of the Virgin Mobile segment of the business (Virgin Mobile 2019). Further, it should also be
noted that the company Virgin Mobile is extensively known for the brand extension activities in
the market and it was the first organization to introduce Mobile Virgin Network Operator in the
market of U.K. The mission statement of the Virgin Group is to make a difference through their

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functions in the environment. The company stand for the value for money, innovation, quality,
fun and a sense of competitive challenge. The business aims to achieve it by empowering the
employees and continuously deliver an unbeatable customers experience to the people of the
country. The objective of Virgin Mobile is to create value as well as profitability in the
communication industry by targeting people belonging to age group 15 to 29 years. The business
looks at high degree of opportunity and growth in the market due to which they aim to expand
their services in such a way to as to increase the satisfaction level of people with time. Talking
about the strategy of the company, it should be noted that the company make use of low cost
strategy in order to attract more and more customers in the target market. Low cost service
provider strategy helped the business to attain unique selling proposition in the target market
(Virgin Mobile 2019). The company specifically make use of three pricing options that are, clone
the prices prevailing in industry, price below the competition and formation of new prepaid
service plan. With the help of this type of business strategy the company successfully gets to tap
the prospective buyers present in the market and at the same time increase loyalty of the existing
customer of the company. The company believes that people deserve flexibility and a choice of
fair deal in the environment in response to which they work with the partners to deliver complete
value to the customers present in the environment (Everington 2017).
External Environmental Analysis
PESTEL
Political: United Arab Emirates as an entire country constitutes of different political behaviours
that affects the functions of the companies present in the country. The seven Emirates themselves
have individual government organization that initiates flexibility in the managerial actions across
the country. Each of the seven Emirates is supervised by the Sheik who is the pioneer of one of
the most effective tribe in the emirate. Further, on the negative side UAE also faces political
conflicts in the environment with the nearby countries on the matter of oil reserves or land.
Mostly the country has healthy trade relations with other countries across the globe (Chuvieco,
et. al., 2018).
Economic: The GDP of the country is exceptionally high that gives an advantage to the
companies to enter in this market and attain profitability as well. Further, UAE also has a very

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low employment rate which signifies that the companies get efficient and trade human resource
to work with them. FDI in UAE is also positive that represent economic growth of the country.
UAE is rich in oil and gas assets due to which economy of the country is progressing in the
external market. Along with the oil and gas industry, the country has also started focusing on
other attractive industries to grow like telecommunication, airlines etc. (Ghosh 2016).
Social: The people of UAE prefers living in comfortable lifestyle which signifies that their
standard of living is high than most of the other countries. Also, high paying jobs provide them
opportunity to live such a healthy lifestyle. Globalization has impact in the Emirates to live with
people belonging to different cultures. Religion of Islam is majorly prominent in the region that
insists people to wear specific clothing. The people of the country speaks Arabic, Persian,
English, Hindi and Urdu due to presence of 96% of Muslims in the community (Lin, Afshari,
and Azar 2018).
Technological: UAE make of highly qualified technology in the environment to grow. The
technological resources are more prominent than ever, also the people of aim to make use to
technology to increase their satisfaction as well. The young population of Emirates is tech-savvy
that allows the companies to leverage technology so as to capture their interest in the market.
The wealth of the country allows to purchase new equipments and look for technological
development in the country (Nagraj 2017).
Environmental: The Emirates has hot and dry climate that results in reducing the favourableness
of the country in the environment. Productivity in the country slightly reduces due to hot and
humid climate. UAE also finds itself near coastal areas so as to allow easy trade by sea (Naizghi,
and Ouarda 2017).
Legal: The laws of the country are strict and simple that lays great impression on the companies
coming from overseas market. The country have legal environment that does not forego the
person who is defaulter. Malpractice activities can face international repercussions in the
environment as well. The legal factors reduce the extent to lawsuits and crimes in the country.
Porter Five Forces
Threat of new entrants: There is high degree of threat of new entrants under this industry because
entry new entry will come up with an innovative idea that will attract customers which will

