Write My Essay Sample: Case Study: Virgin Mobile UK
Virgin Mobile UK mainly targets pre-paid customers who use mobile phones for communication. They achieve this by extending network services to the mobile phone subscribers. The company’s value propositions include “value for money, outstanding service, great products and a sense of fun” (Anderson & Kupp, 2009, 6).
Virgin’s success is a culmination of its ability to leverage an existing customer base to acquire customers at a lower cost as compared to its competitors in the subject market (Anderson & Kupp, 2009, 5). Likewise, its proliferation of the UK market was largely augmented by its ability to initiate a reduction in churn rates through brand loyalty, modern “sticky” services and excellent client service (Anderson & Klupp, 2009, 5). In addition, the success of the company lay in its ability to develop new revenue streams by accessing its niche segment, leveraging new distribution channels through innovation and increasingly succinct value propositions. [“Write my essay for me?” Get help here.]
In an increasingly volatile environment, a consequence of the rapid change in technology in the 21st century, Virgin’s dependence on its heritage and reputation to address customer’s needs might not be sustainable in the long term (Anderson & Klupp, 2009, 6). It ought to shift its orientation from the customer needs and instead align itself to a technology-oriented strategy (Anderson & Klupp, 2009, 1). It should also emphasize the need for innovation given that customer preferences tend to evolve with the changes in the prevailing technology.
To begin with, VM is subject to a significant threat given the level of competition in the mobile networks market. The intense competition limits the profits generated by the existing firms, a situation that discourages the entry of new firms in the market. The threat of substitutes remains significant given that there are many firms, such as Tesco and EasyMobile, which offer relatively similar services (Anderson & Klupp, 2009, 16). The fact that there are many firms in this market gives the clients a higher bargaining power. The suppliers also have a higher bargaining power as only a few of them can provide the resources needed by the VM Company. The fact that industry rivalry is high should also be taken into consideration.
VM has three core competencies which include its ability to influence the existing customer base to acquire more customers at a cost that is relatively lower than the competitors in the industry. Compared to other firms, it had successfully created a significant prepaid customer base by lowering the subscriber acquisition cost. The next core competency is found in VM’s ability to reduce churn rates through brand loyalty, excellent customer service and a high post-pay retention over prepay (Anderson & Klupp, 2009, 5). Conclusively, the last key competency entails the creation of new revenue strategies through the penetration of the market segments which is further augmented by the leveraging of new channels of distribution with specific value propositions. (Anderson & Klupp, 2009, 5). [Click Essay Writer to order your essay]
The Virgin brand comprises one of the major competitive advantages that are available to the company. The VM company is a branch of a larger corporation which has its wings in several industries. Likewise, “the company enjoyed the scale of benefits to the network operators, without the associated investment and technology risk” (Anderson & Klupp, 2009, 4). Essentially, the company did not have to spend a lot of capital on establishing its technological base given its partnership with T-Mobile. The VM company further charges lower prices on its services than the other firms in the UK network market, which gives it an edge over its competitors. The company got rid of peak time tariffs and “took a very simple and transparent approach to pricing” (Anderson & Klupp, 2009, 8). The company further developed a succinct distribution network across the UK which gave it an edge (Anderson & Klupp, 2009, 8).
VM strengths include significant economies of scale because of the combined services in which it engages. Likewise, the company mirrors an excellent distribution network with over 6,000 sales outlets, all with appropriate structures, and that has increased access to the market (Anderson & Klupp, 2009, 8). Some of its weaknesses include internal managerial ambiguity associated with rapid expansion. The opportunities include the intense competitive situation, which gives the VM brand the niche to “position itself as not only a strong brand experience but as value leader as well” (Anderson & Klupp, 2009, 3). Also, any new entrants to the Network market comprise the major threat to VM.
VM’s mission was to provide mobile network services to a specified group of users based on the customer’s interest. The vision, on the other hand, was to be the ultimate leader in the mobile network segment in the UK. Its goals and objectives were aligned towards securing a larger customer base through the provision of services at lower prices.[Need an essay writing service? Find help here.]
Conclusion and Recommendation
Conclusively, the Virgin Mobile case is one of the most profound success business stories today. However, to enhance their position in the market, the company should engage in technology-oriented strategies above the need to address the customer’s needs. Furthermore, the company ought to determine ways through which they can mitigate the increasing operational costs in the face of intense competition.
Anderson, J., & Klupp, M. (2009). Virgin Mobile UK. Berlin: European School of Management