Strategic Analysis of Vodafone Australia: Pestle and Porter's Five Forces

This report provides a strategic analysis of Vodafone Australia using the Pestle and Porter's Five Forces models. It examines the external environment, internal strengths and weaknesses, and strategic directions and objectives of the company. The report also analyzes the ethical position and stakeholder analysis of Vodafone Australia.

Executive summary
Vodafone Australia is a third largest network service provider in Australia. This report
focuses upon the strategic analysis that will be done on the basis of Pestle model and porter’s
five force model that further provides insight about the telecom industry’s future prospects. The
strategic analysis also helps to gather information about company related threats, opportunities,
strength and weaknesses that will also help make strategic decisions. This will also include
strategic direction and strategic objective on the basis of vision and mission of the company. It
will further analyze the ethical position of the company and stakeholder’s position.

Table of Contents
1
.Introduction................................................................................................................................................3
2. Strategic Analysis....................................................................................................................................3
2.1 External Environment Analysis.........................................................................................................3
2.1.1. General Environment.................................................................................................................3
2.1.2.Specific Environment.................................................................................................................6
2.1.3.Conclusion on external environment threats and opportunities...................................................7
2.2.Internal and Competitive Analysis.....................................................................................................7
2.2.1.Core Competencies.....................................................................................................................7
2.2.2.SCA............................................................................................................................................7
2.2.3.Internal Weaknesses...................................................................................................................8
2.2.4.Conclusion internal strength and weaknesses.............................................................................8
2.2.3.Conclusion about organization’s competitive position in its market...............................................8
3. Strategic Directions and Strategic Objectives..........................................................................................8
3.1.Vision................................................................................................................................................9
3.2.Mission Statement.............................................................................................................................9
3.2.Strategic Objectives...............................................................................................................................9
3.2.1.Ethics Matrix..................................................................................................................................9
3.2.2.Stakeholders Analysis and Table..................................................................................................10
3.3 Conclusion.......................................................................................................................................11
References.................................................................................................................................................12

1. Introduction
Vodafone Hutchison Australia (VHA) also known as Vodafone Australia is a mobile
telecommunication and fixed broadband service provider based in North Sydney, Australia.
VHA came into existence after the 50:50 joint venture between Hutchison Telecommunications
(Australia) Limited (a subsidiary of CK Hutchison Holdings) and Vodafone Group Plc. in 2009.
After this venture, the company is tasked to conduct all operations related to the Vodafone
Company throughout Australian market. VHA offers calling, text, voice, mobile broadband and
international roaming services.
Moreover, it also serves customers through online services and through its more than 120 retail
stores across the country (Vodafone.com, 2019). With the help of its innovative programs,
company is continuously building a competitive advantage throughout the world (Bloomberg,
2019). The purpose of this report is to analyze the strategic framework of the company in order
to provide a clear picture about the strategies adopted by the Vodafone, shared vision and
mission of organization’s future and how it helped business in accomplishing desired goals
related to the organization (Papadakis & Barwise, 2012).
2. Strategic Analysis
2.1. External Environment Analysis
External environment analysis refers to the study of macroeconomic factors, industry analysis
and competitor analysis that can impact organizational growth.
2.1.1. General Environment
Pestel model has been used to assess the factors affecting general environment of the company. It
also helps to evaluate the megatrends of the Australian market, which are most relevant to VHA
over the next 5 years.

Source: (50Minutes.com, 2015)
Political and Legal Factors
The telecommunication policies comes under current regulatory regime with the passage of
Telecommunication Act 1997 and major amendments takes place under the Trade Practices Act
1974 (TPA). Telecommunication Act, section 4 contains the outline of regulatory policy, which
states that telecommunication in Australia must be regulated in manner that intends to promote
the practical use of industry self-regulation. Section 6 of this act encourages related bodies in
order to develop voluntary and mandatory code of practices (Parliament of Australia, 2019).
Economic Factors
The 60% of Australian economy is mainly driven by the consumer spending and business and
government spending contributes to other part of the economy. As per the estimates, GDP per
capita is going to increase in the near future as well as unemployment rate is showing a
significant decrease (IMF, 2018). As telecommunication industry comes under the service sector
indicates that this sector has huge scope of investment in terms of domestic and FDIs.

