(PDF)Business Strategy | Assignment

Business Strategy

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
P1 Applying appropriate framework analyses the impact and influence of the macro
environment.................................................................................................................................1
TASK 2...........................................................................................................................................3
P2 Analyses the internal environment and capabilities of a given organization using
appropriate frameworks..............................................................................................................3
TASK 3............................................................................................................................................6
P3 Applying Porter’s Five Forces model evaluate the competitive forces of a given market
sector for an organisation............................................................................................................6
TASK 4............................................................................................................................................8
P4 Applying a range of theories, concepts and models, interpret and devise strategic planning
for a given organisation...............................................................................................................8
CONCLUSION..............................................................................................................................11
REFERENCES..............................................................................................................................11

INTRODUCTION
Macro environment plays an important part in the success of any company. The impact of
the external environment could be dreadful if not approach at the right time. Vodafone is one of
the leading mobile communication providers in the world headquarter in London. It currently in
has operation in 25 countries and partner networks in 47 further companies (Scanning the
Environment: PESTEL Analysis. 2018). In the given report will discuss of about the management
decision taken by the company with the use of different techniques like Pestel, Ansoff matrix,
and strategic tools etc. To ensure sustainability and Vodafone growth in the competitive market.
To remain at the top of the market.
TASK 1
P1 Applying appropriate framework analyses the impact and influence of the macro environment
PESTEL model for environmental analysis,
Pestel model is used to study the external environment in reference to company.
Any undesirable situation could be find out with the help of pestel. Description of this
techniques in context of Vodafone is given below,
 Political environment: This factor directly affects the profits of any organization as
government is the one who make rules, regulation and policies. Though the
government of the United Kingdom is stable but still other factors can influence
the profit of the company. Roaming regulations is strict in UK and it directly
influence the company's profit (SWOT Analysis, 2018). Besides this tax policies
for the Vodafone and cartelisation factors plays an important part for Vodafone to
grow.
 Economical environment: This is a crucial factor as it is related to money or
economy of the country. After the Brexit, rules of doing business has changed
and Vodafone has incurred loss due to this. Other than this cost of spectrum is
high in UK and there are other big players also in this industry. That's why
Vodafone has to buy the spectrum for higher cost just to maintain the quality of
the calling. Due to this Vodafone has to increase their cost so that they can earn
some profit.
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 Social environment: Social and cultural factors of the United Kingdom directly
affects the decision making process of the Vodafone. Nowadays, Mobile service
becomes a necessity instead of fashion. By this Vodafone profit is increasing
significantly. Mobile and internet service has become crucial for the people, by
this company has lot of people to capture so that company profit can be increase.
 Technological environment: This is the only area where technology prediction
could never be done as it changes so fast. Vodafone should improve and use
advance technology so that they can lead and make a competitive advantage
over others.
 Environmental environment: People are nowadays concerned about the
environment and how companies are affecting it. Due to greenhouse emission,
government are making policies so that company should repay what they are
getting from the society. Vodafone should work on Green energy or solar power
so that they can do their part to save the natural resources.
 Legal environment: There are rules and regulations on advertisement in UK
which government has made and Vodafone and other competitor has to follow
them (Aras and Crowther, 2012). Vodafone should follow the guidelines if they
wants to advertise. Moreover, Vodafone should follow the discrimination law,
employment law etc so that they can keep a safe distance from any legal action.
Ansoff's growth vector matrix to analyse the organization's strategic positioning.
This strategy is used by the company to find out the opportunities and how a
company can attain a growth. There are four product market combination Vodafone can
use,
 Market penetration: It is a tool through which company tries to market their
existing product so that they can increase their market share. Vodafone can
extensively invest on marketing activities or cut their price through which they
can capture the remaining market. Price is always the important factor for
penetrating the existing market.
 Market development: Through this strategy, Vodafone can tie up with other
operators in the market. Through this Vodafone can increase their market share
by providing services globally. Moreover Vodafone customer base and profit will
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increase gradually. In addition to this, Vodafone can enter into rural market and
try to capture it by understanding their unfulfilled needs. This strategy will be
perfect for Vodafone if they can identify the unfulfilled needs of the customer and
how they can overcome them with the help of their product.
 Product development: When a firm pursue to launch a new product in the
market, product development happens. In context to Vodafone, their brand name
will help them to market their new product. With the help of this strategy
Vodafone can increase their revenue. Vodafone can introduce their 5G network
so that existing customer can switch it from 4G. Through this Vodafone can
retain their old clients and make new clients from other operators who doesn't
have 5G network.
