Report on Internal and External Environmental Analysis of Vodafone
Added on 2020-06-06
15 Pages4784 Words57 Views
Business DevelopmentLeadership ManagementProfessional DevelopmentCalculus and AnalysisEconomics
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BUSINESS STRATEGY
CONTENTSINTRODUCTION.......................................................................................................................................1TASK – 1(THE EXTERNAL ENVIRONMENT).......................................................................................1PESTEL analysis of Vodafone................................................................................................................1Ansoff’s Growth Matrix to analyze Vodafone’s strategic positioning.....................................................3TASK – 2 (INTERNAL ENVIORNMENT)...............................................................................................5Strategic capabilities................................................................................................................................5Applying VRIO model to determine the strategic capabilities of Vodafone............................................5Vodafone’s strength and weakness..........................................................................................................6TASK – 3 (ANALYZING THE TELECOMMUNICATION SECTOR)....................................................7Porter’s five force analysis......................................................................................................................7TASK – 4....................................................................................................................................................9Bowman’s Strategy Clock model and strategic options for Vodafone.....................................................9Strategic direction and options..............................................................................................................10CONCLUSION.........................................................................................................................................11REFERENCES..........................................................................................................................................12
INTRODUCTIONTelecommunication sector is the most dynamic sector of the world economy, as itincorporates large number of operations. Technology is considered as a heart for this industry.Articulating in relation with the mobile telecommunication sector, it is growing very fast allthroughout the globe. In UK also, the trend remains the same. As per the survey conducted byDeloitte, it was explored that around 53 percent of 16 to 75 years of age group people makes useof smartphones in UK. In addition to this, the revenue from this industry has shown an increasingtrend. There are varieties of mobile operators flourishing in the markets of UK such EE,Vodafone, British Telecommunication etc. Because of the presence of such giant players in themarket, the competition is obvious within this sector (Newth, 2012). Due to this intense form ofrivalry, it has become a challenge for the companies to maintain their position in the market aswell as to increase their share in the global market. Concerning to this, the current research report will focus towards the internal and externalenvironmental analysis of Vodafone. The company is the telecommunication giant and leadingthe whole sector in various parts of the world being formed in the year 1982. Vodafone offersnumerous services to their valuable customers such as social product, voice services, VodafoneLive, messaging services, USB modems etc. The vision of the firm is to become the leadingmobile telecommunication provider through enriching the customer’s live and helping them toget connected all through the world (Curwen, 2001). However, there are many factors thatinfluence the operation of the business in achieving the desired goals. Thus, the present studywill evaluate such factors that impact the Vodafone’s strategic decision making. Furthermore, theinternal capabilities of the company will be assessed by applying models and approaches. Otherthan this, various strategic options available for Vodafone will also be discussed later in thestudy. TASK – 1(THE EXTERNAL ENVIRONMENT)PESTEL analysis of VodafonePESTEL analysis influences the operations as well as power of the business to takedecisions. Seeking help through this, company can prepare their strategies earlier and can enterinto the market. Furthermore, with this framework, the firm will be able to answer variedquestions related to the business society. Thus, it becomes necessary for the business to analyze1
these factors (Barney and Wright, 2009). Further, through this the firm can achieve an advantage,as they will be well aware about the scope as well as limitations of their business. PESTELanalysis of Vodafone is as follows: Political – This factor takes into consideration various factors such as trade restrictions,tax reforms, tariff, political stability, labor laws and environmental laws. Many problemsare being faced by the company due to political issues. Legislations and laws changeswith the change in the government and the firm are compelled to abide by these laws.Because of the high inflation rate in some of the nations, the government of UK madepressure to reduce the prices (Bower and Gilbert, 2005). Pertaining to this variouschanges has been made in their internal and external environment of Vodafone. Economical – This factor is most important to the companies like Vodafone. The chancesof company to expand increases with the increase in the development of the state. Theyget a chance to open different ventures in the developed zones. The GDP of UK is goodand this depicts that people has more income levels. Higher level income groups are moreprone to adapt the latest technology in relation with the communication. In such amanner, the overall profits of Vodafone increases. However, due to recession andslowdown in European and Asian countries, the company has to cut their prices andprofits (De Wit and Meyers, 2004). Due to global uncertainty, the company is bound tochange their strategies. Furthermore, the company has good customer relationship andthus, they are ready to shift their approach from unit pricing to unit based tariffs. Throughthis, they are able to render more value to their clients. Social – The social factors are related with the local beliefs, cultural values, society andvalues of the people in which the company is operating their business. Hence, it can besaid that it is quite dynamic domain and for the organization to succeed needs flexiblepolicies and procedures in place. They must have developed such policies that match withthe local culture. Many of the countries have banned the mobile internet services due toits misuse. Vodafone is a European company but they have altered their preferences asper the demand of the social factors of a particular nation. For instance, according toresearch it was found out that around 53 percent of 16 to 75 years of age group peoplemakes use of smartphones in UK (Krogerus and Tschäppeler, 2017). 2
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