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Strategy and the Global Competitive Environment-Virgin Media

University : Mont Rose College

  • Unit No : 5
  • Level : Undergraduate/College
  • Pages 16 / Words 3500
  • Paper Type : Assignment
  • Course Code :

    EC4F05

  • Downloads : 112
Question :

The global competitive environment is the macro-environmental factors that influences the competitive nature of organizations. The company chosen is Virgin Media which is a telecommunication organization dealing in telephones, landlines, internet, broadband services.

  • Demonstrating the theoretical knowledge of marketing and strategy.
  • Deploying analytical tools of marketing and strategic management in internal and external environments.
  • Evaluating and developing strategic and marketing options in the complex environment.
Answer :
Organization Selected : Virgin Media

INTRODUCTION

Within any kind of economy whether closed or open it is important that business organisations are formulating strategies for their operation and marketing as well that would be enabling them to regulate with competition. However, before this it is required as per organisation that they are setting up a target which would be helping them to enable and analysis the competitive positioning and gaining competitive advantage within the market. So it becomes essential and vital that they are identifying what strategic and marketing optio

In this report which is based on Virgin Media is a British telecommunication company formed in 2006 providing variety of services and products like that of internet, telephones or landline, broadband and television as well. The report will be highlighting all marketing and strategic options available to Virgin Media which will be helping them in gaining more competitive advantage.

MAIN BODY

Virgin Media is most competitive telecommunication company selling and producing many products and service like that of television, telephone or landline and internet or broadband as well. Liberty Global Plc. is the parent company to Virgin Media which is manufacturing television on international level. The company was formed in year 2006 with the merger of Telewest and NTL thus creating first quadruple-play media of UK which is a service of broadband with combination of access to telephone, television and internet with the fixed landline connection service (Casadesus-Masanell and Ricart, 2010). Then in November 2006 Sir Richard Branson who owned Virgin brand made a deal with Virgin media to rebrand company as brand name of Virgin only. Company is having their own fibre optic cable network which is connecting with the street cabinet and not to customers directly. Virgin media is having roughly 4.8 million customers of cable, 4.1 million of fixed line telephony service, 3.79 million of television service and 4.2 million having broadband service. There are many rivals or competitors of firm which are been operating within telecommunication sector like that of BT, Vodafone, EE and Sky.

Then in 2013 Liberty Global which is a parent company of Virgin Media announced buying of company in about $23.3 billion into a stock and cash merger.

Evaluating strategic options

Virgin media is one of the largest telecommunication company of UK that is been operating on international level offering all types of service like that of mobile, landline, broadband and TV as well. The company is having their vision as focusing and using digital platform so that their main two pillars could be included within their operating profits like that of sustainability and responsibility with use of digitalisation only (Grant, 2016). As company knows that technology is very much important factor that would be impacting life and working of people so they should be using it for gaining competitive advantage.

Virgin media is having majorly 3 main operating segment namely cable, content and mobile each of these segments will be regarding its own services. Internet, fixed line telephone and television which are given to household customers of UK are under cable segment. Virgin media’s teaming up with T-Mobile which is named to as Virgin Mobile Brand Name is under the mobile segment of company. While on other hand all genre based entertainment channels like that of Challenge, Bravo, Virgin1 and many more will be included within the content segment. So it is clear that Virgin media is having and putting 3 strategic options within like that of engaging with customers, expanding business and correcting all fundamentals within company. These all three option with Virgin Media will be included and termed to as strategic option for company with help of which management would be planning out future. Virgin media is of belief that in order to get continuous success and growth with product diversification they must be engaging with their customers as well.

All the three options will be included by company so that they could be able to set up their future planning or strategy so that they are been able to compete in this competitive environment.

Engaging with customers-

This will be most important part of any organisation as for them their customers will be first and foremost priority of firm as they will be ensuring profits for company. Virgin media will be ensuring that they are having brand portfolio which is helping organisation tailored to meet up with expectation of customer (Holburn and Zelner, 2010). Engaging with customer is known to as communicating with them in order to find out what is the need and want of customers so that company then could be formulating further planning.

