International Business Strategy

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This document explores the international business strategy of Albania and its potential for expansion. It provides an overview of the political, economic, social, technological, legal, and environmental conditions in the country. The document also focuses on Vodafone's business activities in Albania and the opportunities it presents for international companies.

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Running head: INTERNATIONAL BUSINESS STRATEGY
International Business Strategy
Name of the Student
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1INTERNATIONAL BUSINESS STRATEGY
Introduction
Albania is situated in Southeast Europe. It has an estimated population of 2.885
million, of which 55% of the people live in the urban areas.The country’s unemployment rate
was 16.1% in the year 2016. The country is anhighermiddle-income country with per capita
GDP of USD is 5,288. Real GDP grew by 4.2% in the year 2018, which is mainly driven by
exports, constructions, household consumption and direct foreign investments. The economic
growth of the country has slowed down in the year 2019 to 3.6%. Albania gets trade benefits
especially for EU and it has free trade agreement with Turkey. Foreign investments are very
essential for implementing the strategic reforms, managerial methods and use of advanced
technology in order to stimulate the economic growth of the country. Albania has
experienced an increase in the interest of the foreign investors in a variety of sectors like
cement production, mining, energy generation, oil and industrial park, especially in the
telecommunication sector(Gloyer 2018).In order to assess the countries attractiveness for
international companies, it is essential to consider the external components that affect the
business of these companies in Albania.
Geography and climate: The country is mostly covered by mountain ranges, united with a
shoreline and a number of lagoons and river with an area of approximately 28,748 square
kilometers. The largest city and the capital of Albania is Tirana, which offers a great place for
the international companies to expand their business to this country (Osmani2013). The
country has Mediterranean climate with temperature range varying from 7-degree Celsius in
winter to 24-degree Celsius in summer. Albania falls within the time zone of Central Europe
(GMT+1) and between the month of April and October switches to daylight savings time that
is GMT+2.
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Religion: The Albanian constitution provides liberty of religion and the government respects
this fact. There is no societal abuse or any kind of discrimination based on religions and
beliefs in the country (Pistrick 2017). Thus, it provides a healthy environment for the
international business players to expand their business to Albania.
Political structure: The politics of the Republic of Albania takes place in the framework of
Parliamentary Representative Democratic Republic. The governmental systemis based on the
balancing and separation of the legislative, judicial powers and executive (Tochka 2016). The
branches of government are independent to each other. The governing structure enables
foreign companies to invest in Albania.
Legal system: The legal system of Albania has a system of civil law. The main piece of
legislation governing the employment relationship in the country is the Law of Civil Servants
and Labor Code. The employees involved in the employment relationship is governed by the
Labor Code. These employees include the private sector employees, certain section of the
public sector and public sector employees. The public sector employees include the civil
servants who are involved in the employment relationship synchronized with the Law
imposed on the civil servants (Hasani and Beleraj2013). There is no significant distinction
based on the criteria of public and private sector. The following kinds of contracts for the
employees are regulated under the Labor Code:
ï‚· Employment agency contracts
ï‚· Part-time and full-time contracts
ï‚· Unlimited and limited duration contracts
ï‚· Collective and individual employment contracts
ï‚· Commercial agent contracts
ï‚· Home base employment contracts
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ï‚· Internship contracts
ï‚· Foreign investments
The contracts of the employment are concluded in writing except for in some special cases.
The employer takes care of the protection of the employees, corruption, and the minimum age
of the employees, safety and health at the workplace, protection of the personalities of the
employees, protection of the pregnant women, minimal salary, overtime limits, paid leave,
unpaid leave and applicable facilities (Osmani2013). The collective contract contains
provisions that are less favorable for the employees.
