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Category: Business and Industry

Date Submitted: 09/30/2012 10:27 PM

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Situation Analysis

I. General Environment and Company.

The mobile communication industry in the United States is intensely overcrowded. In the year 2001, the mobile communication industry was considered to have reached maturity. The U.S had six national carriers and some regional and affiliate providers however, the congestion, customers between the ages of 15 to 29 were significantly small in representation in the mobile communication industry.

The national carriers and the affiliate providers still made no efforts to increase their subscribers between the ages 15 to 29, and Virgin Mobile USA business strategy is capitalization on underrepresentation. The two key reasons for not targeting this segment for big mobile carriers is that young consumers often have poor credit scores, which possibly results in not passing the required credit check and that young consumers are not frequent cellphone users. Hence, acquiring youth consumers is irrelevant.

Virgin Mobile USA’s target segment selection is an excellent choice considering the fact that a good number of them youths have the means to pay but lack the qualification required by the larger carriers. One the other hand, a setback in targeting this segment of individuals is not having consistent customers since Virgin Mobile USA’s phone plans are not based on strict contracts. For the company, not being able to guarantee constituent usage could possibly not generate the necessary profit the Virgin Mobile USA is targeting, which could also be the reason why for the larger mobile carriers are not targeting the youths.

II Company’s Strength: Virgin Mobile USA

The Virgin Brand focuses on fun, honesty, and great value for money for its customers. Virgin Mobile USA’s views this as key in capturing the target market wants. The company embarked on developing a service that not only will appeal to youths in the preliminary stages of subscribing, but also to generate usages and create customer loyalty in...