Strategic Planning in Telecom Sector

The assignment discusses the importance of strategic planning in the telecommunication industry, focusing on Vodafone as a case study. The essay highlights key complex issues that organizations like Vodafone face during strategic management, including fear of uncertainties, shortsighted behavior of staff, and customer loyalty. It emphasizes the need for effective communication, innovative thinking, and social media presence to stay competitive in the global market. Additionally, it recommends the use of Yip's CAGE framework for business planning and strategic decision-making.

Strategic Management

ESSAY
INTRODUCTION
Strategic management is considered as one of the most important
aspects business management that has significant impact on success and
growth of business entity. In the process of strategic management, every
organization develops wide range of strategic plans associated with business
expansion, marketing, joint ventures, mergers etc. as per the distinct
business needs (Lowson, 2004). Apart from that it is analysed that the
success of an organization is greatly depending on its strategic planning
process that has direct effect on efficiency and productive of management.
This report is going to discuss various strategic issues which are faced
by an organization in strategic management process. The present
assessment is carried out with reference to strategic planning process of
Vodafone Group Plc. It is a British multinational company which is offering
wide range range of tell-communication services in various overseas issues.
The essay is going analysis various theoretical models associated with strategic
management process that assists management while taking various
strategic management related issues.
MAIN BODY
Industry overview
The UK’s telecom market is identified as one of the largest service
sector industry in Europe which is characterised by fierce competition in the
mobile and broadband sectors. In order to increase market share, various
companies formulates different innovative services which has pioneered
business models for distributing digital content (Hubbard, 2014). As a result,
mobile and broadband penetration is comfortably ahead of the European
average. Consumer prices across the board have fallen steadily due to
increase in competition level. On the other hand, network capabilities have
been greatly expanded with the help of recent investments by British

Telecom and Virgin Media in Next Generation Networks. Furthermore, there
is significant downfall addressed in revenue of companies associated with
UK's telecommunication sector.
Environmental analysis of UK telecommunication sector Consumer and brand switching: The emergence of globalization
has led significant impact on success and growth of various companies
during overseas business operations. It has enhanced importance of
strategic management process.In this process, companies like
Vodafone is facing several issues during the strategic planning process
(Carlos, 2014). Therefore, consumers are addressed as a key market
player on telecommunication sector of UK. In order to manage distinct
needs of consumers, companies are applying different tools and
strategies to attract consumers towards their products.
Telecommunication industry is one of the industries which possess
high rates of brand switching (Baker, 2007). This is because intense
competition in telecommunication industry so as customers of mobile
service provider companies often switch their service providers brands
which provide extra benefits to them In 2015 the market value of
telecommunication sectors will reach at £40.7 billion. Growth in internet based communication tools: Increment in
number of smartphone users has created significant impact on growth
of mobile telecommunication sector. It includes communication
through internet tools such as Skype, What's up, Hike etc. have
significantly influenced the demand high speed communication. It
influences companies like Vodafone for developing of new business
strategies and services along with facilitation of high speed network as
per the current market trends. Introduction of new technologies: As per the current market
trends, the growth in number of smartphone users has increased the

demand of high speed telecommunication service. This thing
influences several companies for development and promotion of next
generation network system system such as 4G services (Stensaker,
2014). Therefore, various companies in UK makes efforts in order to
expand high speed network. In addition to that companies are also
focusing low cost telecommunication of services. Public legislation: The public authority of UK has developed various
legislations in order to control telecommunication sector. In this
regard, Communication Act, 2003 has played important role for
development and growth of telecommunication sector as well as safety
of service users. As per current business strategies of Vodafone, this
act helps organization for introduction of high speed 4G network
(Carlos, 2014). The term 4G refers to the fourth generation of mobile
communications standards. Therefore, independent regulator and
competition authority for the UK communications industries have
auctioned and awarded radio spectrum licences for 4G mobile
communications in the 800 MHz and 2.6 GHz bands. In addition to that
public authority has determined various new legislation for safety of
consumer's rights. Fluctuations in domestic and international capital market: In
the strategic management process, an organisation is also facing
issues related to capital markets and institutional relationship. During
overseas business expansion, the management of Vodafone
determines various policies for managing the interaction of finance and
strategy (Hubbard, 2014). In this process, business entity faces several
issues in formulation and conduct of strategy due to fluctuations
occurred in domestic as well as international capital market. In addition
to that differences in institutional relationships among various
international trading partners of Vodafone influences strategic

