Example – Virgin Media Applying Michael Porter’s Five Forces

Virgin Media is top UK based communication industry which is a major part of Virgin group of companies. Virgin Media is one of the top and largest media companies which offer broadband, mobile telephone services, television services and land line telephone services through its fibre-optic cable network to more than 10 million customers with 13,320 employees across the UK, and almost £4 billionturnover. Its registered headquarter is in New York, USA and operational headquarters in Hook, North Hampshire, United Kingdom. Formerly it was known as NTL: Telewest (merging of NTL with Telewest Global) and further merging with Virgin Mobile UK in 2006, it became first quad paly media industry providing all services from one place.

Virgin Media is the first company in the UK offering TV,broadband, mobile and landline all from one place. The main services of virgin media are:

TV cable, with all top viewed channels; around 3.4 million subscribers

Superfast Broadband up to 50MB internet access; behind TalkTalk and BT of 22.2% market share

Phone packages with cheaper cost; from 1 April 2010, it began to offer free home phone to mobile calls

Mobileservices (contract and pays you go) with over four million subscribers

Virgin Media is very rapidly growing communication industry in the UK just because of its technological improvements and innovation by providing all that communication services more than customers’ expectations and preferences. Virgin Media is UK’s most advanced TV service provider by firstly launching a high definition TV (HDquality) and high specification, HD V+ personal video recorder. Currently Virgin Media is only operating in the UK through its Hook headquarter. It is listed on the NASDAQ stock exchange.

Based on these forces the analytical report of Virgin Media is illustrated as under:

Force 1: The Degree of Rivalry:
The first force to be considered while determining the company’s strategy and movementtowards profitability and success is measurement of competition level with the same products and services in the current market. It refers to the same line product competitions which also offer the same products or services as we are offering to the ultimate customers.

In the case of virgin media the rivals are BT, TalkTalk, Vodafone, 3 networks, sky, orange, O2 and so on. There is extreme levelof completion in the sector of communication and media industry in the UK. Virgin media being an established and well-known brand image offering all communication services (TV, Mobile and broadband) from one place and large scale of industry owns the best choice of the customers and is in favourable condition. Its high definition technology and innovation all the time differs from all competitorsto the top.

According to the latest survey, the position of Virgin Media among its competitors is mentioned as under:

In the case of TV: 1st position, 55% of UK households are using Virgin
In the case of broadband: 3rd position 22.2% market share
In the case of Landline: 2nd position after BT.

After seeing all above facts and figures, there is a high level of completionfrom its rival companies especially from BT, Talk- talk, and sky. The best way to get rid from these competitors and to get competitive advantage, Virgin must apply contentious change in technology and should offer new and new services to the customers. To get competitive advantage in this situation Virgin Media can apply the following strategies:

By changing prices: Lowering the pricesregarding offering services than its competitors can motivate new customers to join with Virgin and it also help to retain the old customers.

By differentiating: Differentiating on offers and service facilities than other rivals can get competitive advantages. It includes advancement in technology, adding and improving some features, implementing innovation, etc.

Creativity using in channel...