External Environmental Factors and Business Strategy

The provided document is an assignment that delves into the relationship between external environmental factors and business strategy. It utilizes Pestel analysis and Porter's five forces to understand how these factors affect a company's profitability and productivity. The assignment draws from various academic sources, including books and journal articles, as well as online resources, to provide a comprehensive understanding of this critical aspect of business management.

Business Strategy

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
P1 Impact and Influence of Macro Environment on Vodafone..................................................1
TASK 2............................................................................................................................................4
P2 The internal environment and organisation capabilities .......................................................4
TASK 3............................................................................................................................................8
P3 Analysing the telecommunications sector.............................................................................8
TASK 4..........................................................................................................................................10
P4 Understanding and interpreting strategic direction..............................................................10
CONCLUSION .........................................................................................................................13
REFERENCES .............................................................................................................................14

INTRODUCTION
In today’s business world, it has became mandatory for every single organisation to make
strategies so that goals and objectives can be formed in specific time of period. In other words,
business strategy can be understood as an art which includes planning arrangement of various
sort of resources, and are enclosed with skills that are being carried by staff members. All these
things are helpful in attaining all the goals and objectives of an enterprise. Vodafone company
has been taken under this report. Assignment is going to include impact of external
environment, approach which are being considered in order to understand external environment
are: Pestle and ansoff Matrix. It is also going to include application of VRIN/VRIO model to
understand the strategic capabilities. On the other hand mobile communication is also playing an
important role on people life. Porter’s five forces model and bowman’s strategy clock model has
also been included which will help Vodafone in hitting its targets in short period of time.
TASK 1
P1 Impact and Influence of Macro Environment on Vodafone
Telecommunication industry is have impacted both positively and negatively on people’s
life. under this it has been located that Vodafone plays a vital role in all over United Kingdom
and in other countries as well where this company is delivering its services like mobile
networking and other items to consumers in order to full fill all the needs of customers they have.
With the help of this company has influenced its customers and which is helping them in
maintaining a good relationship with them and this is impacting positively on there profitability
and productivity. Vodafone is delivering its services in almost 67 countries majorly they do
business among India Europe Australia which is helping them in generating expected revenues.
Along with this it has been located that this organisation has grabbed a good position at
Marketplace of whole world through delivering Quality Services to consumers. This action is
helping Vodafone in expanding its business in other countries as well in which it is not doing
business at the moment (Ackermann and Audretsch, 2013). But, while expanding its business
there are ample number of issues that can be faced by organisation and most of them comes
from external environment some of them are being understood beneath:
Political Factors: Government of UK and of other countries plays Vital role on organisation’s
business. As governmental bodies mostly develops policies in order to enhance economical
conditions of a country. Therefore it is required for business organisations like Vodafone to keep
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on following all the rules and regulations which have been made by political parties of a nation.
Along with this it has been analysed that some of policies do puts positive impact on business
organisations and some of them are not does it is required for companies to implement all of the
rules as per their needs. Rules and regulations gets keeps on changing just because of influencing
of all the foreign departments and change in text policies as well which may become as a barrier
for companies that are doing business at international level.
Economical Factors: Vodafone is a big brand name in all over world therefore it is required for
the company to keep in mind of this factor just because they are doing business at international
level. Every single country carries its own sort of policies which has impacted on profitability
and productivity of Vodafone. For an example India carries a good growth rate in all over world
on Economy but on the other hand United kingdoms economical conditions are already good in
nature therefore Vodafone cannot implement all the policies that they have made for United
Kingdom in India as this may put them in situation where they can face losses and reduction and
Goodwill lesbian. along with this consumers pockets also plays necessary role when it comes to
generate high revenue. monetary gets changes when a company expands its business from one
country to another. At the same time it is also possible that taxation rates may also get changes
which may put impact on manufacturing products and on services as well that are being
delivered by Vodafone.
Social Factors: this order factory is much included with belief of consumers and of other people
in today’s business environment (Auzair, 2011). According to survey of United Kingdom it is
essential for companies like Vodafone to consider this element as well along with political and
economical because perception of society can directly put impact on reputation of company. If
Vodafone try to enhance its business in South Africa it is maybe possible that they will see a
whole new culture from the culture they were following of Britain. Away from this if company
is looking forward to enhance its profitability it is must for companies to do CSR activities which
pay directly affect Goodwill of company at international market. Through this Vodafone can
do business as a whole new place if they will get to know about culture which are being followed
by countries in which extension is being done.
