Vodafone Business Strategy Plan

This assignment provides a comprehensive business strategy plan for Vodafone, covering the company's organizational plan of action, external forces (PESTLE) and internal factors (SWOT analysis and VRIO analysis), as well as an analysis of the telecommunication market. The report then devises a strategic plan for Vodafone to achieve success in the sector.

BUSINESS STRATEGY

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
Critical analysis of macro-environment.................................................................................1
TASK 2............................................................................................................................................4
Internal environment analysis of Vodafone...........................................................................4
TASK 3............................................................................................................................................6
Analysis of telecommunication sector to devise appropriate strategy by using Porter' s five
forces model...........................................................................................................................6
TASK 4............................................................................................................................................8
Strategic management plan and interpretation of strategic decision......................................8
CONCLUSION..............................................................................................................................11

INTRODUCTION
A business strategy may be defined as all those competitive moves and actions that are
undertaken by business organisations towards attraction of new customers and retention of
existing customers as well as to gain the competitive advantage over the rivalry firms towards
attainment of business objectives effectively and efficiently. The basic motive behind
formulation of business strategy is to carry out long-term business planning. In the current
globalised and competitive world, it is very important to develop business strategy in
telecommunication industry for fighting competition.
Vodafone group, one of the most popular telecommunication company of united kingdom
has been founded 27 years ago that is in the year 1991(Klauer, 2015). Currently the company is
running its operations in the entire world with around 111556 employees associated with the
company by the end of 2018. This assignment will include critical analysis of macro-
environment and its impact on strategic decision-making of the company. Apart from that,
critical evaluation of internal environment of the company along with its capabilities would be
done. Even a critical analysis of telecommunication sector for devising appropriate strategies
would be carried out with due care. Furthermore, a systematic and appropriate strategic
management plan would be produced.
TASK 1
Critical analysis of macro-environment
Critical analysis of macro environment is carried out with the objective of determining
strategic management decisions. Analysis would be done using PESTLE model for
environmental analysis and Ansoff's growth vector matrix for analysing the organisations
strategic positioning.
PESTLE model for environmental analysis
Political factors – political factors have a great impact on the smooth working of the
business organisations towards the attainment of their objectives. Political factors include
political stability, instability, political rules and regulations, etc. For example: Vodafone group
has to consider entire political scenario of the state in which the company is operation with the
objective of development of infrastructure for the company where it will run all its operations.
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The political factor that affect Vodafone the most in charges of cartelisation which has created
difficulty for the company to operate its operations smoothly. Furthermore, the company is even
affected by the peace of the state as well as political instability and this is evident from the fact
that the recent conflicts in Europe has adversely affected the functioning of the company(Ang,
2016).
Economic factors – it is one of the most important dimension of pestle analysis as it not
only have an impact on the functioning of the company but also impact the economy of a country
as a whole. Economic factors play a vital role towards the smooth running of the business
because more the GDP of a country, more would be the income of the people which in turn leads
to better capability of the company in adapting latest technology. Hence, vodafone group
crucially examines the economic factors of the country in which it is operating in order to gain
the competitive advantage over the rivalry firms. Furthermore, effect of Brexit and increased cost
of spectrum due to talks of 5 G in India affected the operations of the company negatively.
Social factors – social factors include factors such as values, beliefs, customs, culture
and norms of the people in which the company is operating. In order to survive and grow the
market share, Vodafone group keeps on changing its policies and preferences based on the
values and beliefs of the people in which the company is operating.
Technological factors – Vodafone group is known for bringing in constant innovation
and up-gradation in technology. The basic reason behind companies huge investment in research
and development is to bring advanced technology in the company with the objective of survival
and grow in its market share in this entirely competitive world(Patra, Mahapatra and Patnaik,
2016). If the company fails to bring innovation that the company wont be able to run its business
smoothly in long run. Apart from this, improvement in digital economy and promotion of
technological culture of SMEs have provided added advantage to the company.