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reduce the efficiency of the country. Also easy exit strategy provides an option for the companies
to think about entering in the telecommunication industry. If there is strong threat of new entrant
in the current market then the players will be willing to earn fewer profits to reduce the level of
threat in the industry. There is easy and flexible exit and entry strategy due to which the
companies look at this industry as a favourable industry to enter (Muhammad Siddique 2015).
Bargaining power of buyer: It refers to the power present in the hands of buyers of the industry.
There are some factors that explain that buyers are powerful while others explain that buyers.
Buyers have moderate bargaining power in the environment which results in affecting the level
of profits earned by the companies. Buyers usually tend to decrease the price of the products
resulting in which the potential of the companies become limited to attain sustainable profits in
the environment (Majumdar 2017).
Bargaining power of supplier: The companies present in telecommunication industry provide
such high volume orders to the suppliers that they have become cautious not to affect their
relationship with the companies in any way. Resulting in which, it can be said that the suppliers
have low bargaining power in the environment. Strong relation of the suppliers with the
company results in their profitability. Thus, the suppliers do not focus on disturbing their
relationship with them due to any reason. As the industry has more number of suppliers with
them due to which their power subsequently reduces (Abu-Rahma, and Jaleel 2019).
Threat of substitution: There is high degree of threat of substitution in the environment due to
presence of several companies in the industry. All the organizations present in the industry
provide similar telecommunication services to the customers in the environment due to which
slight change in the price of one product lead to major change in the sales ratio of the company.
Also, the company Virgin mobile make use of low pricing strategy so as to reduce the threat of
substitution in the market. So, it can be said that there is high degree of threat under this case
because there are several players present in this industry that constantly working to attain
maximum profits in the environment (Gerpott, May, and Nas 2017).
Industry Rivalry: High degree of competition present in the industry makes it difficult for the
companies sustain the level of profits in the environment. Intense competition makes it difficult

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for the players to grow with increasing profits. High degree of threat in case of entry and
substitution give rise to high degree industry rivalry as well.
Competitive Position of Organization: The fact should be noted that the industry analysis
evaluates the company is sustaining its difficulty in the target market however; the company
Virgin is facing difficulty to increase profits due to high degree of competition in the market.
The company is attaining advantage over the suppliers and buyer but high degree of market entry
along with competition reduces the pace of the company (Sutherland 2017).
Internal Analysis
VRIO
Resources Valuable Rare Imitable Organization Advantage
Management of
Regulatory and
Legal Obligation
Yes No Can be
easily
imitated by
competitors
Yes Not a Critical
Factor
Technological
Expertise
Yes No Cannot be
imitated by
competitors
Yes Has potential
Financial Resources Yes No Financial
instruments
and
liquidity in
market is
available to
all
companies
Yes, it has
sustainable
financial
position
Temporary
Diversification Yes Yes No Yes Permanent
Implementation of
Digital Strategy
Yes Yes No Yes Has potential

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Cost effectiveness Yes Yes Yes Yes Permanent
Supply Chain
Integration
Yes No Yes Yes Permanent
Intellectual
Property Rights
Yes Yes No No, as so far
the company
has not utilized
the full extent
of IPR and
other properties
Permanent
competitive
advantage
Valuable: The fact should be noted that the resources used by the company are valuable as they
provide competitive advantage to the business in the target market. The company effectively
make use these critical resources to reduce the value of their product and deliver successful
satisfaction to the customers in the target market. The three most valuable resources of the
company are financial resources, human resources and operations and marketing expertise. With
the help of these resources the company is able provide such prices to the customers so as to
increase its level of satisfaction in the market, thus it should be noted that the resources occupied
by the company are valuable (Ameen, and Willis 2018).
Rare: Resources of the company are called rare when they can be acquired by the one or very
few companies present in the environment. Talking about the resources of the company Virgin
Mobile, it should be noted that the resources used by the company are not extremely rare. The
resources utilized by the companies in the market are cheap and easily available which reduces
the rarity feature of the resources. While the resources like IPR, digital media etc. are rare for the
business as they cannot be attained by any other company present in the industry (Gong 2015).
Imitable: The fact should be noted that as not all the resources of the company are rare, so
competitors can easily imitate them in the target market. A resource that is costly to imitate
provides the advantage to the company to attain results from the resources in such a way that
other competitors cannot attain. So, the fact should be noted that the resources used under this
industry are not costly or rare due to which imitation of resources can easily be initiated in the
market (Fathurahman, and Huseini 2018).

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Organized: organization refers to the process under which the business makes use or organizes
the resources in such a way that they capture value from the external environment. It is important
for a business to organize the management system and process so as to extract profitability from
the environment and other resources implied as well. Talking about the organization of activities
and resources, the fact should be noted that the company successfully organize the services and
internal activities in such a way that benefits are received in the external environment (Calabrese,
et. al., 2018).
Value Chain Analysis
Value chain analysis refers to a process under which a firm identifies primary as well as support
activities that add value in the final product and then evaluate these actions to reduce the costs
and increase differentiation in the environment. Value chain process represents the internal
activities that an organization initiates in the environment so as to transform the inputs into
outputs. Below mentioned is the evaluation of the Porter’s Value Chain Model for the company
Virgin Mobile, UAE:
Type of activity Description
Primary
Activities
Inbound logistics The company Virgin Mobile, UAE make use of
resources that are acquired from different parts of the
world. Along with this, the UAE market also has
qualified resources to help the company. The company
also have tie-ups with other brands present in the
environment (Munyao 2017).
Operations The major operations of the Virgin Mobile, UAE
include networking services and providing trendy
mobile phones in the market. The operations include
proposing the final products and services to the
customers according to their packages and plan
decided.
Outbound
logistics
The outbound logistics process includes internal as well
as external functions to deliver the products and
services of the company in the environment. The

