Last but not the least, Virgin mobile maintains its nominative advantages by concerning in employee satisfaction that will correspondingly help to improve their services to its customers (Wassermann, 2003). Nowadays, it is very important things that every business will always evaluate the utter trend to the country where the company will run the business to set the overall strategies to overcome the market (Hill, 2013).
Additionally, PEST analysis that consisted of political, economic, socio-cultural and Technological condition will be deeply used in this task to analyses the external environments of Virgin Mobile in ELK as follow; Political Factors There are several policies, which are governed by government that influenced telecoms industry. First of all, The Elk’s government had supported the use of technology and innovation by using mobile phone as playing big role in the election in 2000 (Coagulant, 2005). It shows that mobile industry has become more significantly important for K people.
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Moreover, after the use Of G network services, the bidding of G licenses was created to acquire new airwaves that suitable for extremely fast mobile broadband services. Recently. G has been coverage more than 60 percent of the I_J and it will be covered al by the end of 2014 (From, 2013). Virgin Mobile aimed this advantage why offering G services to its customer as well (Khan, 2014). Furthermore, the emergency law that ARQ aired the mobile services provider to keep records of the data retention has been launched.
This new legislation is aimed to protect the ELK against and terrorist attack (BBC, 2014) Humanly, The government implemented health and satyr law to prevent the use to mobile phone during driving. As a result, the sale Of Bluetooth handsets at Virgin Mobile was increased (Anderson, 201 3), OFF Economical factors TO Start with, the population Of ELK increased 0. 3 percent in previous year from 64. 1 to 64. 5 million people that more than 400,000 people. Furthermore, in the end of year 2014, the GAP in UK is strongly expected to increase 3. 2 percent (Inman, 2014).
Meanwhile, it means that there are sufficient people who purchase mobile phone and use the mobile services that able to be company’s customers in mobile industry (BBC, 2014). Moreover, the movement of economic market condition is depended on interest rates, inflation, exchange rates and income etc. , which used to analyses the macro economic that can have a major impact to the operation f the company. For instance, the increasing of inflation 3. 4 percent in 201 3 will affect to the increased cost of company by the higher wages from workforces that have to be paid (Housel, 2012).
Moreover the higher of GAP of customers will lead to increased demand of the products. In addition, Virgin Mobile has used those opportunities to stimulate the customers in Pre-Pay segment by offering their simplified tariff structure that cheaper than other competitors in UK telecommunication industry (Herder, 2000). Social Factors The analysis Of macro social environment identifies trends Of beliefs, society aloes, behavior and norms. Furthermore, other social factors that affected to the organizations such as ages, population growth rate, emphasis on safety, attitudes and etc. Paris, 2006). Additionally, the popularity of usage of mobile phones in younger section is increasing continuously and significantly. Moreover, the mobile handsets sales were speedily growing from the increased usage of mobile phones. As a result, Virgin mobile has followed the niche marketing by targeting in younger segment than other competitors (Wassermann, 2003). Virgin Mobile has advertised its innovative ideas by soused on youth to share company’s common beliefs and thoughts such as the company’s outlets ware designed to be colorful to attract the younger usages.
Last but not the least, Virgin Mobile concerns in maintaining employee satisfaction because the company believes that it will help to improve their services to its customers and generate more profit at the same time. Obviously, this is the reason that the company maintained top rank of employee in order to increase the customer satisfaction. Technological factors Due to the rapid changes in technology in mobile industry, the technologies eave the directly impact on innovations, company’s costs and quality of services that both beneficial for operators and consumers.
Currently, the election’s life span is short, every operator has to frequently change its strategies than ever before. The analysis of macro technological factors tracks the changes in application of technology in the industry. However, Virgin Mobile has more focused on offering services rather than technological raises (Wassermann, 2003). Finally, Virgin Mobile has conducted its operation on the internet that customers are able to order company’s products via online and seed the door to door delivered system to send its products to their home.
Task 2 – Internal environment To start with, the resources and capabilities analysis that concentrates on analyzing the company’s internal environment in order to gain sustained competitive advantage. Moreover, firms are able to obtain competitive advantages by implementing strategies that exploit their internal strengths, through environmental opportunities, while neutralizing threats from external environment and avoiding internal weaknesses (Barney, 1991). Furthermore, the 5-step resource-based approach will be used to strategy analysis (Grant, 1991).
First of all, firm’s resources will be analyses and classified to see its strengths and weaknesses. Second, identify the resources inputs to each capability, what can the company do better or more effectively than its competitors? Third, appraise the profit potential of these capabilities and competencies in terms of their potential for sustainable competitive advantage and the ability to collect their returns. Then, select a strategy, which best exploits the firm’s resources and capabilities relative to external opportunities. Eventually, identify resource gaps, which need to be filled.
In order for the firm to gain competitive advantage a resources strategy must be implemented. There are three components of resources strategy that consists of tangible, intangible and human resources. Tangible Resources Tangible resources include financial and physical resources of values in the company. The financial resources can be looked back from 2008 to 201 2 ratio and growth analysis of Virgin Mobiles financial statement in Figure 2: Figure 1: Financial statement of Virgin Mobile (Virgin, 201 3) According to the financial statements in Figure 1, Virgin Mobile has performed very well since 2008.