 Diversification: In this strategy, company launches a new product in the market
which is not related to their existing business. With the help of this, Vodafone can
enter into new market and can capture the existing also. Vodafone can launch
their banks so that they can diversify their product line and chances of increase
in profits is also high (Basco and Rodríguez, 2011). Moreover Vodafone can
enter into any attractive market and can also reduced their business portfolio risk.
TASK 2
P2 Analyses the internal environment and capabilities of a given organization using appropriate
frameworks
VRIO model to analyses the strategic capabilities possessed by Vodafone.
This model is used to evaluate company's resource so that competitive
advantage can be attain by the company. VRIO is a acronym of Value, rareness,
imitability and organization respectively. Once the company knows their strengths and
weakness then only they would be able to make the strategy according to that. With the
help of VRIO, Vodafone can use this technique to analyses their strengths and
weakness and make their competitive strategy according to that. In VRIO analysis of
Vodafone, three significant resources of the company will be considered for the
evaluation i.e. R&D, Brand equity, Access to capital. All these factors which are taken
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as a factor is important as these assist company to gain competitive advantage over
other company in the same industry. Value: It simply refers to how much value does a company resources has and
how easily it can be obtain by the other organization. In Context to Vodafone,
R&D, Brand equity and access to capital has value. If the Vodafone resources is
not valuable then they should deploy it as it does not create any value to
company. All the three resources has value and plays an important role in the
success of the organization. For instance, company is regularly spending huge
amount of money on IOT network so to improve it coverage. Brand equity refers
to image of company in the mind of customers which includes credibility of
brands, loyal customers, trust of consumers on brand etc. Rareness: It means that how rare is company resources or is it easily obtain by
the other company. R&D and brand equity of Vodafone is rare as competitor
doesn't have this resources. But Access to capital is not rare as other companies
can also raise funds according to the scenario of the market (De Toni, Nonino
and Pivetta, 2011). Resources is valuable but not rare then Vodafone and other
competitors are on the same boat. It won't give any competitive advantage to any
competitor. Other company in the same industry can acquire more funds in the
reserve by providing high amount of equity to the investors so it can be said that
Vodafone capital capabilities is not unique and can be copied by other company. Imitability: It means that how easy any company's product or service can be
imitate or copy. Brand equity of the Vodafone can not be imitate as it is unique.
But R&D of Vodafone can be copied in the near future by any other competitor.
For instance there are many companies who are also working on IOT networks
so to cover more bandwidth and network coverage. The Vodafone R&D is
valuable and rare but it will take some time for com[competitor to imitate it. Then
it will give a temporary competitive advantage to Vodafone. But as soon as any
competitor copy or imitate it then the advantage will get over.
 Organization: It refers to how the company or organization can manage the
resources effectively. Brand equity is valuable, rare and not easy to imitate.
Company image is always been clean and trustworthy in front of customer.
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Besides this Vodafone is a re known brand who has been providing services in
many countries from many years. If Vodafone can manage their brand name and
able to use their resources effectively. Then it will becomes a permanent
competitive advantage. For example no other company can copy or imitate the
goodwill of Vodafone in the mind of customers. Though other companies can
degrade their image by doing negative marketing towards Vodafone but they can
not copy it into their business operations.
STRENGTHS AND WEAKNESS OF VODAFONE
Strengths Market coverage: Vodafone is been one of the most re known brand in the
world. They are offering their services in more than 100 countries. Vodafone
coverage is wide and that's what make an competitive advantage over others as
they have more market and customer share as compare to other competitors.
They are the market leader of telecom industry as prices are changed by other
companies after analyzing there strategies. Revenue generated: Vodafone generates billions of revenue every year and the
figure is increasing day by day. Due to their access to capital they have remained
at the top from past many years. There revenue is high as compare to their
competitors as they have large market and customer share in the market due to
which there revenue generation is also high. It creates a positive impact at the
time of globalization as they have ample amounts of funds in their reserve which
could be use by them at the time of conducting marketing activities or market
expansion. Marketing techniques: Their marketing teams have created some massive ads
like Vodafone Pug or zoo-zoo. Due to their unique marketing strategy, many
customer converted to DIE HARD fans of Vodafone and become a loyal
customer. Company has unique marketing strategies which stands them out
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when comparing with their competitors. Besides this it also differentiates their
products from other company. Skilled workforce: All the workers of the organization including management
leaders are active in nature. They try to fulfill the unfulfilled needs of the
customers and make their improvements accordingly (Dörner, Gassmann and
Gebauer, 2011). That's why Vodafone is one of the biggest brands in the telecom
industry all over the world. Workforce activities has direct impact on business
operations as they are the one who does all the functions of company. Company
is using them as an assets which increase their motivation to a certain level
which leads to better performance of employees. Product mix: Vodafone has large number of product lines that helped the
company to reduce the portfolio business risk. Vodafone collective capture the
market with their vast product line like online payment, Vodafone apps which
includes movies and music etc. More products and services offered by company
persuade to better acquiring of customers which decrease their operational risk
and increase sales and profitability of company.
