Business Strategy: Telecommunication Sector (UK) - Vodafone Group Plc Analysis

Business Strategy: Telecommunication Sector (UK)
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Table of Contents
Introduction...................................................................................................................... 3
Task 1 – The external environment..................................................................................4
1.1 PESTLE model for environmental analysis................................................................4
1.2 Ansoff’s growth vector matrix to analyse the organisation’s strategic positioning......5
M1. Critically analyse the macro environment and how it determines your chosen
organisation’s strategic management decisions...............................................................7
Task 2 – The internal environment and organisation capabilities....................................9
2.1 Explain what strategic capability means.....................................................................9
2.2 Apply the ‘VRIO/VRIN’ model to determine the strategic capabilities possessed by
your chosen organization.................................................................................................9
2.3 Identify the organisation’s strengths and weaknesses (SWOT analysis).................10
M2. Critically evaluate the strengths and weaknesses of an organisation’s internal
capabilities, structure and skill set..................................................................................13
Task 3 – Analysing the telecommunications sector.......................................................14
3.1 evaluate the competitiveness of UK’s telecommunications sector using Porter’s five
forces model...................................................................................................................14
M3. Devise appropriate strategies to improve competitive edge and market position of
your chosen company....................................................................................................17
Conclusion..................................................................................................................... 23
Reference List................................................................................................................ 24
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Introduction
Mobile telecommunication sector is considered one of the fastest growing sectors in the
global economy sector. With the advent of decentralised and globalised economical
narrative, the global market telecommunication sector has seen exponential growth,
coupled with efficient business strategy, which are adopted to further the market reach.
According to the seventh annual Mobile Consumer Survey (2017) conducted by
Deloitte, shows that more than 53% of the respondents in the 16-75 age group prefer
being engaged with smart phones while walking. The retail revenue generated by the
telecom company range in the first fiscal quarter of 2017 was £3.8bn, an appraisal of
£32m from the previous fiscal quarter. The challenge for the companies has been to
retain their brand image in the market and further their market bases in the international
shores. Vodafone Group Plc is a major player in the telecommunication sector,
providing a range of services such as voice, data and messaging. The company was
found in 1984 and acquired the license of using radio frequencies to deliver the mobile
services. Vodafone has shored out and opened up outlets in various domains,
perpetuating deep in the market sphere (Stirling, 2017).
This assignment will build forth a comprehensive and conclusive analysis, examining
the different nuances associated with the Vodafone telecom industry with the contextual
business strategy and suggesting, in process, the appropriate measures that must be
employed.
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Task 1 – The external environment.
The micro and macro factors have an instrumental impact on influencing an affecting
the success potential of an organization. The efficacy of the business marketing
strategy being implemented and the discrepancies associated could be comprehended
with an in-depth understanding of the macro economy, which is concerned, with the
overall functioning of the economic functions (Boateng, 2016). The task will be
constructed with talking in accordance the models of environmental analysis and apply
the Ansoff’s growth matrix of growth to gauge the strategic positioning of the
organization.
1.1 PESTLE model for environmental analysis
Factors Analysis
Political After the recent occurrence of Brexit and the ensuing political instability in the
adjacent regions, the management and the operations process has been hit
tremendously. Vodafone is dependent on the infrastructure for the optimum
functioning of the processes, the political scenario are responsible for
influencing the narrative of a particular region which subsequently influence
the infrastructure and other aspects associated with the manufacturing and
supply chain management (Middlemiss, 2017).
Economic The fall of pound against the Euro has lead to financial insecurity in the social
stratums. The bank rates increase and the aggressive growth of the domestic
VAT rates, coupled with a unstable GDP tethering on the margins of economy
bankruptcy has majorly impacted the operation of Vodafone.
Social The social factors which influence the functioning of Vodafone, have been
influenced to a major extent by the dynamic nature of the domain and the
strategies adopted by Vodafone are flexible to accommodate the different
narratives of the local culture pertaining to the regions they function in.
Technological Vodafone has always operated with the primary motive to further the business
acumen and enhance the operation process, which is imperative. The
constant innovative approach employed by the organization has helped the
brand to take rapid strides in the directives, chalking up operational directives
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and assessing the different forthcoming trends of the market, which helps
them to satiate the needs and the demands of the customer base in a more
competent manner. The initiative to display more innovative technological
offerings in a particular domain such as the Vodafone TObi, the revolutionary
chatbot, and the services for voice authentication currently tested by
Amazon’s Alexa has been conducted with efficiency in the new microsite,
Vodafone Labs.
Legal The EU regulations have had a major impact on the business expansion and
the profitability of Vodafone. The management at Vodafone has taken a very
strict assessment of the legal attributes and has dealt with piracy issues with
vigilance. The organisational structure incorporates the endemic legal
framework and functions with proper adherence of the domain. The
Companies Act of 2006 has been subjected to the change in legislative
structure following Brexit. The UK IPO (Initial Public Offering) has also been
amended with the Brexit and the services for filing patent have been
temporarily suspended which has acted as an hindrance to the operation and
thus affected the businesses of the telecommunication sector, especially
Vodafone (Haaker et al., 2017).
Environmental The advent of a global market space has brought forth a new genre of
customers who are effectively more ethics oriented and consider that the
company, which they associate with, must be especially responsible for
overall development of the society. The management structure at Vodafone
has been dynamic and external and the internal factors are incorporated with
due diligence.
Table 1: PESTLE analysis of Vodafone
(Source: Created by the learner)
1.2 Ansoff’s growth vector matrix to analyse the organisation’s strategic
positioning
Ansoff’s growth vector matrix is compiled for analsying the different alternative
corporate strategies for growth, with keeping in focus the different potential markets and
the products of the firms. Vodadfone has provided the customer base with a wide gamut
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of services and products, effectively tapping in the dynmaics of the maklret to ensure
that the profitability of the organisation is sustained. The company mainly focuses on
bringing new products fore new market segments, relying on the matrix of diversification
for the operational processes. The ansoff matrix is shown below:
Figure 1: Ansoff’s growth vector matrix
(Source: Yin, 2016)
The four major strategies for growth elucidated in the matrix are:
Market penetration: Vodafone has effective incorporated various strategies, which
would essentially enable the organisation to achieve growth, with the aim of enhancing
the market share with the existing product portfolio in the present market segment.
Market penetration is the least risky aspect since the emphasis is on the existing
capabilities and the resources.
Market Development: The market development aspect is constructed with the inclusion
of the pursuit of the additional geographical regions and the unexplored markets
segments. IT is conducted with the consideration of the new market segments; the core
competencies of the organisation must be related to the product with the experiences
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