Business Strategies and Competitive Advantage

This assignment provides a comprehensive analysis of business strategies and their impact on achieving overall organizational objectives. It delves into the importance of adapting and modifying strategies in response to changing micro and macro factors that affect business operations. The use of tools like Pestle, Ansoff Matrix, Bowman's Strategic Clock, and VRIO Model is discussed as they aid in formulating effective business strategies and gaining a competitive advantage in overseas markets.

BUSINESS STRATEGY

Table of Contents
INTRODUCTION ..........................................................................................................................3
TASK 1............................................................................................................................................3
1.1 PESTLE Model for environment analysis............................................................................3
Vodafone PESTLE Analysis.......................................................................................................3
1.2 Ansoff's growth vector matrix ..............................................................................................5
TASK 2............................................................................................................................................6
2.1 Explain strategic capability...................................................................................................6
2.2 Apply VRIO Model to determine the strategic capabilities of Vodafone.............................7
2.3 Identify strength and weakness of Vodafone .......................................................................8
TASK 3..........................................................................................................................................10
3.1 Porter's Five Force Model ..................................................................................................10
TASK 4..........................................................................................................................................11
4.1 Using, Bowman's strategy clock model, analyse the strategic direction and options
available for Vodafone. ............................................................................................................11
CONCLUSION .............................................................................................................................13

INTRODUCTION
Every organisation has to formulate some strategies so as to cope up with different types
of situation that comes in their path. Every company is having its own vision and mission
statement that they need to accomplish and this cannot be attained without effective business
strategies (Ackermann and Audretsch, 2013). Vodafone is a successful British
telecommunication company, headquartered in London. In UK, the company is ranked as the 6th
largest in terms of earning higher revenues and growths. The given report talks about how the
internal and external environment of the company affect overall company's operation and
functions. Others framework like Ansoff, SWOT, Porter's have also taken into account that help
in formulating business strategies in an effective and efficient manner such that organisational
goals can be accomplished appropriately within stipulated time frame as well.
TASK 1
1.1 PESTLE Model for environment analysis
Vodafone PESTLE Analysis
Vodafone PESTLE analysis is a strategic tool which help in analyse the macro environment of
the organisation. Pestle stands for -Political, Economic, Social, Technological, Environmental
and legal factor that impact the working of this company. Changes in the macro environment
factors can have direct impact on not only the Vodafone group but also have effect on other
players in communication also. This provide great detail about operating challenges Vodafone
will face in current macro environment other than competitive forces.
Political Factors :-
These factors play a major role in determining factors which give effect on Vodafone
long term profitability in certain country and market. This company is operating in Wireless
communications which is located in many countries and bring out itself to different types of
political environment and political system risks. These factors are related with political system
and political instability of countries where this company wish to market its products. This will
involve examination of system of government that other countries have adopt(Annabi and
McGann, 2013). This company can closely analyse the many factors before entering in
market .These are related with political stability and importance of Wireless communications
sector in the economy of country, Risk of military invasion, level of corruption which is related

to level of regulation in technology sector and pricing regulation related with mechanism for
technology.
Economic Factors :-
These factors are related with inflation rate, saving rate, interest , foreign exchange rate
and various economic cycle which determine the aggregate demand and aggregate investment of
economy (Auzair, 2011). Their are factors which are related with competition norms which gives
impact on competitive advantages of the firm. This company use country's economic factors
which is related with growth rate, inflation and industry's economy indicators for example
wireless communication industry growth rate, consumer spending etc which help in forecasting
the growth of these sectors. Economic factors which this company is consider these are various
economic system in countries of operation, government improvement in free market and related
technology, exchange rates, efficiency of financial market, unemployment, inflation and interest
rates. Vodafone has to establish the infrastructure which help in supporting the network which
usually require taking permission from the government and other regulatory body. So, this
company has to give brand image and asset to take the advantages of other market.
Social Factors:-
Society's culture and way of doing things impact the culture of an organisation these are
related with values, customs, beliefs and attitude etc. Shared beliefs and attitude of people play
important role in how marketers of this company will understand the customers of given market
and how they design the marketing message for wireless communication industry consumers.
This involves the management of Vodafone which help in analyzing the income level, social
structures, educational backgrounds, religion and family units before marketing its services of
network operations to the entire market. These factors play a major role in utilization of services
in the society because some religious beliefs may not allow the use of mobile phone in church.
Therefore it is important for the company to clearly identify the right services and products for
the right consumers as well as for the right markets (Azar, 2011). Therefore this company has to
consider in details such factors in order to avoid losses associated with social factors.
Technological Factors:-