Economic condition: Albania has remarkably progressed in the economic sector during the
past few decades. Due to such an improvement in the economy of the country,Albania grew
from one of the poorest country of Europe to a middle-income country, with decreasing rate
of poverty. The financial crisis in the global market has exposed the weaknesses of the model
of growth of Albania. This marks the requirement of a shift from consumptions to
investments in various sectors including exports. The new model will require helping people
who has very less access to various opportunities in the economy in order to benefit these
people from the economic growth (Zoto2013). Albania is structuring and implementing
structural reforms in order to accelerate the growth rate of the economy. This will in turn lead
to increase in productivity and competitiveness in the economy, creating more opportunities
of jobs,improved governance and public sector delivery. This will also enhance regional
connectivity and access to the global and regional markets, allowing more exports and
diversification for promoting the faster growth within and outside of the country. This will in
turn give major opportunities to the telecommunication industry to expand their business to
this country with economic stability. The government of Albania had imposed broad based
reform programs in order to focus on the macroeconomic and fiscal sustainability, stability in
the monetary sector, energy concerns, territorial administration and pensions. Such ongoing

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4INTERNATIONAL BUSINESS STRATEGY
reforms createcircumstances for recovering business confidence and domestic demand
including the beginning of augmented investment and export led recovery. Such stable and
growing economic conditions of the country offer a great platform for the international
companies to expand their business in Albania (Zoto2013).
Social conditions of Albania: Albania has progressed on setting up social safety net for
the poor people. Government has taken measures to improve efficiency, equity, transparency
and effectiveness in order to initiate social protection. NdihmaEkonomike is the major
poverty oriented social programs that gives cash benefit, providing a monthly cash allowance
to approximately 7.3% of the total population. The overall spending in the social assistance is
easily compared to other countries of that region (Muharremi,Madani and Pelari2013). The
World Bank is supporting the act of social protection through the Social Assistance
Modernization Project, that is supporting the societal loopholes and disability reforms. These
projects are in turn supporting the actions and reforms of the government. Albania spends
approximately about 2.6% of the GDP on the health care sector.
Technological advancement in the country: Technology advancement in Albania has
been poor. The government in Albania has approved and implemented the National Strategy
for Science, Technology and Innovation in the country. It had few strategic goals:
ï‚· In order to create five Albanian centers of excellence in science government has
introducedwell-equipped and well-designed laboratory equipment and workspaces
that will be utilized for certification, testing and other technology related works
(Sherifi and Senja2018).
ï‚· In order to stimulate innovations in hundreds of countries either through
investments in R & D or through consortia with foreign partners.
ï‚· In order to increase the public spending on research and development.
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ï‚· Albania has less penetration in the market of technology with internet compared to
other countries. Production sector is heavily slanted towards traditional low-
technology activities that depend on the cost of labor rather than the production of
high value added services or products (Sherifi and Senja2018).
Although the improving technology in the country is providing platform for the international
companies to expand their business in Albania.
Environmental condition of the country: The government of the country is developing
and implementing various rules and policies for protecting the environment of Albania. The
impact of the centralized economic system on the environment has become apparent with the
beginning of the transition period in Albania. Albania was although facing major issues; they
take the issues related to the environment very seriously. The Committee for Environmental
Protection was established in the year 1991 and a new legislation of the environment has
been enacted. Several such projects and studies relating to the environment were carried out
meanwhile the National Environmental Action plan has been prepared in order to initiate the
protection of the environment. Recently the environment has become one of the major
priorities of the Albania government. NGOs had starting playing a major role in spreading the
awareness of the environmental issues and it protection among the business communities and
the public. Albania has to tackle many environmental issues. The latest leap of NEAP has
pointed out various issues of the environment, which has been identified as the main issues
related to the environment in Albania. Various industries using obsolete technologies and the
fleet of old vehicles with diesel engines are majorly polluting the environment. The
groundwater resources are polluted by the discharges coming from various industries but the
condition of the water surface is much better than before. Urban and industrial wastes are
polluting the soil surface. Thus, a Ministry has been developed to take care of the
environmental issues of the country. The law on environmental protection has imposed major
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responsibilities on the Ministry. Their responsibility is to corporate and coordinate with the
local and central government institutions, public and non-profit organizations in order to
increase the enforcement level of environmental legislation. Their major responsibility is to
figure out the needs of the country and check the activities of the personnel who are dealing
with the protection of the environment. Thus, Albania’s environment although has many
issues are being taken care by the government and improved over the years for the citizens to
survive healthily in the country. Albania can thus provide a very good platform to the
international companies to expand their business to Albania.
Demographic background: The demography of Albania has been characterized by three
major phenomena namely the declining rate of fertility, declining rate of mortality and large
external and internal migratory waves. The population of the country is majorly young with
an average age of 28.3. The population who are below 15 years is now decreasing and
migration from various other parts of the world has become very dominant in the country’s
socioeconomic landscape. The migratory flow in the country has been internal, international,
temporary and permanent. Thus, Albania is open to the expansions of business of the
international companies to their country.
