Strategic Planning and Management Models

The assignment focuses on the strategies used in general business courses, emphasizing the Porter Five Forces Model and concepts of strategic planning. It uses the telecom company Vodafone as a case study, highlighting how they apply these models in practice. The report also explores macro and micro environments, focusing on internal capabilities using an appropriate framework.

BUSINESS STRATEGY

Table of Contents
INTRODUCTION...........................................................................................................................1
LO.1.................................................................................................................................................1
P1 Analysing impact and influence of macro environment on Vodafone..................................1
LO.2.................................................................................................................................................3
P2 Analysing internal environment and capabilities of Vodafone..............................................3
LO 3.................................................................................................................................................5
P3. Porters Five Forces Model And Evaluation Of Competitive Forces....................................5
LO 4.................................................................................................................................................7
P4. Theories And Concepts Of Strategic Planning.....................................................................7
CONCLUSION................................................................................................................................9
REFERENCES..............................................................................................................................10

INTRODUCTION
Business strategies can be said as a set of decision which can assist an Organization to
achieve their specific business goals or objectives (Boateng, 2016). This report will analyse all
the macro environment factors which will impact an influence an organization and its business
strategies through PESTLE analysis, asses an organization's all the internal environment
capabilities of an organization through SWOT analysis (Cibro, 2016). By applying porter's five
forces model all the competitive forces will be evaluated for an organization and different range
of theories, models and concepts will be applied to interpret strategic planning of an
organization. All these four tasks will be explained with Vodafone Company as an example.
Vodafone is a UK based second largest mobile telephone operator in the world (Williams and
Figueiredo, 2014). They have the third largest telecommunication network in the world who
provide internet and telecommunication services. They have more than 480 stores based only in
UK and many more across the globe.
LO.1
P1 Analysing impact and influence of macro environment on Vodafone
Impact and influence of macro environment on Vodafone will be explained with the help
of PESTLE analysis. PESTLE is basically a strategic tool to analyse all the macro environment
factors of an organization. PESTLE stands for political, economical, social, technological, legal
and environmental. Changes in all these factors can have direct impact on Vodafone and other
wireless communication players.
 Political: Political factors can impact business of Vodafone in terms of profitability in
many countries Market. Vodafone operates in more than 12 countries with different
political environment in different countries. To achieve success in many countries in this
industry they need to diversify the risk in different countries of political environment.
Vodafone need to analyse political stability of a particular country and importance of
wireless communication in that particular country (Boateng, 2016). They also need to
check weather there is any military invasion risk. Before entering in any countries market
they need to check trading and tariffs regulation in that particular country, taxation rates
and wedges legislation any kind of laws related to communication in that country.
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 Economical: Economic factor is also an important macro factor which can impact
Vodafone's business. Economic factors include inflation rates, interest rates, growth rate,
saving rates and foreign exchange rates. Vodafone need to analyse all these economic
factors before entering into a countries market. They need to check unemployment rate in
that country, education level, labour cost, exchange rates, and need to consider
consumer's affordability rate(Cibro., 2016). If the economic growth rate of that particular
country is low then they need to lower their data service charges or call rates.
 Social: Social culture of a country is a main factor which influence a companies
business. Vodafone need to consider culture, attitude, leisure interests and education level
of people in that country. Vodafone need to show flexibility in their policies according to
the local culture of that country. Vodafone is purely a European company but now they
have changed their preference and started to operate in different countries according to
their local social factors. In short they need to understand the customers of that particular
countries market and accordingly design their strategies of marketing and deliver their
message to their customers.
 Technological: As technology is changing it is affecting various industrious specially in
communication industry. Vodafone is famous for their innovative thinking in the world.
Vodafone need to do a technology analysis and along with it they need to do an analysis
of the speed at which technology disrupts in that industry. Slow speed of technology in
that country can give time to Vodafone to establish themselves and fast speed of
technology will give them very little time to establish themselves and think of ways to do
business with profitability. So they need to do analysis of technology which will have an
impact on: diffusion rate of technology, value chain structure will get impacted, their cost
structure will also get impacted, technology's effect will be clearly shown on the product
they are offering.
 Legal: For a company like Vodafone which operates globally have many rivals so they
need to be very much vigilant about issues like piracy and copying. Like recently
Vodafone has faced many other penalties like not paying much to their employees as
compared to their rivals(Ghosh., 2016). Vodafone should try to abide all the legal issues
in order to increase their customer base and maintain their positive image for gaining
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trust of employees. They also need to ensure employment law, data protection,
discrimination law, anti-trust law in their sector and at last they need to consider all ther
other health and safety law.
