International Business Across Borders: A Case Study of Vodafone

This research paper examines the international business strategy of Vodafone, a leading telecommunications company, focusing on its operations in India and other global markets. The paper analyzes Vodafone's competitive strategy, organizational structure, entry strategies, operational control, supply chain management, and human resource management practices across borders. It identifies key issues and opportunities for management and provides recommendations for improvement.

INTERNATIONAL BUSINESS ACROSS BORDERS
A Case study of Vodafone
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Executive Summary
India is being considered as one of the fastest growing nations in the world. By having a diverse
nature, India is always successful in attracting various parts of the world towards its open and
developing economy and allows various investors to make investments in the developing and
growing market. There are various companies in India who are operating there but also have
their existence in the other parts of the world or can be said that they are having many
international branches. This assignment will have proper analysis in regards to the factors in
relation to the international business across borders.
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Table of Contents
Executive Summary.....................................................................................................................................2
Introduction.................................................................................................................................................4
Overview of the company............................................................................................................................4
Review of company’s international competitive strategy............................................................................5
Existing organisational design structure and control issues.........................................................................6
Entry strategies used to enter other regions/countries..................................................................................7
Operational control, production and distribution/supply chain management...............................................8
Management of Human Resources across borders......................................................................................9
Identify key issues or opportunities for management..................................................................................9
Recommendations to management for improvement.................................................................................10
Conclusion.................................................................................................................................................10
References.................................................................................................................................................12
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Introduction
Nowadays there are many organisations that are having more than one branch in the various
foreign countries and are operating well for the achievement of success. Companies generally
expand their business internationally in order to increase profitability and productivity and also
to make growth in business activities and tasks (Kumar et. al., 2012). There are also numerous
opportunities in the foreign business market that support them in overall development and
growth. For this assignment, ‘Vodafone’, a telecom company is being selected who is operating
in the country India but are also having branches in many other countries. In this report, an
overview of the company will be given along with its operations. There will be a discussion of
international competitive strategy, control issues, and organizational structure. Entry strategies,
supply chain management, human resource management, key opportunities, and issues, as well
as several recommendations, will be provided so as to draw a valid conclusion.
Overview of the company
Vodafone group is the British multinational telecommunications company having it’s
headquartered in London. Vodafone India is considered as the Indian subsidiary of the UK based
group of Vodafone. It is the second largest company in the mobile phone and the provider of
telecommunication services in the various parts of the world. Vodafone in India has a market
share of 18.42% with around 212.52 million of the subscribers and is having a second largest
network of the mobile communication after Airtel. Vodafone is currently operating and owning
network in around 26 countries and is having a partner network in other 50 countries. Vodafone
global enterprise division is providing IT and telecommunication facilities to the corporate
clients in around 150 countries. Listing of Vodafone is there in London Stock Exchange and
have the market capitalization of around £ 52.5 billion (Indiaretailing,com, 2015). The company
is currently operating in many areas of Egypt, Kuwait, South Africa, Qatar, Ghana, U.A.E,
Brazil, US, Australia, Japan, and India.
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(Source: Indiaretailing,com, 2015)
In the year 2009, Vodafone launched internet service for Mac, PC and mobile names Vodafone
360. This service gets discontinued in the year 2011 as there were disappointing sales of
hardware. Apart from this, they are offering money mobile transfer services and health services
which is the application of network technologies and mobile communication to healthcare. The
company is operating in many international nations and is providing good amount service in
order to satisfy needs and requirements of the customers in the various areas. It is one of the high
profits making MNC with the support of expanded business activities in various parts of the
world.
Review of company’s international competitive strategy
Vodafone is a multinational company as it is making deals in different nations all around the
world in order to make the selling of the services in relation to mobile networks and
telecommunication. It is the 2nd well-known company in the industry of mobile networks and has
a strong impact on the national as well as international market. Airtel being at the top of the list
of a famous company is becoming the threat for Vodafone and is impacting its business (Shenkar
et. al., 2014). It is very necessary for the organisation to build competitive advantage in the
market so as to face various challenges, issues, and competition in an effective manner. It is very
necessary for the company to beat the competition in the market so as to have proper
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maintenance of the profit and sales so that there can be an enhancement in the market share by
having a proper business expansion that will help in attracting new segments of the customers in
the international market.
The main purpose of Vodafone to enter in the international market in order to gain the improved
foothold in the market of Asia-Pacific, which is supporting in giving a large amount of the
wireless subscribers in the global market and to have a quick win in a market of Vodafone that
will be supportive in penetrating. For the planning of the international strategy, it is very
necessary to analyse external environment as well as controllable variables. Corporate objectives
and goals must also be designed in order to gain competitive advantage. The company has
adopted ‘Innovative alteration in the technology' so as to attract more and more customers and
to provide high-quality products in the target market. The company must focus on implementing
a stronger network with many different features. ‘Improved quality of product and reduced
price’ are the two main factors that are being adopted by an organisation so as to beat the
competition in the market. This will benefit the company in many ways as they are having a
large base of customers who should be satisfied with the services and products (Piekkari et. al.,
2014).
