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A Strategic Analysis of Virgin Mobile South Africa
Group Assignment 1
31. Introduction 32. Company background 43. The business landscape 43.1 Porter's 5 forces 43.1.1 Competition from substitutes 53.1.2 Threat of entry 53.1.3 Industry rivalry 63.1.4 Bargaining power of buyers 73.1.5 Bargaining power of suppliers 73.2 A sixth competitive force - complementors 84. Resources and capabilities 84.1 Resources 84.1.1 Financial Resources 94.1.2 The Virgin Brand 94.1.3 Technology 94.1.4 The Virgin communications network in South Africa 94.1.5 Government license 104.2 Capabilities 104.2.1 Marketing and Sales 104.2.2 Leveraging the Virgin network 104.2.3 Buying Power 114.2.4 Research and development 115 Analysis of VMSA's resources and capabilities 136 Strategic Options and Recommendations for VMSA 136.1 Development of own network and infrastructure 146.2.1 Government Relations 146.2.2 CellC Buyout 156.2 Diversification 167 Conclusion 178 References IntroductionThe Virgin brand is one of the largest global brands in the 21st century. This report will analyze Virgin Mobile South Africa's current and future sources of competitive advantage by examining internal factors such as the company's resources, and external factors such as competitors and marketplace conditions. Recommendations will then be presented to leverage and optimize our resources and best align our capabilities with external opportunities and threats by identifying future optimal strategic options for the South African Group.Company backgroundThe Virgin group world-wide consists of over 200 different companies, employing in excess of 25,000 people and earning revenues of over US$7 billion per annum. The Virgin group has become synonymous in business circles with strategic diversification, with Virgin being involved in industries including soft drinks, airlines, trains, internet access, music, mobile phones, wines and even bridal wear.Founded by Sir Richard Branson in the 1960's, the Virgin brand is one of the company's key assets. Branson's outlandish and alternative approaches to business have become famous (and infamous) in most business circles. He has attempted to foster and maintain a spirit of entrepreneurship in a large company environment, and continually seeks to challenge established businesses and industries by entering existing markets in new and innovative ways. Branson's strategy thus finds a natural complement in the industries that Virgin has entered in South Africa. Most of the industries - airline, mobile and finance - are characterized by a history of heavy regulation, with the existing competitive environment consisting of a few large incumbents that have enjoyed exclusivity for a number of years, enforced by government-backed regulation. With South Africa's communications industry being characterized by a drive towards deregulation,...