GIFFGAFF BUSINESS ANALYSIS

Giffgaff Business Analysis report

Abstract

This report encompasses several aspect of business, from the initial launch of the company to present situation, and with respect to other competitors. This report shows, how the company initiated and captured this much interest of the consumers. It presents the strategies taken to improve the cost structures, particularly activation cost. The strategy of giffgaff of keeping the cost low seems to be working, however, in past some financial difficulties are visible. The company has incorporated several measures in the strategy to curtail that and present payback amount to customers signals the improvement in financial health.Table of Contents

AbstractI

Introduction1

Discussion1

Marketing Strategy3

Pricing Policy4

SIM Card4

Customer Service5

Community provided Applications5

Giffgaff Labs5

Paybacks6

Business Model6

Financial performance7

Competitors Analysis8

Conclusions10

References11

Giffgaff Business Analysis report

Introduction

This report is prepared to assess the business model of the giffgaff operations in UK. It gives an insight into the pricing, marketing and financial strategies of the company. It discusses how the idea of 'pass the savings forward' works for the company and the customers. The UK based Mobile Virtual Network Operator (MVNO), Giffgaff, has the USP that, it is run by its customers. The customers perform the marketing function, provide a solution to other customers, and also design and test new products.

Discussion

The name Giffgaff has its origin from old Scottish term that literally means “Mutual giving”. Its customers are also its customer support and do the marketing, shape products and in a sense run the company.

The UK based company Giffgaff is a mobile virtual network operator having its strong backing from the company O2, formally Telefónica UK Limited. It was launched on 25th November, 2009. Giffgaff is considered an act of corporate entrepreneurism. The O2's Head of Brand Strategy, Gav Thompson, conceived the idea. He was inspired by the Internet platforms like Facebook and Wikipedia. These social websites have explored a new way of getting things done non-institutionally. He wanted to make a mobile network based on the principle of mutuality. A unique mobile network that will reward the customers' community for performing the work that is traditionally done by employees, like, marketing and shaping the products etc.

The analyst worked on this idea, and came up with a plan of forming the Mobile Virtual Network Operator (MVNO), while using O2 network. Giffgaff is owned by O2 , but it is operated as a separate business.

Giffgaff has won many awards, which include Forrester Research Groundswell award and ranked fourth in Headstream's 'Social Brand 100 Report'.

Giffgaff acquired the help of Lithium Technologies to assist them in the making the architect of a community where members' activity could result in mutual benefits of the both parties. The model was finally designed which enabled the Giffgaff to reward the active members of community for running the parts of business including answering questions in the community, helping in promotion of company, attracting new members, or shaping the products. Community members are awarded by virtual praise called Kudos (evaluated personal reputation). The community members are also rewarded through a 'Payback Points systems' (awarded every six ...