Vodafone Business Strategy Analysis

The report covers the business strategy of Vodafone, including its internal environment, external environmental conditions, and competitive advantages. It utilizes various management models such as VRIO, Pestle, and Porter's five forces to provide a detailed understanding of Vodafone's strategic direction.

Business Strategy

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1...........................................................................................................................................1
1. PESTLE Analysis....................................................................................................................1
2. Ansoff matrix...........................................................................................................................2
TASK 2............................................................................................................................................3
1. Vrio model of Vodafone..........................................................................................................3
2. Analyse the organisation’s internal environment and its capabilities......................................5
Strength and weakness of Vodafone...........................................................................................6
TASK 3............................................................................................................................................8
1. Porter's five forces Model........................................................................................................8
2. Stakeholders analysis of Vodafone plc ...................................................................................9
TASK 4..........................................................................................................................................10
1. Bowman’s strategy clock model of Vodafone.......................................................................10
2 Porter s Generic Strategies......................................................................................................12
CONCLUSION..............................................................................................................................13
REFERENCES..............................................................................................................................14

INTRODUCTION
Business strategy refers to the formulation of strategic plan in order to achieve business
objectives and goals. Business strategy helps in utilization of business resources at its optimum
level. The Business strategy helps in securing advantageous position. The Business strategy
directs the efforts in a unified form. The business strategy refers to the long integrated business
plan that is helpful in increasing the market share of the Company. The project report is based on
the Mobile telecommunication sector as if now it is fast growing sector in UK. The selected
Company is Vodafone. Vodafone plc is a British multinational telecommunications
conglomerate. Vodafone is founded on 16 September in the year 1991 by Ernest Harrison and
Gerry Whent. The headquarters of Vodafone is situated in London and Newbury, Berkshire in
England. The project report will do Pestle analysis of Vodafone and will determine its external
environment with help of Ansoff Matrix. The project report will further analysis its internal
environment by help of VRIO model. Then Project report will apply Porter's five model on
Vodafone. Lastly the report will interpret the strategic direction of Vodafone with the help of
Bowman Strategy clock model and Porter's generic & Hybrid strategies.
TASK 1
1. PESTLE Analysis
Political Factor – The political factor affect positively for Vodafone due to political stability in
UK. Vodafone has favored trading partner. The WiFi and internet are the human rights so
government is also bound to support such industries. The political factor that affect Vodafone is
bureaucracy and interference in Wireless communication by the government (Baumgartner and
Rauter, 2017). There is Work week regulations in Vodafone. There is high level of corruption in
the sector of technology.
Economical Factor – The Economic factors that affects the Vodafone is high interest rates.
There is requirement of skill level of workforce in telecommunication industry. The Vodafone is
creating Employment as the telecommunication industry is growing rapidly in UK. There is
impact of inflation on Vodafone. The businesses are using internet and mobile phones this
impacts positively on Vodafone in order to increase its market share. The businesses are creating
social media pages and advertisement sites which is only possible because of telecommunication
industry. For promoting their products the businesses are creating official online websites for
their companies which drives the Vodafone plc.
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Social Factor – The social factors is also impacting Vodafone positively as the today's
generation is highly active on mobile phones and social media networks. The demand for
telecommunication products got increased so as for Vodafone too (McKiernan, 2017). The
customers need data packages to communicate with their family and friends and need internet
packages. Nowdays customers are tended to do online shopping and order food online as the
result the Vodafone has increase its profitability.
Technological Factor – The Growth of Vodafone is dependent on the technological
advancement. The Vodafone install fiber wire in their built over copper now. The technology
improvises basic needs of Vodafone by introducing Voicemail and Caller id. The Vodafone need
to updated with the technology in order to offer customers the best improvised technological
products.
Legal Factor – The laws affects the Vodafone business like Copyrights, patents act, Data
protection and Consumer protection and e-commerce. The copyrights and patents act abide
Vodafone from copying or adopting others technology in their smartphones and devices that
others already have. The Consumer protection and Data safety act also influence the internal
organization of Vodafone.
Environmental Factor – The environmental factors that affect the Vodafone plc is the
technological wastage that arise due to up gradation of new version. The old version is become
wastage for Vodafone. The Vodafone is adopting recycling process. They dispose the E-waste.
They do Waste management. The Vodafone has positive attitude towards green and ecological
products and they support renewable energy.
2. Ansoff matrix
Market Penetration – Market penetration exist when the existing products of Vodafone are
marketed in such a way to increase its market share. The Vodafone seeks growth in existing
products which lead company towards increasing market share. The existing products were the
Handsets, Vodafone Mobile Connect, Vodafone live, Data roaming packs and Vodafone Mobile
applications (Chen, Delmas and Lieberman, 2015). The Vodafone plc is extending its business
model in order to generate revenue from its advertising by partnering with advertising specialists.
