...VIRGIN MOBILE CASE INTRODUCTION: Virgin is a leading branded venture capital organization. It is conceived in 1970 by Sir Richard Branson, the Virgin Group has gone on to grow very successful business in sectors ranging from mobile telephony, to transportation, travel, financial services, leisure, music, holidays, publishing and retailing. Virgin has created more than 200 branded companies worldwide, employing approximately 50,000 people, in 29 countries. TARGET MARKET: The core-competency of Virgin mobile is making a difference in the eyes of the customer in terms of value for money, Quality, Innovation, Fun, A sense of Cool-ness. It identified the age segment where the Industry penetration was the lowest, that is, between 15 years to 29 years of age. Also, by demography, it targeted income segment with a low disposable income and high aspiration for trendiness. Since the target market for Virgin mobile is youth segment, it makes sense to develop a value proposition like VirginXtras. The revenue for mobile entertainment is projected to increase in the next few years (Exhibit 3). So, by offering value added services like delivering music, video and game content of MTV, VH1, and Nickelodeon etc. Virgin can increase its sales. PRICING STRATEGIES FOR THIS SEGMENT: Option 1 – Clone the industry prices Pros: Easy to promote, No need to spend more money on salespeople, Customers are used to ‘buckets’ and peak / off – peak distinctions Cons: Highly competitive market....
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...Black hat: virgin mobile recuit students as maketers who work on promotion. But students lack of promotion experience, they are not exper promoter. Virgin mobile and other mobile operators think students are the largest market in the industry competition, but its difficult to market to students because they are hard to reach and they are cynical about sales pitch. Virgin mobile decide recuit students as their promoter,but it is problem that how to identify student markers with brilliant ideas and good selling skills. Red Hat: 1.Virgin Mobile phone operator worried about the fierce competition. 2.Virgin Mobile phone operator hopeful promote the brand to students and open the large students market. 3.Virgin Mobile phone operator expected winning a large market share in the student market. 4.The students hated to promotes sales. 5.Students satisfied with mobile phone can be convenient to contact. White Hat: 1.Virgin Mobile is a phone operator in UK. 2.Now,Strong competition between mobile phone operators. 3.Great potential in student market,such as UK,there are 2.5 million students in this place,and 96 percent of them own a mobile phone. 4.Student market are hard to promote and students are cynical about sales pitch. 5.Virgin Mobile has decided to work on promotional campaigns in the campus,in order to promote the brand to students. Blue hat: Virgin mobile think student market has most potential than other market and decided to entry the student market with brilliant idea or good selling skills...
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...Case Study:-Virgin Mobile USA: Pricing for the very first time Introduction: Virgin Mobile Company led by Branson, is a British-base company. Dan Schulman was chosen as CEO in 2001. He was trying to find a niche market in US for virgin mobile. US market was under-served and dissatisfy with existing Carriers. Youth were ignored and no carrier had capitalized on this segment. The company entered in a 50-50 joint venture with US-based Sprint in which Virgin will use Sprint network for US services. The goal of the US Virgin mobile was to have one million subscribers by 2002 and 3 million by year four. Virgin mobile was planning to adopt pre-paid system instead of contract. It was intended to serve those that are unable to have credit cards yet. Virgin mobile had to fight many shortcomings that were endemic in the industry. They preferred to introduce new features that will attract youth to use their services. Therefore, they were worried about pricing their services that should be attractive for the consumers, profitable for the company itself, and not rise the reaction of the rivals. 1. Do you agree with Virgin Mobiles target market selection? What are the risks associated with targeting this segment? Indeed yes, the saturated nature of the wireless communication industry in U.S. made it very difficult for the new brands to enter the market. However the (15-29) market segment is yet remained untouched by the big players. If the youth segment remains the main focus for Virgin...
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...Strategic Management Case plus Case Answer – Apple’s Profitable but Risky Strategy Case study Apple’s profitable but risky strategy When Apple’s Chief Executive – Steven Jobs – launched the Apple iPod in 2001 and the iPhone in 2007, he made a significant shift in the company’s strategy from the relatively safe market of innovative, premium-priced computers into the highly competitive markets of consumer electronics. This case explores this profitable but risky strategy. Note that this case explores in 2008 before Nokia had major problems with smartphones – see Case 9.2 and Case 15.1 for this later situation. Early beginnings To understand any company’s strategy, it is helpful to begin by looking back at its roots. Founded in 1976, Apple built its early reputation on innovative personal computers that were par-ticularly easy for customers to use and as a result were priced higher than those of competitors. The inspiration for this strategy came from a visit by the founders of the company – Steven Jobs and Steven Wozniack – to the Palo Alto research laboratories of the Xerox company in 1979. They observed that Xerox had developed an early version of a computer interface screen with the drop-down menus that are widely used today on all personal computers. Most computers in the late 1970s still used complicated technical interfaces for even simple tasks like typing – still called ‘word-processing’ at the time. Jobs and Wozniack took the concept back to Apple and developed their...
