Virgin Mobile

946 words 4 pages
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 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 Alternative like pagers are outdated & this target market cannot afford sophisticated PDA service.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.
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Although there are many players in the cell phone service provider market, Virgin wants differentiate themselves by targeting a new market of consumers. Since they do not own their network and are leasing space from another network provider, it is important for them to focus on getting and retaining new customers. Their main concern is pricing. Since they are in business to make money, they want to make sure their operating costs are low so they can offer the low prices to the consumer and make a profit as well. Being able to offer features that most young adults look for will ultimately attract buyers and hopefully develop some brand loyalty with the no-commitment plans.

Advertising is limited to cut costs as well. Virgin Mobile hopes their efforts in marketing are successful by using a focused strategy and being selective with magazine brands/publications and television networks to advertise their product.
The main issues are to have competitive pricing, make money, and have not get drowned in already cluttered cell phone market.

Recommendations:
Virgin mobile wants to compete within a new market and not have the competition beat them at their own game. Several options as far as pricing were developed by the company. They can either clone existing prices, price below the competition, or create their own unique pricing strategy.
Cloning the industry, will not allow them to differentiate themselves in order

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