 Environmental: Environmental standards of a particular market affects the profitability
of an organization. Every country has different environmental standards and even each
state within that country has their own different standards, laws. Like lots of European
countries provide health tax breaks to all the companies who operate in renewable sector.
Vodafone should do an evaluation on all the environmental factors that are required to
operate in that country like they need to check weather, climate changes, attitude towards
ecological products, waste management in their sector etc.
LO.2
P2 Analysing internal environment and capabilities of Vodafone
Internal environmental capabilities' analysis of Vodafone will be done with the help of
SWOT analysis. SWOT analysis is a strategic planning tool which can be used by Vodafone to
do internal environmental analysis of the company.
 Strength: Strength basically describes the factors in which an organization excels. One
of the main strength of Vodafone is its popularity i.e. it is one of the most popular brand
in the world (already established their brand name). Provides many services like landlines
services, mobile services, digital TV services etc. Have very high brand visibility and
present in more than 150 countries with more than 450 million customers(Shrestha.,
2017). Have employee more than 1000,000 all across the globe. Provide many diverse
services like m-mobile, mhealth services, foundation etc. They also have a very high
efficient online application and website which provides easy recharges, online payment
through various options, service activation etc. They also provide many more services
like movies, music, balance transfer etc. through their website and their Vodafone
application, have strong 4G presence globally with a strong customer base and strong
retail presence with easy availability, also have strong dominance over other service
providers.
 Weakness: Weaknesses are the factors which stop an organization to perform at its best
level. Vodafone always need to fight for market share with their other competitors
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because of their high pricing. Being a global brand they are always under vigilance from
global authorities. Despite being a global brand their performance is continuously
decreasing in Europe. They have a tendency to follow others instead of being a leader.
They lack in clarity f vision and have difficulty in identifying market trend and customers
preferences, their needs and desire. Because of this their customer base is declining and
people are switching their network to their competitors network.
 Opportunities: Opportunities are basically external factors through which company can
gain an opportunity to increase their business and gain competitive advantage. Fast
expanding cellular market across the globe. Recently Vodafone has proposed a merger
with idea cellular. One this merger is done they will be one of the leading cellular service
provider in India. Latest and low cost trending technology can be beneficial for the
company and help them to grow. Untapped rural market can be a biggest opportunity for
Vodafone to grow their business(Williams and Figueiredo., 2014). If they start to focus
on MNP they can easily convert competitors customers to come into their network.
Mpaisa is a mobile wallet which can be a game changer for Vodafone which was
launched before Airtel. They need to position their brand more towards young generation
as they are the most frequent users who can boost their business. Mobile related
applications like health, payment, e-commerce, education are spreading and are vast so it
is a big opportunity for Vodafone. They have a huge market opportunity in African
market as their mobile market is growing at a very exponential rate. They can generate
massive revenue through targeting mobile wallet segment like mpaisa and drive their
revenue to the top. So we can say that opportunity for Vodafone is high. %G technology
can bring rise in their customer base and as they are partnering with different mobile
brands like Ericsson, Nokia, Intel etc. to work on 5G technology will boost their revenue
generation.
 Threats: Threat are the factors which can harm the organizations business. New entrants
in wireless communications sector are providing their services at lower price than
Vodafone which is affecting their profit margins and their revenue generation. Nowadays
with the intense competition in the wireless communication sector mobile number
portability service can drive their customers to their other customer's which can reduce
their subscriber base or reduce their customer base. Many legal cases going on Vodafone
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and past cases of Vodafone can affect their Customer base and their loyalty and trust
towards the brand.
LO 3
P3. Porters Five Forces Model And Evaluation Of Competitive Forces
Porters Five Forces Model focus on the concept of five forces model that determines the
competitive intensity and attractiveness of market given by Miachel Porter, in the year, 1979.
This model is useful in understanding the strength of organisations current competitive position
and also the strength of position that an organisation wants to move in. The five forces are as
follows:-
 Power Of Supplier:- It is an assessment in the respect of how, easily supplier drive up his
prices. It is driven by the number of supplier on the basis of each essential input;
uniqueness of their product; relative size and the strength of supplier and also on the cost
of switching from one supplier to another (Gawer, and Cusumano, 2014). Here the
factors that determine this are as follows:-
1. Number Of Suppliers:- In case of more than one supplier in the market, an
organisation can switch to another supplier in case of threats.