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company distributes the produce through online as well
as physical channel (Mazumder 2016).
Marketing and
sales
Marketing and sales activities are important for any
organization. The company make use of different
platforms like Social media and other online platforms
to promote the sales of Virgin Mobile in the target
market. In addition, word of mouth promotions is also
conducted by employees of Virgin Mobile.
Service Virgin Mobile has its outlets located at different
locations due to which the company is able to provide
effective services to the customers before and after the
purchase of products.
Support
Activities
Firm
infrastructure
The company make use of efficient infrastructure in the
environment to support the functioning of the company.
The company has solid administrative and
technological infrastructure to hold its managerial
functions (Meyer, and Peng 2016).
Human resources Employees are the biggest asset of the business who
helps the management in designing functions and
implementing them accordingly in the environment.
The company works with employees by forming strong
consolidated relationship with them.
Procurement The procurement of the resources is done by the
company to provide services to customers at best
prices. Efficient technology is procured along with
human resource to initiate functions in the
environment.
Technology
development
The technology adoption is essential aspect for the
company as major functions of product and service
development at implemented using technology. In
addition, the technology can be used for marketing and

Strategic Decision Making 11
for providing value-added services (Tamimi, Hoshang,
and Al Blooshi 2017).
The distinctive competencies of the company Virgin Mobile, UAE is that it makes use of
effective technology to create its products and provide services in the environment. Cost
effectiveness strategy also differentiates the company from other companies present in the
market. Adequate organization of resources and customer support services can also be regarded
as the distinctive competencies of Virgin mobile in the target market (Rashidirad, et. al., 2017).
Issues and Challenges
Below mentioned are few issues and challenges attracted with the functions of Virgin Mobile in
the external environment:
Quality Issues: The Company is facing a serious threat of depleting quality of its products and
services in the environment. People are continuously complaining quality of products and
services that the company has started providing. People are facing network issues and damaged
mobile phones as well. Resulting in which dissatisfaction has started to increase because people
believe that the company is facing difficulty in reciprocating the value to the customers in the
target market. The customers have started raising complaints on social media websites as well
due to which the goodwill of the company is somehow depleting in the eyes of other prospective
customers (Virgin Media 2018).
High Competition: high degree of competition is eating the efficiencies of Virgin mobile in the
UAE market. DU and Etisalat are the two major competitors of the company Virgin mobile that
are present in the target market. Due to these companies, Virgin mobile have started to reduce
the level of profits so as to maintain the loyalty of customers in the market and attract them. The
company is facing the threat of organizing innovation in business because failure of such
innovative activity can make the company pay heavy losses in the target market (Ameen 2017).
Low Profits: as discussed above that with an aim to eliminate profits in the target market, the
company has started reducing the costs. Resulting in which profits are also reducing and
declining profits are making it difficult for the management to initiate activities in the tough

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market. Low profit is reducing the competence of Virgin Mobile in the market of UAE as other
company are attaining effective profits and using them in order to attract more and more
customers present in the industry (Ameen, and Willis 2018).
Dissatisfaction of Employees: imbalanced work life balance is increasing the dissatisfaction level
of the employees of the company. Increasing work load is making it difficult for the employees
to survive in the company. Also it should be noted that low profits are making the company use
the cost cutting strategy to appropriately grow the company. The employees are facing difficulty
to work at low wages with high pressure as well. Resulting in which, employee turnover rate is
increasing in the company (Rizomyliotis, et. al., 2018).
Recommendation
Below mentioned are the recommendations given to the company Virgin Mobile, UAE so as to
effectively manage its sales in the target market.
 In order to manage the quality issue, the management should organize quality assurance
team by staffing the employees from the company and not recruiting new employees. The
experienced employees already know about the products and services along with the
reputation of the company so they will make sure to check the quality and train the
employees to maintain quality in the market.
 In order to eliminate high degree of competition from the market, the company should
effectively make use of promotional strategies to attract the interest of clients in the
business. Social media platform should be effectively used to attract customers and retain
them at the same time. The company should provide perks and benefits to the new clients
and loyalty bonus to loyal customers.
 With an aim to eliminate the problem of low profits, the company should focus on the
organization capability as well as value proposition segment. If the customer will get
adequate value from the company then they will definitely initiate sales which will
increase the level of profits in the environment.
 Dissatisfaction of employees should be eliminated by providing them flexible working
hours and increasing motivational training programs by the human resource manager of
the company.

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Conclusion
Thus, in the limelight of above mentioned events, the fact should be noted that the above
mentioned paper represented information about the company Virgin Mobile, UAE. The paper
evaluated that the company is consistently growing in the market but it is still facing some issues
due to internal as well as external structures of the company. However, these issues can be easily
resolved using above mentioned recommendations in the environment. The report details
adequate information about the company and its activities in the market of UAE.

Strategic Decision Making 14
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