Technological Factors: Vodafone carries a worldwide brand name in all over world but it has
been located that this form also keep an eye on technological factors just because this can be
considered as one of the main element that may put both positive and negative impact on
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profitability ratio Vodafone. Along with this this factor is included with two major things and
Desire Innovation and invention. As technology changes it has been analysed that Products
cost get thread uses and this can be considered as main role of making or developing a business
strategy under which consumers can directly focused upon the bringing innovation within the
services and thus it is mainly known for this thing. Mission and vision of company gets changes
because of impact of new and updated tools and techniques that are related to technology (Azar,
2011). Apart from this, it has also been located that Vodafone carries updated Technology and
this scenario is helping them in delivering appropriate and updated services which are related to
technology to consumer. can be stated technology driven which can mainly help out in future
time to gain the competitive advantages. On the other hand if Vodafone does not adopts
updated technology in specific time of period then it is may be possible that form may face a lot
of losses along with decrease in Goodwill as well.
Legal Factors: Vodafone is already containing a good market share in all over world but it has
been located that there are ample number of competitors present at Marketplace. Therefore it is
required for this company to do business in an appropriate manner with the help of all the legal
factors that are being said by government of United Kingdom and by other countries as well. On
the other hand, is Vodafone case doing business all around globe it is maybe possible that form I
have to face various sort of legal issues which are being charge by government of countries
where company can get a lot of time penalties. There was an issue got a rose In Vodafone in
previous years where company did not paid staff members with sufficient wages which was fixed
by government of United Kingdom And this created any sort of Charges for this company
Where They also had to face a lot of reputation problem as well just because it was going down
in rapid manner. Employees who left at the same time just because of fear that company will not
be sufficient wages to them and got selected in other countries which directly impacted on the
profitability and productivity at the same time because innovative ideas that was being brought
by them went to an another company which enhanced their revenues.. thus, it has become vital
for this organisation to keep on looking and two different aspects that were related to legal
elements so that too enhance their image in front of society.
Environmental Factors: telecommunication services delivery services to consumers with
networks but it has also been seen that this company developer radiations in a huge manner
when it compares to other companies that were dealing in the same sector. Disaffected on
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environment in a bad manner which reduced its services because consumers started feeling like it
will put that impact on their health as well (Bharadwaj and et. al., 2013). Does it has became
vital for Vodafone to keep on looking into various solutions in order to reduce all the radiations
which are being developed by their network sites in order to enhance their profitability and
reputation as well in front of the society.
There are numerous strategies within Ansoff's Matrix for choosing a Product-Market Growth
Strategy:
(Source: Ansoff's Matrix, 2017)
· Market Penetration: in today’s business environment companies like Vodafone, EE,
Virgin have built their operations in an appropriate manner with using various sort of
business strategies in order to enhance their profitability. This was mainly done with the
help of consumers as they are the one who purchase the services that are being provided
by company and it is vital as well for Vodafone to keep on looking into these aspects so
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Illustration 1: Ansoff Matrix

that to fulfill all the needs and wants of consumers. Mainly Vodafone believes in
adopting strategies that are less included with risk because developing a strategy ask for
high maintenance and funds as well at the same time. Piece of the overall industry
support inside the development of market will assist in increasing high outcome for
development and accordingly will give number of stage of chances for connecting with
limits. There are sure procedures which are constrained alongside organization for
embracing the one for developing.· Market Development:. Market can be developed buy an organisation through looking
into all the needs and wants of consumers and all the Trends that are being followed by
Rival competitors. There are very short of strategies that are being used by Vodafone in
order to fulfill all the requirements of customers and this was done show that to sustain at
market place of United Kingdom and of other countries for a longer period of time
(Bucolo and Matthews, 2011). Away with this market development strategy is filled with
high risk when it comes to compare to other approach and with that is market penetration
strategy.· Product Development: innovation process most retakes under this sort of approach . it
has been analysed that if a company is not fulfilling all the requirements of users in an
appropriate manner then it is maybe possible that form fill sustain at market place for a
short time of period. Therefore sustaining at Marketplace has become wider for
companies to generate high revenues and to earn more profit. With the help of this
Vodafone has reached its market share among other companies in all over world.· Diversification: this approach of ansoff matrix it has been analysed that all the risk can
be reduced to zero when a company face losses or when organisation is looking forward
to expand its business through adopting technology or updated Technology at workplace.
