Business Strategy - Virgin Media

TASK 1

P1. Impact and influence of external environment on Virgin

PESTLE Model

Pestle analysis is a concept which defined principles of marketing. It is a strategic tool of companies which help in tracking the external environment that influenced an activity of business (Ostos, Hinderer and Bravo, 2017). When company is going for launching new products and services in the market. Pestle has six factors which are like political, economic, social, technological, legal and environmental. Also go through the business environment sample of CBC college. 

Political factors- Political factors have a great influence on the business of Virgin. Political factors consist of laws and regulations which come up frequently in the environment which affect the functional activities of Virgin and the taxes or duties imposed on the revenue of the company as well. Sometimes, it becomes very difficult for company to handle all these affairs. Internet is the day-to-day concern of life. People wishing to make internet as a capital human rights. In the world of modernization, there is need of internet. But there is always conflicts grow among government and service providers. Virgin has ability and has capableness to overcome all the political factors.

Economic factors- Economic factors have a great influence on the functional activities of company. The performance of economy that directly affects company and have resonant long effects on the operation of company. The cost of the infrastructure of telecommunication is an expensive as building towers and furnishing resources in remote and rural areas are very costly. People living in remote and rural areas are largely affected the price of services and products of company which directly influence the purchasing power of customers. For example, rise in the rate of inflation in UK affect greatly affect cost of product or services and purchasing power of customer as well.

Social factor- Social factors have great influence the operation of company as it is very important for each and every sector to work as per the norms and legislation of the country. Virgin is functioning effectively and efficiently in the social environment. In telecommunication sector there is limited growth in horizontal way as because it difficult and expensive too. In telecommunication industry there are monopolies in the environment as they are coverage of both internet and mobile phones (Galpin, 2018). For average person, telecommunication has become the main need of life. Virgin is encouraging more innovative products in the market in order to attract more consumers.

Technological factors- Inventions and innovation has become the most crucial things for telecommunication industries to compete and sustain in the market. In the world of modernization, people wants more innovative products and services in order to make their life more comforts and luxurious. Telecommunication sector has become wireless and smart phones has become more compact. Virgin is investing and contributing huge funds on innovations. Virgin is providing internet facility to stations, cafe, airports, hotels and many other places.

Legal factor- Legal factors also have huge impact on telecommunication sector as it is largely affected the laws and legislation issues. Specially issues with government, monopolies and consumers (Yuliansyah, Gurd and Mohamed, 2017). Telecommunication industries allows import and export of services like smartphones, laptops and many other wireless devices are exporting and importing from countries. Virgin company is also trade with many countries by that there is immense development and growth of the company.

Environmental factors- Telecommunication industries are largely affected by the climatic changes and global warming. It is big state of affairs for Virgin to scope up the networks to its consumers in environmental conditions and climatic changes. Services or goods come and goes frequently sometime renew from the environment, which is very essential duty of Virgin to struggle and improve. Virgin company is working in advance according to the changes and demand of Consumers.

Ansoff Growth Vector Matrix

Ansoff's matrix is a strategic instrument of communication which helps to analyze the growth of organization. It is the marketing strategy for product with four dimensions of growth areas which are like market penetration, market development, product development and diversification.

Market Penetration- It is the first dimension in Ansoff matrix. This dimension is adopted when organization has an existing product with the best-known market and requires a growth strategy within market. In telecommunication sector, market penetration is the best dimension. Virgin is trying to increase the market share by up-rising and improvement in the quality of products or services.

Market development- It is the second dimension in Ansoff's matrix. This dimension is used when company uses its existing products for targeting new market. This dimension of matrix is used when company has brand royalty in the market. There are many companies which target international market by their existing products. Virgin Telecommunication Company is also developing its products in international market and has perfect market penetration.

Product Development- It is the third dimension in Ansoff matrix. This dimension is used by company when it wants to introduce new product in market. Company has main intention to expand their business (Lozano, 2018.). When company's existing products have good customer base than company try's to expand more in order to increase the market share.