Technology is fastly impact the various industry across the world. A company should not
only to technological analysis of the industry but also the speed at which technology give bad
impact on industry. Slow speed give more time while fast speed of technology give more better
result to company and also increase the profitability (Bharadwaj and et. al., 2013) These factors
help in analysis the understanding the following impacts it is related with recent technological
development by Vodafone competitors, its impact on product offerings and rate of technological
diffusion.
Legal Factors:-
Every country follow their own laws and regulations, because legal framework and
institutions are not enough to protect the intellectual property rights of an organisation. A firm
should carefully evaluate before entering such market as it can lead to theft of organisation's
secret . Vodafone consider various legal factors these are Anti-law in wireless communication
industry overall in country, discrimination law, consumer protection, e-commerce, employment
and safety law.
Environmental Factors:-
Different markets have different norms or environmental standards which give effect on
profitability of an organization. Even within a country often states that can have different
environmental laws .Before entering in new market or starting a new business in existing market
the firm should carefully examine the environmental standards that are requires to operate in
market. Their are various factors which company should considered before entering into market
these are weather, climate change, laws related with environment pollution, Waste management
in technology sector, Air and water pollution regulation in wireless communication industry,
waste management in technology sectors, attitude towards green product and attitude towards
renewable energy.
1.2 Ansoff's growth vector matrix
Ansoff Matrix is mainly used by business enterprises in order to determine how each opportunity
fits the business strategy in context product and market ( Bucolo and Matthews, 2011). It is easy
to use and very effective in terms of clear strategic thinking around growth. It covers:
Market Penetration: The company is having strong market base because of its Zoozoo
advertising campaign. They are trying to increase their market presence by expanding their

business operation in urban distribution network. In UK, the company is having extensive
number of distribution network that gives them higher competitiveness level over their
competitors.
Market Development: According to the recent survey, it has been clearly figured out that
Vodafone is one one of the leading mobile sector in UK (Kalyani and Sahoo, 2011). Almost half
of UK's population are Vodafone users thus enabling them to gain high competitive advantage
all over Europe. A major proportion of revenue is generated from entire UK.
Product Development: The company is trying to provide new services to their customer which
retain them for longer period and to establish stronger foothold in its existing subscriber base. It
is the process of rolling out existing mobile services and providing them such services that gives
them high competitive advantage over other existing competitors such as O2, EE etc.
Diversification: Recently, Vodafone has decided to establish global Machine to Machine service
platform that assist companies to manage and deploy large and wireless M2M projects
application that help in enhancement of customer service and central automation and control of
projects. According to the statistics report it has been figured out that most of the UK people
prefer to use their smartphones while walking and not only adults, even young generation is also
doing the same. Children ranging between 15-24 make extensive use of mobile operators.
Presently Vodafone is having strong customer and market base in all over the market of United
Kingdom
TASK 2
2.1 Explain strategic capability
Strategic Capability describes the ability of business to successfully employ competitive
strategies that allow business to survive in market for longer run and assist in gaining high
competitive advantage in the market. It is a major component of that aid company is achieving
business objectives in an effective manner. In other words it can be describe as set of capacities,
skills and resources that create long term competitive advantage for the firm in overseas market
(Meskendahl, 2010). With the help of this tool, Vodafone can easily analyse their strategic value
in terms of available financial resource that needs to be used in an optimum manner. It normally
relies on financial data of the company that compute their performance in the market in terms of
sales, revenues throughout the year.

2.2 Apply VRIO Model to determine the strategic capabilities of Vodafone
VRIO Model: The framework was proposed by Jay.B.Barney with an aim of evaluating the
impact of company's micro-environment factors such as financial resources, material resources,
knowledge, information, human resources on their business operation ad activities (Mitra and
Bhardwaj, 2010). It is an analytical technique that mainly deals in evaluating company's
resources and competitive advantage in overseas market. It encompasses of Value, rareness,
limitability and organisation.
With the assistance of this mode, Vodafone can easily analyse their resources in an
effective manner. Once the company knows about their resources they better understand
competitive advantage and weakness. The dimension of VRIO are discussed below:
 Value: It includes cost of resources and how to obtain it easily from the market?
 Rareness: It deals with how limited or rare resources are?
 Imitability: How is it difficult to imitate the resources?
 Organisation: It deals whether available resources support the existing arrangement of
company and can the firm use it optimally or properly.
Vodafone has mainly taken into account this model so as to assess the situation inside the
organisation. Further it also laid stress on following things:
 If the resources of Vodafone is not valuable, then the company needs to outsource it
 If the resources are valuable but not limited or rare than, the company is in their
competitive implication and needs to focus on possible potential improvement for a given
resources.
 If the resource are valuable and rare but not expensive enough to imitate then the
company is having competitive advantage (Schaltegger and Wagner, 2011).
 If resources are valuable, rare and expensive to imitate but the company is not able to
organize it properly within the company, then the resource become expensive for us
 If we are able to organize and manage it properly, then company can easily convert
temporary competitive advantage into permanent.