Market Development – The Vodafone plc seeks growth by targeting its existing products to
new market segments. The Vodafone plc operates its operations in 30 countries and has 2000
global enterprise. In Southern Europe it is very challenging to establish their market due to
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macro environment factors like government intervention, polices and procedures. The European
regulations continue to depress the returns in Vodafone plc.
Product Development – The Vodafone plc is developing new products by targeting its existing
markets. The Vodafone plc is going to introduce 5G services. The Vodafone plc is working with
the Pepsi Company to develop a pre - programmed SIM that will Track inventory in refrigerator
which is used by retailers to store cold drinks (Engert, Rauter and Baumgartner, 2016.). The Sim
will use the data sensing to define the weight of the bottles in the refrigerator.
Diversification – The Vodafone plc is going to introduce new products into new market. The
Vodafone plc is in way to launch its Vodafone Red with using new strategic approach to pricing
their customer proposition in 14 markets. The Vodafone plc has an opportunity to establish its
markets in Asian Countries.
TASK 2
1. Vrio model of Vodafone
Vrio model helps to vodafone to identify the internal resources of the company. The Vodafone
use the VRIO Analysis to improve resources for increase competitive advantage and enhance the
growth of the company, further this analysis helps to use the resources in systematic way.
Company analyses the resources in sustainable manner, also company use this model to take the
competition advantages in different markets by improving the quality of product.
Valuable
Financial resources
The Vrio analysis describe the Vodafone that the financial resources are valuable resources for
their business. As this resource helps to investing in different external sources which help to
internal expansisson of the business as well company also use the financial resources to compete
the external threats.
Employees as resource
According to VRIO analysis that shows that the employees of Vodafone are valuable resources
for their business. The employee of the company is highly trained and they have high knowledge
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about the work, they work harder and make better production to increase the quality of product.
The employees of Vodafone has loyal, and they create high level of profit to the company(Anwar
and Hasnu, 2016.). So basically employees is the valuable resources for the company.
Patents
The Vrio analysis describe the Vodafone that the Patents are most important resources for the
company. This model is described that the product of the company has own rights, that other
competitors are not interference of particular product of the company, Also no other competitors
can copied the products of Vodafone. So patent also provide licensing to the company. This
result is created the high revenue for the company.
Rare
Distribution network
According to Vrio analysis the distribution network is a rare resource of Vodafone. Because,
competitors has also made better distribution channel to increase the sale of the company they
would invest huge money and time to enhance their distribution channel. So Vodafone has also
enhanced their distribution channel to increase the sale of the company.
Highly skilled employees
The Vrio model is describe that the employees of Vodafone has a rare resource of their business.
According to this model that identified as the employees is the highly qualifies and they have
ability to enhance their production which directly impact of the performance of the company.
The employee is the loyal as they do not leave the organization. So the employees of the
vodafone has highly quantified and trained as compare to the other competitors.
Imitable
Employee are not costly to imitate
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According to the Vrio model employees of Vodafone has also not costly to imitate. Because
other competitor also spend their money for providing the training to their employees, other
company also recruit the employees and also offering best package as compare to the Vodafone
provide best work environment, different benefits, growth opportunities etc. so employee of
Vodafone take the benefits as increase the future growth of Vodafone.
Distribution network costly to imitate
The vrio model describe that the distribution channel of Vodafone is also very costly to imitate
by competition. This describe that Vodafone develop their distribution channel in every year.
Also, competitors would have invested the huge amount to enhance their distribution channels
(Kossyva, Sarriand Georgolpoulos, 2015).
Organizational
Research and development
Vrio model describe that the research and development process of Vodafone is organised. The
research and development is the necessary for all the business that provides the benefits to the
company for produce the innovative product, so basically research and development is provided
the competitive advantage to the company. This is described that research and developments are
improved the production as well help to reduce the cost of production.
Financial Departments
VRIO model is describe that the financial Departments of Vodafone are organized. This
department are well organized which describe that company organize this department for
increase the profit also increaseing the capital of the company (Whittle and Myrick, 2016).
2. Analyse the organisation’s internal environment and its capabilities
Strategies capabilities
Strategic capabilities' means ability of the business, it defines as all strength of the business such
as people, place, process, resources, skills, etc. these all capabilities of the business and that
gives the high competitive advantages. So basically company would use the many strategies in
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order to achieve competitive advantage as well expand the future growth of the business.
Different strategies help to organization to increasing the productivity and profitability of the
business (Rugman and Verbeke, 2017). Strategy helps to increase the ability to compete,
identifying competition, analyses the value of business etc. that means strategic capabilities
identifying the ability of firm.
