Impact of Economic and Non-Economic Factors on Vodafone's Behavior

CONTEMPORARY
BUSINES
ENVIRONMENT

Table of Contents
1.0. INTRODUCTION....................................................................................................................1
2.0. LITERATURE REVIEW.........................................................................................................1
2.1. Economic Environment shaping the behaviour of Vodafone..............................................1
2.2. Non-Economic Environment and its impact on behaviour of Vodafone.............................3
DISCUSSION AND ANALYSIS...................................................................................................5
3.1. SWOT Analysis...................................................................................................................5
3.2. PESLTE Analysis.................................................................................................................6
CONCLUSION................................................................................................................................8
REFERENCES..............................................................................................................................10

1.0. INTRODUCTION
Contemporary Business Environment refers to all the factors and components that
surround a business and have direct, or indirect impact upon the same. Furthermore, these
aspects are very much appropriate in context of enhancing the capabilities of a company when it
comes to building effective relationships within the marketplace. It takes into account both the
internal, as well as external factors that are related towards the internal competencies of the
company, along with external market conditions that are required to be interrelated to leverage
the opportunities and strengths within the organisation (Lenart-Gansiniec, 2018).
Hence, for this purpose, it is mandatory that an organisation takes into account the
abilities within its operations and functions that are internally related to the organisation, as well
as external factors that are inclusive of the economic and non economic factors that directly
influence its behaviour in an appropriate manner. Moreover, analysing these factors and aspects
would be contributing towards gaining sustainability and competitive advantage in the market
which the firm is currently situated in.
In this context, United Kingdom is one of the most prominent market that could be
analysed as currently, the market is facing high uncertainty due to Brexit. Moreover, as for the
organisation, Vodafone is being considered as an organisation, that is a company operating under
the telecommunications industry of the UK. The report would hence undertake an effective and
detailed evaluation of the economic, as well as non-economic factors that influence the
behaviour of Vodafone. In addition to this, another part of the report addresses the internal, as
well as external analysis of the organisation. For this purpose, frameworks like SWOT and
PESTLE analysis are being utilised within the assignment. Furthermore, the linkage within both
the internal and external environment is also showcased which reflects that interrelation of the
core competencies within the company, with the outside environment of the firm.
2.0. LITERATURE REVIEW
2.1. Economic Environment shaping the behaviour of Vodafone
The economic environment of a company is a combination of all the factors that are
related to the country's current economy (Makojević, 2016). These factors have a huge impact
upon the company and its working. The reason to support this aspect is associated with the fact
that Vodafone is an organisation which has one of the highest market shares within the UK.
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Hence, the impact on changes on economic statuses is witnessed most on the organisations that
have high working within the nation.
UK currently is dealing with the effects of events related to Brexit, which is the
abbreviation given to “British Exit” from the European Union. Since March 2016, when the
referendum was first signed, the UK political and economic scenario witnessed a shakedown due
to closure of MNCs, unfavourable economic conditions, as well as reduction in the value of
Pound (Koišová and et. al., 2017). Hence, all these elements also impacted the organisation and
some of these aspects are witnessed below:
2.1.1. Economic Policies
Within the nation, specific policies related to the telecommunications industry have a
direct impact upon Vodafone. In addition, these rules and regulations are very much appropriate
to be analysed as it reflects the current condition of the market and possible consequences in
context of the company (Nikitina and Lapiņa, 2019).
For the telecommunications industry and Vodafone, the rules that are currently being
imposed within the country are the ones according to EU Law. This is because despite of UK
exiting the EU on 31st January this year, the transition period would continue till the end of this
year, which means that the EU law would be prevalent for the organisation this year. However,
there are more negative implications upon the telecommunications industry and Vodafone. This
is because after this year, the EU free movement rights, treaties, as well as the EU law would not
be applicable on the UK companies. Under the EU law, there are several regulations that are
related to the telecommunications sector, for instance, Communications Act 2003. The aim of the
framework generated by EU directives for the UK telecom organisations is that the rules are
harmonised within the overall country, as well as across EU, which ensures better and more
competitive environment for the companies to perform. If the trade deals continue after the
transition period ends, then the organisation's behaviour would be positively influenced,
considering the fact that a status quo would be maintained within the market. However, once the
transition period ends, the behaviour of the company might be negatively impacted due to
formulation of policies that might be negative for the firm and its operations within the EU
nations.
2.1.2. Economic Conditions
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