Business Challenges in Expansion

This assignment explores the various challenges companies face when expanding their operations into unfamiliar geographic locations. It delves into factors like legal regulations, cultural differences, and market competition that can hinder growth. The analysis utilizes PESTLE and Porter's Five Forces frameworks to provide strategic insights for overcoming these obstacles and achieving successful business expansion.

BUSINESS ORGANISATION

Table of Contents
INTRODUCTION...........................................................................................................................1
Background of Vodafone.................................................................................................................1
Business Environment.....................................................................................................................2
Application of analytical approaches...............................................................................................6
CONCLUSION................................................................................................................................7
REFERENCES................................................................................................................................9

INTRODUCTION
In today's world, it is essential for every single firm to understand and analyse the
marketplace of a country where it is looking forward to expand the business. A multinational
organisation which has been taken under this project i.e. Vodafone that is aiming to enlarge its
business in Canada. Initial phase of this file will show problems of environment that corporations
faces while opening new stores in fresh market (Coghlan and Brannick, 2014 ). Issues like
unknown competition, non familiar policies of government of Canada, managing employees and
many more can come across while spreading out business. In regards to this, some techniques
like PESTLE analysis, Porter's five forces and etc. can be utilised by manager by which
favourable conditions can be made.
Background of Vodafone
Company was found in the year of 1980 and at that time its name was Racal Electronics.
Than in, 1991 it got changed as Vodafone. Last year the revenue was generated by this
telecommunication firm was £47.631 billion. Away from this net income was almost in amount
of £(6.297) billion. Vodafone's headquarter is in London. Firm is already its services in more
than 50 countries where it is partner of network along with this, it owns and runs systems that are
related to network in 26 nations. Asia, Europe, Oceania are some of regions where Vodafone is
delivering its services in a proper way. As this company's market share is big enough all over
Europe thus economical growth of country also gets affected when any changes this organisation
faces.
At current moment, Vodafone is looking forward to expand its business in Canada as
well. In order to do this, it is important for this firm to analyse business market, taste of clients
and other related environment so that enlargement can be done without facing any sort of issue
or problem. Vodafone has made telecommunication related network with innovations for their
clients so they can use whenever and wherever they want (Kopnina, 2016). Along with this,
organisation has also made many electronic items like internet dongle, mobile phones, broad
band services, IPTV and so on.
Size of Vodafone: Vodafone has almost 111,556 employees that are serving to consumer
24*7 all over the world. Apart from this, they have approximately 3000 multi stores worldwide.
In Canada, people likes to use high speed internet with minimum cost price of services. Thus,
1

management of Vodafone can easily get familiar with market of Canada as they gives best
services to their consumers with minimal cost.
In the year of 2017, Vodafone held a market share 22.6 percent in United Kingdom in
mobile sector and 51 percent in Africa which is also rapidly increasing in all over globe
(Cummings and Worley, 2014). Apart from this, quality services to consumers as per
requirements of their clients directly puts impact on profitability and productivity.
Structure of Vodafone: This firm is one of the biggest multinational telecommunication
that is providing services to consumers that are related to network. Wireless connections with
high speed internet are type of services which most of consumers look forward to get. Here,
Vodafone is providing same which is aiding them to expand their business operations. If they
wants to build their goodwill in Canada it is essential for them first to understand their
requirements and modify in their services that they were giving to other countries as every single
nation has its own sort of culture. Perceptions of people gets changes from area to area. Haris
Broumidis is the Chairman & CEO of Vodafone, his objective is to bring changes in their
products and services that they are providing so that it can be utilised in proper sort of manner.
Current operations of Vodafone: In current scenario, Vodafone has already covered
most of areas by its network and have its clients in all world. From small village to urban areas
its telecommunication services are being utilised by customers in a vast manner. They have also
made internet application for their consumers through which they can choose internet packs,
change rate of calls and can pay their bills and so on (Lawrence and Weber, 2014). Firm has
also brought some innovative ideas of doing promotion of their services with a character named
as ZooZoo. With the help of this, they grabbed the attention of most of people all over world.
Business Environment
In United Kingdom, IT and electronic sector is already developed in a great way. As
people of this country mostly likes to use new technological products from time to time. Thus, it
becomes essential for companies to manufacture goods with innovative ideas so that competitive
advantages can be gained. Away from this, as per examination it has been concluded that
Canada's market is also same in nature just like UK. Henceforth, Vodafone will not get into
much trouble in formulating a plan in regards to open stores in Canada. Here, detailed
information of Canada is given below:
2

