Virgin mobile is planning to bring a cellphone service to the 14- 24 year market‚ which are overlooked by the big carriers. The young market is overlooked by carriers because they lack good credit or any credit history at all. In addition‚ the customer dissatisfaction in the industry is high so Virgin plans to improve customer experience for young users. The goal for Virgin is creating brand loyalty. It is would make the most sense to analyze the landscape of the whole industry using the Porter’s
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Porter’s Five Forces Supplier Power - Weak o Lots of cell phone providers‚ therefore companies like Kyocera lower prices to contract with service providers. Buyer Power Strong o Current cell phone service providers are numerous‚ which allows for many options for buyers. Barriers to Entry Weak o 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
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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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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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Mobile computing has revolutionized the way we do business‚ shop and communicate. Let’s break down briefly how mobile computing has an effect on each of the Porter’s five forces. 1. Bargaining Power of Suppliers Mobile computing gives suppliers more bargaining power‚ especially with the integration of social networking. There is variation of services and personalization that is readily available with so much customer input. Considering supplier costs‚ development is either costly or it isn’t
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Virgin Mobile India-Think Hat Ke Vision To be the favourite mobile service of India’s youth Company Overview Virgin Group‚ Ltd. operates as a venture capital company. The company engages in various businesses‚ including mobile telephony‚ travel and tourism‚ financial services‚ leisure and pleasure‚ transportation‚ social and environment‚ music‚ holidays‚ shopping‚ media‚ publishing‚ and retailing. It has operations in Africa‚ Asia‚ Australia‚ Canada‚ Europe‚ the United Kingdom‚ and the United
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Virgin Mobile USA: Pricing for the very first time Executive Summary Virgin is one of the world’s most recognized and respected brands. The company was established by Sir Richard Branson in 1970 and has been expanded into different areas such as travel‚ entertainment and lifestyle. Dan Schulman was appointed as CEO of Virgin Mobile USA in 2001‚ with 18 years experiences in telecom industry‚ Dan was confident that he would help Virgin to achieve 1 million subscribers by the end of first
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Case Analysis: Virgin Mobile USA What we are analyzing here is pricing of a service in a market which is saturated‚ as it has reached maturity‚ is highly capital intensive and in which a large amount of competition prevails. Virgin however is a known brand name with an extremely diversified portfolio. It has experimented successfully with the telecom business in the UK but failed in Singapore. It now targets the USA market; the problems before it are to: come up with an appealing offer and ensure
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