 Performance in Asians country: Vodafone has performed well in Asians
country like India as 40% revenue comes from the Asians market.
Weakness: Market valuation: Market valuation of Vodafone was 29.61 billion US dollars in
2014 but it reduced to 18.74 billion US dollars in 2018 due to poor strategy of the
management leaders. In recent past, company has seen a huge drop of market
valuation due to which there investors are taking their money out from the
company which is affecting their investing in different sectors so to expand their
business. Apart from that, management has taken bad decision in different
countries due to which they have lost huge amount of chunk of customers. Performance in UK: After the Brexit, Vodafone has not done their best in the UK
market. rules and regulations have changed which affects the working style of
the Vodafone. It will take some for company to recover. It has been seen from
the recent past that company has not fully recover from the brexit as due to this
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political conditions, company has bear million dollar loss. Company has large
amount of customers in UK which affects the balance sheet in a negative way.
 Price war: In the telecom industry company can capture the market by cutting
the price of the service. But in the long time it will affects company's profit. Due to
price war Vodafone is not able to earn satisfying amount of profitability and that
affects the strategy of the company. Company does not change their prices
according to the customer needs and demands and due to which customers are
changing their brands to satisfy it.
TASK 3
P3 Applying Porter’s Five Forces model evaluate the competitive forces of a given
market sector for an organisation.
 Porter's five force model – Vodafone is the biggest telecommunication
company in the world. This model is used by management for knowing main
factors which gave profitability to the organisation. By the help of it, management
can increase their revenue and create a strategy for achieving competitive
advantage in the market. This model is mostly used for analysing the simple
structures of market. Also this model doesn't considers the non market forces.
The competition in telecommunications sector is high due to less availability of
companies in UK market. In present assignment we have to discuss this model,
which is given as below:
 Threat of new entrants : This part is connected with new competitors, which
gave impact on the existing other challengers. Because high profitability is
attracting new entrants and they creates innovation in the market with attractive
schemes, so it gave threat to the company. But due to complexity of industry,
there are various barriers so new challengers are can't enter in this market
because they have to pay a huge amount for establishing a place in the
telecommunication sector. Due to the high costs involved, new firms aren't
capable of entering easily into this segment. As a result, It increases the
competition among the existing competitors like virgin, giff- gaff and Vodafone.
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 Threat of substitutes – In this part, It refers to a similar products which is
satisfying the customer's needs in different manner such as tea and coffee. It
may reduce the revenue of the organisation (Elmes and Barry, 2017). There are
various types of substitutes present in the market place which are easily
available for uses alternatively to the mobile phones. Because innovation of
technology creates various alternatives which gave satisfaction to the consumers
with value of their money such as Skype, yahoo messenger etc. Vodafone has
no need to low their cost or investment on new innovations, because they have a
strong goodwill in market place which is enough to attract their customers. Also
the company is comparatively experienced in the sector along with international
presence, so threat from substitutes is also low.
 Bargaining power of buyers- It is similar to buyer power, In mobile industry
there is a huge competition between various competitors with same products. It
is created for attracting the buyers by the industries at lower price for achieving
competitive advantage in market place. Instead Vodafone has a brand image the
company may bring innovation in technology for attracting new customers.
 Bargaining power of supplier- It connects with supplier ability, it is defined as
their impact on an organisation in negative or positive aspect. Providers In
telecommunication sector use their power for increasing profit for the firm or by
switching in costs may be decreasing the revenue of firm so every firm uses
alternative option for save firm from these conditions. Vodafone has a great
market share so their supplier have a trust on it. Because it gave more margin to
them than their challengers. Due to huge market presence they gave more
incentives to their providers so they easily maintain their competitive advantage
in the market.