The revenue groom of Virgin Mobile slightly increased from 2008 to 2009 and then jumped more than 5 percent in 2010. Moreover, the company is able to generate revenue more than 100 million pound from 201 0 and gained 4,100. 5 million pound by the end 2012. Additionally, Virgin Mobile generated net income more than 2,852. 6 million pound in 201 2, it means that company is able to continuously generate profit from its revenue with well-performed operation and it has strong financial performance in the telecommunication industry. Furthermore, the total asset of the company has increased from 9,933. Million pound in 2008 to 10,504. Million pound in 2012. In additional to that, this indicates that Virgin Mobile continues to use its assets to generate its revenue (Virgin, 2013). Intangible Resources Intangible resources are consisted of reputation, technology, and a particular set of culture. Virgin Mobile has a very good reputation and brand image. It is a well known of the customers services in telecommunication sector in JACK. The company concerns in employed satisfaction that would absolutely affect to the customers services (Wight, 2009).
Customer acknowledges that fact as well applies to customer in global market too. According to the Virgin Mobiles strong reputation, the company is able to create strong brand image and trademark in global market at the same time. The brand value of the company of its customers is telecommunication well-service’s operator offers virtual network such as television, broadband and cellular phone etc. Human Resources The company’s human resources composed of the effort and expertise offered by employees (Martinez-Lucia, 2014). Virgin Mobile is known for knowledge based employees and human resources. We make sure engagement is a combined measure and it’s not just satisfaction” said Ionian Thomas (Virgin Mobile Committee), generally, employees are the main assets to the company. Last but not the least, all employees have the opportunity to grow in their career and in their community. Furthermore, working for Virgin Mobile is like being company’s partner and also provides employees such as wide range of perks, benefits, and assistance. This effective human resources management converts into well-known exceptional customer services.
The Development of the Multinational Corporation Virgin Mobile facilities as decentralized by using geographical areas such as Europe, America and Australia, it means that the company is able to take advantage of the division of labors and decision-making because each area is able to make their own appropriated decisions or strategies (Wilson, 1994). Furthermore, there will be the interaction among shareholders, managers and employees. Consequently, it enables and motivates its employees and allows them to work towards company’s goal.
The last but not least, Virgin Mobile has used the decentralized to develop its performance by allowing their workforces to improve their skills by providing the training programs for TTS staffs. Additionally, These training programs are able to help the staffs to work more effectively and efficiently in order to provide warm welcoming experiences (Leaden, 2010) Porters Generic Strategies According to Porter (1985), the firm’s competitive strategy could specify its position in the same industry. There are four competitive strategies: cost leadership, differentiation, cost focus, and differentiation focus.
Virgin Mobile uses differentiation strategy because it provides a superb customer experience and also gains more customers’ satisfaction. The company uses his strategy to attach its targeted customers between 28 to 35 years. Moreover, the company has the outstanding of customers experiences, which are friendly staffs, good relationship with customers, sincere pricing. The strong brand image of the company differentiates itself from other competitors to gain more competitive advantages and offers low cost business model to the telecommunication sector as well.
Linkages Between External and Internal Environments The external and internal environment factors of Virgin Mobile are promising. The nation’s political stability and positive economic trend give the opportunity to the company to expand its business. With the supported policy of government in the use of technology, Virgin Mobile can generate more profit. Moreover, the rapid growth in population will be beneficial to the company by gaining more customers. In additional to that, the increasing in youth’s usage in UK of telecommunication industry, it allows the company to gain and reach more targeted customers.
Moreover, the rapidly developed technology is also beneficial to the company by having the closely contact to customers via online media. Eventually, Virgin Mobile is able to use its petition to effectively and efficiently create brand awareness in LIKE and global markets at the same time. TASK 3 – Challenges Experienced in the Analysis There are some reflections on the challenges and limitations experienced from this analysis in term of external and internal environment of Virgin Mobile to be discussed in this task.
To start with, PEST analysis is the tools that used to analyses that how political, economic, social, and technological factors affect the company. On the other hand, there are limitations and drawbacks in this approach. Particularly, the PEST analysis in external factors s dynamic and it can change very quickly. As a result, some changes might occur while analyzing the analysis that difficult to make sure that those factors will absolutely affect to the current or future strategy. Furthermore, some economic and political factor such as health and safety law that is not in my field of expertise.
Therefore, the intensive research and effort were very necessary to make more understanding in the context. The effective analysis in PEST required to collect a large amount of information. However, once expose to too much information and data, I get a bit confused and lose track f what factor are more important. I tend to make too many assumptions based on the data collected, however, I am not quite sure that are there making sense or not. Consequently, I have to find people who are able to check my assumptions and prove my analysis to be corrected.
In my opinion, there are several business analysis tools that used to analyses the external environment factors such as Porters Forces analysis that could be the anther effective tool. In term of the resources and capabilities analysis, the internal environment factors will be analyses. Anyways, there are some weaknesses ND disadvantages in using the resources and capabilities analysis. First of all, the applicability of this resource-based view approach is too limited. Additionally, it does not effectively and efficiently apply to smaller companies because of sustained competitive advantage cannot be based on their static resources.
In addition, in order to sustain the competitive advantage is quite hard to achieve because as it has been mentioned that firms are in a dynamic environment where innovation and changing all the time. Therefore, the firm need to stay from other competitors to gain more profit and make the fermentation of the company. However, according to the resource-based view, to sustain competitive advantage can be achieved if resources are meeting the valuable, rare, inimitable, and non-substitutable criteria (FRI.) (Barney, 1 991 On the other hand, more tools and strategies should be used for the firm’s analysis to be more effective.
For example, SOOT analysis that could be used to analyses the internal factors of the company usefully. In term of author’s point of view, personally think that this is the useful assignment for business school student because there are several strategies that used to apply in the real case. However, this assignment is quite difficult to gather and analyses data, I have realized that there are plenty of useful sources of information available in university’s library and online sources but there are a little useful sources that exactly related to the assignment.