Virgin Mobile

Internal Factor Evaluation

Critical Success Factors Weight Rating Weighted Score

Strengths

пЃ¶ Strong name recognition from prescription drug users 0.10 4 .40

пЃ¶ Strategic alliances create stronger marketing to consumers 0.08 4 .32

пЃ¶ FDA approval is less time consuming and less expensive for OTC 0.12 4 .48

пЃ¶ Prevention claim distinguishes Pepcid AC from competitors 0.13 3 .39

пЃ¶ Recruiting pharmacist proved successful 0.07 3 .21

пЃ¶ Sales and profit projection encouraged drug stores to actively promote product 0.08 3 .24

Weaknesses

пЃ¶ Over the counter version could drive the price of the prescription down 0.15 1 .15

пЃ¶ Simultaneous studies prove costly 0.05 1 .05

пЃ¶ First to the market may not occur 0.08 2 .16

пЃ¶ Tagamet leading in FDA approval 0.14 2 .28

Total Score 1.00 2.68

External Factor Evaluation

Critical Success Factors Weight Rating Weighted Score

Opportunities

пЃ¶ FDA approval is less time consuming and less expensive for OTC 0.12 4 .48

пЃ¶ OTC market for anacids continues to thrive 0.15 4 .60

пЃ¶ Clinical trials show treatment claim as effective for potential buyers 0.08 2 .16

пЃ¶ BASES II trials show favorable for target users 0.09 2 .18

Threats

пЃ¶ Business revenue estimated lower than target 0.10 3 .30

пЃ¶ Brand awareness from competitors 0.15 3 .45

пЃ¶ Leading Antacid brands have more market share 0.12 2 .24

пЃ¶ Marketing advertisements limited by the FDA 0.09 2 .18

пЃ¶ BASES II trials show prevention claim as not favorable 0.03 2 .06

пЃ¶ Prescription will compete with the OTC version 0.07 1 .07

Total Score 1.00 2.72

Porter’s Five Forces

пЃ¶ Supplier Power - Weak

o Lots of cell phone providers, therefore companies like Kyocera lower prices to contract with service providers.

пЃ¶ Buyer Power вЂ" Strong

o Current cell phone service providers are numerous, which allows for many options for buyers.

пЃ¶ Barriers to Entry вЂ" Weak

o There is nothing that will prevent Virgin from competing to an untapped market.

пЃ¶ Threat of Substitutes вЂ" Weak

o There are very few substitutes available that offer mobile and immediate communication. Alternative like pagers are outdated & this target market cannot afford sophisticated PDA service.

пЃ¶ Degree of Rivalry вЂ" Strong

o Competitors have brand recognition in the US and have the majority of the market share.

Competitive Profile Matrix

Virgin Moblie A T & T Cingular Verizon Sprint

Price 0.30 4 1.20 4 1.20 3 0.9 2 0.6 2 0.6

Brand Recognition 0.20 4 0.80 4 0.80 3 0.6 4 0.8 2 0.4

Advertising 0.15 2 0.30 1 0.15 2 0.3 3 0.45 1 0.15

Multimedia Functions 0.15 3 0.45 1 0.15 2 0.3 2 0.3 1 0.15

Operating Expenses 0.20 3 0.60 4 0.80 2 0.4 1 0.2 2 0.4

Total 1.00

Based on the CPM data, Virgin’s main focus should be primarily price, operating expenses, and brand recognition. The company should spend their money in these areas because it will yield the most return. Advertising and Multimedia functions have already been addressed. Each company will have to compete for market share. Price is an essential component of their marketing strategy, since they are dealing with a younger crowd.

Financial Analysis

Top Competitors A T & T T-Mobile USA

Annual Sales 63,055.00 14,080.00

Employees 302,000 29,000

Market Cap ($ mil.) 256,432.90 0.00

Current Market Data- Virgin Mobile USA, Inc.

Company Type Private (NYSE: VM Proposed)

Fiscal Year-End December

2006 Sales (mil.) $110.6

1 Year Sales Growth (88.8%)

2006 Net Income (mil.) ($36.7)

2006 Employees 442

(Source: Hoovers.com)

Initially, Virgin may have no great profits since they are trying to be the low cost provider. Although they were profitable in the UK, they have no brand