Business Strategy Report: A Case Study of Virgin Mobile in the UK

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Business Strategy: Telecommunication Sector (UK)
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Contents
Introduction................................................................................................................. 3
Task1.......................................................................................................................... 4
P1 Applying appropriate frameworks analyse the impact and influence of the
macro environment on a given organisation and its strategies........................4
M1 Critically analyse the macro environment to determine and inform
strategic management decisions.........................................................................6
Task 2......................................................................................................................... 8
P2 Analyse the internal environment and capabilities of a given organisation
using appropriate frameworks (M2).....................................................................8
Task 3....................................................................................................................... 17
P3 Applying Porter’s Five Forces model evaluate the competitive forces of a
given market sector for an organisation (M3)...................................................17
Task 4....................................................................................................................... 20
P4 Applying a range of theories, concepts and models, interpret and devise
strategic planning for a given organisation......................................................20
M4 Produce a strategic management plan that has tangible and tactical
strategic priorities and objectives.....................................................................23
Conclusion:............................................................................................................... 26
References................................................................................................................27
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Introduction
Modern global business scenario is consisting of various factors which determine the
sustainable market and competitive advantage. The main objective of the current
study is to analyse the business strategy associated with telecom industry based in
United Kingdom. Various approaches and models have been adopted in the current
context to analyse the business strategy of British telecom industry. Virgin mobile
has been adopted as the standard telecom organisation in the present case which
would be analysed by applying various models in the current discussion to develop
an idea about the methodologies associated with business strategy development
and factors influencing it.
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Task1
P1 Applying appropriate frameworks analyse the impact and influence of the
macro environment on a given organisation and its strategies.
The Virgin Group is counted as one of the Top 50 powerhouses in the world. The
company has continued to expand and gain prowess regardless of the
socioeconomic conditions. Everyone directly or indirectly relies on the services
provided by the Brand.
The legacy of the Virgin Group has continued in the form of Virgin Mobile, they
facilitate cellular services and largely operate in the United Kingdom. This endeavour
was launched in 1999 as one of the world's first Mobile Virtual Network Operator
(MVNO). The company NTL: Tele west purchased Virgin Mobile, the subsidiary of
Virgin Group on 4 April 2006 and reintroduced it to the customers with new branding
with the name of Virgin Media on 9 February 2007. In 2013 Liberty Global bought
Virgin Media. The company provides different mobile packages to the people in
accordance with their needs. The Virgin Company is synonymous with the best in
the UK and is a tough contender for the others the top position in other nations. The
company heavily dominates the communication and entertainment sector and
provides its customers with a variety of services including broadband, television,
mobile, and fixed line telephone (Ghezzi et al. 2015).
PESTLE analysis
The Virgin group has built its name on the motto of changing businesses for good.
The company has been affected by the political, economic, social, technological as
well as the environmental situation of the nation.
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Political factors
A change in the policies, rules, and regulations of the United Kingdom government
have had an imperative impact on the functioning of the company. The sharp rise in
regulation and control of business undertakings by government and political
instabilities as well as high customs and tariffs imposed by governments act as a
barrier. Britain boycotts European Union, popularly referred to as Brexit has
impacted traffic and operation. The government of United Kingdom promotes
innovation and the use of new technology. Virgin Mobile has more than 130 million
mobile subscriptions. The company has removed, hidden fees and off-peak hours in
its services to offer better service to the customers (Hacklin et al. 2018)
Economic factors
Prices of Goods and services in the nation, inflation as well as the situation of the
International market impacts the economic factors. Virgin mobile faces heavy
competition from other firms and companies. A rise in unemployment has negatively
impacted the buying capabilities of consumers. Due to the inflation of the market, the
production of goods has automatically become more expensive, in turn increasing
the price of the products. The Virgin group subsidiary, Virgin mobile has several tie-
ups with other companies. The changing policies and rules of the company create
instability for Virgin mobile
Social Factors
The amalgamation of the beliefs, attitudes, values, and preferences of the customers
is being affected by the hegemony of the American culture in the United Kingdom.
The youth of the nation is the target audience as the millennial and generations have
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impacted the most by the culture of influencers. The employees of the company are
allowed to form trade unions and get paid minimum wage. Virgin’s promotional
opportunities are offered to the employees to ensure that both Customer and
Employee satisfaction is high (Dodgson, 2018)
Technological Factors
The fast-paced development of technology has impacted the pace on which
companies are doing away and introducing new strategies. Virgin Mobile in the form
of Mobile Virtual Network Operator ensures that the technological infrastructure of
the company is in a process of continuous development. They have signed a legally
binding contract to upgrade the cellular services to 3G, 4G, and 5G. A special portal
was constructed for the customers to ensure that the customers get the added
benefits of magazine and newspaper subscriptions. The company ensures that there
are no hidden costs. Virgin mobile offers cheaper driving to their services in
comparison to its competitors (Taghizadeh et al. 2018)
Environmental factors
Climactic changes that are not in control of anyone yet they impact the functioning of
the Company. With increased pollution and global warming, The company has done
its part by raising awareness through the organization of several events. The
company also recycles and have worked on multiple environment-friendly strategies.
The amount of paper, ink and other resources that are used are also put under
review (Kushida, 2015)
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M1 Critically analyze the macro environment to determine and inform strategic
management decisions.
Ansoff’s Growth Vector Matrix
Market Penetration
When a company thinks of or grows the existing offerings in the established markets,
it is called as market penetration. Some global corporate challenges & other global
acquisitions are the classic examples of the same for the virgin group (Hacklin, et.
al., 2018). There are also various discounts and promotions regarding the same,
these kinds of efforts are made to make the market grow.
Marketing Development
The virgin group's marketing strategy is based on Branson's intuition. The company
has been making use of its brand name as the guarantor for quality delivery of
products & development. The marketing objectives of the group are known to be the
strategic objectives & strategic thrusts.
Product Development
Product development implies the development or introduction of new product in the
market where you already have an established brand name. This is done in the case
to expand the company's reach and understand the other aspects of the market
better. Virgin mobiles are the example of such a venture of the Virgin group, to
expand and understand the market diversity in a better way (Asimakopoulos and
Whalley, 2017).
Diversification
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The virgin group can be considered as a typical example of a company that has
been consistently diversifying itself in the last decade into newer markets. The
company has diversified in the travel & the tours market with fantastic holiday
packages wooing the holiday goers, it also has dived in the credit card niche with all
its Virgin money that is offering quite cutthroat credit card rates to the consumers.
Let us not forget the diversification in the cell phone industry with virgin mobiles &
the latest venture in the fitness world with its most recent series of fitness centers. All
these business ventures have been following the forward diversification strategy in
their wake. This group has been constantly taking leverage of its brand image for
pushing forward the various other ventures in its name (Ghezzi et al. 2015).
Task 2
P2 Analyse the internal environment and capabilities of a given organisation
using appropriate frameworks (M2).
To grasp the capabilities and advantage over the others, firms use numerous tools to
analyze their external and internal environments, one such internal tool is the VRIO
Analysis. VRIO Analysis is a well-designed instrument when it comes to identifying
the competitive advantage of an organization, viz., Virgin Mobile. VRIO Model was
initially designed by Jay B Barney.
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virgin Mobile: VRIO Capabilities:
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Value
Yes
Rare
Yes
Imitation
Imitation is possible by the rivals
Organization
It is definitely one of the most diverse companies.
Worldwide and Local
Presence
Competitive Edge: Has a very strong Competitive Advantage

Virgin Mobile is one of the most popular brands across the globe. With an impressive
global presence in nations like United Arab Emirates, Australia, Colombia, Canada,
the United Kingdom, Ireland, Chile, Russia, France, Saudi Arabia, Poland, South
Africa, Mexico, and the United States. Virgin Mobile branded services used to be
offered in Qatar, India and Singapore as well. As it is based in multiple countries, the
revenue flow is diversified. Not many telecom companies are able to reach the
growth and expansion achieved by the Virgin Mobile. Though it is a rarity, this quality
can be easily tapped by the competitors in the near future. Yet, currently, the Global
and Local presence of Virgin Mobile gives it a competitive edge against the
competition (Summanen 2018).
With over 3.1 million customers in the UK and Ireland and a revenue generation of
169 million pounds, in the third quarter of 2018, Virgin Mobile has a large piece of
market share across the UK and Ireland. With pursuant mergers to making the
company public, has allowed Virgin Mobiles to raise a substantial amount of capital
form the market, resulting in a stronghold for the company (Asimakopoulos et al.
2017).
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Value
Yes
Rare
No
Imitation
Imitation is possible by the rivals
Organization
Feasible Financial Position
Financial Resources
Competitive Edge: Has a Temporary Competitive Advantage

As it is evident from the wide array of the products and services that Virgin has been
introducing in the local and international markets in the past and the present, that the
company has an expertise in the vertical and horizontal integrations. It is no wonder
that the company had proved to be an umbrella organization with products and
services like Virgin Active, Virgin Atlantic, Brightline, Virgin Australia Holdings, Virgin
Books, Virgin Experience Days, Virgin Galactic, Virgin Limited Edition Virgin
Holidays, Virgin Hotels, Virgin Hyperloop One, Virgin Limited Edition, Limobike,
Virgin Mobile, Virgin Money, Virgin Oceanic, Virgin Orbit, Virgin Pulse, Virgin
Megastores, Virgin Racing, Virgin Radio, Virgin Rail Group, Virgin Sports, Virgin
Unite, Virgin Startup, Virgin Care, Virgin Connect, Virgin Vacations, Virgin Voucher,
Virgin Voyages and more.
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Value
Indeed, it is significant in the business given the
different divisions and consumer inclinations
Rare
A large portion of the contenders are endeavoring
to enter the worthwhile fragments
Imitation
Can Be Imitated by Competitors
Organization
Has been used by the firm advantageously
Brand Portfolio and Symbiosis
among Various Product Lines
Competitive Edge: Only for a short period
Value
Yes
Rare
Yes, organization has an excellent customer
relationship managemant
Imitation
Difficult to imitate
Organization
Yet to tap the potential
Customer Service