Business and the Business Environment: A Comprehensive Analysis of Vodafone

This assignment delves into the intricate world of business and its dynamic environment, focusing on Vodafone as a case study. It explores the various types of businesses, including public, private, and social ventures, and examines their legal structures. The assignment utilizes PESTLE and SWOT analyses to identify the impact of external and internal factors on Vodafone's operations. It further analyzes the influence of these factors on decision-making processes, highlighting the strategic importance of these tools in achieving business success.

BUSINESS AND THE BUSINESS ENVIRONMENT

CONTENTS
INTRODUCTION...........................................................................................................................................2
LO1..............................................................................................................................................................3
P1 and P2.................................................................................................................................................3
LO2............................................................................................................................................................21
P3...........................................................................................................................................................21
LO3............................................................................................................................................................24
P4...........................................................................................................................................................24
LO4............................................................................................................................................................27
P5...........................................................................................................................................................27
P6...........................................................................................................................................................29
CONCLUSION.............................................................................................................................................30
REFERENCES..............................................................................................................................................31

INTRODUCTION
Business environment comprises of various factors that affect activates that are undertaken by the
company. Study of business environments helps to take better decision and make better plans for the
future (Wetherly, 2014). This assignment is about study of business environment and various types of
business that run in this business environment. It also focuses on the legal structure of public, private
and social ventures. Tools such as Pestle and SWOT are used in this assignment to identify the impact of
external and internal environment facts on Vodafone. This assignment also highlights the impact of
strength and weakness of these factors in decision making. Overall, this assignment provides a good
understanding of business and business environment and their influence.

LO1
P1 and P2
Slide 1

Slide 2

Slide 3
Business Environment
Every Business consists of various factors that influence it, this factors can be divide into external factors
and internal factors. The external factors are political, environmental, economic, social and cultural. The
internal factors are organization structure, financial resources, human resource, product and leadership.
The output of business are result of influence this internal and external factors.

Slide 4
Business can be classified into three different types that are public, private and social. They all have
different objectives and business purpose, and have a lot of similarities and differences.
Public Sector: They are owned by the government and have an aim of public service. They are large in
size and investment and do not aim to earn lot of profit. They are all good employees and thrive for
customer service.
Private Sector: Private sector is owned by individual or group of individuals, and aim to earn profits from
their operations. They provide products or services to the public and provide good quality customer
service.
Social Sector: Social Sector aim to serve a social issue such as women empowerment, child education.
They run from the donation they get and are very important part of society. Different social organization
has different purpose.

Slide 5
On the basis of legal structure business can be classified in six different ways they are:
Sole Proprietorship: this is the simplest kind of business, they are owned by a single individual who
invest and runs the business. The most common examples are local shops and restaurant. The owner is
responsible for profit and loss in the business and they have limited scope.
Companies: Companies are formed when group of individuals come together to run a business activates.
A company may be formed to run variety of business or a single business and a company may be formed
by group of many companies also. Companies in UK are defined by companies act 2006 by legal factors.

Slide 6
A partnership is formed when two or more people invest in a business activity and run that business
activity for sharing of profits. The profit sharing in a partnership is based upon the ratio of investments
that has been contributed by each of the partner. A partnership is formed when the investment that is
required in the business in more than the single individual can afford.
Charity: the definition of charity is different from countries to countries because of various tax related
laws that are forced over this organization. But a charitable trust is has a objective to run for the social
cause and in UK it must be register with the Charitable Commission. This charitable commission is
different for Scotland, England and wales and Northern Ireland.
Franchise: A franchise is a license given by a business owner who wishes to increaser the profit and
market share. The license is given to an individual or group of individuals who wish to run the business
on behalf of the business owner. The people who run the business get advantage of using the brand
name, marketing and other copy rights of the business owner. A franchise is given on behalf of a legal
contract that explains various terms and condition. The examples of franchise business are McDonalds,
Pizza Hut.

Public: Public companies are owned by the government, they are very large in size of investment and
area of service. Most of the companies that are public have a small share of public and private
investment in them by means of share and derivatives. They are defined by Companies Act 2006.

