Vodafone Business Strategy Report

This report examines Vodafone's business strategy using various frameworks, including PESTLE analysis, Ansoff's growth matrix, VRIO model, and Porter's five forces. It analyzes the impact of the macro environment, internal capabilities, competitive landscape, and strategic positioning of Vodafone in the telecommunications industry. The report also includes a SWOT analysis of Vodafone's strengths and weaknesses.

BUSINESS STRATEGY

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1 ..........................................................................................................................................1
P1 Impact and influence of macro environment on Vodafone and its business strategies.........1
TASK 2............................................................................................................................................4
P2 Internal environment and organisational capabilities............................................................4
TASK 3............................................................................................................................................7
P3 Porters-five-forces model.......................................................................................................7
TASK 4............................................................................................................................................8
P4 Bowman's strategy clock model.............................................................................................8
CONCLUSION................................................................................................................................9
REFERENCES..............................................................................................................................10

INTRODUCTION
Business strategy is said to be a process that is used for formulating policies which helps
company in attaining their goals and objectives in speculated period of time (Business Strategy.
2015). Thus, it is determined as a long term action plan that assist firm in performing their
activities effectively. In addition to this, it help company in reducing the chance of risk while
accomplishing set targets. Company on which report will focus is Vodafone, which is one of the
leading organisation of telecommunication in United Kingdom. Topics that will be covered in
this assignment are PESTLE analysis of Vodafone company so as to understand the impact of
both internal and external environment factors. Along with this, Ansoff's growth matrix is also
explained in order to know the positioning of company in market area. Other than this, VRIO
and VRIN model is also mentioned in this report. Lastly, Bowman's strategy of clock model is
mentioned for having a strategic direction for company.
TASK 1
P1 Impact and influence of macro environment on Vodafone and its business strategies
Macro environment includes such kinds of factors which can have an impact on business
environment and in strategy making as well. It consist elements like political, social, legal,
technological and others. Further in context with Vodafone, PESTEL analysis s is done for
having better understanding:
PESTLE Analysis: In recent times, Vodafone comes under top most leading telecommunication
organisations and operated its business in around 30 countries and still expanding its business in
other places.
Political Factor: It is majorly concern with political situation that is present in a country
and play an important role in decision making process of an organisation (Aithal and Aithal,
2016). It constitutes tax policies, laws and legislations, rules and regulations for different sectors
etc., Therefore, for running a business in a better manner it is important that company consider
this factor while launching or operating its business. If political system is stable than it can
provide maximum benefits but unstable regulatory bodies or change in government policies can
put an negative impact on company. Henceforth, all the rules and regulations that have been
formulated by Government of United Kingdom are followed by Vodafone which is helping firm
in developing its business.
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Economic Factor: It is considered as an effective factor which can have direct or indirect
effect on the growth of business in terms of profitability. In this there are certain factors that are
to be undertaken and these are inflation, deflation, saving rates, foreign exchange rates, cash
flow, income of an individual etc., Thus, in order to grow business in a positive manner it is
crucial that company focuses more in providing best quality services to people. As a result it will
enhance companies economic level (Akter and et. al., 2016). For example: In United Kingdom
as all individual' s are working and they have sufficient level of income which is gradually
increasing the economic level of nation.
Social Factor: Culture that are followed by a group or a community gives a huge impact
on the business of a company. It includes different kinds of demographic profile like age,
attitude, nature and behaviour of a person, education, sex, etc., Therefore, by determining all
these factors company will get to know about the choices and preferences of customers.
According to the recent times most of the people are using mobile phones for communicating
with each other and for this networks are important thus, customers are suing various networks
for the same.
Technological Factor: many organisation for operating its business are using advanced
technologies and new machineries. This is assisting companies in manufacturing goods in
specific period of time. In context with Vodafone, company is collaborating both high speed
networking firms and planning for developing 5G through cloud services. Therefore, it will assist
company in grabbing a huge market share of market area as a result it will improve sales and
profitability of Vodafone.
Legal Factor: Different countries have different legal structures that are to be followed
by firms is they want to operate their business without any problem. In terms of Vodafone, they
have to look some of the legal laws which includes Anti-trust law, consumers protection,
employment law etc., This will assist company in winning loyalty of customers and trust of
society as well (Basco, 2015). For example: Like it is mandatory that companion has to keep
details of customers as a secret and if firm doesn't do this than they might have to face penal
provision which can put a bad image of company in society.
