Applied Corporate Strategy: Vodafone's Acquisition of European Liberty

This case study explores Vodafone's successful acquisition of European Liberty and its corporate strategy. It discusses the external environment, industry competitiveness, internal analysis, and evaluation of the strategy.

APPLIED
CORPORATE
STRATEGY

Table of Contents
INTRODUCTION...........................................................................................................................3
MAIN BODY...................................................................................................................................3
External analysis.........................................................................................................................3
Internal analysis .........................................................................................................................6
Evaluation.................................................................................................................................10
CONCLUSION .............................................................................................................................12
REFERENCES..............................................................................................................................13

INTRODUCTION
Corporate strategy is defined as the strategy which are undertaken in order to manage and
improve the working of the company to a great extent. This is particularly essential because of
the fact that if the strategy will not be good then the company will not be able to manage the
working of the company in profitable manner. Thus, the current study will outline the case study
wherein Vodafone acquires European Liberty and makes sure that the strategy of acquisition is
successful. The current report will outline the external environment and the industry
competitiveness. Also, it will discuss about the internal strength and weakness along with the
resources and capabilities of the organization. In the end the evaluation of the strategy being used
will be made to ensure that whether the strategy will be successful or not.
MAIN BODY
External analysis
For the successful running of the business it is very essential for the business to have an
eye over the external environment. The external environment is the one in which the company
operates and runs the business. This external environment is frequently and ever changing and
this affect the business in great manner. If the changes are positive, then it is good for company
and if not then the company will not be profitable. Thus, for this the major tool being used by
Vodafone is the use of the PESTLE analysis which is discussed as follows-
PESTLE
Political Factor- Political factor are all about what about of the influence is there of
government in different decision making of company. There is good political stability in the UK,
which is a very positive sign for the company in the long run (Perera, 2017). At the same time
political decision like Brexit in the market has created good sort of the Threat for all the
company operating in telecommunication industry. Biggest reason behind the same is identified
that Brexit in the market has created a good sort of uncertainty in regards of the variety of the
different type of the decision to be taken in the organization to cope with the restriction which
will be brought by the Brexit in regards of operating between UK and European nation.
Economic factor- Economic Factor generally includes the factor such as economic
growth, interest rate and exchange rate. Looking at the interest rate and inflation rate it can be
said that they are very favourable which help telecommunication company in getting the finance

easily. At the same there are many different factor which are creating a good sort of the threat for
the company as rate of transportation and water is increasing at a rapid rate these has eventually
open up a threat for the company in the context of increasing cost of the company in long run
(Achinas and et.al., 2019).
Social factor- Social factor generally used to look at the different belief and attitude of
the individual toward the product. Social factor used to open up a good opportunity for different
telecommunication company. As need and preference of different consumer used to change on
regular basis so it used to open up a good opportunity in front of them to develop more customer
friendly product to attract the eye of different consumer toward the product of the company.
Technological factor- This factor used to consider impact of technology change on the
industry. Technology factor used to open up good sort of opportunity for the company in the
long run (Rastogi and Trivedi, 2016). As there are many different new type of the technology
available in the market, selecting correct type of technology in the organization used to help the
company in getting the competitive advantage in the telecommunication industry .
Legal factor- Legal factor looks at the different impact which is brought on the
organization performance due to different legislation (Lewis, 2017). This generally used to open
up a good sort of the threat for the company operating in the telecommunication company as due
to implication of Brexit there will be good sort of the change in the legal laws of the company in
the long run. For the same reason it will open up a threat for the company in understanding the
law and planning variety of the thing accordingly.
Environmental factor- Environmental factor are the one which looks at how
Environment of the nation influence different decision in organization of telecommunication
industry. These generally open up a good opportunity for different organization as all the
consumer are more diverted toward the company who used to follow up a good ethical
consideration. As a result organization has to make sure that they used to compile all the activity
with the Environmental factor which will help them in seeing good sort of the consumer in the
market and will help the company in getting competitive advantage (Chen and Cheng, 2019).
Porters 5
Industry analysis- the company operates in the whole industry and not in isolation and
because of this it is essential for the company to analyse the trends going on in the whole
industry. This is essential because if the company goes in opposite direction in which the