Economical environment: Canada's economy is much developed than other countries
and is also increasing from time to time. It is the 10th largest GDP in the world. Apart from this,
it comes on number 4 in all over globe when it comes to estimation of natural resources which
was valued in 2016 in the amount of US$33.2 trillion. Away from this, it has been examined that
Canada is different, unique and innovative among other developed countries (Wagner, Beimborn
and Weitzel, 2014). In which its primary sector and oil industries helps in growth of economical
conditions of the country. 0.4 percent increase in GDP rate of Canada has been located in the
year of 2017.
Cultural and Political environment: Canada's political status is much effective in nature.
Self making decisions power has already been given to state ministry by national government.
Uniqueness can be seen through various ways that shows importance of Canada's political
aspects. Away from this, ample number of authorities has been given to supreme court of nation
with the aim of development which is hardly given by any other country. Canadian people have
various rights that gives them opportunities which are related to expressing their thoughts, Away
from this, there are many legal restrictions which can be faced by nation's people which are
related to legal, cultural, political, economical and so on. Situations in Canada are diverse where
government of the country give many opportunities to their people in regards to development of
nation. Company like Vodafone can face problems which are related to technology as Canada is
already advance in technological sector. Thus, issues can be faced by Vodafone while opening
stores as marketplace.
Canada's culture and society is unique as collate to other countries. Nation is raising its
economy in a rapid manner. With the help of this, people gets so many sort of opportunities for
those who are willing to start a new business. It has been examined that both social and culture
can put impact on companies which are trying to expand their business in other geographical
areas. Some of the advantages like heavy anticipation of life, varieties in manpower and etcetera
can be expected. Along with this, Canada's individuals try to do work independently without any
sort of disturbances as they mainly focuses on developing their self respects. By this, both the
person and country can see developments of their own. Most of families stays nuclear in nature
because every single person loves his/her freedom and do not want any sort of disturbance and
support in their lifestyles.
3

Canada is a country in which people likes to live by their own life without getting indulge
with others. This happens because of interdependency (Geppert, Becker-Ritterspach and
Mudambi, 2016). Every single person likes to work on his own and not in groups. Because of
this, competition in between them gets raises thus, this scenario directly puts positive impact on
economical growth of country. In some places, it has been examined that people who have
worked together created many sort of advantages which helped them in making effective
decisions.
Diversity, harmony and tolerance are some of elements that needs to be considered in a
proper sort of manner when it comes to religion of Canada. It has been found that this country
has many cultures and most of area is covered by Catholics. All of the people, with different
cultures lives together and have same rights. People who have Sikh, Hindu, Muslim, protestant
religions are considered who are a part of this country.
Most of business person or job preference people likes to wear a proper suit. Dark and
faded colours are being mostly chosen by these individuals (Alonso-Almeida, Bremser and
Llach, J., 2015). Apart from this, women wears jackets which matches their dresses. People of
Canada feels that these dark colours mostly pushes them towards their work with motivation also
it makes them feel more effective at workplace.
People of Canada looks into various aspects by which they can resolve issues in a
specific time of period. Thus, it becomes vital for Vodafone to find resolutions of problems that
Canadians are going to face at the times of using network of the company. Away from this,
promotions of business can be done through many ways which will give benefits to Vodafone.
Before opening stores in areas of Canada management of Vodafone can use innovative ideas
which will directly influence people who are using network of other companies.
Legal and Financial systems: This is another factor which should be examined in
detailed manner by Vodafone. Canada faces rapid changes in tools, techniques and technologies
it is mandatory for Vodafone to locate them and at the same time formulate plans so that better
results can be gained. Legal system of Canada in different from United Kingdom thus, it will
create some sort of problems which are related to firms policies ( Carayannis, Sindakis and
Walter, 2015). Away from this, structure of tax policy also differs of both these countries.
Therefore, Vodafone have to take decisions which are effective in nature so that profit can be
raised at its maximum level. People of Canada, do not easily get influences at times when it
4