Legal factors – it is very important for all the companies to take into consideration all the
legal factors n order to avoid complexities in carrying out business activities smoothly.
Complexities arise because of high restrictions from the government regarding their business
activities. Hence, for this purpose Vodafone group lays immense emphasis on legal factors to
avoid penalties and enhance its brand image. For example: Vodafone group has laid down laws
and regulations pertaining towards the sphere of infrastructure. Moreover, longer payment tenure
has lead to decrease in interest rate prevented the company from paying low tax.
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Environmental factors – in this globalised world, it has become very important for
business firms to take into consideration environmental factors to maintain and build the image
of the company. Hence, Vodafone group has adopted various sustainable and ethical practices to
gain competitive advantage over the rivalry firms. The concept adopted by the company that is
vision of zero environment harm enhanced safe culture.
Ansoff's growth vector matrix for the purpose of analysis of strategic positioning
Ansoff matrix is a strategic marketing tool that is used to link the marketing strategy of
the company with the general strategic direction. This matrix is basically used for determining
the strategic positioning of the company by matching the existing and new products with the
existing and new markets. The matrix show four options for growth strategies and those are:
Market penetration – this option is concerned with selling the same product to the
existing customers with the objective of increasing the existing customer base without expansion
in the product line of the company(De Waal, 2016). Vodafone group in order to adopt this
strategy of market penetration would have to extend their working hours to enhance their long-
term appeal and this strategy adopted by the company would help them in retension and increase
in existing customer base.
Market development – this strategy is concerned with attraction of new customers
towards the existing product and this would help the company in increasing the brand awareness.
For example: Vodafone group can achieve this strategy by increasing its reach that is by entering
into new demographic area and thus by entering new market company would be able to attract
more customers.
Product development – this strategy is concerned increasing the product line by creating
new products by limiting the customer base that is sell only to existing customers. In
telecommunication sector, companies widely adopt this strategy because of changing needs and
preferences of the customers. Thus, this strategy would help Vodafone in enhancing its product
line.
Diversification – this strategy is concerned with selling new products in the new market.
It is a highly risky strategy and is generally adopted by the large firms. Vodafone can take this
strategy into consideration as it has a brilliant supply chain which fosters approaching new
customers easily with the new product.
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TASK 2
Internal environment analysis of Vodafone
The internal environment of the business includes all the elements which are internal to
the organisation and which affects the working of the business. It includes factors like
management, employees, culture etc. There are many ways and methods with help of which
impact of the internal factors can be analysed. Some of these factors used by the Vodafone
company are as follows -
VRIO analysis
It is an analytical tool which is used in analysing and evaluating the company's resources
and the internal or the micro factors with the intention to modify the competitive position of the
company. The VRIO analysis of Vodafone is listed and discussed below -
The VRIO analysis of Vodafone looks and considers each and every internal resources to
assess that all the internal factors provide a sustainable competitive advantage to the company
(Bozkurt, Kalkan and Arman, 2014). Basically the VRIO is initials for four questions framework
which are asked about the resources and their capabilities. These questions are as follows-
The question of value - it tries to find answer that whether the company is capable of exploiting
the opportunities or not. The valuable factors of Vodafone are as follows -
 The VRIO analysis shows that for Vodafone the employees are more valuable resources
for the firm as they are the one on which the whole working and operations of the
business relies up on. If the workforce is highly trained then it will lead to more
productive and efficient output for the organisation.
 Also with the help of the VRIO analysis the company analysed that the distribution
network is also a major valuable resource for the company. This is so because it helps
Vodafone in reaching to more and more customers and increasing the consumer base.
This ensure increase in the quantum of the revenue because if the customer will increase
then obviously revenues will increase.
The question of rarity - it tries to find that is control of resources is in the hands of relatively
few people or more. The rare factors of Vodafone are as follows -
 in accordance with this analysis the resources of financial nature of the company are rare
because only few companies have such strong financial resources.
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 Also it was found that the patents are a rare resource for Vodafone as found by VRIO.
This is because of the reason that these patents are not easily available for competitors.
