Scenario:
You are managing an Azure Virtual Machine (VM) that hosts a critical internal application used by your company’s employees. Recently, users have reported intermittent connectivity issues when trying to access the application. The VM is configured within a Virtual Network (VNet) and is part of a subnet that also includes other resources. Despite no recent changes to the VM’s configuration or the network setup, the connectivity problems persist.

Blocker:
You have checked the basic VM health metrics, such as CPU and memory usage, and they appear normal. However, the network latency and packet loss have increased, causing the application to become unresponsive at times. There is no clear indication of what is causing these networking issues.

Question:
What steps would you take to diagnose and resolve the network connectivity issues affecting the Azure Virtual Machine?