company is going then this will create a wrong implication over the working of company. For
this Vodafone uses the model of Porter five forces model which is discussed as follows-
Threat of new entrant (Low)- These sort of threat is very low in the telecommunication
industry as entering into this sort of the industry, requires a good sort of the financial investment
to be done by the new organization, these eventually used to increase the cost and capital
requirement of the company (Mudambi and Puck, 2016). As a result there are many few number
of the new entrant who used to enter into the new industry these used to eventually lower down
the amount of the new entrant entering into the new market.
Threat of substitute (Moderate)- There is no as such direct substitute of
telecommunication product in the market. So it can be said that there is very low level of threat
from the substitute product of the company. At the same time there are some social media
platform which also used to provide the services of calling and SMS at cheaper rate these used to
create some of the issue. So it can be said that threat from substitute product is very moderate.
Bargaining power of supplier (Low)- Looking at these threat it has been identified that
there is very low level of the power in the hand of the supplier in the nation. Reason behind the
same is identified that there are many different type of the supplier which can provide the
services to different telecommunication company. This has eventually reduce the amount of the
power from the hand of the supplier in the market in the long run.
Bargaining power of buyer (High)- Looking at the bargaining power in the hand of the
consumer it has been highlights that this threat is high in the market (Ounga, 2017). As consumer
has a good sort of the alternative to choose one out of them in the industry. This has eventually
created a good sort of the power in the hand of the consumer in the market and has created high
impact of these sort of threat in the market.
Competitive rivalry (High)- There are many different type of the organization who used
to operate in the telecommunication industry of the UK. These has eventually created the issue of
high level of the competition in the market (Vodafone acquisition detail. 2019). These eventually
impact the different company to operate in the industry, reason behind the same is identified that
organization has to adopt the variety of the different type of the strategy in the organization
which may help them in getting the competitive advantages in the long run. It can be said that
these is a oligopoly industry in which few competitor at the top used to run the whole industry as
a whole.

Internal analysis
The internal environment is the type of environment in which the company works and
operates. It is very essential for the company to operate in good internal environment and this is
necessary because of the reason that if the internal environment will not be good and cordial then
the employees will not work in proper and effective manner. Thus, for this the analysis of
internal environment is also essential and is undertaken in following manner-
Resources-
Human Resource: Vodafone used to have 93,000 employee in the organization
throughout the globe. These sort of the Human resource availability throughout the globe used to
help the company in carrying out the different activity that easily in the market. After acquisition
with European Liberty Global Assets, Human resources of the company has seen good sort of the
advancement as employees of European Liberty Global Assets, will also be join by the
Vodafone. There were 20,600 employee of the company now all of them will be working with
the name of Vodafone on their Chest. So it can be said that Human resource is strength of
company (Vodafone Annual report. 2019).
Infrastructure Resources: It is another strength of the company as Vodafone is having a
good number of the market area coverage with establishing different stores by their own through
out the globe as in the past the company was having there stores in 18-20 nation in the market
but with acquisition with European Liberty Global Assets Vodafone now used to operate in the
24 nation through out the globe. This is one of the strength of the company. In the current
scenario company infrastructure includes in total 7700 stores (Mudambi and Puck, 2016).
Technological Resources: It is another strength of the company as it has been identified
that the company uses a high quality of technical resources to carry out variety of different type
of the operation of the business. It generally used to help the company in seeing good sort of
customer interest toward the product of the company. So it is one of the biggest strength of the
company.
Goodwill: It is another important strength of the company as it has been identified that
with the help of the good sort of the operation of the company, organization is able to build good
sort of organizational image in front of the other. This has eventually helped the company in
improving the customer base of the company and also build good loyal customer base in the
organization. This has proven as one of the strength of the company in the long run.

