Business Strategy (Management)

This report provides an insight into the business strategy of Vodafone and its entry into the UAE market. It analyzes macro-environmental factors, internal environment, and strategic formulation using the McKinsey's 7S Model. The report also discusses the competition and provides recommendations for the organization.

Running head: MANAGEMENT
Business Strategy (Management)
Name of the Student
Name of the University
Author Note

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Table of Contents
Introduction:...............................................................................................................................4
Analysis of Macro-environmental Factors:................................................................................5
Political:.................................................................................................................................5
Economic:..............................................................................................................................6
Social:.....................................................................................................................................7
Technological:........................................................................................................................7
Environment:..........................................................................................................................8
Legal:......................................................................................................................................8
Vodafone McKinsey’s 7S Model:..............................................................................................8
Structure:................................................................................................................................9
Strategy:.................................................................................................................................9
Systems:.................................................................................................................................9
Shared Value:.........................................................................................................................9
Staff:.....................................................................................................................................10
Skills:....................................................................................................................................10
Styles:...................................................................................................................................10
Analysis of Internal Environment:...........................................................................................11
Capabilities:..........................................................................................................................12
Analysis for the Porter’s Five Forces Model:..........................................................................13
Competitive Rivalry:............................................................................................................13
Threat of Substitutions:........................................................................................................13

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Threat of New Entry:...........................................................................................................13
Bargaining Power of the Suppliers:.....................................................................................14
Bargaining Power of the Buyers:.........................................................................................14
Strategic Formulation...............................................................................................................15
Vodafone Porter’s Generic Strategy:...................................................................................15
Bowman’s strategy clock:....................................................................................................16
Recommendation:....................................................................................................................17
Conclusion:..............................................................................................................................18
References:...............................................................................................................................19

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Introduction:
The report aims at providing an insight into the business strategy of Vodafone that is
planning to make an entry into United Arab Emirates (UAE). Vodafone represents a British
Multinational Telecommunication Corporation having headquarters in London, Berkshire and
Newbury (vodafone.co.uk 2019). The company operates its service primarily in Asia, Africa,
Oceania and Europe. Amongst the global operators of mobile phones, Vodafone holds a
fourth ranking in terms of the customers that has been close to 313 million. The British
Telecommunications Corporations operates and own networks in close to 25 countries with
partner network in close to 47 nations. The division of the company known as the Vodafone
Global Enterprise provides IT and telecommunication service to the corporate clients across
150 countries. Vodafone has primary listings on London Stock Exchange and is a component
of FTSE 100 Index. As per the records put forward in 2016, Vodafone has £52.5 billion of
market capitalization and represents the 8th largest company to find a listing on the London
Stock Exchange. Vodafone also has a secondary listing on the NASDAQ. The paper is
focused in the elaboration of the macro environmental factors that have the potential to affect
the business operations of the mentioned organization in UAE market with the application of
the PESTEL analysis. Apart from this, the paper also provides important information
regarding the strategic capabilities of the organization with the application of the McKinsey’s
7S Model and SWOT analysis. In addition to this, the paper provides a significant analysis of
the level of competition that the organization is expected to face in the new market and along
with that, the paper also identifies the factors that the organization is in need to consider in
the establishment of a profitable business in the region. Hence, the organization is expected to
face the need of the formation of the appropriate strategies and under such situation, the paper
provides important discussion on the porter’s generic strategies and the Bowman’s strategy
clock for the development of the strategies that have the potential to position the organization

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in such a place where the implementation of the plan of expanding their business to UAE will
be easier for the senior management of the organization.
Analysis of Macro-environmental Factors:
For the identification of the macro environmental factors that have the potential to
affect the business of the mentioned organization in UAE, the PESTEL analysis of the
mentioned organization will be of great significance.
Political:
The political influence on the telecommunications industry of the mentioned region is
observed to be pretty stable as the mentioned region is observed to have a significantly well
distributed governance across the 7 emirates of the region. Each of the seven emirates of the
mentioned region is seen to have individual governmental organizations which plays a crucial
role in the establishment of the flexible and improved management across the region (Mullen
et al. 2013). This will be significant for the organization as the stable management from the
part of the government will eliminate the concerns of the organization regarding the
excessive and undue political pressure from the political houses on the successful business
operations of the mentioned organization.
The minor conflicts that UAE has with the neighbouring countries is observed to be
regarding the oil sectors or more specifically regarding the ownership of the oil reservation.
The telecommunications industry of the mentioned region is observed to face the impact of
the conflict in a significantly limited extent.
One of the major boost for the mentioned organization in expanding their business
operations to the mentioned nation is the strong and improved trade relations of the
mentioned nation with the other countries. This will be crucial for the organization in the
establishment of a fruitful business operations.