comes to do investments. But, as Vodafone is already a big name in all over world. People will
directly start doing investment which will affect both company and economic condition of
Canada. Apart from this, legal framework of state and national are similar to each other but the
difference is that legal decision at state level are going to be taken by state legal system only and
resolve issues.
These, legal authorities of both of the systems forms out laws, rules and regulations in
regards to development of nation. In Canada, acts are being made while the aim of developing
lifestyle of nation's people (Baker and Niederman, 2014). Some laws are mentioned below: Constitutional Law: This type of law gives opportunity in regards to locate portraying
supreme court's power. Statutes and ordinances: Under this, it gets divided into 3 parts and these are local,
national and state. Common law: In this, people uses this type of law while considering both present and
older values at same time so that better decisions or determinations can be made.
 Administrative law: Administrative bureau is the one which makes laws. It is essential for
them to give proper description and purpose of making rules so that act can get passed.
Therefore, complete study of business environment can be located through various ways
by Vodafone. This will help out Vodafone to take decisions in regards to providing services to
Canada's people. Mainly, they are focusing in giving services by which customer can meet to
his//her satisfaction (Kalowski, 2015).
In some areas of Canada, regulatory bodies has stopped foreign investors that are related
to like commercial fishing, broadcasting, defence, banking, power generation, mining rights,
communication and so on. Government has made a law that shows only people who are of
Canada can only invest their money under these sections. If any firm or outside people are
looking into investing under these sector first they have to take permission from national
ministry with undergoing of some laws:
 Agricultural Foreign Investment Disclosure Act 1978
 International Investment and Trade in Services Act 1976
Away from this, it has been located that Canadian people are mostly looking forward to
remove all the barriers and laws for people who are willing to invest in businesses with the aim
5

of making profit. Along with this, regulatory bodies may give hard competition to outside people
which will directly raise competitive level in Canada.
Vodafone, needs to look into every single aspect which may put both positive and
negative impact on both profitability and productivity of this company (Hair, 2015).
Application of analytical approaches
PESTLE analysis of Vodafone: It has been located that there are ample number of
external factor that can put impact on operations of Vodafone. These elements plays a crucial
part and these are mentioned below:
Political Factors  Vodafone's needs to consider rules and regulations
which has been made by government of Canada while
making decisions in regards to expand its business.
 Continuous application of laws in the company can lead
firm to grow at marketplace.
Economical Factors  Raw materials and other resources cost are high in
Canada thus, Vodafone needs to look through which
cost of services can be decreased in regards to making
profit.
 Tax policy is less rigid of Canada thus, Vodafone have
to locate at changes that government is going to make in
regards to betterment of the country.
Socio-Cultural Factors  People of Canada lives their life with ethics and likes to
make improvements in their lives. Thus, quality of
services and other things needs to keep in mind while
manufacturing products and services.
 People's pocket may or may not allow these firms to
take appropriate decisions.
Technological Factors  Rapid changes in technology may create problems for
management of Vodafone. Thus, it is essential for them
to keep on locating alterations that has been made by
rivals so that better and effective determinations can be
6

made.
 Online application can be made by Vodafone so that
benefits can be gained in a shorter period of time.
Environmental Factors  Keeping resources for future and utilise them in an
appropriate and optimised manner so that business can
get run for a longer period of time.
 Policies which has been made by Canadian Government
can help Vodafone in many ways.
Legal Factors  Canadian laws are different from United Kingdom thus,
it is essential for Vodafone to understand them in order
to run business in a smooth manner.
Porter's Five forces analysis of Vodafone: Threats of New entrants: Regular increase in competition may lead firm to create issues
for Vodafone (Bartunek and Rynes, 2014 ). Bargaining power of supplier: Vodafone is already a multinational company that do not
need any sort of help from any supplier. Bargaining power of buyers: Competitive level is high because Canada is already have
many telecommunication companies therefore Vodafone may face high power of
purchasers. Threat of substitute: Network which is being given by Vodafone to its user usually is
owned by the company only thus, maximum profit can be gained by this firm.
 Rivalry among competitors: Vodafone has many rivals like Ofcom, EE limited that are
giving hard competition at marketplace.
CONCLUSION
From above comprehended report, it has been summarised that there are ample number of
issues or problems which can be faced by companies while establishing its business in an
unknown geographical area. Apart from this, rules and regulations of countries may also create
barriers in expansion of business. PESTLE and Porter's five forces are two factors which can be
7

utilised by management of companies in order to make decisions than can create better
conditions.
8