Virgin Mobile Case Presentation

Case: staring(a) Mobile USA 1 Synopsis pure Mobile USA, as a new entrant into the US radio receiver returns market, aimed to acquire one million subscribers in a year. The fraternity chose to focus on a niche market: consumers in their teens and twenties. The company also was wondering or so its pricing scheme: -- Fol downcasting the typical pricing structure in the persistence, -- Or adopting a new pricing structure which gets liberate of contracts, unknown fees, and bucket plans, and implys pre-paid plans? 2 1 What are the threats to industry positiveness? 3 Industry Analysis Competitors: displace markets with half dozen national service providers (AT&T, Cingular, Verizon, etc) -- no single provider croup control more than 25% of the market (Exhibit 1). Buyers: -- The main(prenominal) ingredient with consumers preceding(prenominal) 30 has reached maturity with a perceptivity rate of astir(predicate) 50%. -- Penetration into the niche se gment with consumers aged 15-29 was very much offseter. However, it did not attract many providers wedded that such consumers typically do not have commendation history. -- Buyers do not have much bargaining force but their expiation is low. 4 2 Industry Analysis (Contd) Suppliers: Cell bound manufactures collaborate with service providers to bundle phones and service plans.

Distribution short letter (outlets, electronic stores, etc) have large bargaining power and typically require for $100 commission per phone. Entrants: Threats from new entrants are low given that the market is very crowded and network personalized effects are significant. Substitutes: There are no steady-going substitutes to wireless phone ! services. Conclusion: the key threats to industry profitability include fierce competition, consumers dissatisfaction on pricing structure, and high customer accomplishment costs (roughly $370 including distribution commission, handset subsidy, and advertising). Therefore, the key problem for Virgin Mobile is to deal with these three problems. 5 What is the logic for the industry pricing...If you exigency to get a full essay, vow it on our website: OrderEssay.net

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