Environmental Factor: Now a days' as most of the company are concerned about
environmental issues so they are planning to manufacture goods which are eco-friendly.
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Vodafone has incorporated a law of reducing the carbon emission and they are switching towards
products that are 100% renewable in nature.
Therefore, all these factors that are mentioned above plays an important role whenever
any kind of variations are being done. Thus, Vodafone is considering all these factors while
operating its business in a better manner.
Ansoff's Growth Vector Matrix: It is considered as an effective tool which is used for making
strategies for business operations. Most of the companies inculcate this model for getting high
competitive advancement from market area as a result it will have a great impact on the sale and
profit of company. Ansoff's Matrix includes different kinds of steps that are explained below for
having better understanding:
Market Penetration: This help organisation in expanding its business to wider area with
the help of resources that are available to company (Cascio, 2018). In this process emphasis is
more given on selling products to existing and new customers so that consumers doesn't go to
buy products from rival companies. Therefore, Vodafone is making strategies by considering all
these factors as it will enable firm in providing different kinds of opportunities to people.
Further, Vodafone is giving offers in their services which company is providing to its customers.
Market development: According to the study in United Kingdom around £3.8bn of retail
revenues has been generated and approximately 45% of revenues comes form the sector of
telecommunication. Vodafone is now thinking of expanding its business to areas where they
have not expanded yet. For this, company is conducting study and analysing the targeted market
from where firm can get maximum benefits. Thus, organisation is making strategies for this and
running their business accordingly.
Product development: This involves developing of new products for existing and new
customers so as to improve sales and profitability. Further company conducts survey in order to
know choices and preferences as it will help firm in developing product according to needs and
wants. As in recent times Vodafone feels like there is a necessity of developing 5G technology
for this, company is using various tools and technology for making this process compatible to
current market situations (Ghezzi, Cortimiglia and Frank, 2015).
Diversification: Company for gaining maximum results are now expanding its business
according to diversification. This helps firm in expanding its business in wider areas and with
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effective services and facilities. Thus, Vodafone for expansion is looking out for various factors
that are present at market area. Therefore, it is providing firm with better results in return.
TASK 2
P2 Internal environment and organisational capabilities
Evaluation of internal environment of a company helps firm in identifying internal
strengths and weaknesses that are included in an organisation. Some of the factors that are
required for going through the internal environment includes technological, skills of workers,
culture that are provided at workplace etc., Therefore, it is crucial that all these elements are
considered by companies while delivering effective services and facilities. Thus, by developing
appropriate working environment company can increase their capabilities of working according
to the needs and wants of customers so that they can fulfil all the demands of consumers
(Higgins, Omer and Phillips, 2015).
Strategic Capability: It is gives an insight of companies in how they implement strategies
for getting competitive advancement so that firm can add value to its products. In this many
factors are taken into consideration which includes market position, business assets which can
help company in becoming more competent. Main motive of this purpose is to sustain in the
market for a longer period of time. For this, firm apply different kind of strategies through which
firm can get gain continuous benefits and growth in business operations. Other than this,
strategies are made so as to maintain their status and remain financial viable and improve its
growth and productivity. With the growth of company its will enable firm in providing
opportunities to stakeholders in determining where company wants to invest for better results.
In terms of Vodafone, company has formulated strategies which are giving them
maximum benefits and enabling firm in giving better services and facilities in relation to
telecommunication. Further any change in technologies present in market area they are
considering on prior basis so as to give appropriate results to customers (Johnson, 2016).
VRIO/VRIN Model: In order to gain competitive advancement, this tool is effective and
provides with maximum benefits. In this, main purpose of HR department is to determine various
kinds of features of human resources which can enable company in gaining better position at
market area. Other then this, there are different kind of aspects that are being considered and this
includes roles and responsibilities that are being performed by workers for gaining best results.
