Business Strategy Unit

This document provides a comprehensive analysis of business strategy, focusing on Vodafone. It includes a Pestle analysis, Swot analysis of Vodafone, Porter five forces analysis, and theories, concepts, and models for strategic planning. The document also discusses the external and internal analysis of Vodafone, along with stakeholder analysis and opportunities and threats in the industry.

Business Strategy Unit
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Table of Contents
INTRODUCTION...........................................................................................................................3
Pestle analysis..............................................................................................................................3
Swot analysis of Vodafone..........................................................................................................6
Porter five forces..........................................................................................................................8
Theories, concepts and models, interpret and devise strategic planning...................................10
CONCLUSION..............................................................................................................................12
REFERENCES..............................................................................................................................14
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INTRODUCTION
Business strategy focuses on the decisions and actions that a firm takes in order to
achieve the goals and objectives of the Business. It is considering as long range sketch of the
desired direction, image as well as destination of the firm (Park, and Mithas, 2020). Present
Report focuses on Vodafone which is known as the leading telecom firm alongside operations
mainly within Asia Pacific, Europe, Africa and Middle East. The name of the firm Vodafone
comes from “VOICE”, “DATA’’ and “TELEPHONE’’ chosen by the firm in order to reflect the
provision of data and voice services over the mobile phones. In terms of the mobile consumers it
ranked 4th as it has around 313 million consumers. It is known as the British International
Telecommunication that can operate within 25 plus nations. Report also focuses on External
analysis, internal analysis, porter five forces and Content theories of the firm (Min, Liangwen.
and Yue, 2018).
Pestle analysis
Pestle analysis of Vodafone analyse the several external factors as they highlights the
several scenarios which impact the business. It is a framework that can be imperative for firms
such as Vodafone as it assists to understand the dynamics of market as well as improves the
business growth
Political factors- Over the years Vodafone has faced the increased competition as political
factors plays a vital role within determining the several factors that can footprint Vodafone
Group Plc’s long term Profitability within a nation or a marketplace (Yuan, and et.al., 2020 ).
Firm is a Wireless Communication operating within several nations and also at the same time
exposes itself to the various political environments. Within the Mexican Market telecom license
are very expansive as well as tightly controlled (Weng, 2020). The government of the Mexico
are not easily gives entry as telecom industry have a high growth as according to the NAFTA
( North American Free Trade) cannot allowed to the begins the business within Mexico. In
Mexico they follow very high regulations that are associated to the needs of the consumer as well
as environment. To take entry within Mexican market Vodafone take permission as government
of Mexico also needs a service which is high quality and In addition to this government also
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implemented tight measures in order to reduce the mobile phone usage of children due to their
health issues (Bayo-Moriones, and et.al., 2020). The Vodafone business also decline because
overall lower benefit received from handset financing within UK as because of Covid 19, All
over the world suffered from lock down things so Firm faces a lot of loss because there is late
handset financing within UK and other Nation. Italy who loss his large number of people during
Covid also strictly lockdown and thus performance was decline within earnings in Italy and
Spain Both.
Economic factors- Due to the Pandemic Covid 19, there came an economic crisis that can be
faces by world till today. It has highly impacted on global economy in negative way and there is
a huge loss faced due to Covid 19 (Juliatin, Sadalia, and Habsah, 2020). But firm also takes
advantages within this period through new digital technologies. Due to Pandemic people are not
buying new products as it impacted a lot so the Vodafone managers changes their policy that can
be associated to the pandemic recession and attracting consumers towards buying a new phone,
due to the recession period there is price war among the various telecommunication firm
Vodafone reduces its calling and net charges as it provides more amount of data in the same
prize. The current inflation rate are reduces around 3.60 % as it also impacts the buying
behavior of the consumer. So Firm also decreases its product prize which is comfortable for the
consumer as they can easily buy. As due to pandemic Inflation rates going much high then
people are more inclined towards saving money and in addition to this control their purchasing
so it can also direct impacts the economy of the UK but also all over the World (Park, and
Mithas, 2020)
Social factor- Pandemic changes the life style a lot as people are now remain within their home
and continue their work from home so they need better net connection speed as they are now
organizing their meeting from home so internet plays a vital role (Robiansyah, and et.al., 2020).
Also the growing demand of the internet also increases as it is both for work purpose and
entertainment. Increase demand of the internet has proved that it is beneficial for the firm like
Vodafone as they provide telecommunication services to people to fulfill their needs. Vodafone
is a firm that can be developing by understanding the education, lifestyle, buying preferences and
beliefs of the consumers all over the World as it could help Vodafone to expand its consumers
base through targeting right individuals within right place (Chen, Eshleman.and Soileau, 2017).
