Virgin mobile Essay Example | Topics and Well Written Essays - 2500 words

Virgin mobile - Essay Example This assignment entails analyzing the macro-environment of Virgin Mobile UK to come up with the issues affecting its strategic decisions. Political Factors: the financial performance of a country is adversely affected by the corporate tax rate. In the period between 1999 and 2007, the UK’S corporate tax rate was 30%, much higher than that recorded between 2008 and the present. (Trading Economics, 2014). This resulted into depletion of the profit margin of virgin mobile between 1997 to 2007 despite the company trying its best to remain profitable. The company targeted prepay customers who were within the age group of 18-35 years. It gained mobile phone subsidies that allocated them a payback of three months as opposed to a contract of three years. This was advantageous for the company evident through the increased profit margin that was evident for the company. There are other political factors that influenced the Telecom industry in UK that in turn affected the strategic decisions of Virgin mobile. They included: The political scenario existing in the country enables an environment full of deregulation. As a result, the level of competition in the UK telecom industry has increased in a significant margin. The buyers’ bargaining and negotiating power has increased due to the increased competitive environment. The UK’s mobile market is also expected to face high competition from other telecom companies in other countries within Europe due to the deregulation in the EU front. The company has made predictions that the political factors in the telecom industry in UK are expected to favor the company in the upcoming years. In turn, their customer base will increase significantly increasing the turnover of customers. Virgin company has proven to be the most formidable and dynamic company in the telecom industry in UK (BBC, 2003). Economic Factors: