Porter's Five Forces Analysis and Business Strategies

This assignment provides a comprehensive overview of Porter's Five Forces analysis and its application in business strategies. It includes various resources such as books, articles, and online sources that discuss the framework and its impact on competitive advantage. The assignment also explores different business strategies, including exploratory innovation, exploitative innovation, and digital business strategy. It highlights the importance of understanding industry forces and their influence on resource competitive strategies. With this knowledge, students can better analyze and develop effective business strategies for success.

Business
Strategy

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
P1 Impact and Influence of Macro Environment on Vodafone..................................................1
P2 The internal environment and organisation capabilities........................................................4
TASK 3............................................................................................................................................7
P3 Porter's five forces model to evaluate the competitive factors of telecommunication
industry .......................................................................................................................................7
TASK 4............................................................................................................................................9
P4 Range of theories, concept and model, interpret and devise strategic planning....................9
CONCLUSION..............................................................................................................................11
.......................................................................................................................................................11
REFERENCES..............................................................................................................................12
.......................................................................................................................................................13

INTRODUCTION
Business strategy is identify as an important requirement of an enterprise with the support
of which entire activities and functions of company are performed effectively. In the organisation
strategy is depict as a plan of action which is made by administration of a firm with a motto to
accomplish their set objectives and goals within pre-determined time. In simple word, it is look-
alike a roadmap which render guidance and direction to the entire workforce to perform
accurately and gain profitable outputs. It is also identified as a science and art of marshalling and
planning resources for their effective use (Ackermann and Audretsch, 2013). In this assignment,
chosen enterprise is Vodafone which deals in telecommunication sector and has operates and run
their business in Africa, Europe, United States and Middle East is undertaken for the motive of
preparing and designing this assignment. This report is based on Macro-environment and its
impacts on business. Organisational capabilities and internal environment of the firm is also
determined in this study. Porter's five forces analysis and Bowman's Strategic Clock are also
shown in this assignment. Main purpose of this assignment is to identify impacts of internal and
external factor of environment on business operations and functions.
TASK 1
P1 Impact and Influence of Macro Environment on Vodafone
The business operations and activities of each and every enterprise whether medium,
large or small are highly affected by macro-environment which business administration to
implement a better strategies in order to meet with these factors effectively. This factor made
with social, political, legal, technological, environmental and economical which assist a
company or reduce negative effects to them (Alsoboa and Aldehayyat, 2013). In this one of the
main factor is PESTLE Analysis which extremely influenced on Vodafone operations and
functions. These are determined as below:
PESTLE Analysis: It is important factor which highly effects on company operations and
function in positive as well as negative way also. Due to this, administration department of the
Vodafone take an effective plans and action to deal with them effectively and efficiently. Beside
this, firm has operated and established its business operations approximately 30 nations and
attain success and development on regular basis. Thus, they highly influenced from macro-
environment which determined as below:
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Political Factor: Due to political changes, business operations and activities of Vodafone
is highly effected. For example: in the United Kingdom, new government of the country may
maximise tax rate on the service of telecom which rises price of products as well as through this
business entity identify different trouble in attracting large number of clients. Thence, firm
upgrade to render better and effective telecommunication services in UK where the changes in
political situation are more stable. In today's environment, the conflict or misunderstanding yield
place in Europe, it make more effects on decision and operations of organisation.
Economic factors: This factor mainly linked with the economic stability of UK which
creates more effects on operations and activities of Vodafone. There are different nations which
creates the maximum variation the business get to enlarge their business activities in other and
unique place (Bentley, Omer and Sharp, 2013). Economic growth and development of the
country will maximise the income level of people in which they show lots of willingness and
interest in order to implement advanced technology. Thus, it will support firm in generating
maximum amount of the capital for long duration. Recently, in the United Kingdom, Economic
crisis bring unfavourable effects on business functions and operations of enterprise.
Social factor: It is another factor that fundamentally related with beliefs and culture of
people who are living in same country in which company is running. It may influenced on the
company success and growth thus requirement to create modifications in their strategies as well
as policies also, it pertain to the culture of an individual. As Vodafone, it is a European and
telecommunication organisation which needed to modify their policies as per the element of
social factor in which the enterprise has launched.
Technological factors: It is one of the main and essential factor which is followed by all
organisation in order to improve their growth and success in limited time period. In this
Vodafone always try to perform and activity according to trends which obtain in technological
and communication area. Through maxima rivalry in telecom sector, it is more valuable for the
enterprise to compete their challengers in an effective and quick way.
Legal factors: Company is operates and launch their business operations at global level
through which they obtain high competitions from their competitors (Cadle, Paul and Turner,
2010). Hence, it is essential for the telecom sector to consider entire legislation and regulations
which is formed by the legal authority of the country. Company indulge in different legal issues
or problems in which Vodafone face different lawful penalties. Beside this, enterprise also faces
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problems about not paying accurate amount of salary to their workforce as compare to other
challengers. Through this, employee turnover ratio is maximised and they leaves this firm to
another. Hence, it is necessary for the firm to apply entire legal standard and regulation to
maintain their strong position in market and increase loyalty of customers and employees for
long duration.
Environmental factor: Through globalisation, a person become much ethical. As each
and every clients hoped-for from their best-loved brand to take involvement in the development
and welfare of society. They neediness from their effective brand and products to be socially
accountable and participate lots in growth of social group (Curwen, 2011). Thence, it must
needed for Vodafone to keep healthy and friendly working atmospheres so as to force
knowledgeable and talented workers and accomplish set goals and targets within predetermined
period.
SWOT Analysis of the Vodafone: It is one of the effective and essential factor for the all
organisation to recognise their internal such as Strengths, weakness, and external like threats and
opportunities. All these are highly effects on business performance and profitability. SWOT
analysis of the Vodafone is explained as below:
Strength:
Global presence in across the world: Vodafone has enlarged its business operations and
activities in various areas of the glove like Middle East, Europe, Africa, United States and Asia
Pacific through the business subsidiary undertaking's as well as investments as of FY2010. Thus
it identify Vodafone is international and best leading mobile telecommunication industry across
the world.
Prominent market position: At the year ending 2009, company has a large market share
and position in the European location with UK, Romania Germany Spain and Italy at 23.4,
33.1,32,31.2 and 33.5 percentages (D'Aveni, Dagnino and Smith, 2010). Whereas, the share of
the company in Eastern European nation of Turkey is at 24.5%. Thus, it is essential for the
company to maintain strong base of the international customers.
Weakness:
Losing market share in USA: In this nation, company could have demanded and need
the premium in order to retain itself afloat. All the same, it is accelerated losing market share in
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such country to AT&T, and Verizon wireless, these are performing or acting far above business
if they includes the United State market only.
Lack of performance in Europe: Through economic conditions in Europe as well as due
to Brexit, performance of the company in its market is not good and it has not created more
amount of capital from its marketplace. In this, they observe at revenues, 40% is entering from
India and not from UK or US.
Threats:
Competitions: It is identify as main threats for the company which highly effects on
business performance and profitability in an effective and efficient manner. In the marketplace,
there are main competitions or substance from AT&T, and Wireless. For example: India has
Reliance Jio and Airtel and China has its China Mobile (Dobbs, 2014). All these are extremely
effects on company and its performance at global or international level.
Mobile number portability: In this main threat to company is MNP for example:
Competitors of the Vodafone introduce a cheap plan or strategic or someone such as Reliance Jio
that provides mobile phone and free internet, then customer don't prefer another before leaving
brands.
Opportunities:
Enhancing the network coverage: In the Vodafone, improving network coverage is
identify main issues which customer of such organisation sometimes have from the brand. In
many time, company has poor network coverage which is highly effects on business operations.
In order to overcome this, company operates different number of towers. Thus, it is a best
opportunity for the company to maximise acquisitions of the customers as well as maintain
strong relation with actual clients of the enterprise.
Emerging markets: In developing country, not only rural markets, other emerging places
such as Africa, it is great and better potential locations for the company. These emerging and
new places have maximising disposable communication and income get essential ones a network
is developing or growing (Firnkorn and Müller, 2012). Thus, there are different duties of
telecommunication business can play and act in an emerging place.
P2 The internal environment and organisation capabilities
As Vodafone launch and operates their business operations or activities at global level
through which they face difficulties from international as well as national challengers. It is
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important requirement to create a better and effective plans nor strategy as per serving quality
services and products to the clients so as to increase the satisfaction level of customer in
minimum time period.
Strategic capability: It is part of business ability in order to gain maximum amount of
capital and competitive edge within an organisation. It refers to the business position at
marketplace so in order to maintain this company should try to provide quality and better
services to the customers at affordable price. This undertake the plans and strategy with the
support of which operation and activities of enterprise can be executed effectively and efficiently
via applying addressable resources in successful and optimum manner. This will support
organisation in keeping their present better in marketplace (Grover and Kohli, 2013). Thus,
strategic capability of the Vodafone is a better and effective for an enterprise in order to make
their strong position as compare to their challengers. With support of acquiring help from
neutrals and many other curious parties, the Vodafone can capable to implement an effective
strategies and plans which assist them to maximise their sales and revenues easily. For instance:
in order to adopt new technology in firm they require to obtain accurate amount of money
therefore they necessarily to attract financial institution and investors to render accurate fund to
them at specified interest rate.
In this needs of the employees is to gain high motivation from the managers then they
work properly. It is the important part for business to maximise their revenues and sales in
certain time period. In this financial bodies and government authorities are play vital role and
responsibility in accomplishing success and growth of Vodafone in long period of time. In order
to keep this Vodafone apply VRIO analysis which are determined as below:
VRIO Analysis: It is identify as an analytical and effective technique with the support of which
organisation can capable to determine their abilities and make appropriate decision about
utilising accurate resources in an effective and efficient manner (Johnson, 2016). It is an
effective aspects which is used by the business manager to do their all activities in appropriate
manner. This model includes few parts which are shown as below:
Valuable: Under this, business resources which are valuable and useful for the
organisation thus require to be assign them in careful way so that favourable effects will be
received in an easy manner. Maximum utilisation of available resources change business to
decrease telecom service cost, it is offered by the Vodafone through which business attract
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different number of clients. Lack of resources is highly effects on the company while gaining
competitive advantages effectively (Klettner, Clarke and Boersma, 2014). Therefore, it is
important for the enterprise to analysis the resources value as modify in business environment.
Rare: It is identify that Vodafone's has accurate number of resources which is important
for them to achieve competitive edge in an effective and efficient way. As Vodafone's, it is a
world's leading and telecommunication industry across the globe which has operates their
business operation and activities in different nations. Therefore, business has accomplished more
resources by which they are able to enlarge their operations effectively.
Costly to imitate: It is another important part of such model in which business adopt an
accurate technique's and tools. These are not easy to imitate maximise the opportunities of
attaining competitive edge (Kernbach, Eppler and Bresciani, 2015). In cause of Vodafone's,
there are different number of aspects and resources implemented in the past times. Therefore, it
is difficult for another business to copy it for their own advantages and benefits.
Organised to capture value: It is important and necessary for an enterprise in order to
realise the significance of resources which are available in the organisation. If a firm is fails in
order to doing this then it show as unfavourable effects to Vodafone's. For this, it is essential for
the enterprise to select a better process, policies, approaches and needed to be integrated
effectively and efficiently.
Strength and weakness of Vodafone's and EE Limited:
Internal
Factor
Vodafone's EE Limited
Strength Vodafone's is world's leading and
famous telecommunication industry in
all over the globe and has achieved
approximately 100000 workers
internationally.
It has achieved strong visibility and
effective brand image in marketplace.
The business has engaged in rendering
various services and products such as
digital TV services, mobile telephony,
More than 27 million clients somce its
existence.
The business entity operates and
launch the biggest amount of grocery
or retail stores which has
approximately, 570 plus including
hundred franchise stores. These are
placed on the shopping malls and high
streets.
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landlines etc.
Brand value and image of the company
has been captured 28 billion dollars in
year 2016. beside this, brand equity
and recall of organisation also goes
higher.
Sponsorship of movie events and big
football maximised brand visibility.
Weakness The brand value and image of the
Vodafone's is fall down through having
different number of challengers.
Due to economic condition in Europe as
well as Brexit, business performance
has been effected on business revenues.
Selecting less effective channel of
distribution in which company is fails in
order to serve effective services and
products in the ruler area.
In research and development area
business entity is fall to promote their
goods and services to the customers in
marketplace
Everything Everywhere is mainly
targeting the segmentation of company
and then mislaying out on specific
clients.
Brand recall and equity is week
through its actual operates as per
compared with launched brand names.
Telecom products and services of the
EE limited is less available in
marketplace. That highly effects on its
brand image and goodwill in
marketplace.
Therefore both business such as Vodafone's and EE has strong presence across the world.
But as compared to Vodafone's, EE limited products and services are minimum which show its
capability and position at marketplace (Li, Zhou and Si, 2010). It is important for the enterprise
to gain competitive edge and benefits at marketplace. Further, it support the business to increase
their sales and revenues in limited time period. Therefore, company utilise better and optimum
resources which assist them to gain strong and long-lasting position at marketplace.
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TASK 3
P3 Porter's five forces model to evaluate the competitive factors of telecommunication industry
Porter's five forces analysis: It is identify as an effective and useful technique' which is
needed by the each and every enterprise in order to evaluate different factors which effects on the
business while expanding their operations and activities at different level (Porter’s Five Forces
of Competitive Position Analysis, 2018). Making such kind of measure which help an enterprise
in implementing valuable strategies and plans to compete with negative factor. Due to this,
Vodafone can capable in order to attain competitive benefits and make an effective position in
marketplace. This framework includes certain aspects which are explained as below in detailed
manner:
Bargaining power of suppliers: In the telecom industry suppliers bargaining power is
much high which is important for them to gain maximum advantages. Vodafone launch their
business operations and functions on large and international level through which they have more
power in order to monitor the values maximise by their producers (Pagani, 2013). Due to this,
business entity can easily attract different number of clients by keeping accurate prices of
telecom services and products.
Bargaining power of Buyers: It is identify as a part of Porter's five force model by which
customers bargaining power in the telecommunication industry is higher through having
maximum number telecommunication firm in marketplace such as Idea, Airtel, O2, EE, Verging
etc., thence, to attract the customer for buy business products and services, Vodafone require to
set an appropriate prices or value as compared to their challengers whose are present in
marketplace.
Threats of new entrants: In the marketplace, there are various barriers or difficulties
which modify the mind on other business in order to come in telecommunication industry thus
the threat to incoming new business into such sector are very down. While entrance into
telecommunication industry, innovative business should needed to yield maximum money of
regulatory issues and licensing fees which mainly considers to these industry (Porter, 2011).
Apart from this, selection of effective network structure are more maximum and regular variation
in such technology will bring down lots of trouble towards innovative organisation in order to
exist and compete with their all rivals whose are currently present in the market.
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Threat of substitutes: In this business faces minimum threats about substitutes of their
telecom services and products. Yahoo messenger, VOPI i.e. google talk, Skype, Video
conferencing and many other are consider as the service and products emerging substitutes to
telecom service. Through, effective economic scale, strong power of buyers, company does not
get influenced and thus, required to decrease the service price as well.
Rivalry with existing challengers: Under this, company face difficult rivalry from their
challengers through which Vodafone may require to improve their products and services in
regular basis so as to increase the gratification of clients.
TASK 4
P4 Range of theories, concept and model, interpret and devise strategic planning
Planning is identify as an effective and essential part for the success and development of
the company. It assist the organisation to maintain their strong and better position at international
as well as national level. Strategic planning is a important aspects of collecting of mission, vision
and value of the firm which render an accurate guidelines to their workforce to achieve targets
and gaols in proper manner (Scholes, 2015). With rapid growth and variation of technology and
time, administration require to find out the healthy and friendly environment. Vodafone is a
telecommunication industry which provide different kind of telecom services to the customers.
In order to identify their position and achieve long term goals and objectives company used
Bowman's Strategic Clock model which is more valuable and essential for the enterprise because
it shown the business position in different marketplace.
Bowman's Strategic Clock: It is identify as an effective and essential framework which are
adopt by the Vodafone with motive to identify various options and choice for strategic planning.
