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Impact of External Environmental Factors on Business Activities of Virgin Media

Organization Selected : Virgin Media

INTRODUCTION

In an economy several business organisations are established with a specific objective that requires to attain at a particular time. These targets of organisation are affected through business environmental factors such as internal and external. These both factors are different to each others. Internal environmental factors are controllable that can be customers, employees, management and shareholder (Johnson, 2016). External environmental factors are beyond the control of an organisation so for this management of firm needs to make impactful strategy to reduce its negative impact easily. This report is based on Virgin media which was established in the year of 2006. This is a British company that provides telephones, internet and television services to their customers. This report represent impact of external environmental factor

MAIN BODY

Virgin media is one of the leading British company that offers different services like telephone, television and internet services. It was established in 2006 and is headquartered in Hook, United Kingdom. They have different product line like digital television, broadband internet, fixed line telephone, mobile telephony, etc. They have the ownership of fiber optical cable network in United Kingdom. They have been serving majorly in UK and Republic of Ireland. They are competing with Sky, BT Group and Talk Talk, EE, O2, Vodafone and Three in mobile in the line of broadband. They have been earning annual revenue around 4 billion and their net income is around 3 billion. They have approximately 4 million cable customers. Tele west and Virgin. net brands were merged with Virgin Mobile under the name of “Virgin Media”. There are majorly focused on two pillars that is Growing responsibly and sustainability and doing more with digital. Their investment teams focus on core consumer sectors of travel and leisure, telecoms and media, music and entertainments, financial services and health and wellness. They deliver long term capitalization by investing in these sectors. They develop innovative and creative investment strategies in order to increase the revenue for company (Reuter and et. al., 2010) .

Strategic Marketing Position

Marketing position can be considered to as perception of consumers towards a brand in comparison with rival organisation. The marketing positioning can be considered to an attempt by business in which it aims to form an image of the company in the market. It is one of the most crucial factors in context of a brand as it determines sales of an organisation and can be managed for over a lifetime of the product. The virgin media is focusing on to be a top position when it comes to music enthusiasts. There marketers in this segment are making numerous efforts to what people desire and to supply the same in an ideal manner and emerge as a leading brand. The wider portfolio of the company makes sure that it emerges itself as a go to destination when it comes to fulfilling diverse needs of consumers. The brand is taking help from cost leadership approaches in which prices which are being charged are lesser than its rival companies so that it is more accessible to people. The economies of scale helps this organisation to make higher revenue and profits as services are being offered to the mass market. The competitive pricing strategy assures that it emerges to be the primary choice of customers who are looking to avail media services. The youth population of the company is more targeted through undertaking numerous advertisement and promotional approaches on T.V. and mobiles. This organisation is not lacking behind when it comes to using social media tools as a major source for cost effective marketing (Rovai and Downey, 2010) . The presence of all major resources of media along with brand name assures that new customers are not reluctant when it comes to availing products and services of this corporation.

Virgin media is leading and only media firm of UK which is offering key media services such as broadband, television, landlines and other packages of mobile that is customisable. They are at the media forefront and are considered as second biggest media provider with innovative brand recognition. In regard of external factors, this is significant for company to perform PESTLE analysis which is mentioned as below:

Political Factor: Having a proper landlines at gone of even a commercial or business line, this is rarely optimise in these days and the variances like the mobile phones and internet are taking over in the market. Along with, the company Virgin Media means deliver a proper mobile service for which very few consumer migrate to this. Despite of selecting more famous provider of media like Orange and O2, the company has numerous consumer which have switched from other companies. Also the political factors can directly influence the manner of operating a business. In these factors, the government regulations and legislative problems include that define numerous informal and formal rules. A successful information freedom request to the state of UK educational division which broadband companies like Virgin Media and BT have emerged a technical, legal, political concerned with the toughen adult website censorship. After the Post Brexit period, company might have faced numerous issues due to distinct terms and policies enacted after the period. Also, after the change of media laws and legislation, organisation need to cope with with distinct negative consequences as well.

