Marketing Strategy Of Virgin Mobile Essay
Virgin has decided to launch their wireless phone services in the USA. This extension, Virgin Mobile, attempts to provide the right service to the youth market by analyzing its competitive forces and challenging environments. Virgin Mobile needs to select a pricing strategy that will both attract and sustain the youth market. This will then increase the company’s attractiveness and competitive qualities.
Porter’s five forces analysis is a useful tool to determine the attractiveness of the cellular industry for Virgin Mobile. The threat of new entrants is relatively low in this market as the barriers to entry are significant. The current companies such as AT&T and Verizon have already established their position in the USA market. This then decreases the threat of substitutes. However, AT&T and Verizon might be able to create the same services for a similar niche at a cheaper price than Virgin Mobile.
The bargaining power for Virgin Mobile is moderate and quite expensive because of the contract signed with Kyocera MVNO and Sprint; currently, these are Virgin Mobile’s only suppliers. The supplier, Sprint, depends heavily on Virgin since the contract involves a venture. The bargaining power for customers is quite low because of the locking contract available for them. All carriers design their packages and plans in accordance with the customer’s needs, however subsidizing or building your own network can be costly.
Virgin Mobile strengths and opportunities…