Business Strategy and Sustainability Analysis

This assignment requires a thorough analysis of business strategy and sustainability using PESTEL, SWOT, and Porter's Five Force model. It involves researching case studies and articles from various journals and books to identify key concepts and relationships between business strategy and sustainability. The assignment aims to develop critical thinking and analytical skills in understanding the impact of external environment on management control systems and corporate social responsibility.

BUSINESS STRATEGY

Table of Contents
INTRODUCTION...........................................................................................................................3
TASK 1............................................................................................................................................3
P1 Impact and Influence of Macro Environment on Vodafone..................................................3
TASK 2............................................................................................................................................7
P2 The internal environment and organisation capabilities........................................................7
TASK 3..........................................................................................................................................10
P3 Analysing the telecommunications sector...........................................................................10
TASK 4..........................................................................................................................................12
P.4 Understanding and interpreting of strategic decision .......................................................12
CONCLUSION .............................................................................................................................13
REFERENCES .............................................................................................................................14

INTRODUCTION
A business strategy acts as a guide in providing direction to an organization to follow a
path which can yield advantage for a firm by configuring its available limited resources within a
challenging and dynamic environment to cater the needs of demands of market and to fulfil
needs and aspirations of its stakeholders (Business Strategy, 2015). These course of actions are
formulated by the top management and are enforced and implemented by middle level managers
to achieve the vision, mission and objectives of an enterprise .
Vodafone is a second largest brand in telecommunication having more than 444 million
subscribers. It was established in 1982 with its headquarters in Newbury, UK. Vodafone has a
team of over 13,000 people across UK and its operations are running in more than 26 countries
with partnership with more than 55 networks all across the world.
This assignment will discuss about the impact and influence of macro environment on
Vodafone through PESTEL and Ansoff analysis. It will further explain the capabilities of
companies internal environment along with its strength and weakness. Moreover the project will
also give synopsis of competitiveness of UK's telecom sector along with certain strategies
adopted by company to improve its competitive edge.
TASK 1
P1 Impact and Influence of Macro Environment on Vodafone
Vodafone being on of the top telecom company has its operations expanding with great
pace in different regions of different countries. Being a global player, Vodafone is exposed to a
number of external factors that organization need to consider for evaluating its success. The
impact of macro environment can be analysed through Vodafone's PESTEL Analysis.
 POLITICAL FACTORS

Political factors greatly influences the progress of a company like Vodafone as it is
depended upon political scenario and stability of ruling political party. It is because to establish
and develop infrastructure to be operational in a particular state Vodafone need to take
permission from government and other regulative bodies (Barberá and et. al., 2012). Besides this,
the company has to comply with various communication and media acts and regulations of a
particular country. Other factors includes trade restrictions, tariffs, public concern, tax policy etc.
For instance, with a substantial increase in tax policy and VAT by UK government along with
high inflation rate in some nations, company has to alter its pricing policies resulting in
significant decrease in its price in past years.
 ECONOMIC FACTORS
Economic factors contributes a lot in company's success as more the state will grow
higher will be chances for a firm to diversify and open its new units in developed and
developing zones. Parallel to this fact another likeable scenario is that the overall economic crisis
faced by world economies also has direct influence on company's operations according to which
Vodafone has to modify its strategies every now and then (Bastian and Muchlish, 2012). For
instance with high inflation rate of 3.6 % prevailing in Mexican market in order to make its
consumers to afford high rates, the company decreases its product price making it economical
for everyone to purchase their products and avail services. Other factors involves exchange rates,
interest rates, partnership with government, level of economic growth etc.
 SOCIAL FACTORS
These factors are based on the social culture, value and beliefs of people in which firm is
conducting its business. Vodafone although been a European company has flexibly changed its
preferences, policies, programmes as per local culture. Some prominent social factors includes
health consciousness, adult content, career attitudes, emphasis on safety etc.
 TECHNOLOGICAL FACTORS
Vodafone follows its mission to always be ahead in trends related to technological and
communication spheres. Being working in a competitive and dynamic environment it is of
crucial importance for Vodafone to stay ahead in technology. The company dedicates a fair
budget to its research and development department for finding out and produce products adhere
to latest technology equipped with latest features (García‐Rodríguez and et. al., 2013). By