Slide 7
In Vodafone the CEO is the head of the company, and he is followed by different directors and Chief
Officers. This directors and chief officer head their department and they are followed by range of
different heads of nation and states. This is type of matrix organization where various heads and chiefs
are interconnected with each other and running the company.

Slide 8
The organization structure of BT Group can be seen in the figure, the Director reports to the
Telecommunication ministry, he is followed by the operation manger, finance manager and the internal
audit manager. The operation manger has various area mangers under him and MIS managers. The
finance manager has different account managers of regions working under him and the internal auditor
works as an independent department.

Slide 9
OXFAM is governed by the board of directors who is followed by the chief executive. The various other
branches that are under him are children and family, which is divided into four regions. Finance and
corporate service who looks after corporate's affairs and HR. Fundraising is responsible for collection of
donations from various regions and publication is responsible for publishing different materials.

Slide 10
Vodafone is a British multinational telecommunication company who deals with mobile, voice and data.
It is listed in London stock exchange and has its headquarters in London. It started in 1982 and than
grown rapidly. Is known for its excellent marketing and operational skills, is largest market are Europe,
India and China.

Slide 11
Vodafone is a multinational company whose revenue was more than €46 billion which is a dominant
figure in telecommunication service. It has more than 111000 employees working for it throughout the
world, other than this it has many patterns in different countries. The valuation of total assets of
Vodafone was more than €153 billion which includes telecommunication machinery, real estate’s asset
and other liquid and non-liquid assets.
The scope for Vodafone's is that it can expand to different developing African courtiers and other
potential markets. Different cost saving measure can be taken by Vodafone to save the cost of
operations and new sustainable measure can be taken to reduce the carbon emission. It can also
improve its retail service to improve the market share.

Slide 12
BT service is a British telecommunication service provider owned 50% by the government of Britain and
50 % by the stakeholders. The telegram services and post office services in UK was modified and
upgraded to provide internet and mobile voice services. It is spared throughout the network of more
than hundred nations. This is a company that has trust of people of UK since very long time.

Slide 13
BT has reach in over hundred countries throughout the world and it has more than eighteen million
customers in UK only. Las year it was able to collect revenue of £24 billion and it offers wide range of
service such as telecommunication, post office and internet and many more. The scope of its
improvement stands in the process of constant improvement and improved customer satisfaction. BT
Group also tries to constantly upgrade its product and services.

Slide 14
Oxfam is a world knows charitable trust that has its organic in Oxford University, London. It has been
able to show constant growth in past years and has been very influential in the works of charity. The
main aim of Oxfam is to reduce the impact of poverty and improve education. It has also worked actively
in Syria and other war affected zones.

Slide 15
Oxfam operates in more than ninety countries throughout the world and ranked as top ten on list of
charities in England. Is was able to spend an amount of more than £303 million in charity works
throughout the world. Its charity has been focused on poverty elimination, women empowerment and
disaster management.
Out of seven strategic goals that are set by Oxfam for its ten year plan three of the most important were
fund raising , improvement in emergency fund collection and distribution system and to serve more
people though its charitable works.

Slide 16

Slide 17

LO2
P3
Organization structure is defined as the system in which various department and functions interrelate
with each other. It explains task, allocation and ranking system present in the organization. It is very
important to have a flexible and appropriate organization structure as it helps to fulfill the business
objective with fast speed and great accuracy (Rahim, 2017). Vodafone is a British multinational
telecommunication company. It was known to have the matrix type of organization structure (Vodafone,
2018). This type of organization structure helps to take actions fast and make the process of decision
making easy and effective. The business objective of Vodafone is to achieve business excellence and
customer satisfaction through its operation. In fulfilling this business objective the organization structure
of Vodafone plays a very important role.
ORGANIZATION CHART OF VODAFONE AND HOW THE FUNCTIONS INTERRELATE WITH EACH OTHER
The organization chart of Vodafone is as follows:
Vodafone Organization chart
Source: https://www.slideshare.net/agrawall/companies-structure
The CEO of Vodafone is the head of the company he is followed by a group ten senior presidents of the
company (Vodafone, 2018). This president looks after different functionality of the Vodafone like
finance, technology, HR, legal, International affairs and two heads look after the business in different

