I. Summary of the Facts
Virgin is a U.K-based company led by Sir Richard Branson and is one of the three most recognized brands in Britain. The company has a vast history of brand extensions – one of which is their launch of a wireless phone service in the USA (McGovern, 2007).
The youth segment, aged 15 to 29, remains largely untapped in the US market and is projected to grow steadily in an otherwise mature market. These consumers have been ignored due to their low credit history. However, the segment is more open to expensive value added features like text messaging, downloads, ring tones, face plates, etc. and Virgin identifies this segment as its target segment. It hopes to differentiate itself on uncomplicated pricing structures, superior customer service standards and a no need for credit checks (McGovern, 2007).
Virgin has decided to enter the US cellular phone market as a MVNO through a joint venture with Sprint PCS, one of the leading operators. It hopes to focus on competitive pricing, innovative marketing and distribution solutions, value added services and superior customer service (McGovern, 2007).
SWOT analysis
Strengths
• Values of the Virgin brand [Globally recognized brand name]
• Pro-active and quick to act
• Good at understanding and meeting customer needs
• 50-50 joint venture with Sprint [no need for a physical infrastructure]
• An exclusive marketing agreement with MTV, VH1, and Nickelodeon
Weaknesses
• Limited advertising budget
• Having a no contract means that there is a chance higher churn rates.
Opportunities
• Penetr ...