Economic Factors: These factors are associated comprises inflation rates, foreign currency rates, fluctuation in prices of goods and services, exchange rates and so on which has a vast impact on whole economy of the company (Rugman and Verbeke, 2017) . In UK market Virgin media is facing stiff competition from other competitors over the globe. For example – due to high interest rates there is decreasing capital and investments as well as economic growth and currency rates. Along with this, in 2008 economic crises has affected many industries in respect of sales and profitability cause at this time customers were not able to spend high money on luxurious things. Situation of employment and poverty also raised at this time. Virgin Media is trying to apply digital media strategies into its functions cause of launching web based services, i.e. Youtube. With this assistance of this device, people will watch video online as the number is increasing by 1 million. Therefore, it can be said that turning out into new trends, i.e. online gaming and video-on-demand can increase sales revenues of the company. In this present scenario, liberalisation and globalization at international markets, there is inadequate and unreliable supplies of organizational inputs which can reduce disposable income of people that has diversely impact on business of Virgin Media.

Social Factor: This factor is essential for companies to evaluate the social responsibility so that they can give excellent quality of goods and services can be provided to its customers at first priority. In terms of Virgin Media, their prime mission is to provide outstanding services to its consumers. Company to its customers are providing different offers that depends upon the social conditions and nation's situations. Therefore, they are considering all the factors that are present in the environment. This includes behaviour and nature of customers towards their company so that they can manufacture goods and services according to the clients choices and preferences. Henceforth, Virgin Media is making products for all age group so that they can give deliver products to its end customers right on time and at reasonable cost as well (Barney and Hesterly, 2010) .

Technological Factors: This analysis constitutes various factors which are related to introduction of new technologies in business. It includes automation of manufacturing system, cost of introducing new technologies in operations, outsourcing processes of business and more. In context with Virgin Media, this firm has gained various advantages due to technological advancement. As in context with, telephone services, it has become more compact especially in moving business of telecom into primarily wireless. It includes general needs in smartphones which includes caller ID, security in data, voicemail and more. Customers want more data facilities by telecom companies.

Illustration 1: Culture Of An Organisation: Strategic Management
(Source:- Culture Of An Organisation: Strategic Management, 2017)

Environmental factor: Now a day's company is manufacturing goods by considering environmental factor. For this, they are using raw material which are eco-friendly and doesn't affect environment so much. Virgin media is also concentrating carbon foot-printing so that they can produce goods without hampering environment. Further technology is assisting them in limiting the use of papers by processing all things through online purpose. Internet is technique which helps management to prevent from use of paper and to spread in various nations about variety of services and items that are available with firm (Teece, 2010) . (Source:- Culture Of An Organisation: Strategic Management , 2017)

Legal Factors: This factor entails a firm to obey rules made by regulatory bodies of a nation. It includes various laws that are used to conduct operations of business in a smooth manner. Equality, discrimination and minimum labour hours and duration are various act which are formulated by government to safeguard rights of members. Management of Virgin Media provide duties and tasks to members in respect to their skills and capabilities. Along this, compensation is given to staff in according to their performance and outcomes. This helps company to retain skilled and competent people for longer period. This enhance market image and reputation which benefit firm to position higher than rival brands. Thus, human resource is able to easily attract candidates and make them apply for post that are remaining vacant. Therefore, management of Virgin Media frame strategies and policies to make system function legally. Along this, modern tools and technologies are used which help seniors deliver quality things and appropriate services to customers. This also helps position firm higher than competitors and attract large number of people.

Internal environment – According to Grant, (2016) it can be define as that factor which includes management, customers, and corporate cultural groups that can describe the workers behaviour or attitude within an organisation. There are various components that are directly impact on firm activities and functions effectively. The Virgin need to analyse whole internal environment that will directly affect on their customers preferences and also assist in identifying their behaviour or nature in proper manner. Along with this, there are various situations, events, conditions, factors in an enterprise which affect business activities or functions, especially employees behaviours or attitude. It can be determined as major part of internal environment that includes company mission, vision, organisation culture and leadership styles. Virgin required to analysing and examining whole internal surrounding through which they can easily identify their desired customers needs and wants in the large market place.

