Business strategies of Vodafone

Business
Strategies

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
P1 PESTEL Model and Ansoff growth vector matrix................................................................1
TASK 2............................................................................................................................................4
P2 Internal Environment and Organisational Capabilities .........................................................4
TASK 3............................................................................................................................................7
P3 Porter's Five Forces Model....................................................................................................7
P4 Bowman’s strategy clock model..........................................................................................10
CONCLUSION..............................................................................................................................12
REFERENCES..............................................................................................................................13

INTRODUCTION
Business strategies is a main factor for the success of company so that duties of
management is to apply a plan into their working environment for meeting objectives and goals
in a span of time. Management of the company develop strategies as well as plan in order to
achieve competitive benefits at market place thus increase their market position in long period of
time. O2 is a industry of telecommunications provider in UK. Founder of this organisation is
John Carrington in 1985 (Ackermann and Audretsch, Eds., 2013). The numbers of employees are
employed in this are approx 21,580 in 2013. their main competitors into telecom sector is
Vodafone, BT, EE etc. In this report include Companies PESTEL analysis as well as Porters five
forces model and Ansoff matrix are involved in this project report. Bowmen's Clock model
strategy and Internarial environment of the organisations.
TASK 1
P1 PESTEL Model and Ansoff growth vector matrix
O2 is an best company in the sector of telecommunication. This enterprise is having their
operations in various regions like as UK, India etc. Reason behind their growth as well as
success is that enterprise is able to execute and formulate best marketing strategies. For dealing
with all the market conditions it is needed that macro environment should be analysed in a
effective way. Some of PESTEL analysis are explained in detail below:
(Source: PESTEL Analysis, 2018)
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Illustration 1: PESTEL Analysis, 2018

 Political Factors: Organisation is having a governance framework for guiding their
functions properly as well as performance are complied with regulatory and legal needs.
It takes seriously any future or current risk of environmental, ethical and social nature. Economic Factors: Factors of economic is an very main context within the sector of
telecom enterprises. By competitors, things are dynamically changing within the whole
world. Globally it depends on customers pocket. It customers will spend higher on
services and products (Alsoboa and Aldehayyat, 2013). These trends of economic will
support the changes of technologies. Social Factors: In O2 it is a very strong sense of companies spirit within the
organisation. It gives advices as well as information on risk of potential health of
contributing fully in debate and mobile user. It is operating a research centre for its
effects on persons health and technology of mobile telephone. It also provide advices on
problems like as safety of customers, child protection and leaflets which are explaining
present scientific thinking. Technological Factors: O2 is an first organisation in the globe to roll out as well as
launch a commercial medium speed of GPRS network of mobile data. Organisation
gives connection of 4G by using the technology of LTE which is given by Huawei
technology company Ltd. Company starts trial of near field communication (NFC) in
2007. It has launched Europe's First HSDPA as it is very fast network than 3G. It also
gives various TV channel to mobile handsets. Environmental Factors: O2 Company is an certified telecommunication gives with a
carbon standard of trust due to its commitment to decrease the footprint of carbon. It
provides technology of smart metering within the organisation cell sites, retail stores
and offices (Bentley, Omer and Sharp, 2013). Legal Factors: Organisation is having a commitments of higher ethical standards to
each person who are working within the company. They work in a very systematic to
live in a comply and law within regulatory guidelines as well as voluntary standards. O2
is abided by the standards of international to make sure about the quality of goods as
well as health and safety along with higher management of environment.
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Ansoff Growth Vector Matrix
It is a systematic market analysis approach propounded through professor Vector Ansoff.
There are major four quadrants which consist in the referred report i.e. market development,
market penetration, diversification and product development. It is a sort of action which contain
four criteria that are explained in this mentioned report:
 Market Penetration: These elements indicate the condition of market in which
organisation is operating their existing services in the recent market. In regard of O2
organisation, this can be discussed as the organisation have launched their service and
data in those nation in which they are operating function of business in efficient way
(Cadle, Paul and Turner, 2010). Company is also producing m-commerce through online
activities and media which has delivered more service through the assistance of internet.