Labor market development: The transition process that is going on in the entire social
and the economics spheres has majorly influenced developments in the labor market of
Albania. The share of agriculture is growing hand in hand along with the growing industries.
The informal labor market is less affected by the external factors and just employment rate in
the country is increasing every year (Dollani, Lerario and Maiellaro2016). Thus, the labor
market development of the country also offers a good platform for the international
businesses to expand their business to Albania.

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Any international company will have no control on the external corporate environment. Thus,
the achievement of any international business depends on its capability to adapt to the
generalatmosphere of the company with the new working environment. Business start-up
processes have become less expensive and there is no capital investment required for starting
a business in the country. Demand of the labor in the formal economy has encouraged and
initiated high level of self-employment, which in turn has been influenced by the public
sector. The government is imposing rules and regulations for controlling the issues related to
electricity, transportation, water and other issues related to the improvement of the country.
The government is also introducing and making strategies for improving the import export of
the country and creating a platform for the foreign countries to successfully and effectively
expand their business to Albania.
Conclusion:
Thus, it can be concluded that Albania has stable political, economic, social,
technological, legal and environmental conditions, which can be a very good platform for any
company to expand its business in this country. Albania offers huge versatility in many
spheres and the most popular and successful sector of the country is telecommunication.
Thus, Vodafone will have huge opportunity to penetrate in the markets of Albania and
increase their revenue generation and in turn their profit.
Vodafone and its business activities:
Vodafone Company is one of the top most companies to operate in the market of
Albania. Vodafone has tried various mechanisms in Albanian market in order to upsurge the
number of subscribers and revenue generation. The Vodafone Company in Albania operates
in the telecommunication industry and is the most important international investments in
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Albania. Vodafone was founded in the year 2000 after winning the coveted second license
and breaking the intensive monopoly of the telecommunication company in the nation.
Vodafone has 1.5 million subscribers and is currently in the second place in the market(My
World - Vodafone, 2019). The company has increased its customer base with prepaid
subscribers and these customers have increased the company’s revenue by 35%. The
company has many products and service to offer to the market of Albania such as voice and
data. Introduction of the other network operators in the Albanian market has substantially
reduced the tariffs and thus, Vodafone has introduced new strategies to provide services and
products in order to attract new customers and retain the old customers (Kresak, Corvington
and Williamson 2016). Customers with consistent behavior drives the revenue generation of
the company in order to add capacity of the company to meet the demands of the customers.
The telecommunication market of Albania has two more operators with lower price schemes
and variety of new products and services. Thus, Vodafone had to readjust, with its pricing
strategies and product design in order to respond to the new market. Vodafone had offered
new services and products based on price, place, promotion and product (My World -
Vodafone, 2019).
Product analysis: Successful introduction of a service or a product from Vodafone resulted
in the rapid consumption of the product by the new customers and in turn increasing the
customer base of the company and has become the fastest growing company in Albania.
Vodafone has improved the promotional strategies of their new launch and their method of
distribution. Their new product has been launched with various new parameters in order to
meet the requirement of the customers (Chen and Riordan 2013). Competitors in the market
had started playing major role in pulling down the profits of Vodafone with their outstanding
low price strategy and variety of new products. Vodafone decide to introduce the product that
affected the entire call network system of Vodafone and for calls outside the network towards
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international calls or other network operators. The company in order to cut down its cost and
attract more of postpaid clients executed this. In order to realize the launch, the company has
made considerable investments in the network and other factors like billing and IT. These
investments were made to set a high-standard product in the marketplace. These investments
on new products have made Vodafone launch high quality product, which had differentiated
this from the rest of the products available in the market of Albania and thereby making the
brand differentiation. This launch of the new products gives a sense of security to the
customers on the durability and quality of the product. Vodafone has designed new product
for differentiating it with the various other products already available in the market of
Albania. Vodafone has made distinct market segmentation in order to target a particular
group of customers and consumers to whom these products will be offered. This
segmentation in the market has inevitably made the company more viable in the market. The
new product was related with a number of new sub-products like lower cost for international
calls and mails within or outside the network of the company. This has been done to create a
packaged schemed product to cater the customers with something entirely new in the market,
considering all the competitors. Vodafone found out new opportunities to present and provide
its new products and services to the customers. They have made efforts and strategies to get
the 3G license which had enabled the company to penetrate the market with products and
services that are highly used and loved by the youth or even by the customers whose one of
the priority spending is in the mobile industry.