Europe and Asia. The national heads of this the respective county to this region heads. The national
head has their own regional and sub-regional team for various functions in their regions.
The inter-relation between various departments in Vodafone helps the company to operate effectively
and easily in its region. This also allows creating a better business environment and sharing of ideas. The
interrelation between various departments of Vodafone is as follows:
Operations Department
The operations department at Vodafone looks at various activities that are related to customer care,
telecom system installing and maintenance and office documentation and other works. It is very
important that the operations team work well because it helps to serve the customers better and fulfill
the business objective of Vodafone. The operation department at Vodafone is related to the marketing
department as it helps to serve the customer better and help the marketing department improve it's
effectively (Belvedere, 2014). The finance department at Vodafone helps the operation department
in finding and budget making which improves their overall performance.
HR Department
The HR department at Vodafone is responsible to hire and manage human resource at the company.
The HR department is deeply interrelated with all the other departments of Vodafone. The marketing
department helps to create a good brand image of the company and this helps Vodafone to attract new
and better talent to the company (Vodafone, 2018). The HR department helps to satisfy the need for the
talented human resource in marketing, operation, and finance department which helps to fulfill the
business objective of the company.
Marketing department
The marketing department at Vodafone for customer relations and other customer service activities at
the company. The marketing department helps to the company in customer retention and to acquire
new customers, it helps to gain revenue for the company and improve its brand image. The marketing
department is helping the HR department by gaining the required revenues that are planned by the
company. It helps the operation department by telling them about the customer feedback about the
current status of operation in the company. The marketing also helps to fulfill the business objective of
the company by providing customer service and helping in market expansion.

Finance department
The finance department at Vodafone is responsible to manage funds, accounts, stocks and other health-
related aspects of the company. It helps the company to deal with its international and national level
finances that include currency exchange and tax-related matters. This department helps other
departments by providing them the budget they require and also share financial goals of the Vodafone.
It also provides its advice to the different department about saving methods that can be applied to gain
good results.
Product development and research and development department
The product development and the research department at Vodafone is responsible to design new
products and services (Frankenberge et al., 2012). This department takes helps from various
departments like the operation, marketing, and legal department to develop a product. They help to
provide feedback based on their own expertise and customer feedback that they get. These
departments also help the research department to encourage customers to participate in surveys and
feedback to make the existing products better and more effective (Vodafone, 2018). This interrelation
helps the produce department as the product designed by the product development and research team
is more effective because of overall contribution.
This interrelation between the departments helps Vodafone to achieve its business objective and
function better. This also helps the company to achieve its expansion goals and overcome competition.
Vodafone has been constantly modifying its organization structure and sue to this modification it is able
to survive difficult completion in the telecommunication sector. Some of the best qualities of Vodafone
is its marketing and operation skills, this excellence is also a result of a good organizational structure.

LO3
P4
PESTLE ANALYSIS
Pestle analysis is a framework that is used to find out the influence of external environment on the
organization. The pestle is an anonym that stands for political, environmental, social, technological and
economic factors of the macro environment (Newton, 2014). This analysis is widely used to understand
the current position of the company and the will be the future growth and development. It also helps to
identify uncertainty and the impact of uncertainty on the organization. Pestle analysis of Vodafone will
draft a picture of macro environmental factors of for the company and their impact on the origination as
a whole. It will also help to identify the steps Vodafone can take to improve its current position and the
limitation of its power to exercise change. The pestle analysis of Vodafone is as follows:
Political Factors
Political factors such as Brexit can an impact on Vodafone as most of the leaders that are working in this
company are from different countries of European Union and Due to Brexit new rules regarding
employment can impact their position (light reading, 2017). As Vodafone has a large pool of employees
recruited from different countries of Europe, Due to Brexit their position is also likely to be affected.
Other issues such as movement of goods and services may also be restricted and the London Stock
Exchange may also react in a volatile manner in the coming days, this will impact the position of
Vodafone (Sutherland, 2017).
Telecommunication companies may face an uncertainty due to political risk, as they are regulated by the
government. A new government in any of its operation country can change the telecommunication rules
which may impact the position of Vodafone. Also, the impact of new roaming laws in European Union
may force the company to increase its tariff.
Environmental factors
New customer from the developed and developing nations wants to opt services from a company that is
low in carbon emission. Due to this shift in interest to various customers, Vodafone is forced to apply
environmental friendly policies in its practice. In addition to these governments of different countries
are very strict regarding an environmental issue that is caused by multinational companies (Walden,