So this allows the company to use them because the competitors do not posses these
patents.
The question of imitability - it answers that whether it is difficult to imitate or will there be any
cost advantage or disadvantage. The factors of imitability are as follows -
 The financial resources of the company are very costly to be imitated and these resources
have been acquired by the company through high profits over a period of time.
The question of organisation - whether the company is organised and ready to exploit the
resources. The factors of the organisation are as follows -
 With the application of this analysis the company acknowledged that the patents are not
well organised and they are not using these patents to the fullest potential (Wu, Gao and
Gu, 2015).
SWOT analysis
it is a strategic technique which is used by the company to help the organisation in identifying its
strengths and weaknesses with the opportunities and strengths also. The SWOT analysis of the
Vodafone is as follows -
Strengths - it refers to the traits and characteristics which gives the advantage to the company.
The major strengths of Vodafone are -
 It is the popular cellular service provider all over the world.
 It posses very high brand visibility and also a strong brand recall.
 It has a very strong advertising agreement with the ZooZoo concept which made the
Vodafone Ads very creative and best-selling.
Weaknesses - these are certain traits and characteristics which stops or hampers the organisation
to perform to its fullest capacity. The Vodafone's weakness are as follows -
 As the famous global brand the company operates in many country so it has to follow the
rules and regulation of many government and laws.
 Because the company operates at global level so it also has to fight for the market share
with their customers.
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Opportunities - these are the elements present in the external environment which can give huge
advantages to the company if they are exploited by the company. The opportunities available for
Vodafone are as follows -
 It can explore the rural market because there is a huge potential for the company.
 A focus on the mobile network portability (MNP) can help the company in converting the
competitors into their networks.
Threats - the threats are the elements present in the environment which causes trouble for the
company in carrying out their business operations. The threats for the company are as follows -
 The new entrants into the market applies policy of low price offerings which affects the
margins of Vodafone.
TASK 3
Analysis of telecommunication sector to devise appropriate strategy by using Porter' s five forces
model
The Porter five forces model is an analytical tool or framework which is used to study the
industry and to interpret the inherent factors of the success for a industry (Ocasio and
Radoynovska, 2016). It is a framework which helps the company in analysing and identifying the
five competitive forces that influences and shapes every industries and to determine the
industry's strengths and weaknesses. It is basically used as a tool to identify the structure of the
industry to determine the corporate strategy to adapt to accomplish the objectives and goals of
the business. It involves analysing the new entrants, power of competitive rivals, customers,
suppliers and substitute products which influences the company's profitability and the
productivity. By the thorough analysis of all these factors helps the company in devising
business strategies.
Vodafone company is the most popular and major company in the telecommunication
industry. The company is also enrolled in the New York Stock Exchange (NYSE) and have a
market capital of approx 80.98 billion USD. The use of Porter five forces analysis of Vodafone
plc as it will help the company in analysing natural and level of competition and will find
solutions in coping up with the competition. The factors of the Porter five forces model affecting
the Vodafone company are as follows -
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Competitive rivalry - this is a factor which analyze that how concentrated is the competition
which is currently going on in the marketplace. The competition rivalry is decided by the definite
quantity of the existing competitors and what every competitor can do to go through the
competition (Purce, 2014). This factor is high when there are few numbers of businesses and
they sell identical products and services. By studying this factor the Vodafone can devise
strategies to solve the competitive rivalry by the following ways -
 By building a sustainable and maintainable differentiation.
Power of suppliers - it is a factor of Porter's five force model which analyses how much power
and control do the suppliers have over the increase in the prices (Lehmann, 2016). If the
suppliers will be low or fewer then the power relying in the hands of the suppliers will be more.
By studying this factor the Vodafone can devise strategies to solve the bargaining power of
suppliers by the following ways -
 By researching with the product and by designing it by using different types of raw
materials from different suppliers.
 By building a cost-effective supply chain with different suppliers in order to maintain
maintaining cordial relations with those suppliers.