Natural Resources: Natural Resources usage is one of the biggest weakness of the
company in the long run. As it has been identified that there are many different type of natural
resources which is used by the company to carry out the operation this eventually used to
increase the burden on the company. As Natural resources scarcity is not any new sort of the
issue in the UK. For example: Vodafone used to consume 5541 Gigawatt of energy a hour.
Competences-
Value Chain
Primary Activity Operation:
Operation of the
company in one of
the biggest strength
of the company in
the long run. As
different operation
of the company are
very synchronized
in the organization
which eventually
used to help the
company in
improving the
efficiency of
different task which
are carried out in
the organization.
Acquisition of
European Liberty
Global Assets will
eventually help the
company in
Marketing and
sales of
company: It is
another
important
activity of the
company and
also can be
recognized as a
strength of the
company. As it
has been
identified that
organization
used to use good
number of the
marketing tool
and platform to
promote the
product of the
company in the
market. Which
will help the
Outbound
logistic: It is
another
important
competency of
the company in
the long run. As
company is
having good
distribution
channel (Vargas-
Hernández and
Garcia, 2019).
As organization
used to sell the
product by both
the type of
distribution
channel i.e.
Direst channel,
in which service
are sell by 7700
store of
Inbound
logistic:
Vodafone has
build a good sort
of inbound
logistic in the
market. As
company has
good relationship
with the supplier
in the market,
these has
eventually helped
the company in
building good
inbound logistic
in which
organization.
This eventually
has helped the
company in
seeing good sort
of the support at

improving the
transportation
function of the
organizational
operation.
company in
seeing good
number of the
customer in the
market.
company and
Indirect channel
in which product
are sold with the
help of different
retailer.
the time of
converting the
services into end
services.
Secondary
activity
Procurement: It is another important competency of the company. As
Vodafone generally used to procure the variety of the different type of
technology to develop good product in the organization. Also,Vodafone
used to acquire the variety of the different type of organization in the
organization to improve their connectivity.
VRIO
Competencies Valuable Rare Imitable
Outbound logistic It is valuable as it help
company in delivering
the product of time
It is not that rare as
other company are
also having same.
It can be imitable
Operation (Core
Competencies)
It is most valuable
for competencies, as
Vodafone used to
manufactured the
best quality of the
product in the
market, which help
the company in
building good and
loyal customer base
in the long run of the
business. Also deal of
19 billion with
Operation of
Vodafone is very
rare. Reason behind
the same is identified
that Vodafone used
to operate in such a
wide area that it
becomes very rare
for the other
organization to
operate in the same
way (Gottfried and
et.al., 2018). As
It is very difficult to
imitate the operation
of the company as for
doing the same all the
organization will
require a good sort of
the financial
resources as
Vodafone used to
operate at really big
market.

European Liberty
Global Assets will
help the company in
improving the
efficiency of
operation as well. As
variety of new
resources will be
added.
company used to
operate in 24
different countries
and is leader
telecommunication
company in the UK.
No company other
than Vodafone used
to operate at such a
big scale.
Marketing and sales of
company
It is very valuable as
help in attracting
customer
There are many other
organization who also
uses different
marketing tool
It can be imitable very
easily in market.
Inbound logistic It is valuable as help
company in seeing
conversion of service
into finished service.
It is rare competency It can be imitate with
some sort of efforts.
Procurement Procurement help
company in increase
value in term of
infrastructure
It is rare competency Also very difficult to
imitate.

Evaluation
S
T
R
E
N
G
T
H
OPPOUTUNITY THREAT
One of the strength of company is
infrastructure resources as acquisition has
helped the company in improving
infrastructure of company. At the same time
there is good opportunity in front of company
to satisfy need of customer by satisfying there
need in the market (Chen and Cheng, 2019).
Another strength of the company is the
operation of the company in the market, at the
same there is good opportunity to have a
technology. This both will help the company
in improving quality of operation.
Increasing transportation cost is one of the
biggest threat in front of the company this
threat can be overcomes in the market with
the help of proper distribution channel
which is competency of the company.
W
E
A
K
N
E
S
S
E
S
Extra consumption of Natural resources is
weakness of company this can be overcome in
the organization by compiling ethical
consideration with different activity which will
help in overcoming same issue
Brexit is one of the biggest threat in front of
the company, this threat can become very
impose-full for company as it will restrict
amount of natural resource which is already
threat for company.
Strategy which was adopted by the business was to betterment the distribution channel to
overcome issue of increasing cost. European Liberty Global Assets. Safe Analysis of the
Strategy in as follows:

