Virgin Mobile Paper A Case Study Analysis Presented to: 1 I. CASE SUMMARY Virgin‚ a U.K. based company led by Sir Richard Branson‚ has had a history of brand extension resulting to 200 different corporate entities. One of which is Virgin Mobile which has decided to expand to USA based on their success in the U.K. market. Dan Schulman‚ Virgin Mobile USA CEO‚ is tasked to lead the expansion to the U.S. and has decided to focus on consumers aged 15-29 given that there is low penetration
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There is nothing that will prevent Virgin from competing to an untapped market. Threat of Substitutes Weak o There are very few substitutes available that offer mobile and immediate communication. Alternative like pagers are outdated & this target market cannot afford sophisticated PDA service. Degree of Rivalry Strong o Competitors have brand recognition in the US and have the majority of the market share. Financial Analysis: Initially‚ Virgin may have no great profits since
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potential competition which may offer a much better deal. Virgin Mobile became aware of this cellular anarchy and had to decide what pricing strategy would best attract their target niche and offer them unbeatable value so that competitors could not enter into the same market easily. Alternative 1 -Clone the Industry Prices The first pricing strategy Virgin mobile considered was to copy the current industry pricing structure. The angle was that Virgin was to offer the same prices that of their competitors
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1. Given Virgin Mobile’s target market (14 to 24-year-olds)‚ how should it structure its pricing? The case lays out three pricing options. Which option would you choose and why? In designing your pricing plan‚ be as specific as possible with respect to the various elements under considerations (e.g.‚ contracts‚ the size of the subsidies‚ hidden fees‚ average per-minute charges‚ etc.). I believe Virgin Mobile has two options. The first option is the obvious for their target market and any new
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1 AEM 4160: STRATEGIC PRICING PROF.: JURA LIAUKONYTE VIRGIN CELL CASE: EXCERCISES Pricing Structure from the Carrier Perspective ¨ Contracts: ¤ ¤ ¤ Annual churn rate WITH contracts Annual churn rate WITHOUT contracts The difference: =2% * 12 months = 24% (p.8) =6% * 12 months = 72% (p.8) 72% - 24% = 48% Take AT&T example: customer base = 20.5 million If AT&T abandons the contract based plan how many new customers would it need to acquire to offset customers from an
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analyze the best possible pricing strategy for the Virgin Mobile venture into the United States. 1.2 Situation Virgin is a global company that has 200 corporate entities involved in everything from planes and trains to beverages and cosmetics. The newest addition is the Virgin Mobile USA entity‚ which was created after Virgin was able to successfully penetrate the U.K. cellular market. However‚ the company was not so successful with the mobile services in other parts of the world. The company has
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Virgin Mobile Company Analysis Critically analyse and evaluate the macro environment in which Virgin Mobile (VM) operates. What do you believe to be the key drivers affecting the mobile segment in the UK? Virgin Mobile is part of Virgin Group Limited‚ a venture capital conglomerate founded by British business tycoon Sir Richard Branson. Virgin Mobile was the first Mobile Virtual Network Operator which launched in United Kingdom in 1999 as a joint venture between T-Mobile and Virgin Group. This means
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Virgin Mobile USA Analysis [pic] August 08‚ 2009 Table of Contents Table of Contents 2 Introduction 3 Internal Factor Evaluation (IFE Matrix) 4 External Factor Evaluation (EFE Matrix) 5 Porter’s Five Forces 6 Porters Generic Forces 6 Financial Analysis 7 Competitive Profile Matrix 8 The Marketing Mix-The 5 P’s 9 Key Issues 10 Boston Consulting Group (BCG Matrix) 11 GE / McKinsey Matrix 12 Space Matrix 14 Recommendations 16 Introduction Virgin Mobile is a great company
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Virgin mobile pricing Document Transcript VIRGIN MOBILE USA – ‘FIRST PRICE’ STRATEGY (An analysis of the Pricing Decision alternatives that Virgin has to undertake to create an alternate customer segment and monetize their buying power)VIRGIN XTRAS – OVERVIEWThe Virgin Mobile USA service involved content‚ features and entertainment‚ called “Virgin Xtras”.Collaboration with MTV networks as it was the most recognized youth brands in the country and unparalleled reach forthe under-30 market segment:
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Considering the youth that Virgin Mobile is targeting‚ we conclude that the best strategic decision will be to establish a new plan that offers no contract requirements‚ lower than industry average minute prices‚ fixed minute rates with no additional or hidden fees‚ prepaid plans internet and text messaging included and subsidies of around 40 dollars per cellphone. This new plan is necessary to differentiate Virgin Mobile from its competitors and retain market share. By having the new venture with
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