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Technological factors- Vodafone have established high targets in operational excellence as well
as targeting commercial performance (Park, and Mithas, 2020). the company provide content
distribution and TV to around 23 billion active users. In establishing and maintaining the
consumer relationship MyVodafone App has plays a vital role as the firm has leading an
international IoT platform for the regular business partnerships. Moreover, AI will impact on
positive way to Vodafone as it will improve customer experience.
Legal factors- In this there are factors related to employment, health and safety, etc. So,
Vodafone has to follow all legal laws of UK in which they operate (Nuraini, and Purwanegara,
2020). So, any change in legal laws will impact on Vodafone in negative way. It is found that in
UK there is increase in minimum wage of employees. Thus, it will affect on Vodafone UK in
negative way.
Environment factors- Vodafone needs to realize that it is very hard to connecting around 650
million as well as several organizations on an international level (Kristinae, and et.al., 2020).
Thus the firm also reduces the environmental effects by more than 60% by 2025 as it can achieve
their purpose by taking firms steps within three domains such as digital society and for planet
also. Firm also focus on switching renewable sources of energy for effective supply. Firm has
also targeted to decreases the wastage for network that can assists them to grow their business as
well as enhances the demands for data through consumers.
Stakeholder analysis- It is a framework which is used to identify individuals before beginning
any project and tasks, grouping them as per their level of interest, participation and impacts
within project. In addition to this it also determines how to best involve and communicate each
of these stakeholders’s group (Habib. and Hasan, 2017).
Stakeholder Impact Interest
Consumers They are considered as a
stakeholder of the business as
they are influenced through
quality of products or services
as well as their values.
High
Government They are also considered as a
major stakeholder within a
High
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business as they can easily
collect taxes from the
Vodafone and also from all
the individuals it employs
( payroles) .
Employee They are the one who have
also a direct stake within the
Vodafone. As they earn
income in order to support
themselves with various
benefits both non monetary
and monetary
Moderate
Shareholders They are those who own share
of firm and make investment
in it.
High
BOD The BOD formulate strategies
and goals that is to be attained.
High
Opportunities- Vodafone can grow with the digital technology as by the using AI in their App
in order to grow its marketing reach as well as engage consumers better (Correani, and et.al,
2020). Thus the firm must also provide free subscription of OTT platforms in order to grow its
reach among its consumers.
Technology- within Investing in Technological innovation can assist such as Vodafone find
faster growth as well as growth within the consumer base in several markets. Such as Next game
changer of the Telecommunication world is 5g and Vodafone is investing within this Area.
Threats- In telecommunication industry growing competition is one of the major threats for the
firm. Also Brexit has caused uncertainty for brands such as Vodafone as the operations can be
impacted in negative way. As a lot of confusion as well as uncertainty occurs over Brexit which
can also impacts the operations of Vodafone (Uyar, 2019). As competition is increased day by
day and due to Pandemic Covid 19, various other firms provides internet data and calling
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services in less cost than but at the same time Vodafone has still strong position within the
market of Europe.
Porter five forces
Porter five force analyses is the management tools used to have proper analysis and
understanding level of profitability of company in the industry. Vodafone PLC have been using
the porter five force analysis to gain proper understanding in profitable relation to markets along
with developing significant strategy. The telecommunication is turning swiftly with it growing
highly completive markets. The firms have performing with high penetration in different
European market (Ge and Li., 2019). Marketing strategy will be helpful in gaining the
competitive advantages and long-term profitability in the wireless communication industry in
perfect manner. Porter five forces is the framework which shapes strategy for the forces which is
having significant impact on the firm profitability. This model is being developed by the Michael
porter.
Threat of new entrants
The threat of new entrants is low as there is high level of barrier to enter into the market.
Companies who are wishing to enter the market have to pay huge level of licensing fees. The
fees have been coupled by spectrum ability and regulatory issues attached within industry (Yuan,
and et.al., 2020). On the other hand, the cost of setting up network infrastructures is considered
to be high. The industry is rapidly changing turning out to be difficult of existing companies a
new entrant to cope the existing competition. However, the Vodafone is trying to cope by
maintaining the high level of efficiency of its services to unravel height. Frequent tariff
interventions and the countries policies on cross border mobile usage put pressure on its revenues
Bargaining power of buyers
The bargaining power of buyer in the telecommunication industry has been high due to
high level of competition as services provided are of same quality. The existing high level of
buyer power effectively resulting in the reduction of cost prices in the industry’s through to be up
in the level of competitors (Weng, 2020). in such situation Vodafone’s is trying to keep up with
reasonable profits as compared to its competitors. The buyer can have reduction in the prices to
gain competitive advantage. The telecommunication industry is growing highly becoming
competitive. The firms have performing with high penetration in different European market.