This model support enterprise in positioning their services and products so as to accomplish
competitive edge in market within an organisation. This concept gives lots of choice or
alternatives of positioning commodity on the basis of 2 aspects including perceived value and
prices. Vodafone is a telecommunication and multinational organisation which provide telecom
services across the globe. Bowman's Strategic Clock includes eight different positions which are
explained as below:
(Position 1):Low price and low value added: This position includes the telecom service
which is not high in price and value (Sumer and Bayraktar, 2012). Thus, it is difficult to attract
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large number of clients as applying such kind of facility. In this Vodafone is fails to increase
satisfaction level of customers as well as achievement of competitive advantages.
(Position 2): Low price: In this model, the value of the telecom service and products
should needed to be reduced with a motive of retaining maximum base of customers in the
organisation. Due to this, Vodafone earn maximum amount of the capital as well.
(Position 3): Hybrid: This position identify as commination of 1&2 position which
involves few aspects of minimum product and price differentiation. In this main aim of the
company is to influence customers to buy more and more. Thus, it effects on buyers decision
making power as well as gain more amount of the capital.
(Position 4): Differentiation: As per this position, Vodafone renders effective and valued
telecom services to the buyers with motto to increase its satisfaction level. Thence, company
require to serve quality service and products by which large number of clients are easily attracted
towards business services.
(Position 5):Focused differentiation: In this position, level of the price are maximised
through to rendering luxurious services and products to the customers. In order to retain better
market position, it must needed to follow distribution channels, segmentation and different kind
of promotional strategies.
(Position 6):Risky high margins: In this strategy or position, the Vodafone maximise
their service and product price without rendering any advantages to clients (Tavitiyaman and
Zhang, 2011). Therefore, if audiences continuing purchase their products or services then the
enterprise may earn maximum amount of the capital but if clients leave to challengers service
and products. It is difficult for them to retain long lasting position in marketplace.
(Position 7):Monopoly pricing: It is another kind of market where individual seller sale
out their products and services in marketplace and thus in this competition of the company is
law. Through this, seller of the company can not includes the preferences and satisfaction level
of clients as they have only single choice to purchase or not.
(Position 8):Loss of market share: Under this strategy need of the company is to keep
stable and strong position in marketplace. In this, business entity required to set an appropriate
prices or value for their telecom services with motive to attract large number of customers.
All these strategies and positions are needed by the Vodafone in order to launch their
business operations and activities at national as well as international level. From mentioned 7&8
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strategies and position are uncompetitive for the enterprise because in which price of the telecom
service and products is more than the value sensed by the large number of clients (Williams and
Figueiredo, 2011). Position of the Vodafone is belongs in Hybrid because it is a combination of
all strategy. In this price of the service and products are classified on the basis of its quality and
quantity. It is good for the organisation to maximise their sales and revenues in limited time
period. Further, it support to attract large number of customers towards telecom services.
CONCLUSION
From the above mentioned report, it can be concluded that effective and better strategy is
more essential and valuable part of the business growth and success. It is also important for the
company to gain maximum amount of capital and achieve competitive edge within an
organisation. In order to expand their business operations at national and international level
company use Porter's five forces analysis and VRIO Analysis both are valuable model for the
telecommunication industry to maintain their market position for long duration. Business
environmental consist two factors such as internal and external which highly influenced on
company performance and performance in favourable and unfavourable manner. PESTLE and
SWOT analysis also identified which impacts on company to identify their strength, weaknesses,
threats and opportunities.
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REFERENCES
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Klettner, A., Clarke, T. and Boersma, M., 2014. The governance of corporate sustainability:
Empirical insights into the development, leadership and implementation of responsible
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Pagani, M., 2013. Digital business strategy and value creation: Framing the dynamic cycle of
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Porter, M.E., 2011. Competitive advantage of nations: creating and sustaining superior
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Scholes, M.S., 2015. Taxes and business strategy. Prentice Hall.
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Tavitiyaman, P., Qu, H. and Zhang, H.Q., 2011. The impact of industry force factors on resource
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Williams, B. and Figueiredo, J., 2011, June. Strategy and technology management: An
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Online
Porter’s Five Forces of Competitive Position Analysis, 2018. [Online]. Available through :
<https://www.cgma.org/resources/tools/essential-tools/porters-five-forces.html>.
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