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...Q.1 Given Virgin Mobile's target market 914 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 subsidies, hidden fees, average per-minute charges, etc.). I will recommend third pricing strategy, which is to come up with a completely new plan, since we are trying to target a new market segment. The following will be the structure of the new price plan, which employs a revolutionary and aggressive approach. Subscription Type All of the plans will be prepaid thereby completely eliminating the need for indulging into contracts. The subscription will come into packages that resemble consumer electronic packaging and would be plug_and_play when you buy them. Contracts: Since the plans will be all prepaid, the services will be offered without indulging into a contract. This will allow e.g. the teenagers 14-17 to be able to get the subscription because otherwise they are not eligible to sign the contracts. This is clearly an untouched segment and will bring lot of new customers. However the risk of churn will be increased to 6% per month, but that will be catered into pricing calculations given in the end. Handset Subsidies: All customers will be offered handset subsidies at 50% of the handset costs. This will reduce the subscription price and...
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...THE VIRGIN GROUP CASE STUDY QUESTION 1: What examples does the case give of links between Branson’s strategy for Virgin and the environment in which it operates? The Virgin Group Ltd is a group of separately run British companies with the Virgin brand under the leadership of English celebrity business tycoon Sir Richard Branson. The core business areas are travel, entertainment and lifestyle, among others. Richard Branson’s strategy comes from his deepest inner beliefs; “in principle there were no product or service boundries limiting a brand name, provided it was associated with quality products/services on offer” The corporate strategy of the Virgin Group is to operate like ‘a venture capital firm based on the Virgin brand.’ This strategy involves non-related diversification at the individual business unit level. Meanwhile, synergies are created from hierarchical relationships and the interaction of the corporate head office with individual business units. By leveraging on the Virgin Brand which has established prominence in the minds of consumers, Virgin is able to enter new business areas with a bang and shake up existing orders. The unique Virgin culture also allows Virgin to break into new markets and execute its ventures very effectively. Virgin’s corporate strategy is best described in the Virgin Charter – the individual businesses are focused and develop as autonomous enterprises under a single unified brand name. This decentralization...
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...strategies for mobile advertising: case studies Alexandra Rehak October 2008 Research from Analysys Mason Fixed Networks and Services Analysys Mason Fixed Networks and Services online market intelligence service MENA telecoms market: strategies and opportunities 2008–2013 Mobile broadband: another substitution threat for fixed operators? Business data services in Europe: market drivers and forecasts 2008–2013 Multi-play services in Western Europe: market sizings and forecasts 2008–2013 Central and Eastern European fixed telecoms: market sizings and forecasts 2008–2014 Pay TV in Western Europe: market sizings and forecasts 2005–2013 Legacy matters: ensuring a soft landing for TDM services Regulatory headaches in the transition to nextgeneration networks Next-generation network architecture: what and when? Success factors for hosted and managed VoIP in Europe Western European fixed telecoms: market sizings and forecasts 2004–13 Wireless broadband forecasts for 2008–2015: HSPA, HSPA+, EV-DO, LTE and WiMAX Mobile social networking: strategies and case studies Strategies for mobile broadband pricing and packaging Mobile proximity payments: scenarios for market development iPhone shows the way for mobile TV Critical ingredients of mobile TV: femtocells and sideloading Mobile media and entertainment in Western Europe: value chains and business models The business case for picocells and femtocells in the enterprise market Femtocells in the consumer market: business case and marketing...