Bargaining power of supplier
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There are no suppliers in offering service. Vodafone directly provide services to
customers. So, there is no high or low bargaining power of suppliers in it (Min,, Liangwen and
Yue, 2018). The company s trying to keep the high degree of efficiency’s along with assessing
entry way into the nomadic communication industry unattractive to its possible rivals.
Threat of substitute
Vodafone is facing the considerable threats for the products and services. The landline
and CDMA services are fast declining while broadband services are fast becoming common
(Bayo-Moriones, and et.al., 2020). Nowadays the latest trends have been accumulated as video
conferencing, VOPI such as the Skype, Google Talk and Yahoo Messenger, email and social
networking have emerged as substitutes to mobile services. As due to the stronger buyer power
and effective economies of scales as Vodafone does not need to have passing the down cost
attributes the substitution to the consumer. Hence, all the factors are contributing in producing
the below profits earning industries. hence the cost of the countries is retraining, revising and
redesigning with major level of client switches to the different level of merchandize or service.
Industry rival
There has been stiff competition in telecommunication industry. It is due to rate cut in
providing services due to which all companies are following low cost strategy. Thus, it has
resulted in intense competition in industry. So, Vodafone is also facing high competition from
rivals such as t mobile, thus, threat of industry rivalry is high (Alstete. and Beutell, 2016).
Internal analysis of Vodafone
Internal analysis helps Vodafone to do perform situational analysis of the firm. It is also
considering as a detailed evaluations of the external as well as internal factors that has been
carried out through Vodafone as it assist the firm to maintain its position within Telecom
industry.
Strength- High brand equity of Vodafone is considered as a sign of reliability as well as trust. As
Vodafone is known as famous, consumer centric brand where the consumers from the various
corners have trust it. Brand equity is the reason where the firm has a large consumer base within
several markets from Europe and Asia (Juliatin, Sadalia, and Habsah, 2020 ).
Technological Innovations- It is one of the vital strength of the Vodafone. As firm as already
spends its core services apart from that the Vodafone is also investing within emerging
technologies in order to grow its market share, revenue and consumer base.
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Weakness- Despite of the fact that Vodafone is growing day by day as it has a heavy focus on
Technological growth and innovation, the consumer base within Europe has declined in some
key markets like Germany, UK, etc. (Robiansyah, and et.al., 2020)
The Mckinsey 7S Model
It is considered as a tool that evaluates the firm’s organizational design as the goal of the
model is to focuses on how the effectiveness can be accomplished within a firm by interacting of
seven key elements.
Strategy – It is considered as an organizational plan as it enables a firm to formulate a plan of
action in order to achieve a sustainable competitive advantage over its rivalries (Lavery, 2017).
Vodafone strategy is to provide high quality services to customers.
Structure- Within this how the Vodafone is organized is mention such as how teams and
departments are structured that includes who reports to whom (Park. and Mithas, 2020). The
structure followed by Vodafone is hierarchical
System- The daily procedures as well as activities that can be performed through employees in
order to job done. There is proper system of doing operations.
Shared values- These are several core values of firm that can be shown such as mission, values
and objectives of every firm as well as plays a vital role in aligning all the elements in order to
maintain the effective design of firm. Vodafone share common values of respect and dignity
Style- The attitude of the senior workers within a firm establishes a code of conduct by their
ways of symbolic decision making and communicating that forms the management style of its
leaders.
Staff- It includes human resources and talent management associated to firm decisions such as
recruiting, training as well as reward system.
Skills- It forms the capabilities as well as competencies of a firm that allows its workers to
accomplish its objectives. Vodafone staff is having relevant skills to perform their job (Park, and
Mithas, 2020).
Theories, concepts and models, interpret and devise strategic planning
It is necessary for Vodafone to follow several strategies so that they are able to grow and
expand in the market. Besides that, the strategies provide a direction and framework on what
they have to do and how. However, there are many market and growth strategies available which
can be implemented by Vodafone. But it depends on needs of organization and market condition
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that what strategy will be suitable. Moreover, within strategy it consists of goals and objectives
to be attained. Thus, with help of those strategies company can gain competitive advantage in the
market. Similarly, Vodafone can also follow certain strategy which is defined as below
Mission- To enrich customer lives by providing unique power of mobile communication
Objectives –
To increase customer base by 2.5% in 2021
To generate revenue of $1 million in 2021
Strategies
There are various strategies which Vodafone can follow. it is as below
Ansoff matrix- this is a strategic planning tool that provides a framework to help executives,
senior managers, and marketers devise strategies for future belong to expansion in market and is
divided into 4 different strategies which are described as follows
Market development- in this strategy the company enters in new market with same product.