(Source: Ansoff Matrix, 2018) Market Development: This sort of scenario help in carrying out the existing product
launching in the new trade or marketplace. O2 is planning to launch their services and
wide range of network across the globe specially in open market nations such as India,
China etc. referring the novel products and market such as mobile data and calling
service which are existing in the current condition of market development (Curwen,
2011). Such sort of market consist of expansion plan of business which organisation are
creating beyond the boundaries of market. Product Development: When an organisation launches a new service in the present
marketplace, then this can carry out new service or product development. As per this, O2
has been working over the development of 5G service in the competitive marketplace as
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Illustration 2: Ansoff Growth Vector Matrix,
2018

this can deliver more efficient and effective service in the competitive marketplace. Also
the enterprise has development a calling services which allow the user convenient PORT
option through satellite touch of organisation. Hence, this can develop a proper new
marketplace and product development strategy in Ansoff Matrix.
 Diversification: It can be referred as the last Ansoff Growth Matrix issues which claims
that when a new service or product is being launched within the competitive marketplace,
diversification situation incur in organisation. In such condition, this is fundamental for
organisation to get success opportunity with a new aspect or concept. O2 has initiated
their business across the United Kingdom and provided numerous different types of
services including, mobile network, calling, smart phones etc. Company provide wide
range of services and products in the competitive marketplace.
As per the mentioned evaluation, this can be claimed that macro environment evaluation
is suitable as this action deliver in-depth evaluation of market situation along with business
environment so that entire decisions of business can be implemented in more suitable manner.
Entire consequences have both demerits and beneficial aspects (D'Aveni, Dagnino and Smith,
2010). Like some, entire limitations and approaches has presents that this is possible that whole
situation of market could be evaluated in most recent conditions as well as cause of these, future
decision can be influenced as well as such actions type can also hamper execution and strategic
formulation in efficient manner. Hence, cause of its effective marketing strategies, the
organisation has been enlisted as market leader in telecommunication industry of United
Kingdom.
TASK 2
P2 Internal Environment and Organisational Capabilities
Strategic Capability
It is a subject matter of enterprise as well as it means successfully applying of whole
competitive techniques in companies operations for enhancement and survive in time as well as
value with increment in reputations.
Management require to have accurate and complete information about system abilities so
that operations are designed in according to market situations. It is essential that appropriate
tactics and strategies are formulated by seniors to improve value of company and its survival for
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longer period of time. Competitive tools, techniques and strategies are used by superiors to
execute activities in effective manner and successful execution of work; thereby enhancing
position and goodwill of Vodafone in marketplace (E. Dobbs, 2014).
VRIO Framework: This concept was developed by Jay B. Barney which defines that
administration of every organisation require to have information about availability of resources
and its usage in different activities. Financial, human, material and non-material are various
forms of instruments that are present with firm. Management need to utilise resources adequately
and take care that appropriate items and services are delivered in market in according to needs
and wants of people.
This tactic includes four components which require to be acknowledge by management
while designing system and forming strategies are Value, Rarity, Imitable and Organization.
Management of Vodafone company uses VRIO framework to assess capabilities of internal
environment and make system function in respect to market situations. These are various aspects
that are specified by management are stated beneath:
Illustration 3: VRIO
(Sources: VRIO strategy, 2016)
Value: This tactic specifies information about numerical quantity or amount link with
resources and its association in respect to execution of business operations appropriately.
Management of Vodafone Company require to have accurate information about usefulness of
resource in according to activities that are executed to provide appropriate things to consumers.
Firm have strong and competent workforce which benefit seniors to accept challenging situations
properly and make system function effectively.