 Industry rivalry- it is used for determining competitive advantage through
adopting new technologies with facing challenges from the rivals. In addition to
this, consumer uses a goods and create a difference between product and its
competitors (Ghosal, 2015). It gave a intense competition between players
because due to huge competition the price of the product may low and overall
decreasing in revenue of the firm. By cooperation of competitors it will be helpful
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for the firm because it helps in increasing the market size. In Vodafone, their
marketing team faces competition from the various contestants due to low data
charges. It gave huge rivalry in the market so their selling team should also
provide the similar to their customers.
 Stakeholder analysis
 Stakeholder group with—————-Level of importance
 High interest and high power —————High importance
 Low interest and high power —————Medium importance
 Low interest and low power —————-Low importance
 High interest and low power —————-Medium importance
on the base of above matrix below is stakeholder relationship with Vodafone is as
under: Customers - customers are the heart beat of any organisation because without
them they can't get growth. In Vodafone customers are first stakeholders without
their interest Vodafone can't get competitive advantage in the market The government - Government plays various roles at different times in every
organisation with the help of such tools like tax, financial duties, price cab at call,
data rates. Vodafone has to maintain their economy to face these challenges
with implementing these factors to balancing their competitive advantage in
market. Employees -Without employees a firm can't achieve their goals in time at
systematic manner. In telecommunication sector employees wants to recognition
of management on their efforts so Vodafone should gave reward on their efforts
so they will get motivated and it will improve their efficiency.
 Community - By using their suggestion an organisation can improve their
services. Taking feedback on their services it will gave efficiency in their work.
Vodafone should consult with their users, it will be helpful for decreasing doubts
and they get sustainability in their growth. It will helps in creating a different
business strategy and achievement of desired objectives.
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TASK 4
P4 Applying a range of theories, concepts and models, interpret and devise strategic
planning for a given organisation
Strategies are defined as the organizations high level plan for reaching its
specific requirement. It is the organizations plans to accomplish its vision and prioritizing
its goals. Strategies reflects the firm strengths, the resources that they have and the
opportunities that they can choose from. These strategies meets the economic
requirement of the organization and helps in fulfilling the needs of its customers. The
business strategy is the objective that a business wants to achieve within a specified
period of time (Holland and Weathers, 2013). The main aim of Vodafone is to achieve
the highest position in the industry that will secure the organizational growth and
development over the next three years. They can accomplish this goal by applying
different theories, concept and models given by physiologist Porter's and Bowman's.
This report will helps to organisation to make a strategic plan
Porter's strategic generic plan:- He suggested three generic business strategic plans,
that if adopted will lead to gain competitive advantage to the company over others. The
strategic challenge of any business organization is to find the way of achieving a
sustainable competitive advantage that will result in long term growth and market
stability. Competitive advantage of any business strategy can be gained by applying
Porter's generic strategy. A firm can get competitive advantage by offering a lower price
product or luxurious product in the highest price range making it differentiate its
products from its competitors. In the context of Vodafone, these four strategy can help
in creating secure organizational growth and development as follows:
Cost leadership strategy:- With this strategy, the objective is to become the
lowest cost user in the industry. This strategy is related with large scale production of
the goods which are more acceptable by most of the customers. This will enable the
company to maximize its sales leading to further increase in its market depth (Kruger
and Noxolo Mama, 2012). So by following these strategy Vodafone can minimize its
cost which will enable them to maximize their profit. Which in turn will help them in
driving their competitors out of market. This will also help in maintaining the customers
as the price for the travel will decrease and if it would be able to maintain low cost then
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it can have advantage of price war under the competitive scenario. For instance, call
cost of Vodafone is lower as compare to their competitors which assist them to acquire
customers from another brand which makes them largest company in world.
Differentiation strategy:- It involves making your product different or service
different from those of your competitors. To make the product of the organization
successful it is advised to do good research, development and innovation. The product
should be able to achieve the needs of the consumers. As Vodafone have to expand its
business and want to achieve its strategic goals, this strategy will help them in making
their product different from their rivalries. They can increase their targeted sales by
diversifying their geographical presence. It will advantage them in securing growth and
development and getting better opportunity. For example company can use start their
own bank in the country so to cover banking industry as it will increase their business
operations and profitability to a certain level. Besides this Vodafone calling quality is
better as compare to other brands and which makes them the credible brand in telecom
industry.