Price of the product: Vodafone has divided the price of its products on three major pillars
on the customers, cost of the product and competition. They are-
ï‚· A customer cannot purchase very high priced service or product.
ï‚· The price policies and the price should match the requirement and trend of the market
and should depend on the competitor condition.

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ï‚· Prices of the product should justify the product quality or be a combined cost and
measure sold for that pertinent product.
The time when Vodafone had entered the market the Albania, the market has huge demand
for its products (Vogel and Paul 2015). Initially the competition in the Albanian market was
very less and cost of product or services were much higher based on the post-paid and the
pre-paid schemes. Customers had started demanding for product variety as competition was
at the lowest level with only two competitors of Vodafone. Now that the competition had
become more aggressive and the market was quite open, Vodafone had to plan strategies for
lowering the price of their current services and products and follow a price policy for the new
launches in the market of Albania. Different environment has led Vodafone to try out
different strategies, different decisions and behaviors on setting the price for adapting the new
situation in Albania. Vodafone has very significantly set the prices of the it’s new products
keeping in mind the image of the price. This in turn affects the awareness of the customers
regarding the price and in turn about the company. Customers in Albania were ready to pay
more to get a unique product from the company. Vodafone kept in mind these aspects while
advertising the price of the product in the market. Vodafone after a decade had presented
packages with alluring prices that were made attractive in the market place.
ï‚· Business customer package
ï‚· Bundle product for the inbound customers
ï‚· Vodafone package combined with post-paid and pre-paid offer in order to increase the
acquisitions.
ï‚· Regular price reduction for facing the competition in the market and pushed by the
rules and policies of the government.
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This is how Vodafone has confronted the market with its variety of products, which has given
a positive impact about the brand to the customers. The aim of the company was to penetrate
into the market of Albania and continue to be the market leader in term of post-paid clients
by retaining the old ones and attracting new ones in such a competitive market. This is how
the company is trying to maintain the revenue, profit margin and providing the same level of
services for SMS and voice to all the customers. The company has responded to the need of
the market by significant price reduction in order to face the aggressive competition.
Vodafone has guided its customers around the values of its products and the customers focus
more on product values rather than the price of the products.
Network distribution (Place): The major factor for the successful launch of any product
is Distribution Network. Distribution network connects the clients with the network provider
through indirect and direct distributors for promoting and selling of the products. Vodafone
utilizes various ways to make a product successful, directly or indirectly (Lopes 2014). The
company has their sales department and they utilize that department in various ways:
ï‚· Vodafone contact their clients directly with the representatives of events of sales
through presenting the product appropriately. This is executed on the post-paid cards
of the big clients.
ï‚· Direct sales activities is organized in the various stores owned by the company where
the number of the employees in each store goes up to five.
ï‚· Direct sales activities also take place in the 200 stores owned by the distributors
ï‚· Vodafone has also arranged various activities in the shops and has occupied an
important place in the business in the markets of Albania.
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Vodafone has optimized the distribution services through the various channels of distribution
in order to send the products to the customers. In order to effectively spread the supply
network, Vodafone follows some basic principles. They are:
ï‚· The place where the distributor or the company performs the activities. Vodafone
has successfully expanded its network throughout the country of Albania.
ï‚· Vodafone has paid attention in structuring the shop lay out which depends on the
marketing strategies of the company.
ï‚· They have made their staffs train and prepare for distributing the products to the
various distributors and in the marketplace.
ï‚· The staffs of the company are made responsible for any kind of services provided
to the customers.
Other network operators have similar stores like that of Vodafone but Vodafone has
established a special service ambience for all its clients. Thus, clients can easily avail the
services and the products offered by the company. In order to achieve this, Vodafone has
increased the sales demand through proper communication and by understanding the
requirement of the customers. Vodafone has also built a training network for the distributors’
personnel and for their staffs in order to give them proper knowledge about the products and
service that the company is catering to the customers in order to fulfill the goals of the
company. Dealing with the demands of the customers is an essential accountability and
animportant role in the circulation channel of the company.