Rarity: This element defines that Vodafone company have resources which are rare and
help management to deliver appropriate items and services in market which are different from
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rivals offerings. Executives have adequate financial resources and assets which help firm to
provide unique and innovative things to consumer to grab attention of large number of people
(Firnkorn and Müller, 2012). In Vodafone, latest tools and techniques are implemented in
system which help seniors to provide quick services and quality things to customers. This help
management to formulate competitive advantage over other firms in same segment.
Imitable: This tactic specifies that organisation require to use resources which are not
easily copied by other persons. Vodafone company has higher market value and image as
business operations are executed appropriately which help management to deliver adequate
things to customers and accomplish targets timely. System is designed in such manner that items
are produced which are difficult for competitors to produce a copy thing.
Organisation: This element define that business person set up firms to generate adequate
profit and income from business. Individuals formulate goals, objectives, vision and mission
which direct management to design system and execute activities effectively. Along this, seniors
require to utilise resources efficiently and provide appropriate items and services in marketplace.
Employees will function properly and complete tasks within defined time if they get positive
working environment and guidance from superiors (Grover and Kohli, 2013). This benefits
management to deliver quality things by improving performance and position higher than
competitor firms.
As per this matrix, if company is not having any valuable resources then it will be result
in competitive demerits. In second condition, if a business is having a useful resources but it is
not unique as well as enterprise competitors can grab then it will convert into competitive parity
and quality. In third kind of situations O2 is having a useful as well as some resources which are
unique but can be copied by another enterprise competitors. This conditions will lead into a
temporary competitive benefits which are valuable for certain time. Fourth conditions is when
O2 have a useful, imitable and rare resources but companies conditions are low then all sources
can not used in a effective way. Competitive advantages which grab the conditions which are
not used. It is an best condition for company when they are having a useful, non-imitable and
rare resources as well as a positive behaviour of companies that will help in effective use of
resources in an effective way (Johnson, 2016).
Strength of O2 company
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 Organisation is having a proper manpower which is able conducting of task for meeting
company objective and aims as well as efficient deals with all new challenges which are
linked with technologies and tools. Top management able to make techniques that are efficient in executing and adopting all
technologies that are useful in achieving competitive advantages and higher share of
markets.
Weakness of O2 company
 There are having various cut throat competitions are having within a market which are
fascinating higher numbers of customers as well as with their actions it is hard for
company to handle this kind of hardcore enterprise competitors within a limited period of
time.
TASK 3
P3 Porter's Five Forces Model
Present market environment is highly competitive in their nature so that it is a
management responsibility to develop core competences in order to gain long term sustainable as
well as higher customers satisfaction. Porter's five forces model has analyse the five competitive
forces which has ability to shape each one industry at market place. They are frequently use
identify business structure in order to determine company strategies (Kernbach, Eppler and
Bresciani, 2015). This method has apply any segment of economy to search for attractiveness
and profitability in long run. Here are explain Porter's five forces model of O2 in detail as below:
Illustration 4: Porter's five force model
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(Sources: Porter's five force model, 2013)
Bargaining power of buyers: In United Kingdom customers has several option of
telecommunication commodities and services. So that, they are higher bargaining power into
market place. But product is very important for each one clients because they have associated
with brand value of the goods. O2 is a large organisation and they have achieve economic scale
by which they are offer product at low price to their buyers in long run. Some important buyer
bargaining power has explain as follows: Cost of changing: Switching cost of the product is very low in telecommunication sector
because all competitors has big and make perfect competition at market. In this
situations, no one company has take addition benefits form the industry. Low changing
cost improve bargaining power of individuals. Price sensitivity: In telecom sector customers has not more prices sensitivity because they
need high quality of services they have able to pay high cost for higher quality in UK. So
that, O2 has retain their customers providing advanced attribute services. Size of each order: Small to large both type of goods have available into telecom sector.
According to clients needs O2 has develop offer. In this condition customers have low
bargaining power (Klettner, Clarke and Boersma, 2014). Ability to substitute: clients has higher power of substitute O2 product with other
competitors goods like Vodafone, BT, EE and many more.