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Economic:
UAE is observed to have an exceptionally robust GDP per capita which provides the
evidence of the strong financial stability of the mentioned nation. The Growth of the GDP of
the nation is observe to have a sharp rise in recent years and that is pretty visible with the
statistics that UAE had 382.58 billion US dollars as GDP in the year 2017 and that in the year
2018, reached to 432.61 billion US dollars (Statista.com. 2019). The growth is expected to
continue and that is evident with the estimation of 475.1 billion US dollars as GDP of UAE
by the year 2020 (Statista.com. 2019). On the other hand, the concerned nation experiences a
significantly low rate of unemployment and that is pretty significant in stating the scope of
achieving sufficient number of employees for the mentioned organization in executing the
operational activities of the mentioned organization with improved degree of perfection.
Apart from this, UAE is seen to be one of the few countries in the region that had the highest
amount of foreign direct investment.

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(Information: United Arab Emirates: Gross domestic product (GDP) from 2012 to 2022 (in
billion U.S. dollars))
(Information Courtesy: Statista.com. 2019)
Social:
The people of the mentioned nation is observed to have a simple yet happy lifestyle
and the impact of the industry standards of the employment legislation in the development of
the pay structures for the organizations operating in the region is considered to be the most
crucial factor for this. The appropriate payment from the part of the employees of the
organizations is observed to play a crucial role in the increment of the comfort level of the
people of the region. In addition to this, the impact of the globalization in the mentioned
region is observed to be pretty prominent as the country experiences a significant mixture of
the cultures. Adding to this, the influence the religion in the mentioned nation is seen to be
pretty impactful. Hence the decision makers of the organization are required to introduce
products that do not affect the religious nature of the people of the mentioned nation.
Technological:
The main targeted segment of the customers for the company is considered to be the
youth and under such situation, the company will be able to achieve significant amount of
competitive advantage as the young generation of the mentioned nation is observed to be
notably tech savvy (Martin 2013). Hence it is pretty evident that the products and services of
the mentioned organization will be subjected to have a significant amount of market in the
mentioned nation. Other than this, the strong influence of the technology on the youth of the
mentioned nation is considered to be a significant factor as that has the potential to create the
increased amount of customer loyalty and will be crucial in the formation of the customer
community for the selected organization.

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Environment:
The mentioned nation is seen to be of dry climate and the temperature is notably high
in the region. The organization needs to be concerned regarding the ethical sourcing of the
raw materials as the sourcing of the materials needs to avoid any sort of disruption of the
ecological balance of the mentioned region.
Legal:
The formation of the organizational policies in the region is observed to be notably
influenced with the labour and employment legislations. The formation of the wage structure,
work time characteristics along with the workplace safety in the organizations operating in
the region, is observed to have tremendous impact of the government legislations. Hence the
organization needs to be aware of this in framing the necessary organizational policies.
Vodafone McKinsey’s 7S Model:
The McKinsey 7S Framework represents a model developed by the business
consultants Tom Peters and Robert H. Waterman Jr in the year 1980s (Singh 2013). This
framework has been quite vital for the working environment and is used for analyzing the
Vodafone Company. There exist a lot of organizations that makes use of this framework in
achievement of the goals. The 7S framework has 7 key variables which include strategy,
structure, systems, skills, style, staffs and the shared value. These variables can further be
classified into the hard and the soft component. Structure, strategy and the system represented
the harder components as they are not only feasible but identified easily since they are mostly
in the business plans, policy statements, organizational systems and structures. The report
now provides a description of each of variables of the framework.

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Structure:
This represents the skeleton and forms the shape of the organization. It refers to the ways in
which a firm operates and performs (Alshaher 2013). Traditionally, enterprises, sectors and
the departments and the levels have lower layers for answering the superstructure. In recent
times, the planner structure is more common where work is completed with the help of Panel
of Experts. This helps in making the Vodafone more decentralized and elastic. It also ensures
the elimination of the middle level management.
Strategy:
The strategy represents the plan of course or action identified for achieving the
objectives for the allocation of the resources the time (Ravanfar 2015). Strategy is often
rehearsed and well thought. This is necessary as the shift of the Vodafone from the current
location to the newer location would be subjected to the constraints of capabilities.
Systems:
The system represents the conventional process that organizes implementations of
procedures followed in strategy and the daily routine matters (Aithal 2017). The key purpose
of the process lies in achieving the maximum benefit. Organizations like Vodafone are using
the latest technology and the innovation for ensuring a faster process of decision making.
Shared Value:
They represent the ‘super ordinate goals’ that represents core values of company evidenced in
general work ethic and corporate culture. They act as the guiding ideology of members
(Gyepi-Garbrah and Binfor 2013). For instance, it represents the goals and values adopted by
staff for reaching towards a common destination. Vodafone might often find that their
employees might face conflict with the personal goal of the other people by adopting weaker
values and the common goals.