Expanding business-

This will be regarded to growing their business in other market or with help of introducing new products into market for this Ansoff matrix could be used. As Virgin media could plan out for expanding their business with help of any of the tactics like market penetration, diversification, product development and market development.

Figure 1: Ansoff matrix- Virgin Media

[Sources: Ansoff Growth Matrix, 2018]

Market penetration- under this component they would expand their base of clients with putting additional endeavors into their improvement and research procedures. This system would be called to as Market infiltration which would be utilized by Virgin media to catch more clients and that too not acquainting any new item with them. Organization would do this by rolling out some reasonable improvements into highlights or strategies for their items or should likewise be possible utilizing all the more publicizing and showcasing elements of that organization. Like Virgin Media utilized new systems when broadband administration of organization was propelled which was done keeping in mind the end goal to assume control BT and its piece of the overall industry (Jones and Jones, 2013). They additionally set down weight on utilization of good showcasing and publicizing efforts which is putting forth their clients administrations at less expensive rates

Market development- . this could be characterized to as best market procedures which is utilized by organization so as to develop their piece of the overall industry or benefits of organization. Market advancement methodologies bargain out with the present items however they are extending their market into some other district or territory. Their objective is new market with their officially beneficial items which are there into showcase. For example Virgin media propelled their broadband administration that was concentrating on their current market clients just with the goal that they would have the capacity to increase higher benefits. This was finished by using the present client base and their administration in these endeavors they started to re dispatch their B2C Virgin Media business to assume control BT which is the top of the line organization in market of UK telecom.

Product development- this first component of network would assist organization with launching their fresh out of the plastic new items or administration into their own particular existing commercial center which would be that of UK and Ireland as it were. This is helping them to develop their current client base prompting increment in benefits and income age of organization (Lee and Carter, 2011). This is essentially the item advancement methodologies which are utilized by Virgin so they could without much of a stretch dispatch their new items and their current markets just as they would have learning and abilities of managing their clients into that territory or area.

Diversification- this specific methodology is entirely called to as enhancement of organization and its items which is propelling new item into entire new market as it were. The market or region is new for organization with their items or administration likewise being new one yet at display Virgin media is just operational into UK and Ireland and not working into any new market with any items. This tells organization is as of now not using this expansion technique. Like organization could be propelling its system in different nations also which is their new market and new items like that of USA or others parts of world.

In order to analysis the internal environment of company so that it is easy to determine what capabilities of company, what market position is and how they could be coping-up with competition as well. In analysing internal environment and their capabilities VRIO model will be carried out so that Virgin media can determine what capabilities company is having and then they could be enhancing their profits.

VRIO model:

With the help of this model it becomes easy for company analysis what their capability is and where they need to work. There are many capabilities, skills and resources with company like that of Virgin media having very capable and qualified personal who are working within organisation (Mithas, Tafti and Mitchell, 2013). So within this model there are 4 questions that are been included within this strategy

Validity-

under this inquiry firm would asking themselves that whether they can investigate a wide range of chances that are significant into current situation. They likewise need to examination that whether all dangers that are there into market could be overwhelmed by firm are they having that numerous abilities or not. Subsequently, it is incorporated that are all the asset which Virgin media is having like that of human asset or capital would be sufficiently fit to esteem or snatch all openings and farthest point their dangers from advertise or not. Distinguishing which factor is useful for them and which could be viewed to as pointless must be imperative errand for them with the goal that it turns out to be simple for them to migrate their qualities and shortcoming.

Rarity-

This incorporates interesting or uncommon element or expertise which just organization is having and nobody is having that at exhibit (Mollenkopf and et.al., 2010). This irregularity is shaping piece of most profitable and vital source which just that firm is having and nobody other could be making or emulating this yet this irregularity could be vanished after some time period. Along these lines, helping other people to discover upper hands which once just that organization used to have. Like if there should arise an occurrence of Virgin media they are having 1 one of a kind mix that incorporates TV, Broadband and settled phone line which is having no other dependence of alternate contenders.