Bargaining power of suppliers: O2 is a company which has run their business activities
into telecommunication sector. They have long term positive impact on their firm entity which
adds some value in their brand. So that, the bargaining power of supplier has very low in the case
of O2 because it have established brand with higher value in UK and their management has make
strategies which help to achieves goals effectively. When inputs have not a big element of cost
so that vendor those has supply inputs to O2 has less bargaining power because of low price of
inputs. Thus positively affect an organisation in long period of time in appropriate manner. Number of supplier: Number of vendor is very high into telecommunication industry so
that it help O2 to switch another supplier if they need low prices of inputs. Thus reduce
bargaining power of suppler in the market.
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 Size of supplier: Small as well as big both kind of vendors has available at telecom
market so that according to their size they have bargaining power. But O2 is a big
organisation and they have ability to influence all vendor in appropriate ways. Uniqueness of services: Management of the company has develop strategies in order to
produce unique goods and services which help to attract large number of buyer toward
O2 product (Li, Zhou and 2010). Supplier has also some uniqueness in their
commodities so that they have higher bargaining power but in case of telecom sector
product are almost same thus reduce their right of bargain. Cost of changing: Switching cost in telecommunication industry for O2 is very low
which help to manager all input resources cost.
Availability of substitutes: Less number of substitutes has provide opportunity to O2 sell
their commodities to large number of consumers at market place. So that buyer has lot product
option but in same segment not in others. Substitute performance: Performance of substitute goods has very low in telecom sector
like wifi modem is a substitute of landlines internet services and its performance is not
so good. Switching cost: Changing cost is very low in telecommunication industry due to lot of
competitors product is available (Pagani, 2013).
Rivalry among existing competitors: In telecommunication sector government of UK has
develop policies related to competition in the same sector. Each one organisation has follows
these rule and regulation in order to run entire business activities in appropriate manner. Number of competitors: Medium, not large and small number of rivalries has available
into telecom sector of United Kingdom. So that it create positive impact on O2
performance in long run. Quality of differences: Yes, lot of quality differences has develop by each one
organisation like Vodafone, EE, BT etc. By this, management of O2 has analyse product
difference and produce their services accordingly. Other core competences: Every organisation has develop strategies in order to achieve
high market share and customers satisfaction. Telecom sector of UK, Vodafone, BT both
have big competitors and their own core competences which affect O2 performance
negatively. So company want to develop plan to reduce that negative impact.
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 Switching cost: Changing cost is very low so that O2 want to develop strategies in order
to make high switching cost which help to retain large number of customers toward their
goods and services in long period of time (Porter, 2011). Customer loyalty: In United Kingdom, every companies has make plan to convert buyer
satisfaction into loyalty thus help to achieve long run sustainability. O2 has loyal clients
but not in large number so that they want to work on it.
Threat of new entrance: High entry barrier in telecom sector due to existence of big
competitors and each one has run their business activities at economic of scale. O2 has low threat
of new entrance into telecommunication industry resulted they are easy operate their enterprise
work in long run. Time and cost of entry: High cost and lot of time should be needed in order to enter into
telecommunication sector at United Kingdom. It is a management responsibility to
manage entire work effectively. Economic of scale: Strong brand name of O2 has build high entry barrier for each one
organisation into market. New firm can not able to provide services at low or economic
cots to their buyers. But new firms have not able to offer this price to clients (Sluyterman,
2013). Technology protection: Patents of technology has create higher protection to advance
technology which help O2 to attract large number of customer toward their product and
services effectively. Cost advantage: O2 has achieved economic of scale and new organisation which are
enter into this market can not able to achieve this benefits thus reduce their power of
competitive advantage at market place.
 Specialist knowledge: High learning curve of O2 about telecommunication sector has
make higher entry barrier for new companies.