Source: IMF – (World Economic Outlook Database, 2018)
Technological Factors
Presently, mobile broadband and Fttn (Fibre-to-the node) are driving Australian
telecommunication market. The fixed line broadband is showing a significant decline, while
fixed wireless broadband services is showing an increase in its popularity and become widely
available now days.
Social
The projected growth in the population of Australia is slow, but the total population is likely to
reach at 31million by the end of 2033 and 42 million by 2060. This growth is a combination of
natural increase and net immigration from less developed countries. Like many other countries,
aging population is also increasing in Australia and life expectancy rate is also increasing, which
in turn creates consumer market for future.

Source: (Mckenzie, 2016)
Environmental
Australian telecommunication sector is facing a brand new situation with the age of saturated
market, though IOT and M2M technologies are coming up with linking sensors and devices that
adds different elements to telecom networks. The development of these technologies is opening a
way for smart cities, smart factories, smart communities, smart grids and smart buildings and
homes. Now days, these technologies are becoming significant to operate one’s increasingly
complex society in a more efficient and effective manner (CISION, 2017).
2.1.2. Specific Environment
Porter Five Force Model: This model provides an assistance to form industry structure and the
level of competition in that industry (Jurevicius, 2013).
Threat of new entrant Low Acquired significant position
in network leadership
Bargaining power of
suppliers
Low Merger with TPG help VHA
in establishing network
infrastructure for future

technologies
Bargaining Power of Buyers High Demand of customers for
more proactive protection
features in network services
Threat of Substitutes High Telstra & Optus provide better
and cheaper service than VHA
Rivalry among existing
competitors
High Less differentiated products
2.1.3. Conclusion on external environment threats and opportunities
There are obvious opportunities for the company to enter into fixed line business and shift its
focus from fixed line players to other users. For this purpose, VHA has begun its large network
transformation project that will help in transition of its core and IP networks into 5G
environments.
2.2. Internal and Competitive Analysis
2.2.1. Core Competencies
Core competencies provide an overview about the strength of a company that makes it able to
strategize. The identification of core competencies is based on following four criteria:
Value VHA’s merger with Telco and TPG rebuild its competitive strength
Leadership Vodafone brand name and network leadership
Dominant Market Share Acquired 5G spectrum holdings and provide 3.6MHz band in
regional and metropolitan areas
Competitive Advantage Large block of contiguous spectrum for wider bandwidth. Acquired
additional 850MHz to provide better coverage network.
2.2.2 SCA
Competitors Position
Telstra Most Dominant
VHA 2nd Position
Optus 3rd Position

Optus owned the second position in the market, but after VHA announced its merger with TPG
Telecom Limited, Optus came at third position. Vodafone Australia with the help of TPG created
a necessary scale for its rivals. At present, Vodafone Australia is the second biggest 4G network
and covers larger population than Optus (Middleton, 2018).
2.2.3. Internal Weaknesses
Vodafone Australia is lacking in self-owned network infrastructure. In addition, the absence of
minimum control over network services provides an inability to adopt appropriate strategies for
improving the quality of its services. As a result, company has to face the complaints of its client
that have waged by customers in order to show its inefficiency in service delivery (WhatPhone
plans, 2018).
2.2.4. Conclusion internal strength and weaknesses
The global brand image of Vodafone and its collaboration with TPG is company’s biggest
strength. The company is leveraging this strength by providing $5 roaming to more than 80
countries, which makes it different from competitive companies (Hutchison Telecoms, 2019).
VHA is also doing efforts in providing better network coverage and bandwidth to its customers,
which further help them in eradicating its weakness of regional network inefficiency.
2.2.3. Conclusion about organization’s competitive position in its market
Presently, VHA is just after Telstra due to its unlimited plan of network coverage. After
comparing its SIM only plans, it can be said that the Vodafone customers are happy with their
services and this can add value to its market performance in future.
3. Strategic Directions and Strategic Objectives
Strategic direction is concerned with the plan of action that is taken by managers to fulfill the
organizational objective. The analysis of this defines that how well the company has
implemented their plans. This includes internal analysis of the company as per their vision and
mission statement (Johnson, Scholes, Johnson & Whittington, 2011).
3.1. Vision
The vision of VHA is transforming the society by bringing innovative technologies and services.
The company is focused towards technologies that makes it commercially viable and provide

