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The Direct Control of the Organization - Coursework Example

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The underlying purpose of this analysis is to identify the available opportunities and the existing threats posed by the industry, that are outside the direct control of the organization. The framework that facilitates the macro-environment analysis of a company is PEST framework…
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The Direct Control of the Organization
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Download file to see previous pages As a part of this assignment, the researcher will be primarily analysis the macro-environment of Virgin Mobile UK in view of highlighting the factors that affect its strategic decisions. Political Factors: Corporate tax rate is a factor that affects the financial performance of a company significantly. The corporate tax rate in the UK during the time period 1999 and 2007 was 30% which was considerably higher than the corporate tax rate recorded during the time period between 2008 and present (Trading Economics, 2014). The amount paid as corporate tax depleted the margin of profit realized by Virgin Mobile in between 1999 and 2007 however, the company still managed to be highly profitable.
Virgin Mobile UK targeted the prepay customers within the age group 18-35. It enjoyed the advantages of mobile phone subsidies which gave them a three months payback as opposed to a three years contract. This regulation proved to be immensely beneficial for Virgin Mobile UK and was evident in the increased profit margin for the company. Other political factors that influenced the Telecom industry in the UK which in turn affected Virgin Mobile’s strategic decisions are:
The present political scenario in the country facilitates an environment of deregulation. As a result of that, the intensity of competition in the UK telecom industry has amplified by a significant margin. The existence of a highly competitive environment has also increased the bargaining as well as negotiating power of buyers. Similarly, due to the deregulation from EU front, the mobile market in the UK is expected to face steep competition from telecom companies based in other countries within Europe.
According to the predictions of the company, the political factors in the UK telecom industry will be in favor of the company in the upcoming years.As far as the challenges faced while conducting the internal environment analysis is concerned, word count proved to be the restricting factor in this case as well. The research could not explain the key resources of the company in depth and detail. In addition, other tangible assets that form the part of a company’s key resources could not be incorporated into the analysis. Furthermore, there was no scope for conducting any comparative analysis. A comparative analysis with a competing company could have induced robustness within the research, but the scarcity of data prevented the researcher from conducting any such analysis. The financial performance of the company was also not evaluated properly. However, the same was necessary in order to ensure that having appropriate resources and capabilities did benefit the company as had been mentioned in the case study analysis.               

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