2. Number of Substitutes Available in The Market:- Substitutes provide an
alternative, in case, the supplier makes threats. Because of these
substitutes only, an organisation is less dependent on one supplier just
because there are many better options available.
3. Importance Of Business Sector:- If any supplier, creates a lot of profit
from a certain organisation, then, its very crucial for any organisation to
maintain their buyers.
4. Product Standardization:- When the products are standardized on the
account of advantages related to money, time and efficiency, buyer will be
less inclined to change the suppliers.
 Power Of Buyers:- In the porters five forces model, this one is very crucial and plays an
important role. When the buyers have much power then, they can put pressure on the
price by playing off against each other. Here, the factors that influence this decision are:-
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1. The part of total market turnover that is purchased per buyer.
2. Importance of the product for the buyer.
3. Degree of product standardization.
4. Switching Costs and the profits of the buyers.
Basically it's an assessment of how easy it's for the buyers to drive the prices down.
 Competitive Rivalry:- This is the main driver and it all depends on the number of
competitors present in the industry or in the market. The organisations entering in the
market are striving for the market share and the resultant outcome is either there is a
decline in the cost of current organisations or it will be higher. Many Competitors
offering undifferentiated products and services will definitely reduce the attractiveness of
market. This creates a low profitability and the organisations react very strongly to the
new potential entrants in such a market. Companies cannot differentiate so much and
therefore they must try to do something innovative and drive away the newly arrived
competitor from the market.
 Threat Of Substitution:- It is a case where close and best substitute product is available in
the market. It is a case where all the companies compete with each other in a broader
sense and the substitute products are manufactured. With its entry the power of supplier
and the attractiveness of market gets decreased (Xi, Kraus, Filser, and Kellermanns,
2015). The response to this case in respect marketing could be given by the cross selling
of products.
 Threat Of New Entrants:- Profitable markets attracts new entrants which erodes
profitability. When the internal competition among the firms is high then, the profit
margins could be severely affected by the downward pressure. Due to this a low
profitability is created and the organisations react strongly and firmly towards the
potential new entrants in the market. Companies cannot differentiate so much, with
respect to the product and therefore they should try to drive away the competitors from
the market (Rugman and Verbeke, 2017).
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In case of Vodafone, a telecom company, there are many competitors in the market like:- Airtel;
Aircel; Idea; BSNL and many more. These competitors act as a threat for Vodafone in telecom
sector and also affects its operations in the market.
LO 4
P4. Theories And Concepts Of Strategic Planning
Strategic Planning refers to an activity which is performed in an organisation for setting
the priorities; goals; focusing on the resources that are required to perform a particular task.
Vodafone does some strategic planning and put efforts on improving the performance of
employees. The organisation also ensures that the employees and the stake holders focus on
achieving the common organisational goal (Quinlan, Babin, Carr, and Griffin, 2019). It is a
disciplined effort which is made by the organisation in the improvement of employees
performance, that aims on producing fundamental decisions and action that shape and guide what
an organisation is, to whom it serves and its focus on future.
The theories of Strategic Planning are as follows:-
 Balanced Scorecard:- It is a strategic management framework that takes in account the
following three things:-
1. Objectives:- These are the high level; organisation goals that are made by
the top level managers with the motive of achieving the organisational
goals in an efficient and effective way.
2. Measures:- Helps in understanding, if the goals are achieved as per the
standards set by the top level managers for the lower level managers are
helpful in achieving the organisational goals or not (Kumar and Reinartz,
2018).
3. Initiatives:- These are the key action programmes, that helps in achieving
the organisational objective. It basically refers to, initiative which is taken
by any organisational member in the accomplishment of any task allotted
by the team leader to the subordinates.
 Strategy Map:- It is a visual tool, which is designed to clearly communicate a strategic
plan and to achieve a high level business goals (Gawer and Cusumano, 2014). Strategic
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mapping is a major part of balanced scorecard. It offers an excellent way to communicate
the high level information across your organisation in an easily digestible format. It
offers a lot of benefits:-
1. Providing a simple, clean, and visual representation which is easily
referred back to.
2. It unifies all the goals in single strategy.
3. Helps in identifying the key goals.
4. Gives every employee a clear goal to keep in mind while accomplishing
the tasks and measures.