Strength and weakness of Vodafone
Strength
Consumer satisfaction
Vodafone is the powerful company which follow the strategies for make the best products. A
telecommunication company manage the customer relationship by providing the best services to
the customer, so Vodafone has own customer relationship management department that mange
the relationship with the customer they provide high level of satisfaction to the customer. Also,
company has able to achieve customer satisfaction to the current customers and provide the good
brand product to the potential customers.
Powerful track record
Vodafone have successful track record that use the different technology in the coming years to
increase the operations and build highly credible supply chain to increase the sales. Also, it has
Successful track record of connected complimentary business through mergers, acquisition,
amalgamation etc. so basically Vodafone will use the highly technology resources to improve the
quality of product.
Highly qualified and skilled work force
Vodafone have Highly skilled workforce that help to increase their profitability, company has
use the workforce to increase the production by providing the best training and development,
learning programs. Vodafone has investing the huge capital in the training and development
programme for increase the knowledge among the employees also helps to increase the
motivation among the employees. So as result when company provides the many facilities to the
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employees which helps to motivate the employees so employees, also make the best product to
achieve the goal of the company (Kossyva, Sarri and Georgolpoulos, 2015).
Good performance in new market
Vodafone has increase their market in different market segment. They use the many strategies to
expand their market and they take advices to their expertise to enter in the new market. The
growth of the company helps to business to enhance their customer as result increase the revenue
of the company.
Weaknesses
competitor disadvantages
Vodafone has not able to compete their rivals in the new markets they not able to take
challenges. For example,vodafone has not being able to take challenges in the Asian market by
face competition to the reliance jio. So vodafone has enhanced their internal growth such as
provide training to the different departments of the company such as product and sales
department. So company will able to counter these challenges.
Not proper financial planning
Vodafone has not made proper financial plan. So which is directly impact on company future
growth of the business of vodafone. Their cash flow is not make properly and current assets
ration and liquid assets ration also describe that company should use the cash flows and other
financial statements properly (Whittle and Myrick, 2016).
High capital invest in the work force
Vodafone has invested huge capital in the training and development program. Company spend
the high amount of capital for its employees as compare to other competitors. So basically
vodafone spent more money in training and learning program as compare to their competitors.
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Limited success
Vodafone has not success in the other market of their core business. Even vodafone is the one of
the successful company in the telecommunication industry but now there are lot barriers which
company faced. For example, product segment according to the different culture.
TASK 3
1. Porter's five forces Model
Porter's five forces Model
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Figure : 1
porter five forces Model

Threats of New Entrants – The Vodafone plc has threats of New Entrants. The New Entrants is
using lower pricing strategy to competite the Company. The New Entrants are reducing cost of
production whereas Vodafone plc has high production cost. The New Entrants is providing new
value propositions to the customers. The New Entrants is introducing innovative products in the
market the Vodafone plc needs to get updated with the upgraded technology by doing research
and development on continuous basis.
Bargaining power of suppliers – The Vodafone plc buys its raw material from numerous
suppliers. Suppliers are in dominant position. They can decrease the margins of Vodafone plc in
the markets. The Suppliers have upgraded technology they are using negotiating power to extrat
the higher prices of Vodafone plc. The Bargaining power of suppliers is strong they are lowering
the overall profitability of Vodafone plc.
Bargaining power of Buyers – The Vodafone plc is also suffering from the bargaining power of
buyers. The buyers want best offering prices on various Data and roaming packs. The Bargaining
power of buyers is strong due to many competitors of Vodafone plc is offering premium prices
so the Buyers can shift their brand loyalty towards the others who are offering lower prices (Hitt,
Ireland and Hoskisson, 2016). The Vodafone plc need to use Customer retention strategy by
giving various offers on data packs.
Threats of Substitute products and services – The Vodafone plc has threat of substitute
products like Dropbox and Google drive which can be substitute the storage hardware drives of
Vodafone (Trigeorgis and Reuer, 2017). The Vodafone plc can safeguard itself by using
Business Strategy like they need to be more service oriented rather than just be product oriented.
Rivalry among existing competitors – The Vodafone plc is facing high competitive rivalry.
The telecommunication sector is at its boom so there are many competitors of Vodafone plc is
available in the market. The Vodafone plc can cut off its competition by building a sustainable
differentiation. The Vodafone plc can also go for mergers and acquisition to collaborate with
their competitors to increase its market share.
2. Stakeholders analysis of Vodafone plc
Stakeholders analysis of Vodafone plc
The stakeholders of Vodafone plc are the suppliers, customers, owners, body corporates
managers and shareholders. The Vodafone plc used to listen their shareholders while taking any
important decision related to the Company (Deasy, Meyer and Strudel, 2016.). They consider the
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feedback while making any other important decision which they receive from the external
stakeholders. The external stakeholders provide necessary information that priorities the
sustainability in their Business. These stakeholders include -
 The non-governmental organisations (NGOs) and sustainability opinion formers who are
interested in Vodafone plc approaches regarding to specified issues.
