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Impact of Macro Environment on Vodafone

   

Added on  2021-01-02

13 Pages4911 Words309 Views
Business strategy

Table of ContentsINTRODUCTION...........................................................................................................................1TASK 1............................................................................................................................................1P1 Impact of macro environment on Vodafone and their business strategies............................1TASK 2............................................................................................................................................3P2 Assessment of organisation's internal environment and its capabilities................................3TASK 3............................................................................................................................................6P3 Evaluation of competitiveness of UK's telecommunications sector......................................6TASK 4............................................................................................................................................8P4 Analysation of strategic direction and different options available to Vodafone...................8CONCLUSION..............................................................................................................................10REFERENCES..............................................................................................................................11

INTRODUCTIONAccording to Miller & Dess (1996), business strategy is combination of all the plans anddecisions which help an organisation in moving forward towards organisational goals. Businessfirms do not perform any activity randomly, they first set mission and vision of the organisationand then decide short and long terms goal (Teece, 2010). Strategies are made for getting close tothe mission and vision of company. Vodafone is a leading mobile British telecommunicationcompany. They are present in almost 75 countries and they hold a strong market share in theirhome country i.e. UK. This assignment will have an environmental analyses where PESTLEmodel will be used for checking the impact of external factors on the business of company.Ansoff's growth matrix will also become part of this report. This file will also include anevaluation of internal environment along with organisation capabilities. Porter's five force modelwill be used for analysing telecommunication industry. Every business organisation take somedecisions in order to achieve their goals. These strategic decisions will be analysed by usingBowman's strategy clock model. TASK 1P1 Impact of macro environment on Vodafone and their business strategiesCompany can control their internal environment but external elements like politicalcondition of country, change in technology are few elements which are not in their hand and theymake a huge impact on growth of the organisation. Below is PESTLE analysis of Vodafone:Political – UK is key market for Vodafone and they are earning significant amount ofmoney from this country. Britain is getting out of EU and this political incidents made a hugenegative impact on the growth of Vodafone. This company want to make strategies for long termbut because of huge uncertainty in government policies and a big question mark on politicalinstability, they are failing to make effective plans. Its negative influence can be seen on theoverall performance of the organisation (Scholes, 2015) . Economical – Unemployment, low buying power of customer etc. are few economicfactor who are creating challenges for Vodafone. This company want to offer more services andnew products in the market but they are failing do it. The reason behind this is that, theyunderstand that buying capacity of customers is not increasing and this is happening because of1

unemployment and few other factors. Negative affect of poor economic condition of UK isrestricting growth of Vodafone in domestic market. Social – Social trend in UK is continuously changing like of other country. Companiesare allowing workers to work from home because they understand that they can easily get basicneeds like internet at their home. Social trends like ''GO Green'' and ''working pattern'' have madea positive impact on the Vodafone's business. This company is getting positively influence bynew social trends. For example, people are decreasing use of paper and they are communicatingby using chatting and mailing applications. This is opening new opportunities totelecommunication companies like Vodafone (Bharadwaj and et. al., 2013) . Technology – Telecommunication sector has seen remarkable growth in past few years.Technological changes made a positive influence on the business of Vodafone because thiscompany adopted new technology when it comes in the market. They are going to introduce 5Gin upcoming time and this will help them increasing their market share as well as profits. Legal – Government is going make huge changes in the laws relating to business postBrexit. In present situation, Vodafone is already facing the allegations of cartelisation, adoptingnew regulation will be difficult for them. They may fail to obey some rules at initial stage andthis will impact them in a negative way in upcoming time similarly to the cartelisation incident. Environment – Government is continuously making effort to tighten the rules relating toair and water pollution. In order to follow these rules, Vodafone have to invest more money inthose areas which will not make any contribution to their revenue. This is ultimately making anegative affect on the sales and net profit of company. Ansoff's growth matrix for analysing organisation's strategic positionMarket development – In this situation, an organisation enter in a new market with theirexisting product. Vodafone has started giving their 4G service in few part of UK where theywere only providing 3G network (Meskendahl, 2010). When this company first introduced their4G network, it was present in limited locations. But, gradually Vodafone entered in every part ofBritain and their strategy is to expand this network in other developing nation like Africancountries. Diversification – If a company is ready to take big risk then they go for this strategy. Inthis strategy, company enter in a new market by launching a new product. At the time of enteringIndian market, Vodafone adopted this strategy. They started 3G services in a market where they2

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