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Therefore, for improving internal strengths of Vodafone, this tool is considered as an effective
tool and it tells about the capabilities which are needed for accomplishing goals and objectives in
given period of time. It is further classified into four factors that are explained below for having
better results:
Valuable: In this, company majorly emphasis on using appropriate approaches through
which they can get more success in business operations. Thus, company uses different kind of
sources that can help company in gathering information through which company can gain long
term benefits. In general this step help firm in reducing final price of products, which enable
company in using these resources for different approaches. Therefore, in terms of Vodafone, it is
necessary that company use valuable resources that are available to them as if not done than it
will reduce value of firm at market area (Lueg, 2015).
Rare: Using same kind of resources will not give appropriate benefits but all these
resources are used in a different manner and style than company can gain maximum benefits in
return. So, it is crucial that company make plan of action that are different of one another
because of which company can get maximum benefits. Other than this, providing different but
effective kinds of services and facilities are also important and this can be possible by giving
appropriate training to employees.
Imitability: There are certain kind of things that cannot be copied by any body and this
includes ideas and thoughts of business. Further, changes in talk time and offers will increase
brand image of companies it will assist firm in developing a brand image in return. As a result
high percentage of profits and revenues can be seen. Therefore, this kind of criteria will help
enterprise in creating an innovative yet successful plan.
Organisation: Vodafone is one of the leading company throughout the world and they
are providing with services that are popular in nature. In terms of customer base firm is
providing best facilities because of which it is helping Vodafone in having good relations with
customers. Firm is making appropriate changes according to the current market situation due to
which better growth of company at market area can be seen. For example: Vodafone is providing
better networks at remote areas because of which company is gaining a good position at market
area (Matt, Hess and Benlian, 2015).
Company's Strengths and Weaknesses: No one is perfect unlike this companies at
different levels have some kind of strengths and weaknesses what important is that on right time
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firm identify strength and weaknesses and perform task effectively. Further, strengths and
weaknesses can be determined with the help of SWOT analysis which is considered as an
important tool for the same.
Strengths:
In United Kingdom, Vodafone has strong customer base: UK is considered as an big
hub for the companies who are dealing in telecommunication. Vodafone is determined as one of
the leading company and better known for telephony service provider. Company has over 17.5
million subscriber which is large in number. Thus, after complete rebranding in terms of image
and slogan Vodafone has achieved in attracting a large number of customers towards their
organisation. In addition to this, modifications in tariff charges has increased their sales and
profitability (Quirke, 2017).
Maintenance of proper balance sheet: From the research it has been analyse that
Vodafone has a good annual return because of great reach to its customers. This directly shows
that company has good relations with its customers and they are happy with the services that are
provided by firm. In April 1, 2012 after taking Cable and Wireless Worldwide company crossed
revenues over £1 billion which is great in numbers. This is the result why it is second most
largest company in United Kingdom in terms of telecommunication. Due to revenues in large
amount Vodafone is enabling themselves in providing effective services on a daily basis to its
customers.
Providing with better services and facilities: Vodafone is known for giving effective
services to its customers because of which their sales and revenues are increasing in the market
of United Kingdom. This shows that company have good customer base and firm has managed to
gain trust and loyalty of customers. On a regular basis company check towers and their service
stations to know whether firm is giving appropriate services or not. Therefore, it helps Vodafone
in providing services according to the needs and wants of customers as a result it is assisting
company in giving tough fight to rival companies (Rosemann and vom Brocke, 2015).
Weaknesses:
Complete dependence of market of United Kingdom: As half of the economy and
revenues are gained through telecommunication in United Kingdom. As Vodafone is second
largest in communication services so, their customer base is also high. Due to limited customer
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base across the world this is the reason company's performance is decreasing. As a result it is
reducing capability of capturing a large market share in United Kingdom.
Implementation of BREXIT: In recent times, this factor has played an important role in
economy of United Kingdom. This had a great impact on companies who works as a small and
medium enterprises. But with the change in course in time this has been improved and in current
economy it is growing in forward direction (Rugman and Verbeke, 2017).
TASK 3
P3 Porters-five-forces model
This is considered as an effective tool which company use for understanding competition
that are provided in market area. It helps firm in determining resources that can improve
enterprise profits and revenues in given period of time. Through this, managers of Vodafone is
making appropriate decisions by which they can get effective outcomes and returns. Porter's five
force model assists company in identifying strengths and weaknesses on the basis of which firm
can make further strategies so as to tale their business in forward direction. Points of Porters-
five-forces are explained below:
Competitive rivalry: According to the current market scenario, there are large number of
companies who are doing the same business. For instance Vodafone has many rival companies
like Virgin, British Telecommunication etc., Virgin media constitute approximately 22% of
market share in the market of United kingdom and in context with Vodafone they are having a
market share of 25% which is large in number.