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Staff:
This represents the employees and their capabilities. Staffs within organizations have
different designations that include engineers, marketer and the salespeople. It is however
different with older organizations where there exists a lead agency for hiring best employees
and provide strict monitoring and support to the employee and provide the required amount
of incentives for achieving professional distinction amongst the staffs(Singh 2013).
Skills:
This represents the real skills and competencies of the employees working for Vodafone.
Styles:
The style represents the leadership adopted by the key personnel in the achievement of the
organizational goals of the performance. Values, norms and beliefs represent the dominant
development over the time that might be involved and becoming the relatively persistent
feature of the organizational life. Compared to the traditional firms, the adopted style of
Vodafone is expected to be more innovative, open, friendly, less hierarchical and smaller
command chain from employees belonging to the lower level.

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Figure 2: Diagrammatic Representation of McKinsey’s 7s Model
Source: (Shiri, Anvari and Soltani 2014)
Analysis of Internal Environment:
The internal structure of the mentioned organization is observed to be focused in the
improvement of the efficiency of the organization in penetrating the local markets and in
meeting the customer requirements in a more efficient manner. Other than this, one of the
main objective of the mentioned organization with the formation of the present structure is
the increment in the capability of the organization’s resources in providing quality and
uninterrupted services to the customers of the organization across the world (Vodafone.com.
2019). The new structure of the mentioned organization has the potential to improve the
decision making inside the organizations and that is one of the significant aim of the
organization going forward (Vodafone.com. 2019).

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With the current structure of the organization, it is pretty evident that the senior
managers of the organization are focused in maintaining a hierarchy for the organization. The
current structure of the organization is seen to place the CEO of the organization at the top of
the hierarchy. The branches of the organization in each of the countries have nine different
department in the form of the marketing, technology, strategy and business integration,
research and development, manufacturing, finance, corporate affairs, human resources and
legal cell.
Capabilities:
One of the major strength of the organization in conducting profitable business is
observed to be the service excellence of 111,556 number of employees of the mentioned
organization (Vodafone.co.uk. 2019). The excellence of the research and development
department of the mentioned organization has enabled the organization in incorporating the
modern technology and the innovative ideas in the services of the mentioned organization.
The marketing and promotional campaigns of the organization is notably unique in
nature. The creative thinking of the employees of the marketing department of the
organization is considered to be one of the significant strength of the mentioned organization
and the success of the organization in communicating their message to the customers is pretty
evident with the global recognition that the ZooZoo advertisement was able to achieve
(Chopra 2014).
The strength of the marketing campaigns of the mentioned organization is pretty
evident with the formation of the tie ups with the global sporting events such as the Formula
One.
The significantly strong presence of the organization across the globe is one of the
major strength of the organization in reaching out to the customers with the products and the

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services. The organization is seen to serve the customers of more than 470 million through
the stores and the offline outlets (Vodafone.co.uk. 2019).
Analysis for the Porter’s Five Forces Model:
Competitive Rivalry: High
The mentioned organization is expected to face significant amount of competition
from the part of the organizations such as Etisalat, Telenor, Three Mobile and AT&T Inc.
With a revenue of $170.756 billion in the year 2018, AT&T Inc. has the potential to provide a
tough competition to Vodafone in the mentioned region (Att.com. 2019). Other than this, the
increasing revenue of Telenor and the improved performances of the company in the recent
years, is significant in stating the capability of the organization in increasing the level of the
competition in the telecommunications industry of UAE.
Threat of Substitutions: High
With a precise focus on the services of the mentioned competitor organizations, it is
visible that the telecommunications industry of the mentioned organization is facing an
absolute price war. Majority of the organizations operating in the mentioned organizations
are seen to be focused in the application of the low pricing for their products and services
(Econstor.eu. 2019). In addition to this, the mentioned organizations are observed to put
strong emphasis on the infrastructural development for the improvement of the quality of
their services and that is pretty evident with the urgency amongst the mentioned
organizations in improving their signal strength.
Threat of New Entry: High
Though the new organizations may face considerable amount of difficulty in
developing the required infrastructure, in managing the intense market competition from the

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part of the established organizations and in maintaining the much required quality in the
services for increasing the customer satisfaction, the significant growth of the mentioned
industry is the stronger trigger for the new organizations in opening their business in the
mentioned industry.
Bargaining Power of the Suppliers: Low
With a precise focus on the business operations of Etisalat, Telenor, Three Mobile and
AT&T Inc., it is evident that the impact of the suppliers in the telecommunications industry is
moderate. The organizations are seen to be notably dependent on the quality of the suppliers
for the infrastructural development, on the other hand, the industry is observed to have
considerable number of suppliers with the quality of providing accurate and on time supply
(Econstor.eu. 2019). Adding to this, the suppliers are seen to have the quality of providing the
supply of the materials at a reasonable prices to the organizations and is ready to provide
lucrative discounts on bulk purchases as well.
Bargaining Power of the Buyers: High
Considering the application of the low pricing from the part of the majority of the
organizations of the mentioned industry and the urgency amongst the organizations in
improving the quality of the services, the customers of the mentioned industry is seen to have
considerable number of options to choose from. Hence, it is pretty evident that the bargaining
power of the customers of the organization will be notably high.