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Existing organisational design structure and control issues
(Source: By Author)
Vodafone is having a proper organizational structure that is supportive of making various
strategies and decisions for the success of the company. The company is different sorts of
departments that work in coordination with each other for the achievement of goals and
objectives in an effective and efficient manner. In the human resource department of the
organisation, management of employees is being done. They are responsible for hiring and
recruiting suitable employee for a vacant position. Requirements and needs of the staff member
are taken care by this department and time to time motivational and training events are also
planned so as to update their knowledge regarding new networks and technologies. In the finance
department of the company, all the necessary decisions in regards with budget planning as well
as investments and expenses are being planned here which is beneficial for the Vodafone to carry
out activities in a proper manner (Puffer et. al., 2013). In the technological department, planning
in regards to the application of the new technologies in the system of telecommunication is being
done. Technological updating is the key aspect of the success of the company as it supports in
building up a wider network for the customers. For the effective expansion of the business in the
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Vodafone
Enterprise
business unit
Consumer
commercial
Commercial
operations Strategy
Human
resource Finance
Technology Legal and
external affairs

international market, department of legal and external affairs plays a significant role in dealing
with all the necessary laws and legislation required for doing business across borders. From
efficiency in the production to boosting cost so as to make increment in the connectivity, the
business unit enterprise of the Vodafone supports organization in meeting challenges and also
prepares them for future challenges. In the commercial consumer department, all the sales that
take place between business and consumer are being handled and the activities and operations
are handled by commercial operation department. In the strategy department of the company,
distinct strategies are being prepared for the expansion of business, targeting customers,
technology adoption etc.
There are various issues also that are arising in an organization which needs to be controlled in a
proper manner so as to gain customer’s loyalty and trust. The main issues are voice and data
issues. In some areas, there is an issue regarding voice quality and network breakdown and
sometimes there is no access to incoming and outgoing calls. Problems of coverage and slow
data speed are also growing up continuously (Cavusgil et. al., 2014).
Entry strategies used to enter other regions/countries
Vodafone is moving aggressively in order to make an entry in the mobile market of the different
nations. In order to make an entry in the international market, there are various strategies being
used by the organisations that support the successful business operations. To make an entry in
the market through equity means attaining ‘high degree of involvement in the markets of
foreign country’ which is also considered as the fast method in comparison to any other kind of
method, is the stated goal or aim.
The particular justification for making entry in the market through acquisition of the controlling
stake in VMS MobiFone will be in two ways, firstly as per the laws of foreign nation, Vodafone
must look for joint venture or a local subsidiary if they don't want to purchase controlling stake
in an organisation and secondly, instead of making entry in the delay and risk of clearing
cultural and legal hurdles so as to operate in a country, Vodafone can directly purchase the
expertise of country's provider of mobile network and vault the stages needed to build foundation
internationally (Turnbull and Valla, 2013).
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Operational control, production and distribution/supply chain management
It is very necessary for the organisation to have proper operational control by making the
establishment of the targets, objectives, responsibilities, and direction to the authorities of
administration and management. Vodafone is having its business operations in India and also in
various outside countries; therefore it is very necessary for the company to have proper
management regarding operational control. There are different tasks that are being done by the
administration so as to make a completion in the entire process. Network administration and
various telecommunication services are considered as the main operation of the Vodafone that
needs to done properly for the achievement of goals and objectives (Holtbrügge and Baron,
2013). The organisation is also having its technical departments in various areas where all the
process in relation with the administration of the network is being done in order to provide
services free from any kind of issues and problems. Vodafone is one of the leading organisation
in the telecommunication services; therefore they have the high responsibility to have proper
operational control as well as distribution and production. They must make an investment in
increasing the voice as well as data quality that will eventually make enhancement in the
productivity and profitability of the company.
After following up a plan for international expansion, a global telecommunication giant will
require global supply chain model that makes the involvement of supplier's approval and
selection process, their activities with subsidiaries of Vodafone and performance management. It
has been recognized by the company that making a global purchase for its owned associations
will be the most beneficial model. There are three main factors in analysing logistic strategy:
improvement in the services, reduction in operations, and reduction in cost. With the support of
supply chain management, Vodafone makes utilization of tax efficient opportunities (Johnson,
2016). There is also a provision of regional distribution centres for network spares and devices
that make a reduction in the cost of facility location and storage. Also, Procurement Company’s
employment has supported the organisation to make a reduction in logistics investment by
following capital and cost reduction approach.
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Management of Human Resources across borders
Vodafone is basically a London based organisation and therefore, it is very essential to have the
proper administration of the cultural diversity in the internal administration of the organisation.
Cultural diversity is considered as the major aspect which is creating a measurable impact on the
employee’s performance and on the internal environment of the organisation. The company is
having various international teams of experts as well as professionals for the management of the
performance in the team. The strategy of the functional HR is based on the system of personnel
management utilized by an association (Gamble et. al., 2013). The code in relation to conducting
business and rules of corporate culture are impacted by the system of personnel management in
Vodafone. The policy of personal management focuses on motivating employees of the company
so as to achieve goals. The organisation also focuses on developing individuals in a company so
that they will be able to perform effectively as per their responsibilities and roles.