Threats of new entrants: In UK, in the field of telecommunication around many
companies are evolving and trying their hand in this sector (Scholes, 2015). Alone Vodafone has
around 25% to 27% of market share. Therefore, with the high profit in this sector most of the
companies are opting to do their business in this field. For top leading firm this is working as a
biggest threat as a result enterprise are focussing more on making modifications in business
strategies so as to sustain in the market for a longer period of time.
Bargaining power of customers: As customers have a wide range in opting various
services in telecommunication. So, consumers have lot many choices of opting services and
facilities according to their choices and preferences. Thus, it can be said that Vodafone, has a
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large number of competitors so, it is crucial that company make strategies as per the need and
wants of consumers (Smink, Hekkert and Negro, 2015).
Suppliers power: In terms of Vodafone, company has a maintained a excellent bonding
between supply chain and company which is enabling them in getting ample amount of raw
material right on time. This is enabling firm in manufacturing goods and delivering them on
speculated time frame. As a result, it is assisting company in providing better services to its
clients.
Threats of substitutions: In terms of Vodafone there is no such kind of substitutions but
there are other companies who are giving same kind of services who are providing services at
reasonable cost. This is providing opportunities to customers in selecting their best possible
network.
TASK 4
P4 Bowman's strategy clock model
It is considered as an effective management tool that is used by company for gaining
strategic positioning at market area. Bowman's strategy clock model provides with a wide range
of perspectives with regards to positioning of services that is being given by company.
As Vodafone is a telecommunication company and they are providing its services all over
the world and for this, firm is using this Bowman's strategy clock model for evaluating market
scenario in an effective manner (Temminck, Mearns and Fruhen, 2015). Further all these points
are explained below:
Position 1: Low Price and value added: This factor states that services which are offered
by Vodafone is different and customers received much lesser values in turn rather the prices of
the products were also low. This states that firm is not having any competitive advantage thus
they are not able to establish strong image at market areas.
Position 2: Low Price: It has been found that this sort of option can be adopted by
business firms when it comes to select the options which is related to products and services. This
may lead organisation to become low cost leaders.
Position 3: Hybrid: This is the situation where companies stays at interesting state and
tries to deliver products and services with less prices which are carrying high quality. This
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strategy is being taken under in use by business firms when it comes to gain competitive
advantages.
Position 4: Differentiation: It has been found that this segment helps a business firms in
delivering products with distinctive and unique attributes which carries high value among
customers. On the other hand, it has also been examined that high perceived value will be much
effective because they will directly grab good position at marketplace because offer which was
given by customers can be successfully considered as some of approaches that may aid business
organisation in gaining good position at international level.
Position 5: Focussed differentiation: This strategy can be adopted by those companies
whose customers buy products or services based on perceived value alone. It is not necessary
that products have any real value, but the perception of value by the customers is enough to
charge very large premiums.
Position 6: Risky high margins: This is being considered as a state where price of
product gets increases but do not put changes values in products and services. Apart from this, it
can also be said that products and services at the same time can be helpful for business firms that
are delivering products and services and carries high risks.
Position 7: Loss of market share: At this stage, it is being said that products and services
that are being offered by organisations carries high prices and this may lead company to face loss
of market share.
Position 8: Low Value / Standard Price: Vodafone is carrying a good name in all over
world an if this company can pursue type of market strategy will definitely lose market share. If
company has a low value product or services, the only way company will sell it is on price
(Basco, 2015).
CONCLUSION
From the above report it has been concluded that, for running a business there are set of
actions that are to be performed in order to gain goals and objectives in speculated time frame.
With the help of various factors like PESTLE, VRIO and other it is assisting company in
knowing the strengths and weaknesses of firm. As a result it is assisting enterprise in evaluating
external and internal factors so that organisation can work on so a to give effective services and
facilities to its customers. Along with this, for having appropriate knowledge researcher has
used Ansoff's Matrix in order to know its business situation at market area.
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REFERENCES
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dynamic telecommunications industries: A study on Italian mobile network operators.
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