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Strategic Formulation
Vodafone Porter’s Generic Strategy:
Porter’s generic strategies describe how the company pursues the competitive
advantage across the chosen market. The strategies include lower cost, differentiation or
focus (Tanwar 2013).
Figure 3: Diagrammatic Representation of Porter’s Generic Strategy
Source: (Brenes, Montoya and Ciravegna 2014)
There are two key ways of achieving the cost leadership strategy:
 Increasing the profits by reducing the cost while charging the average prices of the
industry
 Increasing the market share through charging low prices while making reasonable
profit on each of the case due to the reduced cost.

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Differentiation on the other hand involves making the products and services more
attractive and different from the competitors.
The telecommunications market undergoes intense price war with entry of the new
and the competent operators with each of the companies launching attractive offers for
attracting the new subscribers and ensures lower tariffs for retaining the current users.
Vodafone thus needs to focus on the cost leadership by providing the cheapest rates with a
higher quality network and the customer service.
Nevertheless, with each operator introducing a newer discount scheme in every
month, the mobile owners started looking for the plans that are not only the cheapest but
suited the particular needs. Previously, value added service or VAS was not very popular in
the telecommunication sector but Vodafone brought about a change in concept as it
introduced more value added service. The services have been unique in the market and
provided the company with a competitive edge over the competitors. Thus, Vodafone would
combine measures of cost cutting with differentiation for gaining maximum amount of profit.
Thus, it used a combinations strategy for increasing the market share.
Therefore, Vodafone has combined cost cutting measures with differentiation. It’s
been successful in using a Combination Strategy to increase its market share.
Bowman’s strategy clock:
With a precise focus on the strategy clock, the section of the hybrid strategy will be
the most preferred option for the mentioned organization (Shakhshir 2014). As the
organization will try to develop a cost leadership in the new region which will force the
organization in getting involved in the intense price war of the telecommunications industry,
the objective for the organization will be apply the low pricing for their products. Along with

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that, the organization needs to make sure that they create the products that are unique in
nature so that they be able to attract the customers in an efficient manner. Hence the
customization of the services of the mentioned organization will certainly force the
organization in applying the hybrid strategy for conducting a profitable business in UAE.
Recommendation:
 It is recommended to ensure continuous innovation to become part of the corporate
culture for all the newer stores of Vodafone.
 It is recommended that Vodafone should provide enough encouragement for all
employees by providing them the incentives that would help in the growth and
development of the organization. Besides, all managers should receive encouragement
for the implementation of the newer process and ideas in the store.
 It is recommended that Vodafone could introduce various vouchers or discount cars
that allow the customers with the benefits of receiving discounts on the various phone
accessories like the headset or the Ipad casing.
 It is also recommended that the company could improve its customer service through
a 24x7 operation and aid the customer in solving issues.
 Intense price war and hyper competition could make the company’s position
challenging. It is therefore recommended that Vodafone should adopt newer strategies
in exploring the markets that has not been explored before especially the rural areas
that would ensure an overall growth.
 The organization needs to make sure that they come up with the uninterrupted
services at cheaper rates to make sure that they be able to compete with the low
pricing of the competitor organizations.

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 The research and development department of the mentioned organization needs to
make sure that they increase the customization aspect of their services to provide a
unique services to the customers.
 The organization is recommended to focus on the infrastructural development to make
sure that they be able to provide uninterrupted service to the customers.
Conclusion:
On a concluding note, it can be said that the strategies of Vodafone were formulated
for capturing the growth of the Middle East Asia and Asia. The strategies are understandable
and took into account the economic conditions and commercialization of telecommunications
service. The highest position of Vodafone is either the CEO or the director and ASIA, Middle
East economy and Europe could be groups under the CEO. It is also clear from the report that
when there exists a need for Vodafone in acquiring a newer company then it could set up
newer strategies by placing the company under the regional group. It also helps in making
things easier. Besides, the interpretation of the structure the company should carefully be
monitoring performance of various regions has led to the growth of the company. Lastly, it is
the higher level directors and the CEO who performs groundwork for bringing about a
change in the company. With better wisdom and experience Vodafone can become a market
leader in the country that it plans to make an entry.

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