providing features and technology like Wi-max, 4, navigation in all its handsets company is able
to maintain and develop strong customer relationship. Other technological factor looked upon by
company includes broadband services, handsets with latest and most prominent features etc.
 LEGAL FACTORS
For a global brand like Vodafone having immense business rivals, company needs to be
circumspect about certain legal issues like copyrights, piracy issues, patenting etc. and has to
abide by many legal restrictions of domain in order to enhance its customer base and to maintain
a clean and positive brand image in market so as to gain trust and loyalty of its consumers.
 ENVIRONMENTAL FACTORS
In modern scenario, due to an enhancement in globalisation trends in economy people has
been adopting the ethical factors in their business operations. In present scenario not only
customers but government also ensures that company fulfils its Corporate Social Responsibility
for the betterment of society and its environment (Hall and Wagner, 2012). Vodafone are among
some top companies which make sure that it fulfil its social responsibilities. For which
Vodafone foundations worldwide supports projects that focuses on public benefits and social
welfare by application of technology in fields like health, education, disaster management and
relief etc.
There are various kind of strategies within Ansoff's Matrix for selecting a Product-Market
Growth Strategy:
Ansoff Matrix helps an organization to analyse how market opportunities fits with strategies of
business in terms of markets and products.
 MARKET DEVELOPMENT
Through this strategy a firm tries to diversify its business operations into new markets having
more opportunities by introducing its existing products in new market environment. In Vodafone
case it applies to -
It involves wider and more in depth coverage with high speed capability in leading developed
and developing nations and to further enhance data networks in other networks that already
exists.

Making adjustment in strategies related to pricing and encouraging data usage and adoption for
existing customers.
Enhancing company's customer support, customer care and online services ( IJocovic and et. al.,
2014).
Providing customized and attractive priced data packs, calling offers and smart phones.
 MARKET PENETRATION STRATEGIES
By applying this strategy, a firm tries to expand its market share in present market scenario. It is
done by increasing share in market by selling more goods and services to existing customer base
and to attract new potential clients through aggressive promotional and distribution strategies
( Johnson, 2016).
Providing high speed uninterrupted 4G/LTE technology
Providing clients with various meshed and other solutions related to mobile communication like
SoHo, Vodafone one Net etc.
To introduce latest and easy payment methods of mobile payment application of NRFC
Launching Vodafone Tv
More focus to regional promotional and advertising strategies for establishing good connection
with rural consumers.

Illustration 1: Ansoff Matrix
(Source: Ansoff's Matrix, 2017)
 PRODUCT DEVELOPMENT STRATEGIES
In this strategy, a firm creates new product and services to be introduced in existing market to the
target audience to attain higher growth. In case of Vodafone it applies to :-
Mobile SMS, voice and validation of economic and affordable data and launching of Vodafone
web box.
Introduction of Vodafone M-pesa
Retain loyal customers and attract new ones by continuously updating its phones and services
range and by regularly taking customers review and communicating benefits and new offers and
schemes of all Vodafone products and services (Li-Hua and Lu, 2013).
 DIVERSIFICATION

In this strategy, a firm expands its share in market by introducing new products and new offers in
entirely new market. It is most risky strategy adopted by any organization as a firms deals in new
market as well as new product (.Maté, Trujillo and Mylopoulos, 2012).
Launching smart metering and track down care telematics, push advertising and promotional
campaigns.
Collaborating with other leading brands like Microsoft, HTC, Samsung for providing its clients
with hosted conferencing, email and other partnership services in a single pack.
TASK 2
P2 The internal environment and organisation capabilities
The analysis of company's internal environment including its internal resources, core
competencies analysis assist a firm in providing a platform to its strategies that underlines its
long term survival and profitability. Mentioned below are discussed some strategies that a
company can analyse to know about its internal strengths and weaknesses.
1. Strategic capability is defined as a set of potential capacity, skills and resources that
helps an organization to get an over its business rivals in long run. It includes formulating
tactics to successfully accomplish day to day business activities besides to achieving
target of increasing growth, adapting into new changes and to seek competitive advantage
in market. Vodafone being second largest telecom network across the world requires to
continuous brush up its strategic capabilities to survive intense market competition and be
innovative by identifying its present resources and potential in light of various
complexities of market. One of most substantial strategic capabilities of Vodafone is to
provide low cost affordable telecommunication services with quality.
In regard to technological up gradation company give considerable focus in exploiting available
technological opportunity.
Due to intense association between its capabilities and resources the firm have become
successful in effectively and efficiently handling its external and internal environment.
2. “VRIO” Model: It is an analytical tool for evaluating company's resources to analyse
its competitive potential of a firm through a framework including questions of value,