(Source: VRIO MODEL, 2017)
2.3 Identify strength and weakness of Vodafone
Strength Extensive market coverage: Vodafone enjoys strong customer and
market base spread all across the world. Presently, the company is
operating in more than 30 countries and also has partner operation in
many more additional places. Thus, the company is enjoying significant
share in mobile-telecom sector in most of the countries in which they
are mainly operating. As of 2017, the market share of Vodafone in
South Africa, UK, India, Germany and Italy are 50.9%, 40.6%, 22.7%,
3.9% and 32.3%. Moreover in UK, it was ranked the 6th most valuable
global telecom brand in United Kingdom.
Innovative advertising strategies: Innovation ha always plays crucial
Illustration 1: VRIO Model

role in Vodafone advertising strategies: In-fact the company was the
first one among others who comes into partnership with Yahoo in 2006.
According to the survey conducted by Deloitte “more than 74% of UK's
young population uses their smartphones while walking, bathing,
eating .This can only be possible if the mobile network they are using
provides strong signals to them so that they can use it anywhere they
want to. In Today,s era life of a person is totally depend upon the latest
and advance technology.
Success of M-Pesa: The company has launched its own mobile transfer
services. It enable million of customer to pay their online bills, do
recharge, book tickets and many more thing. This is only become
possible with the such effective and successful services. M-Pesa is
providing several offers in various countries like UK, Africa, Asia etc.
This also become the another reason for attracting youth or young
generation.
Weaknesses Cut Throat Competition everywhere: In its homeland, the company is
facing strong competition against EE, Three network, O2. This enable
their management to keep changing their policies and strategies on
frequent basis. Thus creating disruption in overall business activities and
operation as they firm only focuses on attaining high competitive
advantage over others.
Legal Proceeding: The company also faced some allegation related
with cell phone radiation that will lead to decrease revenue of telecom-
mobile industry. Various cases have filed against Vodafone concerning
health issues that children or people face as a result of extensive use of
mobile usage. As per the Deloitte statistics report, In UK, young
generation aged between 16-75 years old have increased their usage of
smartphones up-to 74% which is not good as this might adversely affect
their health and brings mental instability.

TASK 3
3.1 Porter's Five Force Model
In UK, telecom industry is considered as one of the fast growing and leading industry in
Europe. It is highly competitive in the mobile and broad band sectors. It is also referred as the
new innovative broadcast sector that has captured the root of business model for distinguishing
digital digital content (Kalyani and Sahoo, 2011). The scope of mobile-telecom industry is very
wide in UK. According to the statistics report of Deloitte, it has been figured out that young
generation ranging from 16-24 are extensively using smartphones. As of 2017, the ratio has been
increased to 74% which is more than half of population of this segment. However, Vodafone is
facing strong competition in the market of UK. Large number of strong competitors are present
in the market of UK such as EE, O2 etc. that also provide similar services.
With the help of five force model, analysis regarding competitor can be done properly
and also aid in understanding how the threat of new entrant, threat of substitute goods,
bargaining power of buyers, bargaining power of supplier and threat of rivalry among other
competing companies will effect competitors and their function in an industry. These five forces
have a direct effect on Vodafone's strategic competitiveness. Following are the detailed analysis
of Porter's Five Forces Model:-
Rivalry with Existing Competitors: It help in determining the extent to which value driven by
company will be dissipated through head to head competition. Presently Vodafone act as a cost
leader in the market. There competitors are facing hard time due to their clever pricing strategies.
In addition to that, their competitors will fall on their face if any aspect of the operation or
logistic department are inferior.
Bargaining power of Buyers: The buyers in the mobile sector are strong. These powerful
buyers can easily reduce the cost leaders prices, but however they cannot pas the level of their
closest competitor. As a result, Vodafone will continue to earn profit at above average return as
compared to its closest or strong competitors.
Bargaining power of Suppliers: As per the statistic report of Deloitte, supplier of mobile sector
are strong. Being a cost leader, Vodafone operates with greater margin as compared to other
competitors which in turn enable them to absorb increase prices of suppliers easier than its rival
(Klettner, Clarke and Boersma, 2014). Vodafone is the largest player of mobile industry in UK.

