Swot Analysis

SWOT Analysis

Opportunities

1. Large untapped market potential (under-30 segment).

2. Increasing demand for mobile entertainment, beyond minutes-only plans (Appendix 3).

3. The MVNO model presents a whole new opportunity with limited fixed costs and physical infrastructure investment.

4. Availability of low cost handsets allow for attractive pricing.

5. The expansion of the mobile communications ecosystem including the introduction of non-traditional industry players such as, MTV and VH1, Target and Best Buy, and Kyocera, results in product and distribution channel diversification.

Threats

1. Overcrowded nature of the mobile communications space in the US (market saturation).

2. Poor credit quality of target market segment (identified as non-business, low-value subscribers).

3. The target demographic exhibits inconsistent usage and live a lifestyle which is constantly in flux, resulting in unpredictable customer behaviour.

4. 90% of the existing subscribers are already tied into contracts.

5. Barriers to entry are fairly low effecting the risk of increased competition.

Strengths

1. Solid financial foundation; backed by the large, successful conglomerate, Virgin Group.

2. Excellent customer focus embedded in their corporate values.

3. Culture of quality and innovation.

4. Pro-active and quick to act, challenging status quo.

5. Attractive product and service offering with proven success in the MVNO space.

Weakness

1. Little brand recognition in the US market.

2. No-touch sales point in a traditionally high-touch sales industry.

3. Relatively smaller marketing budget when compared to US competitors.

4. Limited flexibility, constrained by Provider's terms and conditions, network capabilities and product offerings.

5. Virgin's broad portfolio of businesses.

Identification and Evaluation of Alternative Strategies

Option 1: Clone the Industry Prices

Pros

1. Highest Lifetime