Imitability-

This is the capacity or estimation of organizations that factor which isn't effectively imitable by some other firm into showcase. The present organization is having outright cost advantage over that item or administration of firm and the adversary firm couldn't duplicate or get a similar asset or capacities for their organization. As Virgin Media into business sectors of UK and Ireland are having advantage of fourfold play as they are putting forth TV, portable and phone and web access too into the market. In the event that some other organization into same media transmission arrange suppliers are endeavoring to mimic this USP of Virgin media then they would be have to bring about colossal cost for this.

Organisation-

This is the arranging and sorting out capacity of administration which informs us concerning that whether organization is effectively sensible and all their arranging are composed or not (Porter, 2011). On the off chance that the organization is extremely efficient then they would be effectively investigating every one of their capacities and openings which are there in both outside and interior condition. So at first if organization can perceive their esteem, irregularity and Imitability then they ought to be sufficiently skilled to sort out and execute all arranging of organization in a composed way out.

Evaluating marketing options

There are many available options which Virgin media could be including but form the above will be that of introducing their product in new market of South East Asia. So in order to launch their business into market of South East Asia Virgin media need to formulate their marketing plan which is helping them to analysis their market.

Executive summary-

In order to expand their business in market of South East Asia Virgin Media need to analysis the market positioning and resources which are made available so that they could acquire competitive environment (Reuter, Foerstl and Blome, 2010). So for launching their products into South East Asia which will be making them grow their profits and customers as well.

Aim-

The aim of company will be launching their product and service within South East Asia which is a potential market for telecommunication sector and gaining more strength there in.

Marketing objective-

The marketing objective would be linked to increasing more customer base for company with their introduction of product and service like that of broadband and internet within South East Asia so that they are able to gain profits so their marketing objective will be related to reaching out to more and more customers of South East Asia who are all potential to buy their products.

Company overview-

Virgin Media is one of the famous telecommunication network provider company which is British company providing service and products to UK and Ireland. It is the subsidiary of Liberty Global and was founded in 2006 having its headquarters at UK with the revenue of about £4.1 billion (Rovai and Downey, 2010). Company is providing many products and service to its customers all around UK and Ireland like that of digital TV, broadband internet, fixed line telephone and mobile phones as well.

STEEPLE-

STEEPLE analysis is a strategic tool for planning. STEEPLE analysis is quite advance than other tools like PEST and other analysis. In order to plan the strategic positioning of company, it is very helpful. It is a framework that deals with external environment. It furnishes a summary of certain field in external environment (Meidinger, 2017). STEEPLE stands for- S- Social, T- Technology, E- Economical, E- Environmental, P- Political, L- Legal, E- Ethical.

Social- Social factors include belief, attitudes, structure of age, living standard. These factors have great impact on the business activities and function. Virgin company used to do market research to find out the trends and patterns in South-east Asia. Fashion, lifestyle, trends of people are influenced by these factors as they are ready to pay for product.

Technological- The world of business is now become totally different from where it was in the past. Technology is greatly advanced and has great impact on business. In telecommunication sector, technology advancement is very fast, people are very demanding in South-east Asia. Virgin Media is working very hard in the area of technological advancement, as they are investing large in technological field to satisfy the needs and wants of customers.

Economical- Economic factors include inflation, economic growth, unemployment and international trade. Economic factors have its impact on throughout the life of business. In order to achieve the goals and objectives in South-east Asia, Virgin Media is controlling the impact of economic factor by optimising of consumers.

Environmental- Environment factor includes legislations of environment protection, waste management, pollution, clean water and air, disposal, and attitudes towards ecology in community. It has both negative and positive impact on the business. In order to overcome the negative impact of environmental factors in South-East Asia, Virgin Media is doing very nicely and they satisfy their customers (Hussain, M and et.al., 2015).

Political- Political factors include laws, policies and regulations imposed by government which has great impact on the business. In order to smooth functioning of company, it is very important that company has to obey all these rules and regulations of government. Virgin Media fulfils all the conditions of government like they pay taxes on time, so their customers in South-East Asia will have great confidence on the company.