Suitable: This strategy of the company is suitable for the company as it will help the
company in touching the larger number of the consumer in the market, this will help the
company in improving the availability of the consumer. As will help the company in touching
the larger number of the individual in the market in a long run. Another reason of suitability is
that it will help the company in increasing network as many consumer are facing network issue
as well (Vargas-Hernández and Garcia, 2019).
Acceptability:
 Customer, will be getting the better service experience due to this strategy in the
organization will eventually help the company in seeing the good positive response from
the customer in the market in the long. As efficiency of delivery of the different operation
will be improve due to this strategy.
 Supplier, Old supplier of the company might see it in the negative way as it will create
the situation in which Vodafone is taking help of more than one supplier which will
create such type of issue in the organization.

 Owner of the company will take it in a positive way as this decision of the company in
the market will help the owner of the company in improving the goodwill of the company
in the long run of the business.
Feasibility: For achieving the current strategy of the company in the market. Company
has to make sure that they used to invest good sort of Human resource in term of the individual
who can work on the field and also has to invest good sort of financial resources to develop a
infrastructure in which delivery of different product can be done very easily (Mudambi and
Puck, 2016).
CONCLUSION
The above report concludes the internal and external analysis of the company with the
help of the PESTLE, PORTERS, VALUE Chain and VRIO analysis. After that the report
concludes the Strategy which company is looking to bring in the organization and on the basis of
the same concludes the evaluation of the same strategy for the organization.

REFERENCES
Books and Journals
Perera, R., 2017. The PESTLE analysis. Nerdynaut.
Achinas, S and et.al., 2019. A PESTLE Analysis of Biofuels Energy Industry in
Europe. Sustainability. 11(21). p.5981.
Rastogi, N.I.T.A.N.K. and Trivedi, M.K., 2016. PESTLE technique–a tool to identify external
risks in construction projects. International Research Journal of Engineering and
Technology (IRJET). 3(1). pp.384-388.
Lewis, R., 2017. Porter's Five Forces of competitive advantage.
Chen, Y. G. and Cheng, J. N., 2019. A STUDY INVESTIGATING
TEACHERS'COMPETITIVENESS-MICHAEL PORTER'S FIVE FORCES MODEL AS
THEORETICAL BASIS. Academy of Educational Leadership Journal. 23(2). pp.1-18.
Mudambi, R. and Puck, J., 2016. A global value chain analysis of the ‘regional
strategy’perspective. Journal of Management Studies. 53(6). pp.1076-1093.
Ounga, S., 2017. The Effect of Value Chain Management Strategies on Competitive Advantage:
The Case of Bamburi Cement (Doctoral dissertation).
Mudambi, R. and Puck, J., 2016. A global value chain analysis of the ‘regional
strategy’perspective. Journal of Management Studies, 53(6), pp.1076-1093.
Vargas-Hernández, J. G. and Garcia, F. C., 2019. The Link between a Firm´ s Internal
Characteristics and Performance: GPTW & VRIO Dimension Analysis. REBRAE, 12(1),
pp.19-30.
Gottfried, O and et.al., 2018. SWOT-AHP-TOWS analysis of private investment behavior in the
Chinese biogas sector. Journal of Cleaner Production. 184. pp.632-647.
Online
Vodafone acquisition detail. 2019 [ONLINE] Available through <https://www.ig.com/uk/news-
and-trade-ideas/shares-news/vodafone-liberty-global-deal—what-you-need-to-know-
190412>.
Vodafone Annual report. 2019 [ONLINE] Available through
<http://media.corporate-ir.net/media_files/IROL/77/77862/annual-reports/
annual_report19/downloads/Vodafone-full-annual-report-2019.pdf>.