In-fact they can even hold suppliers cost down and could generate revenue as well even if their
competitors are only yielding average return.
Threat of new entrant: Threat of new entrant in mobile industry is weak. The company needs to
decrease its cost as compared to its competitors. By keeping high efficiency level, they create
unattractive market entrance for potential competitors (Köseoglu and et. al., 2013)
Product Substitutes: The company is facing low threat of product substitutes. Vodafone's cost
leadership strategy makes it difficult to compare product with other rivalry brand that provide
same services. With its excellent buying power, economies of scale and their absorption of
temporary price raises that directly come from various suppliers and that don't need to be passed
on the potential buyers.
TASK 4
4.1 Using, Bowman's strategy clock model, analyse the strategic direction and options available
for Vodafone.
Bowman's Strategic Clock is a framework that explores the different option available fir strategic
positioning i.e. how product should be positioned in the market so as to gain high competitive
edge or position in the market. The main purpose of this model is to illustrate that a company
will have a number of options regarding how to position a product in the market based on two
elements one is price and other is perceived value (Murano and et. al., 2011). Following are the
Eight Strategic Position of this framework which are discussed below:

(Source: Bowman's Strategic Clock, 2017)
Position 1: Low Price/ Low Added Value:
Under this segment, company do not use any particular option. They mainly select this position
when the product they are selling lacks differentiated value. A business can apply this concept
mainly through cost effectively volumes of sales and by constantly attracting potential and new
customers. Product qualities at this position is inferior but the prices at which they offer their
product is attractive enough to convince customer to try product at least one (Oestreicher-Singer
and Zalmanson, 2012). For example: At this stage, Vodafone is selling their services at low rate.
However the quality of services that they are providing is low but it is effective enough to
instantly attract customers.
Position 2: Low Price
This option is suitable when the company act as low cost leader. When a operate under this
strategy, their profit margin is low. As a result, they need to increase its sales. If a business entity
is a low cost leader and having large sales volume than they can easily sustain in market for
Illustration 2: Bowman's Strategic Clock Model

longer run. For example: Vodafone is targeting all kind of market. For their low income group,
they are selling their services at low prices.
Position 3: Hybrid (Moderate Price & Moderate Differentiation)
Under this those companies falls that mainly sell their product its customers at low price, but
they offer it with a higher perceived value as compared to its competitors. Here the main issue is
volume but company builds their strong brand image in the market by providing fair prices
goods and services at an economical cost. At this stage, Vodafone can provide some additional
offers with their services.
Position 4: Differentiation
Under this segment, product offered by companies are high perceived value against their high
prices (Schaltegger and Wagner, 2011). Under this strategy, customers purchase product or
services on the basis of perceived value. However, it is not necessary for companies to have any
real value, their goods are often sell on the basis of customer perception only.
Position 6: Increased Price and Standard Product:
At this stage, company takes a chance and simple increase their prices without doing any
innovation or adding extra characteristics or features. If the increased price offer by Vodafone is
accepted by buyers, company will enjoy higher profitability and if in case, prices aren't accepted
by customers than the company may face tremendous market fall until and unless they make an
adjustment regarding price.
Position 7: High Price/Low Price
At this stage, one single company rules the market. Being a monopolist, the company did not
concerned about adding additional value in the product that instantly seize the attention of
customers. Basically at this stage, the company mainly provide such goods and services that
effectively meet customer requirement. But such type of companies do not last for longer run in
the market.
Position 8: Low Value/ Standard Price
Companies under this market strategy will definitely lose its market share. If the company is
having low product or services, the only way they can sell their product is through their price
(Scholes, 2015)

CONCLUSION
According to the above mentioned report, it can be concluded that one of the primary
responsibility of business is to formulate effective strategies that help in achieving overall
objective of the company in a structured and thorough manner. Business Strategies are referred
as the core function of every organisation. It needs to changed or modified with the course of
time. The company needs to underpin both micro and macro factor that directly or indirectly
impact overall operation and function of business enterprise. Tools like Pestle, Ansoff Matrix,
Bowman's Strategic Clock Bowman's have been analysed so as to evaluate competitive
advantage of the firm. In addition to that, all such tools and techniques aid in formulating
effective business strategies and gain high competitive advantage in overseas market.

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