Legal- Legal factors include laws and regulations of government. It has both negative and positive impact on the functions and operation of company. It is connected with taxation and custom regulations of country. In order to overcome the negative impact it is very essential that company should follow the norms as per the legislations and policies of government of South-East Asia.

Ethical- Ethical factors include responsibilities, morality, behaviours, pons and cons for company, integrity, employees and community. In the concept of Corporate Social Responsibilities includes concern of ethical in management. Ethical and legal factors are almost same. It also has both positive and negative impact on the business.

SWOT-

Strengths:

Virgin media is having fast cutting edge optic system which is likewise viewed to as their spine of organization and the best quality. Other than this they are additionally having triple play which is their USP too having TV, Broadband and Fixed phone line with having solid 2009 business comes about. They are likewise having brand unwaveringness and acknowledgment into showcase which is helping into their upper hands over different opponents into advertise. Organization is viewed to as giving all answers for issue of systems administration to their everything kind of clients including business and others too.

Weaknesses:

Other than all their above expressed qualities organization is likewise having numerous shortcomings which are not enabling them to appropriately develop into advertise and increasing upper hands over their rivalries also. Shortcomings would be characterized to as those constraints over the working of organization that is ceasing them to become over their opponents into showcase or that reason concerning why firm can't perform in better way (Schuler, Jackson and Tarique, 2011). In year 2009 organization was having about $676 million of obligation which in 2008 was about $8,946.6 million. Because of this factor the liquidity of Virgin Media was influenced on bigger bases and this was not enabling them to develop in advertise.

Opportunity-

As they are planning to grow their business into South East Asia which is most potential segment based on geographical one having one of the largest number of customers and buyers of internet and broadband. This could be regarded to as biggest opportunity for company to grow or penetrate in new market with their existing products and service only.

Threat-

Other than these they will also be facing many problems with their rivals or competitor whom they need to defeat and according to which Virgin media will be planning (Vogel, 2010). Like Telekom Malaysia Bhd is one of the largest operator in Malaysia and Bharti Airtel is one of the biggest in India.

Marketing mix-

Marketing mix is the most essential tool as it aids to understand what type of products and services should offer and how to plan for a successful offering of product. 4P's of marketing mix covers Products, price, promotion and place (Huo, Zhao, and Zhou, 2014).

Product- Product is the most essential elements in marketing mix as well for company as product is the identification of company. In marketing mix, the product element will identify what is the demand of customer, how will the product will satisfy its customers etc. Virgin Media has wide range of products like broadband, bundles, TV, Mobile phones and many others. In order to enhance the profitability and production effectively company is following wide range of products.

Price- Price is also the most essential elements that have great impact on company's profit as well as its market share. Customers are very price sensitive. Virgin Media is offers low price in the market so that company is leading in the world. Virgin follows competitive price strategy. Price is the element that has both positive and negative impact as if company follows high pricing strategy it sometimes loses its value and sometimes it earns high profit and large amount of market share and if company follows high pricing strategy, it may get out of market or can earn high revenue.

Place- Place is also the most essential part of marketing mix as it is very essential for company select the locations that can easily be reach to their customers. Virgin Media has so many service centre in many cities so that their customer does not have any issues.

Promotion- Promotion is very crucial part of each and every business as it requires huge amount of fund to communicate the features of product to public. The promotional techniques of Virgin Media LTD are fabulous as they are using digital technologies to promote their product and services. They also promote and advertise their product by making contract by celebrities which influence the mind of customers (Hanan Abdulla, Mehairi and Zakaria, 2015).

CONCLUSION

It is then concluded that Virgin media which is planning to establish their business in South East Asia need to include all their resource and research of market. Virgin media which are one of the largest running telecommunication company of UK need to grow their customer base and profits. As company is having many potential customers and having capacity to grow more into market which will be helping or enabling company to gain competitive advantage.

RECOMMEDATION

From the above report it is recommended that Virgin media should be including all their resources which would be helping or enabling them to improve their potential customers and profits.

  • Virgin media must be overcoming all their weakness like over debt and obligation which will be enabling them to grow in market.
  • It is also included that all the tools and techniques of strategic and competitive analysis like that of SWOT, STEEPLE and marketing mix as well.
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