Focus strategy:- This strategy generally sets the direction of the company and
specifies whether the company will focus on cost or product differentiation. The key to
make the strategy successful is by ensuring that the company is adding something extra
in the product or service that it is offering. Vodafone can target its customers by
focusing on the cost and differentiating its services from those of others (Lehmann,
2016). For instance, if they are focusing on cost then they should use different pricing
techniques like penetration pricing, psychological pricing so to acquire more customers.
But if they are focusing on product differentiation then they should make products like
best quality of calling services which other companies is not offerings.
These are the main factors which gave value of money to their customers by the
product and services It is profitable for competition when the products and services
have a balanced combination
Bowman strategic clock – This model was invented by Bowman. In this model, It
determines the path , which helps to creating combination of price and benefits in the
company. It is also in creating business strategies for facing challenges by the
competitors. In this clock, they contains various kinds of tools like series of business
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strategies and every strategy is shown as the hand of clock. It is divided in various parts
such as low added value, low price, hybrid, differentiation and focused differentiation. It
also help to gaining competitive advantage with different strategies. In Vodafone,
Management should use Hybrid strategies because they gave value of money to their
customers, In other words they gave higher benefits on lower price to their customers. It
can be gain by organisation Because in this strategy organisation providing their
product at lower price and giving higher quality satisfaction to their customers. If they
low their data recharges and gives high speed network, it should increase their brand
image and they maintain a high customer base (Marx, 2015). Vodafone may implement
this, by giving focus on developing skills in their marketing team and cost department
that will evaluate the services and prices of product which are given to customers. It will
make a brand image of the company and helps in achieving competitive advantage for
long term in market. For example, Vodafone has launched their bank in the market and
so to capture more market and customer share. They have used hybrid model in which
they kept their interest rate lower as compare to their competitors so to provide high
return to their customers. Besides this, they are offering distinct types of services which
are different from their competitors like opening account within 5 minutes etc,
These frameworks will gave proficiency in the work of employees of Vodafone. It may
helps in achieving growth and secure their place for the market leadership. By using
such kind of tools, Vodafone will decrease their cost which will helps them to increase in
revenue.
CONCLUSION
From the mentioned assignment it can be concluded that business run in an
environment which can be internal and external. The various factors which impact and
influence macro environment and its strategies which helps in strategic management
decisions. The report also include strength and weakness of the Vodafone which is
internal environment. The project has analyzed Vodafone telecommunication sector by
using Porter five model forces for running in market. There are various
concept,models ,interpret and devise which required for strategic planning. Here the
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project has discussed about understanding and interpreting strategic direction for the
effectiveness of the company.
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REFERENCES
Books and references
Aras, G. and Crowther, D. eds., 2012. Business strategy and sustainability. Emerald
Group Publishing Limited.
Basco, R. and Rodríguez, M. J. P., 2011. Ideal types of family business management:
Horizontal fit between family and business decisions and the relationship with
family business performance. Journal of Family Business Strategy, 2(3),
pp.151-165.
De Toni, A. F., Nonino, F. and Pivetta, M., 2011. A model for assessing the coherence
of companies’ knowledge strategy. Knowledge Management Research &
Practice, 9(4), pp.327-341.
Dörner, N., Gassmann, O. and Gebauer, H., 2011. Service innovation: why is it so
difficult to accomplish?. Journal of Business Strategy, 32(3), pp.37-46.
Elmes, M. and Barry, D., 2017. Strategy retold: Toward a narrative view of strategic
discourse. In The Aesthetic Turn in Management (pp. 39-62). Routledge.
Ghosal, V., 2015. Business strategy and firm reorganization: role of changing
environmental standards, sustainable business initiatives and global market
conditions. Business Strategy and the Environment, 24(2), pp.123-144.
Holland, J. and Weathers, J., 2013. Aligning a company's people strategy with its
business strategy and brand strategy. Journal of Brand Strategy, 2(3), pp.245-
258.
Kruger, C. J. and Noxolo Mama, M., 2012. Incorporating business strategy formulation
with identity management strategy formulation. Information Management &
Computer Security. 20(3). pp.152-169.
Lehmann, C. F., 2016. Strategy and business process management: techniques for
improving execution, adaptability, and consistency. Auerbach Publications.
Marx, T. G., 2015. The impact of business strategy on leadership. Journal of Strategy
and Management, 8(2), pp.110-126.
Online
Scanning the Environment: PESTEL Analysis. 2018. [Online]. Available
through:<https://www.business-to-you.com/scanning-the-environment-pestel-
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analysis/>.
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