rarity, imitability and organisation. The main purpose behind this analysis is to know
about firm's resources and potentials by getting response in yes or no.
 Value:- It includes determining resources which add on value by allowing firm to
explore and exploit market opportunities and get mitigation startegies formulated for
potential risk. If the answer of this question comes positive for a firm than resource
are considered to be valuable (Murthy, 2012).
 Rare:- Obtaining resources which are rare and valuable and can grant transitory
edge over competitors are analysed in this determinant. There are certain resources
that should not be ignored by a firm even though they might not provide the
expected competitive advantage.
 Cost to Imitate- Another determinant is top see what and how much cost is involved
in imitating or substituting a resource. It can be done in two ways, either by directly
imitating that particular resource or by providing parallel goods and services.
 Company whose resources are unique, valuable and costly to be substituted is able
to achieve sustainability within competitive business environment. In case of
Vodafone, company has various resources that are hard to imitate (Schaltegger and
Wagner, 2011)
 Organised to capture value:- There are various resources which don't specifically
yield any benefit for a firm if they are not exploited for value within them.
Therefore, it is highly recommendable for an enterprise to effectively organize its
management system, policies, procedures and business structure together with its
work culture so as to fully explore capabilities of its rare, value and costly to
substitute its competencies and resources.
3. Strength and weaknesses
STRENGTH
 Large market coverage:- Being second leading global telecom company Vodafone has
wide distribution and netw2ork coverage in more than 200 countries across world.
 Income generated:- According to latest figures Vodafone has generated a total revenue
of around € 47.6 billion till 31st march, 2017. There has been substantial increase in its
dividend as well by 2 % to 10.03c.

 Marketing :- Vodafone have been very innovative in its advertising strategy, starting
from rebranding Hutch with Vodafone Group with a pug as its brand ambassador to been
launching zoozooz using IPL2 as a platform (Wang and Verma, 2012).
 Success of M-Pesa- Vodafone with its M-Pesa services provides its customers to transfer
money even when they have limited access to a bank account for availing top up airtime,
send and receive money, pay bills and many more.
 A loyal subscriber base:- Vodafone enjoys a massive subscriber base which they are
able to retain and increase effectively. It has around 444 million subscribers around the
globe according to 2017 reports.
WEAKNESSES
 Declining subscriber base in USA:- Vodafone is rapidly losing its customer base in
USA to other competitors whose performance are far above than it.
 Poor Performance in Europe:- Because of brexit and other economical conditions
prevailing in Europe, Vodafone's level of performance is declining in its home market.
Illustration 2: SWOT ANALYSIS VODAFONE
(Source: SWOT ANALYSIS, 2017)

TASK 3
P3 Analysing the telecommunications sector
Telecommunication sector can be effectively analysed by Porter's Five Force Model
which recognizes appealing attributes along with their profit ratio. what are the factors which can
make impact the environment of business. This model helps in understanding how threat of new
entry, bargaining power of buyers and suppliers, menace of substituting merchandises and the
available competition among various companies will impact Vodafone's strategic fight and
tactics. Competitive Rivalry: This factor determines no of rivals present in market and their
ability to posses a threat for a company. Larger the availability of business competitors
having competitive products and services , lesser power a company will have over them
to achieve high sales and profits. kind of factor mainly looks out for the number along
with the strength for the competitors of Vodafone UK. Along with this, it should be
known by the company that how many of the competitors they have within the
marketplace who are working better then them. Vodafone been second largest telecom
company ha establishes itself as cost leader as it becomes very tough for them to compete
on the basis of price as it will be a very costly affair as well as non profitable to further
lower their logistics and operations (Woerner and Wixom, 2015). Supplier Power: This factor deals with aspect that how easy and cost effective it is for
supplier to drive up price of products and services. The major attributes impacting this
decision are number of suppliers in the market, uniqueness of these aspects and cost
incurred by a company in switching from one to another supplier. Vodafone having cost
leadership gets the advantage to absorb increment in price by its suppliers more easier
than its rivals. Being a large market player it can easily cost down its suppliers and can
earn profits when its competitors are getting average returns. Buyer Power: This factor deals with customer ability to drive price down. It is dependent
upon the number of buyers a firm has, significance of each consumer and the probable
impact on company even when a single customer switches to its business rivals.
Company needs to analyse ways through which prices can be reduced by buyers, besides
determining their numbers and size of their orders placed. When company has limited
number of buyers the bargaining power of them increases giving them an upper hand in