The company must also make adoption of international HRM policies so as to make the
development of a better environment of work in a nation. E-learning system is also used for the
purpose of training employees. Adoption of on the job training method in order to provide the
experience of real working to new joiners so that they will be able to perform real duties and
tasks effectively. Provision of incentives and bonus are also there for the employees who work
well for the success of the company. These incentive programs support in increasing motivation
of the employees (Santos-Vijande et. al., 2012).
Identify key issues or opportunities for management
When the business expansion has been done by an organisation, there are various issues as well
as opportunities that arise in front of the company. It is very necessary to analyse such factors for
the appropriate development and growth of the business. At the time of expansion, political
factors of the nation like labour law, trade restrictions, tax policy, political stability, and tariff
must be taken into consideration as they become a serious issue in the flow of operations.
Inflation rates, exchange rates, interest rates are some of the economic factors that may occur at
the time of business expansion and may create issues (Hernández-Perlines et. al., 2016). The
swift growth and expansion of the mobile industry have involved a large number of internet
users, it is very important for the company to consider all the technological innovations and
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creations so as to keep attracting users. If the technology will get updated from time to time then
this may create a problem in the operations of the business. It is also necessary to consider the
environmental factors of the nation before making expansion of business in a particular nation.
There are various opportunities also that are available with the management of the company at
the time of expansion. They can make growth in the various business activities or operations
which will eventually make increment in the productivity as well as the profitability of the
business. Size of the business will get increased due to which there will be a rise in the customer
base. It is very necessary for the Vodafone to make segmentation of customers in a proper
manner so as to gain a competitive advantage in the market full of competition (Rosli, 2012).
Recommendations to management for improvement
The main goal of the development of the strategy has the creation of the sustainable value for the
shareholders by considering threats of the success and the opportunities of the benefit. There are
various recommendations that are being provided to the management of the company for the
more effective operations. They must look for the opportunities in the various untapped market
that will create a source of expansion in the market by building several strategic alliances. The
growth of the customer is considered as the main source of the revenue. There should also be the
development of the various new products as new services, devices and technologies can be
accessed by all. It is being expected by the Vodafone to make provision of the various new
services like integrated mobile, high-speed access to the internet. For the maintenance of the
competitiveness, Vodafone makes a reduction in the expenses through outsourcing, exploiting
and integrating the economies of scale. The endeavour of Vodafone must stimulate voice usage
and fixed line usage for mobile in a manner that increases revenue and customer value.
Conclusion
From the above assessment, it can be concluded that expansion of the business in international
boundaries can be beneficial for the company in many terms. It supports increasing business
activities, profits, productivity, customer base, and sustainability. Leading mobile network is
being operated by Vodafone group in the world by having their presence in both developing and
developed nation. The company is operating in India but have many branches in other nations of
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the world. They are applying international competitive strategy so as to make the development of
the innovative product and technologies. There are various issues which must be controlled by
the company for the effective business operations. For the appropriate expansion, various entry
strategies are also applied by Vodafone.
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References
Cavusgil, S.T., Knight, G., Riesenberger, J.R., Rammal, H.G. and Rose, E.L.,
2014. International business. Pearson Australia.
Gamble, J.E., Thompson, A.A. and Peteraf, M.A., 2013. Essentials of strategic management:
The quest for competitive advantage. McGraw-Hill/Irwin.
Hernández-Perlines, F., Moreno-García, J. and Yañez-Araque, B., 2016. The mediating role of
competitive strategy in international entrepreneurial orientation. Journal of Business
Research, 69(11), pp.5383-5389.
Holtbrügge, D. and Baron, A., 2013. Market entry strategies in emerging markets: An
institutional study in the BRIC countries. Thunderbird International Business Review, 55(3),
pp.237-252.
Indiaretailing,com, 2015. Vodafone pumps in Rs. 150 cr. To boost rural distribution, store
network. [Online]. Available at: https://www.indiaretailing.com/2015/04/10/retail/vodafone-
pumps-in-rs150-cr-to-boost-rural-distribution-store-network/. [Accessed on 16 May 2018].
Johnson, G., 2016. Exploring strategy: text and cases. Pearson Education.
Kumar, V., Gaur, A.S. and Pattnaik, C., 2012. Product diversification and international
expansion of business groups. Management International Review, 52(2), pp.175-192.
Piekkari, R., Welch, D., and Welch, L.S., 2014. Language in international business: The
multilingual reality of global business expansion. Edward Elgar Publishing.
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market managers: Facilitator or inhibitor of international expansion?. Asia Pacific Journal of
Management, 30(2), pp.327-349.
Rosli, M.M., 2012. Competitive strategy of Malaysian small and medium enterprises: an
exploratory investigation. American International Journal of Contemporary Research, 2(1),
pp.93-105.
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Santos-Vijande, M.L., López-Sánchez, J.Á. and Trespalacios, J.A., 2012. How organizational
learning affects a firm's flexibility, competitive strategy, and performance. Journal of Business
Research, 65(8), pp.1079-1089.
Shankar, O., Luo, Y. and Chi, T., 2014. International business. Routledge.
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