Promotional strategy:Promotional activities connect the public with the brand name of the
company in order to persuade them to buy the product. Vodafone has made a brand
differentiation from other brands by launching and promoting the products in the market.
This is one of the major reasons for the success of the brand. Vodafone makes the promotion

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of its new products in order to create a better brand image by stimulating the market with
unique design and product features. Good promotional campaign resulted in strengthening the
brand image and differentiated the brand from its competitors in the market of Albania. This
has significantly increased the sales of the company. Vodafone uses the television, printing
outdoor, pamphlets, newspapers, magazines, hoardings and posters to promote the new
products of the brand. The company also executes communication campaigns for which the
company is following certain aspects.
ï‚· The clarity in the message, the customers are going to receive from the network
provider.
ï‚· The image of the brand should be the main focus in order to differentiate the products
of the brand from its competitors in the Albanian market.
ï‚· The promotional activities should create an impact on the customers immediately
after they have watched the advertisement of the new product launch of the company.
ï‚· The price elasticity should be shown through the promotional campaign.
 Respond to the customers’ needs once they start using the service or the product of
the company.
The promotional activities of the company incur a lot of expenditure. One of the major
segments of this activity includes printing. The printing cost for brochures, outdoor
posters, layout of the shops cover 25% -30% of the entire budget allotted for the
promotional activities. Vodafone decides this budget during the time of annual
forecasting of the expenditure of the products to be the launched the next year. However,
these expenditures vary in some special cases in order to meet the requirements of the
customers. The process of annual forecasting never predicts this budget. Vodafone spends
most of its budget on TV, radio promotions as these are the most critical part of the
promotional campaign, and this forms 60%-70% of the total budget calculated. Vodafone
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uses various tools for promoting its products and services. The company sponsors the
events and the public relations for establishing brand preferences amongst the customers.
All the creative activities like the hoarding, pamphlets, television advertisements in turn
has increased the awareness of the customers towards the new products and the brand in
turn in the market of Albania. The competitors of Vodafone in the Albanian market use
similar strategies and resources to survive in the market. Thus, Vodafone should come up
with better marketing strategies to promote its services and products for being the market
leader throughout. Vodafone should also consider the financial crisis the country is going
through and act according to that. Vodafone can use the internet for its promotional
activities and the social media platform in order to make it cost effective.
Conclusion:
Vodafone has established huge markets in the country Albania. They have used
various strategies in order to be the market leader in the telecommunication sector. The
company has used the strategy of differentiation and low cost in order to stand out. They
have come up with unique products and services to attract more customers. The company
has been a huge success in Albania and still growing by implementing unique marketing
strategies. They have kept in mind the product, price, place and promotion of their
company which has helped them to gain the competitive edge in Albania.
Market challenger of Vodafone in Albania, Orange:
Orange is a multinational telecommunication company and the fourth largest
company after Vodafone in the market of Europe. The company however is earning good
revenue is not able to be the market leader as Vodafone. Orange can merge with
Vodafone in order to reduce the cost of both the companies and introduce the 3G and 4G
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services in a greater proportion(Corporate Website of Orange - orange.com, 2019). This
will help both the companies to have a greater customer base. On the other hand, Orange,
in order to compete with Vodafone should realize the two basic types of competitive
advantages:
1. Cost advantage- When Orange will be able to provide the same benefits that are
provided by Vodafone at a much lower cost, it will have a competitive advantage
in the market of Albania.
2. Differentiation advantage- When the company Orange provides benefits that
exceeds the benefits provided by Vodafone, the company will automatically gain
an advantage over Vodafone and compete effectively with Vodafone in the
Albanian market.
Orange should also consider the four generic business strategies in order to gain
competitive advantage over Vodafone in Albanian market. These strategies are:
ï‚· Differentiation- In this strategy Orange must select the target audience of the
company and then plan accordingly in order to meet the demands of the market. As
the income level of the country is moderate, Orange should make strategies in order to
fulfill the requirement of the customers. Most of the companies come up with plans
that in turn charges a premium price for the service or the product that reflects greater
cost of production and extra value added features to the customers (Thompson,
Strickland and Gamble 2015). Differentiation strategy thus can help Orange to charge
a premium price by offering the customer some unique features in the product or the
services, which Vodafone is not offering in Albania. For example: Vodafone used the
differentiation strategy when they had launched the I phone service with a premium
cost which was much higher than that of the competitors but they have gained the

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competitive advantage by offering free calls from Vodafone to Vodafone for lifetime
and better network strength compared to the competitors.