planning such as merger, acquisitions as per the different corporate
goals.
Drivers and Barriers of Internationalisation for Telecommunication
sector
Yip's Frameworks
There are different theoretical approaches applied in strategic planning
process. In this context, Yip' framework is addressed as a most important
model to determine various drivers associated with the strategic
management process. This model determines 4 categories of drivers that
influence an organization during overseas expansion like Vodafone. These
drivers are acting as motivator for the management of Vodafone for
establishment of international trade relationship with other companies.
These drivers include market globalization drivers, cost globalization drivers
and government globalization drivers.
 Market Globalization drivers: The market drivers are mainly
associated with social and demographic factors which are influencing
overseas expansion strategy of Vodafone. In the context of Vodafone,
management considers change in income and lifestyle of people that
influences their decision regarding selection of different kinds of
products and services (Hitt, Ireland and Hoskisson, 2012). For example:
In India, the number of internet and smartphone users is significantly
increased within last decade that provides an opportunities to
Vodafone for offering wide range of unique and creative services as per
the distinct needs of consumers. Change in social and demographic
factors provide new opportunities to Vodafone for managing business
as per the current market trends. It will increases profitability and
market share capabilities of firm.
 Government Globalization drivers: As per the Yip's framework,
government is also considered as a most important driver that plays

important role in strategic management process and management
decision's associated with overseas business expansion (Moutinho,
2011). In emerging countries like India and China, the public
authorities offer wide range of support in the form of tax benefits, easy
administrative process, low cost funding etc. that motivates an
organization for developing of appropriate plans and strategies to
exploit some new business opportunities with the help of government
support. By assessing support with public authorities of particular and
establishing partnership with government such as expansion of tell-
communication network in particular nation, the management of
Vodafone is able to increase the profitability and can develop strong
market position within highly competitive business environment
(Stensaker and et. Al., 2014).
 Competitive drivers: Competitive drivers are also playing important
role in strategic formulation process within an organisation. In this
process, manager considers several factors based on economic
growth, competition level, financial stability etc. within particular while
taking any kind of strategic decision for business expansion, merger
and joint ventures. By considering the economic growth of new
marketplace, managers of Vodafone are able to predict future business
opportunities which are influenced by economic growth of nation
(Uliwick, 2005). Furthermore, it plays important role on cost of finance
that influences overall efficiency of an organization.
 Cost drivers: As per the Yip's framework, the cost driver is termed as
a most important element that encourages an organization for
establishing relationship with other companies to reduce cost of
different services and products with the help of latest technology. In
the context of tell-communication sector, the administration of
Vodafone always tires to increase quality of services within less cost

that would significant impact over the profitability of business entity
(Gnosa, 2011). Therefore, organization makes efforts to assess new
technologies with establishing relationship with various other firm to
assess high tech equipment associated with tell-communication
network.
CAGE model
The cultural, administrative, geographic, and economic (CAGE)
distance framework helps managers identify and assess the impact of
distance on various industries. This approach plays significant role in
strategic planning process within an organisation. This is because this model
assists management in evaluation, administrative, geographic along with
economic variation while expanding business in new market and developing
of trade relationship with various companies working in different parts of the
world (Marren, 2007). This approach has been found very effective for
handling of various activities associated with strategic management process
as per the corporate goals.
Vodafone is operating in various nations so as assessment of cultural
variation is essential for success of business entity. Culture is referred to as
the software of the mind that has invisible but indelible influence on people's
values and behaviors. This understanding helps manager for developing of
distinct strategies related to business structure, new product development,
selection of marketing tools etc (CAGE Analysis, 2015). It provides significant
assistance for avoidance of uncertainties. On the other hand, administrative
distance determines the historical and present political and legal
associations between trading partners. In addition to that trade practices
between countries are significantly affected by laws and regulations
associated with national or international level (Ellsworth and Drucker, 2004).
Therefore, the Vodafone considers all these strategic compliance in

formulation of business policies. This approach has significant impact on
competitive position of business entity.
With the reference to CAGE framework, the management of Vodafone
makes efforts to assess variations among trading partners based on size of
the country, climates, and nature of transportation as well as information
networks. All these elements have direct impact on organisation's productive
within new emerging markets (Cardwell, 2015). In addition to that the
management of Vodafone also carries out detail assessment of economic
difference related to income, the distribution of wealth, and the relative
purchasing power of segments of a geographic market. The assessment
supports business entity while handling different activities associated with
pricing of services, selection of marketing tools and quality of services.
Evaluation of the most important aspects influence development of
telecommunication sector and Vodafone
As per the current market structure, it is clear that an organisation is
facing several issues associated. In the support of this, wide range of
academic model can be applied: Customer loyalty: In telecommunication sector, companies are facing
tough competition. In addition to that brand switching cost is very low.
Therefore, companies in UK make efforts to assess needs and desires
of consumers to manage market competition. In this regard,
companies are applying different strategic business model that play
important role in order pay appropriate attention on the basic
components of management (Moutinho, 2011). Therefore,
management tires to formulate appropriate and unique strategies to
influence goodwill and market position. It influences loyalty of
consumers. For example: Vodafone has applied this approach in
development of new services and selection of best marketing tools