negotiating in prices. However, in case of Vodafone, as it has a wide and mass subscriber
base their who are loyal and satisfied company will continue to earn profits higher than
average returns as compared to its rivals. Threat of Substitution: This refers to competitor's products that can be utilized or opted
by a customer as a substitute for a company's goods and thus pose a threat. It take into
consideration that how easy, economic and effortless it is for a client to switch to rival's
substitutes. In case of Vodafone, the focused cost leadership strategy adopted by the firm
which provides economies of scale to the company, makes it immensely hard for its
competitors to produce a substitute at such lower rate without incurring heavy loss.
 Threat of New Entry: The profitability and success of an enterprise is also determine by
the impact of new entrants in to its market scenario. Lesser the cost, time and restrictions
factor for competitors to enter into market more likeable for a company's position and
profitability to be impacted and weakened. An industry having strong restrictions on its
market entry and exits are more attractive and profitable for a firm to operate its business
with fewer competitors. As telecom industry have weak threat of new entrants. Vodafone
by continuing its strategy of reducing costs below than its competitors can always
maintain high level of efficiency making the entry unattractive affair for its potential
competitors.
TASK 4
P.4 Understanding and interpreting of strategic decision
Bowman strategic clock is one of the famous clock in the world. This gives different
different positions to the company so that they can choose and select various steps and methods
for the strategic decisions. Hence as a result they can maintain unique position in the market a
well as in front of various customers. It can only only through this model. Main objective is to
position in the market in an effective manner (Auzair, , 2011). Thus as a result they can have
different options to position in the market. It is based on two dimensions that is the price and
perceived value. Below is the strategic clock:
Low price and low valuer added:
It is that position which is not so much competitive in nature. Thus as a result they can easily
position themselves in this segment. In this goods are to be sold at cheapest and very lower

prices as then only they can attract any customers. Through this they can easily maintain unique
position in the market and ion minds of all users.
Low price:
This is the most important part of any business. Through this leader tries to reduce their price of
all products and hence it can easily maintain unique position in the market and as well a in front
all users. Through this they can easily maintain good and strong position in the market. So thus
company reduces the cost of all products so that it can generate more revenues. Thus as a result
they can increase their reputation. This is only method for the company to beat the competitors
which are available in the market.
Hybrid: In this company has to create different product so that it can maintain unique
position in the market as well as in minds of all users. Company has to motivate all customers to
purchase the product. Thus they have to improve the quality of product so that they can improve
themselves. Thus as a result they an easily increase their sales. Through differentiating their
product they can deliver some unique and distinct product to their customers.
Differentiation:
In this process company creates some differentiation and customer can perceive products ion a
different and unique manner. Thus as a result they can easily maintain good and unique position
in the market. Branding also a crucial role in differentiating the product in a unique and distinct
manner. Thus as a result they can maintain good and unique position in the market as well as in
front of all customers.
Focused differentiation:
In this strategy company can create unique and distinct brands so that they can maintain unique
position in the market as well in front of all customers. So hence company majorly emphasis on
the distribution and advancement strategy so that they can maintain good and unique position in
the market.
Risky high margins: It is a technique in which company sell their products at the high
costs. Thus customers have to purchase the product at the higher costs.
Monopoly pricing: In this there is only one market who sells the products in market and
there are no other competitors who are present in the market.
Loss of market share: In this there is lower price and low perceived value as compared to
other competitors.

CONCLUSION
This assignment it can be concluded that it is of critical importance for an organization to
formulate business strategies by carefully analysing its internal as well as external environment,
evaluating its potential strengthens and weakness. Vodafone from among many
telecommunication companies is the second leading brand across this industry due to its efficient
and effective competencies which it gains by thoroughly analysing its macro and micro
environment through PESTEL, SWOT and Porter's Five Force model to find out its core
competencies.
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Business Strategy. 2015. [Online]. Available Through: <http://finsburyfoods.co.uk/who-we-
are/business-strategy/>