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...Case Study - Virgin Mobile USA PGXPM 10 – ARJUNAS – GROUP VI SERVICE MARKETING Assigned by Prof. D. Sriram MEMBERS: NIRANJAN DAUTKHANI Virgin Group Profile: * Virgin, a leading branded venture capital organization, is one of the world's most recognized and respected brands. * Conceived in 1970 by Sir Richard Branson, the Virgin Group has gone on to grow very successful businesses in sectors ranging from mobile telephony, to transportation, travel, financial services, leisure, music, holidays, publishing and retailing. * Virgin has created more than 200 branded companies worldwide, employing approximately 50,000 people, in 29 countries. [ “ We believe in making a difference. In our customers' eyes, Virgin stands for value for money, quality, innovation, fun and a sense of competitive challenge. We deliver a quality service by empowering our employees and we facilitate and monitor customer feedback to continually improve the customer's experience through innovation.” ------- Virgin Group Website Virgin Values: * Virgin stands for value for money, quality, innovation, fun, and a sense of competitive challenge. * Successful cellular operations in U.K.- 2.5 million customers in 3 years. * Unsuccessful operations in Singapore (2001) - Virgin hip and trendy positioning failed. Virgin...
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...Virgin Mobile 1. Given Virgin Mobile’s target market (14 to 24-yeard-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.) 2. How confident are you that the plan you have designed will be profitable? Provide evidence of the financial viability of your pricing strategy. 3. the cellular industry is notorious for high customer dissatisfaction. Despite the existence of service contracts, the big carriers churn roughly 24% of their customers each year. Clearly, there is very little loyalty in this market. What is the source of all of this dissatisfaction? How have the various pricing variables (contracts, pricing buckets, hidden fees, off-peak hours, etc.) affected the consumer experience? Why haven’t the big carriers responded more aggressively to customer satisfaction? 4. How do the major carriers make money in this industry? Is there a financial logic underlying their pricing approach? 5. What do you think of virgin Mobile’s value proposition (the VirginXtras, etc.)? What do you think of its channel and merchandising strategy? 6. Do you agree with virgin Mobile’s target market selection? What are the risks associated with targeting this segment? Why have the major carriers been slow...
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...Virgin Mobile USA is a brand extension of Virgin, a U.K.-based company founded by Sir Richard Branson. The company led by CEO Dan Schulman was founded under Virgin's mission statement which stated "we believe in making a difference. In our customer's eyes, Virgin stands for value, for money, quality, innovation, fun and a sense of competitive challenge... we look for opportunities where we can offer something better, fresher, and more valuable, and we seize them. We often move into areas where the competition is complacent... We are pro-active and quick to act, often leaving bigger and more cumbersome organizations in our wake." (1) Virgin Mobile USA had a number of things going for them despite a crowded cellular marketplace. For starters, they had a CEO who had experience in telecom as he was formerly an executive with AT&T. Schulman also had experience with successful pricing strategies and technology as former CEO of Priceline.com. The biggest plus for the startup was the support and backing by its management and stakeholders who genuinely wanted to garner success against the perception of another market saturated run poorly with complacency and poor customer service. The bar was set high for success, as Schulman's goal was to have acquired 3 million customers by their fourth year of operation. I believe that Virgin Mobile USA took a big gamble in targeting a niche that was essentially written off by the other players in the industry as being largely unprofitable. Perhaps...
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...Virgin Mobile USA: Pricing for the Very First Time - CASE STUDY Kiran Chimmiri Virgin is a U.K-based company led by Sir Richard Branson and is one of the three most recognized brands in Britain. Dan Schulman has been appointed CEO of the Virgin Mobile USA and is now trying to determine what pricing strategy would be most efficient in attracting and sustaining customers in the USA. There are several other decisions which also need to be made, such as unique features Virgin mobile can offer to differentiate from their competition, channels to use in order to sell their product and advertising strategy to market the product most efficiently. The company had couple of failures in the past in MVNO and so is more keen in building a robust strategy to venture into the US market. The key issue for Virgin Mobile USA is to select a pricing strategy for market penetration. There are 3 alternatives provided in regards to the key decision: Clone Industry Prices, Price below the Competition & A Whole New Plan. Analysis and Evaluation: The Company decided to target the market which is underserved i.e., in the 15 to 29 age group. For this the company analyzed the strategic issues such as a)Develop value proposition that will appeal the youth market b)Maintain customer loyalty & Life time Value c)Address the unmet needs of the target market d)Make the venture a profitable one e)Don’t want to trigger off competitive reaction The Mobile communication industry in 2001 was highly...