through company could attract new consumers and retain old
consumers for long duration. Development of new innovation services: in this context,
departmental management model helps manager for paying extra
attention on different situations in which management is able to focus
on different tactical elements of strategic plan for meeting specific
goals of different department (Carlos, 2014). For example, the
management of Vodafone is looking to improve quality of internet
services with the help of new 3G or 4G mobile network as per the
market conditions of target market. In this, department will focus on
identification of customer needs and then analyses the needs with
reference to increase in smart phone users and increase in income of
people. Managing competition through overseas business expansion:
The growth in competition among companies working
telecommunication sector has influenced companies to expand
business in new market. In this regards, Vodafone of Uk has adopted
the joint venture model which is also beneficial for Vodafone and
provides better opportunities to business with reference to current
market trends. This approach plays important role in the strategic
decisions of Vodafone related to business expansion in new markets
(Hitt, Ireland and Hoskisson, 2012). For example, the partnership of
Vodafone and Conexus Mobile Alliance plays important role to increase
the presence of Vodafone Asia and provides Conexus with greater
access to Vodafone’s global footprint. In addition to that Vodafone and
MTS have agreed to extend their strategic partner market agreement
and expand the scope of company in the market of Ukraine by
signifying a deeper relationship between the two companies in the
country (Vodafone and Conexus Mobile Alliance form Strategic

Alliance, 2015). With a new non-equity partnership, the companies will
roll out 3G and develop wide range of in the Ukraine market using the
the Vodafone brand in Ukraine. Technology innovation: The rate of technological modification is
very high in the telecommunication segment. In this continuously
changing business environment, company like Telecom Corporation
and Vodafone make efforts in order to offer such products and services
that are exceptional and innovative. Therefore, every organization has
to ensure change in technology new models of communication devices
and phones. There exists the need for the company to remain up-to-
date about the latest techniques as per the preference of consumers.
Recommendation to resolve key complex issues of during strategic
management Fear of uncertainties: The management of Vodafone should
manage appropriate strategic planning with reference to internal
business environment and external factor of current
telecommunication sector. This is because lack of appropriate vision
lead fear among management. Fear is termed as most important
barrier to effective planning. It is mainly associated with the lack of
success rather than the potential for growth (Stensaker and et. Al.,
2014). This element also increases difficulties of management of
Vodafone to plan for the future of an organization. Shortsighted behaviour of staff: The management of Vodafone
needs to develop an appropriate communication system with staff
members. This is because Shortsighted behaviour of staff or managers
within organization can cause executive managers to stop in their
tracks. By focusing on current projects or short term gaols rather than
broader, long-term goals and future growth and profitability, the
management hampers the strategic planning process for attainment of

different objectives. Therefore, an appropriate communication is play
important role in strategic planning process (Uliwick, 2005). This is
because the senior managers need to establish appropriate conversion
with employees about the organization's purpose, goals, projects,
differentiation, members, competitors, and how their departments and
the employee's personal efforts contribute to the organization for
attainment of strategic objectives. Customer loyalty: For retention of consumers for long duration, the
management of Vodafone should develop Innovative Loyalty Program
through which company can influence perception of consumers. It also
support telecommunication firm during service development process
(Marren, 2007). In this regard, telecom companies are required
formulate clear strategy in order to meet customer's expectations in
the best possible manner and provide them value for money services.
 Use of Social Media: As per the change in interest and lifestyle of
consumers, technological advancement it becomes very crucial for
every organization to make their presence in the the global market.
This can be done by effectively employing a suitable platform that can
be accessed by large number of users. Social media is one such
platform that plays important role to attract new consumers from all
over world. By using social media, telecommunication firms like
Vodafone can establish direct communication with consumers to
assess preference and feedback of consumers about service quality
(Ellsworth and Drucker, 2004). This information should assist company
for improving service quality and satisfaction of consumers. This will
increase sales and revenue of organization in new as well as existing
market.

CONCLUSION
On the basis of above assessment, it can be concluded that
management has to considered several elements during the strategic
planning process associated with business expansion such as level of
competition, change in interest lifestyle of consumers, economic growth etc.
This essay has evaluated that Yip and CAGE framework assists management
in business planning and strategic decision by analysing several elements.
This assessment has found that lack of communication, creative thinking etc.
are acting as major barriers in strategic management.

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