2012). If Vodafone is not able to follow this rules then it will be difficult for it to function in this types of
countries and impact its business. Vodafone is also a responsible company with regard to environmental
issues hence it has taken several measures such as the use of renewable energy and reduction in the
number of business trips to control its carbon emission. It has modernized its equipment's to reduce the
carbon emission from them and take a measure like energy audits and HVAC improvements.
Social factors
Social factors such as urbanization and low population growth are likely to impact the position of
Vodafone. Due to low population growth rates in many countries the potential markets for Vodafone is
constantly decreasing also the major markets of Vodafone like Europe is having more number of age-old
persons( Lam and Shiu, 2010). Due to these factors, Vodafone has to take new strategic steps to expand
its reach and revenue in the coming years.
Due to urbanization the scope of growth for Vodafone has increased, it can get new customers without
expanding its service to the new area. Urbanization in the South Asian countries has helped
telecommunication companies expand their market reach. The disposable income that is the amount of
money a customer spends on certain goods and service is limited for telecommunication sector. Due to
this, the total income for Vodafone is limited for its existing customer, hence it encourages its customer
to use post-paid service rather than pre-paid services to measure that it gets a fixed amount of income
regularly.
Technological Factors
The cost of technological up gradation of the existing telecom service such as 4G to 5G and use of optical
fiber can result in increased the expenditure of the cost of the company. The cost to the company will be
very high as the market reach of Vodafone is in many countries. Some other factors such as issues
safeguard of data of customer and issues of hacking of telecom services can result in negative impact on
the Company. Vodafone has to take preventive measure to protect data and safeguard it from hacking
and other problems.
There is also need for the introduction of new technology in telecom sectors such as machine to
machine communication and higher internet speeds the company needs to research and develop new
technologies to implement these changes. Vodafone has its research and development team working on
various other technologies for up gradation, cost reduction and implementation of new products.

Economic factors
As Vodafone operates in more than hundred countries throughout the world it has to pay a lot of
currency exchange rates and charges to convert the profit into its home currency(Vodafone, 2018). Due
to this, it faces a loss in the total profits that it earns. This is also impacted by the changing rates of
currency in the market. It needs to deploy strong strategic planning to control the impact of currency
rate change in the market.
There has been always a risk associated with economic uncertainty in the market, due to this
uncertainty it is difficult for the company to do large investment in the emerging markets of the world
(Baker et al., 2016). This also hinders the profit-making capacity of the Vodafone. The GDP ( Gross
Development Product) of countries of Europe have become flat and have shown a very slow growth
rate, but the GDP of countries like India and other African countries is in the range of 7%-9% which is a
positive factor as Vodafone holds good market share in this companies ( world bank, 2018).
The Pestle analysis helps us to understand the macro-environmental factors and the challenges that are
faced by Vodafone due to them.It clearly identifies the opportunities that are available for it as a
multination company.

LO4
P5
SWOT ANALYSIS
SWOT analysis is done to find out the relative power of strength and opportunity of an organization with
respect to the power of opportunity and threats for the company (Goodrich, 2015). The SWOT analysis
of Vodafone will help us to identify the influenced of its micro environmental factors over the company.
STRENGTH
 Brand Image
 The high number of customers
 Good amount of revenue collection
 Marketing and operation skills
 Capacity to innovate and apply new
technology
WEAKNESS
 Losing number of customer in the USA
 Reducing brand Valuation
 Low performance in Europe
 Reducing the number of customers
OPPORTUNITY
 Rural market penetration
 Product diversification
 Use 5G and optical fiber technology
 Emerging markets
THREATS
 Saturation in the telecom market
 High level of competition
 Low margins
Strengths
 Vodafone is a recognized and reputed brand in all over the world. Is known by many people and
trusted as a telecom company.
 As Vodafone has a presence in more than hundred countries it has a customer base of more
than 444 million customers around the world (Vodafone, 2018).
 Due to a large customer base, Vodafone is able to collect a high amount of revenue due to its
operation each month. (Vodafone, 2018)