Bargaining power of buyers - this factor gives importance to the consumers and the effect of
their behaviour on the quality and the pricing of the product. The consumers have power in their
hands when the number of consumers are less and the sellers are in large numbers. Buying power
is less if the customers buys products in the smaller quantities. By studying this factor the
Vodafone can devise strategies to solve the problem of buyers by the following ways -
 By rapidly bringing more innovation and creativity in the products.
Threats of new entrants - it is a factor which involves considering the level of new entrants into
the existing market. The easier it is for a competitor to join the greater is the risk of the market
share being depleted. By studying this factor the Vodafone can devise strategies to solve the
threats of new entrants by the following ways -
 By developing the scale of economies so that the company can reduce the fixed cost per
unit.
 By bringing more innovation in the products because it will not only attract the new
customers but will also give the old customers a reason to buy and get stick to only
Vodafone.
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Threat of substitute product - this factor studies how the consumers switches from one
business product to that of the competitors products and the services. The threat of the substitutes
is informed and analysed by switching the cost both long term and immediate as well as buyers
inclination to change (Habib and Hasan, 2017). By studying this factor the Vodafone can devise
strategies to solve the threat of substitute products by the following ways -
 It can develop measures to understand the core needs and requirements of the customer
so that the customer do not switch to another product (Whittle and Myrick, 2016).
 It can also make a strategy of increasing the switching cost for the customer which will
discourage the customers from switching to competitors product.
TASK 4
Strategic management plan and interpretation of strategic decision
Strategic management refers to as method of comprehensive collection of the ongoing
process and activities which the organisation uses in systematically to align and coordinate all
the efforts, action and working with the achievement and accomplishment of the objectives,
goals and mission and visions of the company. It involves the formulation and implementation
of the strategies to achieve the organisational goals and objectives efficiently, effectively and
productively. It provides overall direction to all the employees and the enterprise.
Strategic planning is defined as a business activity which is used to set the priorities and
focuses on strengthening the business operations and on optimal utilisation of the resources. It
ensures that there is a relation between the employees working and the objectives and goals of
the company that is ensuring that is there any link between the employees efforts and the
organisations objectives. A strategic plan is a document which is used to communicate with the
organisation the different types of the organisational goals and the different actions and activities
which are needed to be performed in order to achieve the goals.
There are many ways of developing a strategic plan to accomplish the objectives of the
business. But the most common way of developing the strategic plan is as follows -
 Clarify the vision – the first and foremost step in developing the strategic plan is to make
the vision and mission for the company (Meckling, 2015). This is done in order to make a
specific goal and to acknowledge that goal to the employees so that everyone works in
the direction of the accomplishment of the goals.
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Vision – The vision of the company is to become the partner of prime company which delivers
the unified value adding services to take advantage telecom experience.
Mission – The mission of Vodafone is to connect and empower the people and different
communities to accelerate the development of other countries with the use of developing
telecommunications centres to create value adding jobs.
Gathering and analysing information- it is the key stage for being the strategic plan to
become successful. In this stage the company tries to gather as much information and data and
facts which are relevant and important in accomplishing the above made vision and mission. For
gathering information the company carries on many methods and techniques to analyse and
gather facts and figures relating to the latest issues and trend (Quirke, 2017). For this Vodafone
used PESTLE analysis and Ansoff growth matrix for gathering information regarding external
factors. For analysing and gathering information regarding the internal factors SWOT analysis
and VRIO analysis is done to gain insight for the internal factors.
Formulate a strategy- after gathering the data the next step is to create and formulate the
strategy by balancing the information, facts and figures with the objectives of the firm. For
example with help of SWOT analysis it was found that there is an opportunity for Vodafone to
tap the rural market. So now it can formulate the strategy according to the information collected.
Implement the strategy- for the successfulness of the strategic plan it is very necessary
and critical to implement the strategy correctly so that objective and goals of the business are
accomplished. After formulating the strategies the Vodafone tries to implement the strategies.