5. Allows better understanding of, which elements of the strategy needs
work.
6. Helps you to see how the objectives affect the others.
 SWOT Analysis:- It is a high level model used at the beginning of organisations strategic
planning. With the use of SWOT an organisation can work on its internal as well as on
the external factors that are affecting and having a negative and positive impact on
organisation's performance (Bamberger, Meshoulam and Biron, 2014). Vodafone, a
telecom company, is doing its SWOT analysis with the motive of doing the self -
assessment in respect of organisation and the employees. The organisation is doing the
workout, in respect of identifying its weakness and opportunities that are present in the
competitive environment.
 PEST Model:- This theory of strategic planning focusses on the political; legal; social
and technological factors that affects the performance of an organisation in each and
every aspect (Ross, 2016). Each and every single factor involved in it is focusing on
looking at the working environment of the company. Basically, it's a testing of the
organisation's health. It is often used in the conjunction with the factors of SWOT.
Vodafone is doing its PEST analysis with the aim of setting a benchmark in front of its
competitors.
Concept Of Strategic Planning:- The concept of strategic planning is related to the determination
of organisational objectives and the resources to be used to attain these objectives. It also
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involves analysis of various environmental factors in respect of how the organisation is related to
its environment (Gawer and Cusumano, 2014).
Models Of Strategic Planning:- The models of strategic planning are as follows:-
 Gap Planning:- In this case, the organisation is required to compare, currently, where it is,
where it wants to be and then, bridging the gap between. It is primarily, used to identify
the specific internal deficiencies.
 Blue Ocean Strategy:- It's a strategic planning model, and the idea behind this model is to
develop an organisation in an uncontested market space that is either saturated or
unsaturated (Cibro, 2016). When an organisation is able to create a blue ocean, it can
mean a massive value boost for the company as well its employees. It refers to a situation
of making the market competition irrelevant and break the value cost trade off (Boateng,
2016).
CONCLUSION
The project report focuses on the, strategies of business that are used in the general
course. The assignment further focus on the Porter Five Forces Model and the theories and
concepts of strategic planning and models. It lays emphasis on the, telecom company -
Vodafone. The organisation is using all the models and concepts of strategic planning and is
using its theories in the practical course of action. The assignment further focus on the macro and
micro environment of an organisation. The organisation focus on the internal environment and
the capabilities by using appropriate framework.
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REFERENCES
Books and Journals
Boateng, H., 2016. Customer knowledge management practices on a social media platform: A
case study of MTN Ghana and Vodafone Ghana. Information Development. 32(3).
pp.440-451.
Cibro, P. A., 2016. The project of Integrated Digital Marketing in order to enhance the Brand
awareness of WIMB Czech Republic.
Ghosh, D., 2016. Promises and Performances of ICTs in Rural India: A SWOT
Analysis. International Journal of Research in Economics and Social Sciences. 6(11).
pp.154-179.
Shrestha, P. N., 2017. Investigating the learning transfer of genre features and conceptual
knowledge from an academic literacy course to business studies: Exploring the
potential of dynamic assessment. Journal of English for Academic Purposes. 25.pp.1-
17.
Williams, B. and Figueiredo, J., 2014. Lessons from an innovation-leader and tools to learn
them. Journal of Industrial Engineering and Management. 7(4).pp.932-960.
Quinlan, C., Babin, B., Carr, J. and Griffin, M., 2019. Business research methods. South Western
Cengage.
Whittle, R. and Myrick, C. B., 2016. Enterprise business architecture: The formal link between
strategy and results. CRC Press.
Rugman, A. and Verbeke, A., 2017. Global corporate strategy and trade policy. Routledge.
Kumar, V. and Reinartz, W., 2018. Customer relationship management: Concept, strategy, and
tools. Springer.
Xi, J. M., and et.al., 2015. Mapping the field of family business research: past trends and future
directions. International Entrepreneurship and Management Journal. 11(1).pp.13-132.
Gawer, A. and Cusumano, M. A., 2014. Industry platforms and ecosystem innovation. Journal of
Product Innovation Management.31(3).pp.417-433.
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Bamberger, P. A., Meshoulam, I. and Biron, M., 2014. Human resource strategy: Formulation,
implementation, and impact. Routledge.
Ross, D. F., 2016. Introduction to e-supply chain management: engaging technology to build
market-winning business partnerships. CRC Press.
Cavusgil, S. T and et.al., 2014. International business. Pearson Australia.
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