Of Vodafone Grover and Kohli, 2013). With the help of this Results can be followed by
an organisation while expanding its business at international level.
TASK 2
P2 The internal environment and organisation capabilities
It has been analysed that there are ample number of tools that are related to competition
which can be adopted by a company and all of these tools stay connected with market share
revenue and many other things. therefore after adopting the best shot of strategies it is essential
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for business manager, leader to select best approach and then apply at on executed in an
appropriate sense so that benefits can be gained right on time.
(1) Strategic capability can be understood as a capability which helps a business leader to adopt
or use scented system so that to improve its position at Marketplace this sort of tool is very much
helpful and building up motivation among staff members and this sort of tool do not required
much money while executing this technique. This sort of tool can help Vodafone in pulling out
all the required details and this sort of tool can help a business firm in many ways because it
aids in locating or observing capacity of other firms as well that are working or doing business
in same sector.
Along with this it has been located that there are ample number of strategy that stays Complex
because of their process just because it consists of various complex is used therefore it is
required for business organisation to keep on accessing all the external and internal environment
on a regular basis so that benefits can be gained in an appropriate and effective manner (Jocovic
and et. al., 2014). Daily Strategies and plans have been developed through locating all the
annual reports, public records, authors point of view and many more. Away with this, it has
been located that Vodafone Business is getting changes Through Locating all the needs and
wants of consumers in in an appropriate Manner.
On the other hand, there are various sort of elements which has the capacities for giving out the
commitment inside the capacities of business. There are different sort of advantages like money,
property alongside a large number of the licenses which can give out the commitment for
business capacities of figuring and hence applying the plans (Kalyani and Sahoo, 2011). There
are number of components for the key capacities incorporating the HR alongside organization's
structure and worker abilities which can give commitment to the business rivalry.
(2) “VRIO” Model: under this kind of model there are ample number of tools that can be used
by companies in order to evaluate all the internal sources through which company can gain
abilities to hits targets and to gain power to give hard competition to Rivals. Along with this
identification of strategies can be done through using this sort of tool.
Valuable: Vodafone is caring use brand name in all over world it is very much required for
them to resolve all the issues that are being faced by them that are related to resources through
which operations can be properly done in an appropriate manner. With the help of this sort of
strategy it has been located that business organisations like Vodafone can keep on evaluating all
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the all the all the values all the values that they have and deliberately from looks forward to
expand its business in other countries as well through using all the values that are being created
by using different strategies (Klettner, Clarke and Boersma, 2014). Main aim under this tool is
to improve products price that means minimising the goods price so that to gain competitive
advantages and uses of resources can also be done in an appropriate manner so that to reduce on
the way stages that are being formed while manufacturing products that are being formed while
manufacturing products and services.
Rare: there are ample number of companies that are using same sort of resources in order to
manufacture products and services in their own ways. But, Rapid use of these resources may
not build up competitive advantages because forms that are liable for Each Other are using
saying Tools and techniques that are being used by others in order to create products and
services to fulfill all the needs and wants of consumers Optimum utilisation of resources are
pretty much required under this section just because resources are not left much in today’s
business environment and it is necessary for companies to take all of these natural resources to
carry forward them in near future as well.
· Costly to Imitate: stimulation of cost should be done of all the resources that are
being collected or taken under by Vodafone in use. with the help of this company may
reduce all Wastages and this may lead an organisation to create high revenue along
with profitability as well (Murano and et. al., 2011). along with this it has also been
analysed that company consists of various resources can help a firm. Along with this it
has also been analysed that company consists of various resources can help a company
in gaining good rivalry procedures, various resources by company which has mainly
stays rare in nature and carries a value so that it aid an enterprise in attaining the
sustainability along with competitive advantage.
Organised to Capture Value: if a firm is not utilising some sort of resources then it is may be
possible that those resources that are not taken under in use or less beneficial. Under this it is
required for Vodafone management to keep on locating into these resources that are not coming
under in use and manage them so that value can be enhanced of company in front of the arrivals
or needs and wants of consumers can also be full filled with this sort of technique as resources
that word left now are being considered as the main one as company have started using
resources that were not coming under in use.