After gathering and formulating the strategies Vodafone implements the strategies. Some
strategies formulated by the company are by building a sustainable and maintainable
differentiation, collaborating with the competitors in order to increase the market share. Also it
can develop measures to understand the core needs and requirements of the customer so that the
customer do not switch to another product, it can also make a strategy of increasing the
switching cost for the customer which will discourage the customers from switching to
competitors product and many more strategies.
Evaluating and controlling- the last step in the process of the strategic plan is to
evaluate the strategy that whether the strategy implemented is accurate and correct or not
(Rugman and Verbeke, 2017). And also to control the strategy by comparing the actual strategy
implementation and the strategy what we planned. For example with help of VRIO analysis
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Vodafone was able to evaluate that its financial resources and the distribution network provides a
sustained competitive advantage and also the patents are the unused competitive advantage
which can be used in the future.
Application of Bowman's clock model
Position 1
Low price & low value added- this is not a beneficial position of Vodafone because here it has to
charge low price so it is not a much competitive position because here the cost is low.
Position 2
Low price- in this position the company charges low prices in order to capture the market. Here
the business positions itself as a low cost leader in the whole market to capture large section of
market.
Position 3
Hybrid- with this position Vodafone uses a combination of both low price and low value added
and in addition to this goes for product differentiation.
Position 4
Differentiation- under this position the company offers its consumers the products with some
differentiation in the features of the same products. This is done in order to attract more
consumers towards company and its products and services.
Position 5
Focused differentiation- at this stage Vodafone positions its product at the highest price because
by this time the consumers become loyal to the company so by increase in price they will not
switch over to other substitute
Position 6
Risky high margins- here the prices are high and also there are not any much extra values added
to those products and services.
Position 7
Monopoly pricing- in this strategy Vodafone enjoys the monopoly within the market and as it
has monopoly so it do not need to position itself in market.
Position 8
Loss of market share- this is a dangerous situation because here the Vodafone start losing its
market share may be due to tough competition.
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For attaining success in the competitive market business unit is required to take
significant action or measure which contributes in organizational growth. In this regard, porter
generic model is highly significant which clearly indicates direction that need to be followed for
building and sustaining competitive position. Porter generic strategy mainly focuses on cost
leadership, focus and differentiation aspects. In accordance with such model focus needs to be
placed on cost leadership aspects. Moreover, UK telecommunication sector is filled with high
competitive situation. Further, now customers use services of the provider who charge low cost
and make focus on maintaining high quality. In this, by becoming low producer in the sector
Vodafone can influence decision making of customers and thereby get competitive edge over
rivals. Thus, company should develop distinct telecommunication plan at low cost for success
attainment.
Porter's Generic Model
This model is one of the best way to gain competitive advantage over their competitors.
The marketing manager of Vodafone is going to implement this model in strategic marketing
plan so that they can gain competitive advantages in the market place.
Cost Leadership Strategy: This generic strategy aims at being the low cost producer in
an industry by the company. Vodafone company has to sell the products at average prices in
order to beat the competition.
Differentiation Strategy: This strategy includes the development of the product or
services so that it offers unique quality to the customers and also increase the product value by
customers of Vodafone and establish the product different from other ones in market.
Focus Strategy- Focus strategy is concerned with the company's prime focus on any
particular component which may be either cost or differentiation. Vodafone will focus mainly on
the cost reduction component as in the scenario due to its lack of profitability and the threat of
losing the trust of investors.
CONCLUSION
With the analysis of whole report it can be inferred that business organization plan of
action is defined as different types of action plan or course of action which are made by the
businessman and entrepreneurs to help themselves by implementing those strategies in the
business operations to achieve the business objectives and goals. For Vodafone the business
strategy acted as a master plan which helped the company to secure a competitive position in the
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market. The report highlighted all the external forces which affects the business operations by
help of PESTLE and Ansoff' s growth matrix. Further it also analysed the internal factors with
help of SWOT analysis and VRIO analysis. After that it also analysed the telecommunication. At
last the report devised a strategic plan for the company.
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