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...Business Strategy Analysis Virgin Group Yingzi Dong Xiange Liu Huan Wang Introduction Virgin is the managing company for the branded private investment group, which had interests ranging from transportation, financial services, health and leisure, and media and telecom to space travel. Virgin’s founder Richard Branson,started the Virgin group in the 1970s, with Branson and Murphy had decided in 2005 that Virgin would focus on two additional pillars of growth: health& wellness, and financial service.In the past, Virgin had generally financed its expansion by selling equity in its operating companies,then, Murphy contemplated the group’s strategy for the next decade. Business Strategy Virgin Group’s corporate strategy is change due to the whole financial situation. At the beginning, Virgin Group is a branded private investment group and seeking an internal rate of return of 30% or more on investments per year. And the initial strategy includes, 1) The founder of Virgin Richard Branson is enthusiastic about his career. The ideas for new investments can came from various people, such as Richard and his meeting friends, entrepreneurs or colleagues. Also, once...
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...1. We decided that that pricing strategy three “a whole new plan” would be the most effective at positioning Virgin mobile as the brand for adolescents and young adults in the United States. This pricing strategy is easy for young consumers to understand and afford. The phones are at the most expensive $100, which a high school student can afford with half of their part-time job paycheck or a teenager who has an allowance can save up for a month and buy. It is also at a reasonable price for parents to spend on a phone if they were to purchase a handset as a gift or for their child’s safety as a way of instant communication between parent and child. This plan is also an excellent strategy because it throws out the idea of contracts, which 14-17 old teens cannot obtain without a parent to co-sign. This allows a teenager whose parent may not want them to have a cellular phone to get a cell phone or parents whom are not willing to jeopardize their credit or risk a high cell phone bill to fulfill their teenagers wants. This strategy will also be a great tool at building brand loyalty at a young age. If a teenager is given the freedom to have a cell phone at an early age by Virgin mobile and feels comfortable and trusting of the provider they will come back to the brand when their are of legal age to a contractual cell phone plan and opt out of it by choosing Virgin Mobile. Cell phones are a form of constantly innovated technology and young consumers are the opinion leader on these...
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...BANKING ACADEMY OF VIETNAMBTEC HND IN BUSINESS (ACCOUNTING) ASSIGNMENT FRONT SHEET | Qualification | Unit Code / Unit number and title | Pearson BTEC Level 5 HND Diploma in Business (Accounting) | (Y/601/0546)Unit 1 Business Environment | Student name / BTEC Registration Number | Assessor name | Hoang Quang HungHoang Tuan DungDao Tien Hoang | F08-027F08-013F08-024 | Martin Ortega-Azurduy | Date issued | Hand in deadline | Submitted on | TBA | 5/11/2015 | 5/11/2015 | | | Assignment title | Assignment 1 : The Virgin Group and its environment | In this assessment you will have opportunities to provide evidence against the following criteria. Indicate the page numbers where the evidence can be found. | Learning Outcome | Learning outcome | Assessment Criteria | In this assessment you will have the opportunity to present evidence that shows you are able to: | Task no. | Evidence(Page no) | LO1 | Understand the organisational purposes of businesses | 1.1 | Identify the purposes of different types of organisation | 1 | | | | 1.2 | Describe the extent to which an organisation meets the objectives of different stakeholders | 1 | | | | 1.3 | Explain the responsibilities of an organisation and strategies employed to meet them | 1 | | LO2 | Understand the nature of the national environment in which businesses operates | 2.1 | Explain how economic systems attempt to allocate resources effectively | 2 | | | | 2.2 | Assess...
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...{sansari@babson.edu, nanni@babson.edu} Dessislava A. Pachamanova, David P. Kopcso Mathematics and Science Division, Babson College, Wellesley, Massachusetts 02457 {dpachamanova@babson.edu, kopcso@babson.edu} T his article illustrates how simulation can be used in the classroom for modeling customer behavior in the context of customer lifetime value estimation. Operations research instructors could use this exercise to introduce multiperiod spreadsheet simulation models in a business setting that is of great importance in practice, and the simulation approach to teaching this subject could be of interest also to marketing and accounting instructors. At Babson College, the spreadsheet simulation exercise is part of an integrated one-case teaching day of the marketing, accounting, and operations research disciplines in the full-time MBA program, but the exercise is directly transferable to stand-alone courses as well. In our experience, students have felt empowered by the ability to incorporate their ideas about customer behavior directly into customer lifetime value models, and have appreciated the ease with which simulation enables them to obtain intuition about the sensitivity of their estimates to different assumptions. Key words : customer lifetime value models; spreadsheet simulation models; cross-disciplinary integration;...
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