P4 Bowman’s strategy clock model
The concept of Bowmen's Strategy clock model gives a most beneficial way in analysing
the position of company at market place as compare with competitors. It was profound by Cliff
Bowmen and David Faulkner according to them to gain competition, an organisation should
concern more on value of products. It includes some marketing techniques through a firm can
promote its products or services in a more interesting way (Srdjevic, Bajcetic and Srdjevic,
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2012). Along with, it convince people in changing their conceptual views about qualities of
commodities as well. This model is concerned more on strategic planning and pricing of
products at marketplace.
Two Dimensions of Bowmen's Strategy Clock
This model is used by marketing department of a firm in order to analyse the position of business
at marketplace in comparison with competitors. This method is provides various benefits to
marketers in evaluating the strategy and policies of rivals which they used to offer services to
customers. It consists two dimensional process, one is related with price strategy while other are
perceived value of output. In addition to this, it divide strategies into four quadrants which
further classified into eight different strategies as shown below.
Position 1: Low Price and Low Added Value
In order to get high attention of customers, sometime a company thinks that offering products or
services in low price is beneficial. Along with this, they thought that through such type of
services assist them in gaining sustainability in competitive world also. But this factor is not
taken as beneficial in Bowmen's model (Sumer and Bayraktar, 2012). The reason behind that is
offering commodities at less price, makes negative impact on brand image of a firm. This would
change the perception of customers also as they will think that such type of goods consist low
added value. Therefore, this method is helpful only for suppliers.
Position 2: Low Price
In this factor, enterprises are used to produce goods in bulk quantity as well as sell them at low
price at marketplace. Generally, selling products at less rates doesn't proves beneficial in earning
desired profitability. But if people will purchase such type of commodities in high volume then it
would definitely generate good amount of profit. This type of method is helpful for dealers or
cheaper market shopkeepers whose main objective is to sell commodities in bulk. In context with
Vodafone company, its managers use this strategy for offering SMS services. The main reason
behind this emergence of various messenger apps due to which SMS services went obsolete
(Tavitiyaman, Qu and Zhang, 2011).
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Position 3: Hybrid
This method is useful in product differentiation. As seen, companies want to sell their
commodities on low prices, so Hybrid method is helpful in informing people about the
effectiveness of such products. It change perception of customers that although goods have low
price rate but possess high value in terms of quality. This would help in making products more
valuable.
Position 4: Differentiations
This strategy is also used in providing higher quality of products to customers at affordable rates.
For this process, managers of a company focus more on demand of people and complete the
same on time which would help in perceiving higher value as well as retain them for longer
period (Williams and Figueiredo, 2011).
Position 5: Focused Differentiation
Luxurious and exclusive products are come in this category in which companies are concerning
more on better quality through which they can offer them on higher prices for customers. For this
process, managers use segmentation, targeting and positioning strategies.
Position 6: Risky High Margins
This method is beneficial for attaining short term goals in which companies used to offer
products on high prices. Therefore, they focus more on quality and manufacturing process of
such products.
Position 7: Monopoly Pricing
In this stage, enterprise has less number of competitors through which they can offer goods or
services on any price rate. This pricing strategy is used by Vodafone to grab attention of
customers in a large manner.
Position 8: Loss of Market Share
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This situation reveals that a company has not good position in market because of poor quality of
services or not meeting the demands of customers on time (Williams and Figueiredo, 2014).
Therefore, an enterprise has to ensure that whatever services it has provided must meet needs of
people in a short period of interval.
So that, Bowmen's model has provide several market position of the company. O2 has
used multiple strategies like low cost product, differentiation, higher risk margine etc. in order to
run enterprise effectively.
CONCLUSION
From the above report it is concluded that Business strategies has help organisation to
operate their enterprise at highly competitive environment. Through this, they are able to
compete competitors in appropriate manner which help to achieve aim in given time frame.
There are some strategy like PESTAL, porters -five -forces model, Bowmen's model, SWOT and
VIRO analysis all have their own strength and weaknesses accordingly management of O2 has
select best method to know market trends which help to gain profitability as well as make
differentiate product as compare to their rivals into same industry.
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<https://www.cgma.org/resources/tools/essential-tools/porters-five-forces.html>./
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