ï‚· Cost leadership- In this case, the main aim of the company should be to become the
lowest cost producer in the telecommunication industryof the country. The lowest cost
producer in the market will have competitive advantage. This strategy works well
with large-scale business that are offering standard services and products with less
differentiation that are acceptable by majority of the customers (Kaliappen and
Hilman2013). Orange can also provide discounts in order to maximize its sales and
have a reasonablegain over Vodafone and in turn increase the market share of the
company in Albanian market. For example: Vodafone has initiated the ‘Home Cell’
tariff plan for its metro digital service, which offered certain benefits to its customers.
ï‚· Differentiation focus- In this case, Orange should aim at differentiating within a
minor number of target market sections. With this Orange can clearly offer unique
products that are much different from Vodafone, who is targeting a broader group of
customers. In order to execute this, the company should analyze and understand the
needs and wants of the customers in the market (Bamiatzi and Kirchmaier 2014).
They should also understand what Vodafone is not able to provide to its customers in
Albanian market in order to fulfill the demands of the customers. Vodafone has
started the One Net, a unique service for the SMEs. This has been the best move of
Vodafone as this strategy has increased the customer base of the company on a large
scale.
ï‚· Cost focus: Orange should plan a lower cost strategy within a small section of people.
Customers usually prefer basic products with unique features at a premium price. This
can help Orange to become the market leaderin Albania. Out of all the strategies, cost
leadership and differentiation operates in a broader range of the market in order to
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gain a competitive edge over its competitors. On the other hand, cost focus and
differentiation strategies are used in the smaller market for gaining competitive
advantage (Lechner and Gudmundsson2014). Orange can target the lower income
people, middle income people and high income people which would automatically
increase the target market and in turn the customer base of the company. Orange can
also do large investments on improving their network so that the customers of the
company can make more number of calls, which in turn will grow a sense of trust and
better relationship between the provider and the user. This will help in improving the
quality and reliability of the services. Orange can also reduce the effective cost by
five times in order to provide better value for money to the customers, which
automatically will give them a competitive edge over Vodafone. Orange should also
focus on the customer services, post sales services in order to maintain high standards
to satisfy the customers. Orange should understand the market trend of Albania,
which is evolving every day and in turn come up with innovative ideas in order to
attract more customers and penetrate into new market. They can make schemes and
plans for different sized businesses and for personal use. For small-scale businesses,
Orange can offer service to the owner of the business and to the family members by
providing business phone and accessories at a very reasonable rate. For medium sized
and large sized businesses, Orange can focus on all the employees of the organization.
They can offer low cost plans and flexible working within an integrated network
system. This plan can transform the business communication within and outside the
organization. For public sector businesses, Orange can plan an agreement for a long-
term tie up with the company b providing them more flexible and efficient working
solutions. Orange apart from targeting the businesses can start new services, which
Vodafone has not started like the disability services. They can make simpler phones
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and technologies for a broader customer base. Orange can invest in their promotional
activities make advertisements that have clear visibility in order to compete with
Vodafone.
Recommendations:
Orange, a competitor of Vodafone in the Albanian market, has also applied various
strategies, which will help to attract more customers and gain a competitive edge. The
company has used the strategy of cost cutting and production of unique products and services
in order to capture the market. Although, Orange has been a success too in the Albanian
market, the company has to come up with better strategies of promoting their products in
order be the market leader. The marketing strategies of the company have to improve in order
to target the global market. The company also has to identify the target customers in order to
supply them the product or service according to their needs.

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Reference:
Bamiatzi, V.C. and Kirchmaier, T., 2014. Strategies for superior performance under adverse
conditions: A focus on small and medium-sized high-growth firms. International Small
Business Journal, 32(3), pp.259-284.
Chen, Y. and Riordan, M.H., 2013. Profitability of product bundling. International Economic
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