 It is known for its marketing skills in the world; Vodafone Zoo-Zoo and The Vodafone Dog are
some of the most famous marketing campaigns in the world. It also has excellent operation
effectiveness, it is able to resolve any issue rapidly (Roy and Das, 2012).
 Vodafone is known for its innovation and research and development in the sector of
telecommunication. This makes it one of the most appreciated innovators in this sector.
Weakness
 Vodafone is losing its customer base in USA market rapidly; this has resulted in an impact on its
revenue collection and brand image.
 From pat three years Vodafone brand valuation has been constantly reducing, it has reduced
from 27.29 billion US Dollars in 2015 to 21.83 billion US dollar in 2017 (statistic, 2018).
 It has been not able to perform well in Europe which is one of its major markets.
 The number of customer of Vodafone are constantly reducing, this is one of the major issues for
the company.
Opportunities
 Vodafone has not explored the rural markets in most of the countries, this is one major market
for Vodafone
 Vodafone has a capacity to diversify its number of products from voice and inter-service to some
other products. It has been diversifying its product by bringing Vodafone mobiles and M-Pesa a
mobile e payment solution (Jack and Suri, 2011).
 Use of modern technology such as 5G and the optical fiber can help Vodafone to develop its
market ( Andrews et al., 2014)
 As it is a stable company is can start its operation in many new emerging markets of Africa
Threats
 Telecom market has come to a point of saturation and there is less scope for growth in this
market with existing products and services
 Telecommunication market has been facing a high degree of completion, due to this the market
conditions have become difficult (Haryadi and Riani, 2018)
 Due to heavy completion, companies have to operate at the very low margin. Which reduces
profit and increase the risk of loss for the company (Haryadi and Riani, 2018)

The SWOT analysis of Vodafone shows that the risk of weakness and threats to the company are
moderate in comparison to strength and opportunities. Due to good strength and a wide range of
opportunities available to the company it has a good scope for expansion and growth.
P6
INFLUENCE OF INTERNAL AND EXTERNAL FACTORS ON DECISION MAKING
Decision making is a process of deriving conclusion out of the present facts and figure and this is a very
important step for the multinational companies like Vodafone (Zsambok and Klein, 2014). The tool such
as pestle and SWOT help to identify various factors and their influence over the company and gives a
direction to the process of taking right decisions.
The political factors have a negative impact on Vodafone for its position in Europe, but this is
temporality in nature and adopting a policy change can help to control their impact. Whereas the impact
of political factors in other markets for Vodafone is neutral and do not affect the company significantly.
Positive steps were taken by Vodafone to reduce carbon emission and ad deep understanding of laws
related to environment suggest that the environmental factor positive for the company and they
support in the growth of the company.
Social factors have a moderately negative impact on the company, in the European countries but if the
company identify new products and services than it will help the company to grow (Lam and Shiu, 2010).
The social factors in the emerging markets have a positive impact on the company growth due to
urbanization and increaser in the youth population. This suggests the company take decision according
to the social factors. The technological factors have a positive impact on the company and suggest the
company to take decisions related to technology up gradation. Due to a good amount of revenue
collection and resource Vodafone can implement technical up gradation and have the advantage out of
it. The economic factors have a negative impact on the company due high currency exchange rate and
flat GDP in European countries, but it has a positive impact on other emerging markets (World Bank,
2018). These suggest the company take actions to balance the negative impact in Europe.
Overall Vodafone has sufficient strengths to overcome the challenges drawn by the negative factor and
they also suggest the decision that is required to be taken by the company. If the company works on
developing strengths and reducing the impact of challenges as well as take steps to take advantage of
positive factors it can grow at a rapid phase.

CONCLUSION
This assignment is about business and business environment and impact of different macro and micro
factors on business. The various type of business that is explained in this assignment helps to
understand how the business environment and change of their influence on business with different
types of objectives. The tools used in this report such as Pestle and SWOT helps to identify the impact of
this factor on the company. The detailed analysis of this factor also helps to identify how these factors
affect decision making. The use of this tool also highlights their strategic importance in the business
environment and the significance for the success of a business. The knowledge and information gained
in this report will be helpful for future perspective and help in career enhancement.

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