scalable support for sustainable development (Strategic Report, 2018). Now a day, mobile
technology is becoming a crucial tool in people’s lives and Vodafone is aiming to provide
dynamic mobile services to their customers in order to improve their livelihood (Strategic
Report, 2018).
3.2. Mission Statement
VHA is focused to enhance the value of its customers by providing them innovative, customer
friendly and affordable communication services. Due to company’s excellence in customer
experience, it is aspiring to be one of the most successful companies in Australia (Annual report,
2018).
3.2. Strategic Objectives
3.2.1. Ethics Matrix
The ethical position of the company can be derived through some standard principles such as
respect for well-being, fairness, autonomy in reference to interest group or affected parties.
Stakeholders Wellbeing Fairness Autonomy
Technology Users Health improvement
initiatives through
technology. provide
safety, efficacy and
remuneration
Provide Fair treatment
to users
Users have freedom to
adopt and not to adopt
Affected Citizens Safety & quality of
life (awareness
programs for alcohol
and cancer causes)
Follow individual and
regional justice
Follow democratic
decision making
Technology
Providers
Commercial Viability
and provide better
working conditions
Welcome equality,
diversity and
opportunity
Provides freedom to
innovate
Environment VHA as a part of
global network use
technology to make
Focuses on the
sustainability of
environment
Support related
charities and fund
raising activities

world a better place
Vodafone Australia foundation was established that focuses on health improvement initiatives
through technology. As per now, Vodafone Australia has donated $26 million for significant
causes. The company believes that mobile phones can create a better future for people and their
programs like change attitude towards alcohol and cancer cause awareness initiatives perfectly
touched this ground (Vodafone, 2019).
3.2.2. Stakeholders Analysis and Table
The stakeholders analysis of the company helps to find the people who shows interest in the
business activities as well as play some role that impact the strategic decision making process of
a company. It includes shareholders, customers, employees, suppliers, financers, environment,
advisors, Government, union and community.
Stakeholders Position Comments
Shareholders Definitive Achieved
Customers Dominant Partially Achieved
Employees Dominant Achieved
Suppliers Dominant Achieved
Financers Dominant Achieved
Environment Dominant Achieved
Advisors Discretionary Achieved
Government Dormant Achieved
Union Discretionary Achieved
Community Discretionary Achieved
As per the analysis, the people related to company and its employees are the secret to its
sustainability. The company comprises with an effective work environment that welcomes
diversity, opportunity and equality. Presently, Vodafone Australia employs around 2500 people
and owned 120 stores across Australia. The only place, where the company is lacking behind is
meeting interests of its stakeholders, as its portal is full of complaints. Company is somehow
lacking behind in responding to these complaints though, it need to improve the communication

process. Moreover, company needs to establish a vertical communication process between their
in-store employees and management. This will help to company to know about the nature of
customer complaints and will also provide an understanding that how to deal with those
problems in future (Vodafone, 2019).
3.3. Conclusion
The Vodafone Australia’s sustainable business strategy is effectively aligned with their
commercial objectives that are defining its clear purpose for long term growth as well as to meet
customer expectations (Amin, El Sheikh, Moharram, Ibrahim & Yehia, 2016). VHA also aims to
be a converged communication leader in terms of sustainability, accessibility and responsibility.

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