Diversification- It is the last dimension in Ansoff's matrix. It is implemented by company when the product is completely new and it is launched in the new market. There are many companies which began with small trading company than expand its business into various sectors. Virgin started its business from small telecommunication company and expand its business into various sectors.

TASK 2

P2. Internal environment and its capabilities of Virgin Company.

Strategic capabilities of Virgin

The competitive advantage and structural capabilities are the strength of Virgin Company. Virgin has various kinds of capabilities like real-time, global market and open platform for consumers. In order increase the value of consumers company is using basic line strategy. Virgin company is scattering its business not only in urban areas but also expanding its services in rural and remote area. Company is contributing towards the welfare of the society. The effect of negative environment is also controlled and manage by the management of Virgin. Virgin also have power to control the impact of external environment on the business. Company is making strategies with the procedure and step to achieve the targeted goals of the organization like implementing the plan, control of plans and evaluation of plans. Virgin is the best suppliers of services in telecommunication to consumers. Competitive reward, resources based schemes and organizational capabilities are the different plan of actions of Virgin. In order to create value to the customers Virgin is using basic line strategy (Linder and Williander, 2017). Virgin is also providing online services to serve all the small scale industries and merger with more companies to elaborate its business in international level. In telecommunication industries there is immense competition in the market, Virgin is overcoming all the threats of competition by furnish quality of services to the customers at nominal rate. Virgin has make its goodwill in the market which has become the most powerful and strong capability and ability of company.

VRIO Model

VRIO model is an instrument for an organization to determine the company's resources and internal capabilities of an organization and thus the competitive advantage. It is developed by Jay B. this model determine how to evaluate the resources of an organization. It also helps in evaluating the weaknesses of company. VRIO model is the opposite of Pestle analysis as this identify macro environment but VRIO model helps in identify the internal situations inside an organization. The dimensions of VRIO are Value, Rareness, Imitability, organizational.

Question of Value- The first question in VRIO model, is the resources of an organization is capable enough to the firm or not. Resources such as human resources, financial resources are the capabilities and strength of a company (Walsh and Reid, 2017). Resources are not unlimited, they are limited elements. Wastage of resources will not be better for company, it decreases the efficiency of productivity. Resource of company can remove and reduce the effect of threat in the business. Virgin are best utilizing their resources in order to enhance and increase its productivity.

Question of Rareness- Rarity of virgin company is the area of network served by them. The quality of network is best among all the telecommunication companies. The products of Virgin are also different and advance in technologies. Customers are more and more attracted towards the company. Rarity in network area is the biggest strength of the business and competitive plus point.

Question of imitability- there are two different ways of imitation of company which are submission and duplication. In order to increase or maintain the market share of company, Virgin

Company is having high imitation cost. High imitation cost lead to high profitability margin for company.

Question of organization- This is the final step of VRIO model. This stage only comes when there are resources has passed all above steps. It is very important for all the department of the company to utilize the resources in most efficient way. But it is the responsibility of company to organize all the resources available in the organization (Moseley, 2017). This model assist in managing and controlling all the resources accordingly.

Strength and Weaknesses of Virgin Company

Virgin is the brand known company in the world. There are various types of features of strength and weaknesses of company which take birth from external and internal environment. Strength and weakness of Virgin company can be analysis by SWOT analysis.

Strength of the company are-

1. High coverage area
2. High revenue generated
3. Growth and development of market strategy
4. cost of products and services are nominal
5. brand valuation
6. good record with the quality of phone
7. customers are satisfied
8. Effective forecasting of demands of customers
9. Flexible to changes
10. Healthy balance sheet
11. Strong financial position
12. Wide area of networking

Weaknesses of the company are-

1. loss of money in specific area (remote and rural areas)
2. Unsound cable lines
3. Slow services
4. lustreless sales
5. lack of coverage in fixed mobiles
6. underdeveloped operation in mobile phones
7. lack of business-strategies
8. customer services are not up to the mark
9. fund management crisis
10. liquidity of cash is limited
11. Promotional tools are not good

Related Sample: Business Strategy Virgin Media