Basically, for that they identify the target market and then enter in it. Along with it, this enabled
in attracting more customers and profits. Likewise, Vodafone can also enter in new market where
they are not operating. For example, in countries like Russia, it will allow in their growth and
expansion (Ansoff matrix, 2018) .
Market penetration- This strategy focus on improving market growth in existing market with
existing product. The company increase customer base in different ways. They give offers,
discount etc to people. Furthermore, effective marketing is done for gaining competitive
advantage in the market. Likewise, Vodafone can also focus on UK market with existing service.
They can reduce cost, offer membership, etc and create strong customer base.
Product development- the strategy allows company to develop new products in existing market.
They identify customer needs and they develop new product. Besides that, more features are
added into service and offered to customer in existing market. Similarly, Vodafone can also
provide new services to people in UK. They can add more benefit within services (Nuraini, and
Purwanegara, 2020).
Diversification- This strategy emphasis on entering in new market with new product. It is highly
risky as this can lead to failure of growth strategy. Furthermore, as company does not have any
experience of operating in new market thus they can fail. Vodafone can also enter in new market
like Russia by providing new services.
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Porter generic model- this is also a model through which company can gain competitive
advantage. Here, there are 3 strategies which can be implemented by Vodafone. This will enable
in their growth in UK market (Porter generic strategy, 2018). Thus it is as follows
Cost leadership- it is a type of strategy in which company offers services at low price. This is
done to gain competitive advantage in industry and attract more customers.
Differentiation strategy- as name depict it show that by making product or service different and
unique from competitor’s company gain competitive advantage. It can be done by adding some
new features and specifications within service and then offering them to people. Thus here firm
is identified as different from other rivals. Hence, Vodafone can follow this strategy in which
they can add unique features in service. In this way they will gain competitive advantage
(Kristinae, and et.al., 2020)
Focus strategy- it is a strategy in which firm emphasis on particular niche markets, by
understanding the dynamics it and needs of customers they develop low cost products for the
market. This strategy can be cost or differentiation focus. Because they serve customers in their
market in effective way, they tend to build strong brand loyalty within customers. This makes
particular market segment less attractive to competitors. Hence, Vodafone can focus on niche
market in UK and gain competitive advantage.
Thus, the company can use these two strategies to gain competitive advantage because it
allows them to focus on cost and expansion. Besides, Vodafone can easily attract people by
following porter cost leadership strategy and offering services at low cost. It is because they
strength of firm is high brand equity in UK. Besides, due to covid 19 people income has
decreased so they want to save (Correani, and et.al, 2020). Thus, offering low cost will attract
more people. Furthermore, Vodafone can use ansoff matrxi strategy of product development to
provide new services like OTT. So, as already they are having opportunity to grow hence
company can easily do it with help of this strategy. So, these are some strategy which can be
followed by Vodafone.
Tactics
The tactics will be that Vodafone can make alliance with OTT providing services
companies like Netflix and provide services to people.
Implementation
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Here, company will implement the product development strategy. They will provide
more new services to people and gain market share. With that, it will allow them to generate
more revenue. Also, more customers can be attracted through it.
Evaluation
It will be evaluated by measuring outcomes with goals and objectives set. Also, customer
gained by company and profit generated will be evaluated as well
Therefore, for Vodafone they can follow various strategies for growth in order to gain
competitive advantage in market (Pati. and Bandyopadhyay, 2017).
CONCLUSION
From the above it had been concluded that various external analysis of Vodafone which
focused on its Vodafone has faced the increased competition as due to Pandemic economic crisis
that can be faces by people are not buying new products as it impacted a lot. Vodafone reduces
its calling and net charges as well as also decreases its product prize. In pandemic people are not
going outside instead of that they uses more internet services for video conferencing with their
near and dear ones and also uses for its professional purpose such as office meeting and many
more. Report focuses on its strength as firm has work on 5g area while weakness is reduces the
consumer base due to Covid. Also focuses on Ansoff matrix that provides a framework to help
executives in Market development, Market penetration, Product development and
Diversification. Porter generic model focused on gain competitive by Cost leadership that is
increase profits by charging cost price at low cost. Differentiation strategy also making product
unique from competitors and will gain competitive advantage while Focus strategy develop low
cost products in order to build strong brand loyalty and can focus on niche market. Bowman
strategy divided into two dimensions on Low prices and low value such as Low prices
Hybrid, Focused differentiation, Risky high margin, Monopoly pricing, Loss of market share
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