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(3) Strength and weaknesses:
STRENGTHS:· Massive Market Coverage: As given by Forbes, Vodafone comes on 395th positiom
among the 2000 worlds top brands. This sort of organization has different issues like
system mistake and accordingly is known for wide dispersion. In India, this organization
has the second biggest base settled down. Activities are being held in more then 30
nations.· Revenue Generated: Vodafone is generating high revenue in every single year which is
helping them gaining competitive advantages at Marketplace of whole world. In the year
of 2016 annual turnover of this corporation was in the amount of 87.3 million dollars
(Oestreicher-Singer and Zalmanson, 2012).· Marketing: Vodafone has its own and unique sense of doing advertisement of its products
and services that they are willing to enhance sales of. In India at the moment Vodafone is
using character named as zoozoo which brand is of consumers in ample numbers and
created high chances for the company to gain competitive advantages true selling its
products and services in a huge manner.· Premium Cost: Vodafone is a sure admnistrations which are being separated by Vodafone
while showcase is being infiltrated by its rivals. Because of better administrations
alongside correspondence, clients has positive attitude towards the administrations of
organization. As result, Vodafone is principally ready to get some sort of premium out of
the clients though other telecom administrators are attempting to keep up the positive
edges.
WEAKNESSES:
· Dropping Subscriber Base: As given under the graph, subscriber base of Vodafone is
gettingdecrease by time which can be understood as a problem for this company and is
also reducing Goodwill of Vodafone as well at the same time.
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· Dropping Brand Valuation: subscriber of Vodafone and its states are getting diminish
which is putting impact on their business as well because if a company does not have
consumers High numbers it is maybe possible that company may reduce its prices as
well this can put impact on profitability and productivity both at the same time which will
directly effect goodwill and growth rate of this organisation (Schaltegger and Wagner,
2011).
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· Losing market share in USA: there are many companies under telecommunication that
took place and started doing business in United States. This has low down the process of
Vodafone to expand its business in US.
TASK 3
P3 Analysing the telecommunications sector
Telecommunication companies in all over world has raised economy of every single
country . Therefore, companies like Vodafone, virgin, Airtel comes under that carries That
carries huge name in all over world And are doing business at international level. They are
offering high speed internet and along with this there are other services as well like offer in
mobiles that are coming and electronic items are being sold by these organization. Some
effective factors of Telecommunication are given Beneath:
· Competitive Rivalry: Supplier Power: it has been examined that there are situations
and factors which are related to suppliers where cost of products and services are
being disturbed by them. with this taking under in the process suppliers is an easy
task but they should be effective in nature just because Vodafone cannot afford if
services are not reaching to the consumers. If services are not been reached to
customers right on time it is maybe possible that services may get disrupted and
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through this customers buying capacity also get reduces so it is mandatory for
suppliers to be effective in a jar so that to deliver products and services to users right
on time and in effective manner. (Slack, 2015). Away with this it has also been
located that there are many companies that are delivering IT services to consumers in
cheap rates But the services that are being provided by them and not helpful in
nature and may create problems for consumers in near future.· Threat of Substitution: in today’s business world consumers looks forward to pay less
and gain more. This way of Thinking has given ideas too many entrepreneurs to deliver
cheap products and services as compared to original companies this has reduced
profitability of organisations like Vodafone and impacted negatively on their revenues as
well. It is highly essential for business organisations to keep on hit their targets through
delivering ample number of products and services to consumers in order to build up or
keep up the interest of customers huge numbers.· Threat of New Entry: telecommunication business sector is filled with immense
profitability margins which is Catching eyes of people high in numbers to do business
under the sector. This scenario can be stated as thread for companies like Vodafone
which may reduce their profit sharing and earnings as well both at the same time it is
required and in fact highly required for administration to keep on locating all the
strategies that are being used by the rivals and then adopt the best one so that good
competition can be given to them. Companies that are already doing business in
Marketplace they mostly have high experience which Can help them in gaining
competitive advantages or generating high revenues even if new companies are coming
or going this may help an organisation like Vodafone to attain all the goals and objectives
of IT in much more effective and inefficient sense.
TASK 4
P4 Understanding and interpreting strategic direction
Bowman's Strategic clock can be stated as one of successful approaches that can be used
by researchers of a company when it comes to attain goals and objectives ineffective timely
manner. This sort of approach is includes various things like low price, high risk, management
of it and so on. It is highly required for investigator to look into different aspects and then take
decisions which may help them in understanding the whole situation in short period of time.