On contrary to this, it is identified that Vogel, (2010) said that addition to this, they need to analysing company internal environment that includes factors which directly affect on firm functions and activities, its managers, leaders, owners, material resources, organisation culture that require to determine abilities, capabilities, of company that can be adopted for combining external environment factors in effective manner. Internal business environment combine with various factors in an organisation that directly impact on growth and success.

External environment is changing day by day due to which company is getting maximum opportunities of success as consumer choices or preferences are fluctuating in coming time frame. Virgin media is totally affected by modification which is done by political bodies in their norms, rules and regulations because company is having their outlets across international boundaries. As a result, their position is also enhancing day by day by gaining the trust or loyalty of entire society. In this modern world number of companies are coming in this sector for gaining trust or loyalty of maximum customers. Strategic positioning of an enterprise is fluctuating in various ways because legal bodies are changing their norms, rules and regulations and overall business is depend upon advisory bodies. Virgin media is seen as most leading and successful name in communication or entertainment industry because company is engaging in offering best opportunity of interaction as it helps entire society by offering qualitative services. Mainly three major operating section of this association are- cable, mobile and content. All these three elements are crucial for overall community as well as corporate world to perform their assigned job in best manner (Chen and Chai, 2010) .

Apart from this, few authors are expressing their views that internal analysis is playing important role in improving the current performance of an organization because it aids in controlling probabilities of mistakes. Along with this, one thing is also determined that strategic positioning of an association is always changes because of modification in political norms and policies. Communication facilities is helping entire corporate world in various manner such as; aids in maintaining the positive connection with long distance customers which resulted in maximization of sales performance as well as establishing company image at marketplace. Thus, virgin media is getting succeeded in gaining maximum benefits by satisfying clients requirements and needs in a defined time frame ( Culture Of An Organisation: Strategic Management, 2017 ) .

CONCLUSION

As per the above report it has been summarised that business environmental factor has direct impact on a business organisation. These factors can be internal and external but they has different impact on organisational approaches. Internal environmental are manageable while external factors are beyond the control of management. So for this it is require that manager make a effective strategy that reduce negative impact of such factors in effective manner. Through this, they can operate their business approaches easily. Throughout the study it has been assessed that an organization needs to analyse the internal and external environment for enhancing their current positioning by grabbing opportunities identified at marketplace. Hence, it has been analysed that virgin media is one of the most appropriate example of this policy.

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REFERENCES

Books and Journals

  • Johnson, G., 2016. Exploring strategy: text and cases . Pearson Education.
  • Reuter, C and et. al., 2010. Sustainable global supplier management: the role of dynamic capabilities in achieving competitive advantage. Journal of Supply Chain Management , 46 (2), pp.45-63.
  • Rovai, A.P. and Downey, J.R., 2010. Why some distance education programs fail while others succeed in a global environment. The Internet and Higher Education , 13 (3), pp.141-147.
  • Rugman, A. and Verbeke, A., 2017. Global corporate strategy and trade policy . Routledge.
  • Barney, J.B. and Hesterly, W.S., 2010. Strategic management and competitive advantage: Concepts . Englewood Cliffs, NJ: Prentice hall.
  • Teece, D.J., 2010. Business models, business strategy and innovation. Long range planning , 43 (2-3), pp.172-194.
  • Grant, R.M., 2016. Contemporary strategy analysis: Text and cases edition . John Wiley & Sons.
  • Vogel, D., 2010. The private regulation of global corporate conduct: Achievements and limitations. Business & Society , 49 (1), pp.68-87.
  • Chen, T.B. and Chai, L.T., 2010. Attitude towards the environment and green products: consumers' perspective. Management science and engineering , 4 (2), p.27.

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