 Consumers and enterprise customers (small and large businesses and organisations) who
are related to the Vodafone plc as a service provider.
 Communities that may be concerned about the sitting of Vodafone plc network
infrastructure.
 Governments and regulators that can affect Vodafone plc business through adopting new
legislation and regulations.
 Investors, employees and suppliers that are directly affected by the business performance
of Vodafone plc.
TASK 4
1. Bowman’s strategy clock model of Vodafone
Position 1: Low Price / Low Added Value
This position is described that many companies not choose this category for their business, also
company not want to be in this position. Some important reason when company choose this
positions when their product is not much good as compare to the other, also company choose this
position because the products lacks of differentiated value (Anwar and Hasnu, 2016.). So
Vodafone also use this position to mange the cost and increase the selling volume, also Vodafone
continually attract the customer by advertising and different policy. Vodafone provides the best
product to their customer such as good data pack on minimum cost. So Vodafone will stay one
step ahead for increase their customer base by providing the best price on their products.
Position 2: Low Price
A Vodafone can use this position to improve their product and service with providing the low
cost of product and services to their customer. Company will choose the best pricing strategy to
attract their customer. Also, Vodafone provide their product on low cost which directly impact
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on their sales volume means become a low prices, customer purchase the products and which
impacts on increase the sales of the company (Kossyva, Sarri and Georgolpoulos, 2015).
Position 3: Hybrid (Moderate Price & Moderate Differentiation)
Vodafone uses this position to attract their customer. For example Vodafone provides different
discount on their data packages which attract the customer. Also, Vodafone increase their prices
on their services as compare to their competitors but prices is not much high (Rugman and
Verbeke 2017).
Position 4: Differentiation
Vodafone uses this position to attract the customer. They provide the unique product to their
customer. So customer easily attracted ,because company provides the innovative product. For
example Vodafone launch the 4G, network, so customer easily attracted towards this product.
Position 5: Focused Differentiation
Vodafone offers the high valued product against high prices. For example Vodafone announces
that they launch the 5G network in the end of 2019 with the high prices. So this strategy also
attract the customer.
Position 6: Increased Price and Standard Product
Vodafone also takes a chance to increase their prices of product without any change of quality
and value in the product. If customer accepted this pricing strategy, that will profit of the
Vodafone, that they increase the high profitability and their market share also increase (Eaton
and Kilby, 2015).
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Position 7: High Price / Low Value
This strategy can be implemented in a market where only vodafone offers the goods or service
such as 5G network. So vodafone launch their product on higher prices to attract their customer.
Position 8: Low Value / Standard Price
Vodafone uses this position to increase their customer base. Vodafone provides the low valued
product to their customer, who have not high income so this class of customer attract towards
this strategy. So this segment help to increase the customer who have low income (Whittle and
Myrick, 2016).
2 Porter s Generic Strategies
cost leadership
A Vodafone can apply the best strategy in their business to increase the demand, so they use this
position to improve their product and service with providing the low cost of product, and they
attract their customer by providing the low prices of product like Vodafone gives the data pack
on minimum prices. Further, they also provide the best network to the customer on high prices
such as 5g network. So it creates the high demand of the product in the market.
Differentiation
vodafone launch their 5g network with some innovation. So vodafone target a broad market to
enhance the profitability. Further they create the research and development to make high quality
product and attract more customer. So vodafone use the effective marketing strategy to to
deliver high quality product and enhance the market share of the firm.
Cost Focus
vodafone target a whole market,doemstic market and niche market. So they offer the low price
for the niche market as well as they offer the high price for the high income class groups. So
vodafone deciding the market and sale their product in market to enhance the profitability.
Differentiation Focus
vodafone target a whole market, domestic market and niche market with good product or service
and also this product has unique features. So it is also the best way of increase the market share
by selling the unique features of product.
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CONCLUSION
The Report has been described the business strategy of Vodafone. Also, Report has been
described internal environment by help of VRIO model. The project report has been describes
the Pestle analysis of Vodafone which describe the external environmental condition of the
company. The report has been described the Porter's five model which helps to Vodafone for
identify the competitive advantages. Lastly the report has been interpreted the strategic direction
of Vodafone with the help of Bowman Strategy clock model.
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REFERENCES
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Hockerts, K. 2015. A cognitive perspective on the business case for corporate
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McKiernan, P., 2017. Historical Evolution of Strategic Management, Volumes I and II.
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Chen, C.M., Delmas, M.A. and Lieberman, M.B., 2015. Production frontier methodologies and
efficiency as a performance measure in strategic management research.Strategic
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