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Understanding the commercial Centre is the main aim of this sort of model which helps
investigators or researcher to look into all the decisions that needs to be taken so that company
can gain high profit margins which helps investigators or researcher to look into all the decisions
that needs to be taken so that company can gain high profit margins. Importantly Strategic clock
is used for to understand the choices of consumers through which Vodafone can take initiatives
and these situations can be of 2 or 3 stages (Svee, Giannoulis and Zdravkovic, 2011). System
clock has been made Below:
(Source: Bowman's Strategy Clock, 2018)
Low Price and Low Value Added (Position 1):
Under the stage Competition level will be zero because of prices as product price stays Lowes at
this stage of cycle and also company may also carries less reputation at Marketplace which
directly reduces profit margins as well of the organisation (Giannoulis and Zdravkovic, 2011).
In other words blue combination that means reputation and profit margins will also stay low. It
is highly required for companies that are coming under the sector to take initiative so that profit
margins can be raised.
Low Price (Position 2):
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Illustration 2: Bowman's Strategy Clock

Researchers, investigators are some of the business position inside the market who search out for
the minimal effort pioneers inside the commercial center. It is exceptionally basic for the
technique of cost lessening which are basically joined with prudent deal. There are a portion of
the low overall revenues for the items, anyway there are low net revenues which has the
capability of creating high proportion benefits. There is the value wars due to the opposition
which is being reveled inside the commercial center for low value position.
Half and half (Position 3):
It has been located that that business environment is consist with various sort of variables inside
this sort of position as per the name at the low sort of cost which are exceedingly identified with
the opposition alongside a portion of the separation for the item. Significant thought process of
this sort of position is inspiring the clients for buying the administrations alongside a portion of
the adequate item separation. This is one of the powerful plans and methodologies which are
being planned for situating, if the additional esteem is being included for the offered in viable
way.
Separation (Position 4):
It has been analysed that different sort of components which are engaged with separation
methodology which is fundamentally being offered by the clients and along these lines they have
abnormal state of seeing for the estimation of brand. Significant part is being played by marking
for keeping up the nature of item. At achieving the moderately costs, top notch items alongside
solid mindfulness which can keep up unwaveringness (Kalyani and Sahoo, 2011). This can be
expressed as best place for including the esteem which thus is being separated procedure needs.
Focused Differentiation (Position 5):
this sort of factor, primary concentration is after situating the thing which is on most lifted
esteem levels where the customers for the most part buy the record of high observed regard. This
can be expressed as the method which is being gotten by indulgence brands, which has the
arrangement of achieving the top notch costs by for the most part centering upon division,
circulation and progression. Income of the organization will naturally enhance alongside having
best things which thus can assist in keeping up the techniques in long residency.
Unsafe High Margins (Position 6):
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This is a high risk masterminding system that you may battle is bound to disappointment – as
time goes on. With this structure, the business sets high costs without offering anything
additional concerning obvious respect. On the off chance that clients keep obtaining at these high
costs, the points of interest can be high. In any case, finished the whole deal clients will locate an
unrivaled orchestrated thing that offers all the more clear helper at the same or lower cost. Other
than for the time being, Unsafe High Edges is an uncompetitive framework (Kalyani and Sahoo,
2011). Being able to offer at a cost premium without protect is unbelievable in any ordinary
focused market.
Syndication Pricing (Position 7):
Syndication is where there is simply single business who gives certain sort of items. There is no
post for the opposition inside the commercial center and along these lines for the most part client
needs to essentially sees inside item. There is no substitute which is accessible, so in the greater
part of the nations, there are imposing business models which are very controlled keeping in
mind the end goal to have abnormal state of costs.
Loss of Market Share (Position 8):
This is one of the compelling technique of debacle inside the commercial center. There are a
significant number of the clients which has prevail upon the cost alongside setting up of standard
alongside low apparent incentive when contrasted with the other sort of items.
From the above report, it can be expressed as three sort of positions which are 6,7 and 8 which
can not be expressed as uncompetitive in nature. These can be expressed as the more prominent
value then the apparent esteem. For organization like Vodafone there are three positions which
will be reasonable.
CONCLUSION
From the above report, it has been revealed that effective business strategy may aid an
organisation when it comes to attain all the desired goals and objectives. On the other hand,
motive of adopting strategies is to expand business at international level. These strategies help
an organisation in understanding behaviour of external environment and locating all the Trends
that are being adopted by Rivals at Marketplace. Through this enhancement of business can be
done in an appropriate and efficient manner. Along with this, Pestel analysis and Porter five
forces are some sort of approaches that can help a business firm in locating all the impacts of
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external factors that may put positive or negative impact on profitability and productivity of an
enterprise.
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